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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (72493)	3/8/2023 2:36:22 PM
From: E_K_S	Respond to of 78958

Re: UNFI earnings From my brief review of their earnings the 'miss' was due to price gains in their inventory channel (last quarter). That apparently was corrected by moving to LIFO accounting for their inventory channel now. Really no change in Sales but only in the prices of goods they pay now. They also use long-term sales contracts for their large retail buyers that have a price escalation clause that s/d cover increases in their cost of goods sold. --------------------------------------------------------------------- Now if the company has a different story and is not providing guidance, that could be a different story. I wonder what other companies have these one time gains in their supply chain. Do all of these wholesale distributors use LIFO? Not sure, I never really checked Remember BGS had a hit but they also had other write offs but their price increases took awhile to work there way into their revenue numbers. Almost took 6 months through their supply chain. Can inflation be that bad and that fast?

To: Madharry who wrote (72493)	3/8/2023 2:53:50 PM
From: E_K_S	Read Replies (1) \| Respond to of 78958

This article is interesting. Looks like Kroger changed to LIFO 6/2022 and it impacted their earnings too. Inflation Puts Spotlight on Companies’ Use of Last-In, First-Out Accounting Concerns about rising inflation and slowing growth are putting the spotlight on an accounting method U.S. companies use to lower their federal tax bill by inflating their costs, which also squeezes their quarterly earnings. Companies including grocery chain Kroger Co. in recent weeks have said their use of last-in, first-out accounting, or LIFO, has increased costs and dented earnings. Kroger said it expects to take a full-year LIFO charge of $300 million this year, compared with a $197 million LIFO charge during the prior year, due to higher inflation. The company raised its full-year earnings guidance, citing strong sales, but said higher LIFO-related costs will be a drag on earnings in the year ahead. ------------------------------------------------ Interesting that the article mentions UNFI and their change to LIFO. United Natural Foods during the quarter ended April 30 reported a LIFO charge of $72 million, up from $5 million a year earlier, and earned $67 million, up 40% from a year earlier. Inventory rose 12%, to $2.6 billion. The company has no plans to change its accounting method, but said this month it revised its metric for adjusted earnings to exclude the impact of LIFO. Maybe should have seen this coming. Wonder if it works in reverse if/when inflation cools?

To: Madharry who wrote (72493)	3/8/2023 11:22:34 PM
From: Ccube	1 Recommendation Recommended By Lance Bredvold Read Replies (1) \| Respond to of 78958

Well I had GTC order on UNFI at 30 or something got hit at the open at 27.95 so I’m in. It’s making 52 week lows I think there is definitely a margin squeeze. With wages. Normally you would be lucky if you got one raise per year at my company. Last year we gave out raises every 3 months or so just to keep the current employees from bolting to other hotels because of the pay. I think it might be slowing down now a bit but it was crazy how fast wages were going up. (Which is good for employees) Not so much for the company unless they can pass that cost to consumers.