United Natural Foods Offers 3.85M More Shares

Citigroup believes that while United Natural Foods UNFI announces a secondary offering of 3.85M shares, the trends will likely remain strong for the company and that sales growth will continue to accelerate. In its report, Citigroup writes "UNFI mentioned on its 4Q call (ended July) that the quarter reflected a continued acceleration in sales growth and saw continued acceleration into August. Based on our recent checks, we sense the natural foods industry continues to see strong momentum following solid trends in the first half of 2010. We sense that industry trends during July, August, and September are tracking solidly, which is encouraging given UNFI should benefit from industry trends and volatility in other discretionary sectors such as leisure." Citigroup maintains its Buy rating and $42 price target. United Natural Foods closed yesterday at $33.40.