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Feb 21 (Reuters) - Organic and natural foods distributor United Natural Foods Inc (UNFI.O: Quote, Profile, Research) posted a second-quarter profit below Wall Street expectations and cut its fiscal 2008 earnings outlook, mainly hurt by higher-than-expected merger costs, sending its shares down 25 percent to a three-year low.

The company, which bought Millbrook in November 2007 to expand its specialty distribution business consisting of ethnic, kosher, gourmet, organic and natural foods, said the acquisition hurt quarterly profit by 8 cents a share, about twice its estimate.

The higher Millbrook costs were based on lower-than-projected growth in gross margin from purchase discounts and forward buying opportunities, and delays in generating identified savings, the company said in a statement.

The company, which had earlier hoped to restore historical margins at Millbrook without any impact on earnings in the first 4-5 months after the deal, now expects to take another two quarters.

"We believe we will make Millbrook neutral to our earnings by the first quarter of our fiscal 2009," United Natural CEO Michael Funk said in a conference call with analysts.

For fiscal 2008, United Natural expects earnings of $1.12 to $1.14 a share, down from its prior outlook of $1.40 to $1.45 a share. It expects the Millbrook acquisition to hurt profit by 10 cents to 12 cents a share in the second half of fiscal 2008.

United Natural, based in Dayville, Connecticut, posted second-quarter net income of $9.1 million, or 21 cents a share, compared with $10.9 million, or 25 cents a share, a year earlier.

Excluding Millbrook, the company posted net income of $12.4 million, or 29 cents a share.