United Natural Foods Stock Earnings Reports

UNFI reported a resilient Q2 FY2026 driven by execution of its value-creation strategy (customer stewardship, merchandising, private brands, technology, supply chain and productivity). Sales were nearly $8B, down 2.6% year-over-year, with roughly a 500-basis-point drag from planned, accretive network optimization (Allentown consolidation). Excluding optimization impacts, wholesale sales were roughly in line with the company’s target addressable market (low single-digit growth). Natural product sales grew (~7%), while conventional declined (~12%) primarily due to the optimization. Gross margin rate edged higher to 13.2% and operating expenses declined ~6%, driving adjusted EBITDA of $179M (+~23% year-over-year) and adjusted EPS of $0.62 (vs. $0.22 prior year). Free cash flow was strong at $243M for the quarter (up ~$50M), enabling deleveraging (net leverage 2.7x, lowest net debt since FY2018), a $115M voluntary senior note prepayment, and opportunistic share repurchases (~750k shares / $25M). Operationally UNFI is rolling out RELEX (AI planning) across the network and expanding lean daily management (36 DCs), yielding productivity, reduced shrink (>11% year-over-year), improved fill rates and on-time delivery. Management raised FY2026 profit and cash guidance while lowering sales guidance: new sales range $31.0–31.4B (midpoint down ~1.9%), adjusted EBITDA $680–710M (up $30M midpoint), adjusted EPS $2.30–2.70, and free cash flow ~ $330M. Management expects sales to return to growth in fiscal 2027 as optimization cycles complete and new business ramps; reiterates multi-year objective of low single-digit average sales growth and ongoing margin/efficiency improvements.