United Natural Foods Stock Earnings Reports

Key takeaways for investors: UNFI reported a strong Q3 fiscal 2025 with sales of nearly $8.1 billion (up 7.5%), driven by Wholesale Natural (+12%) and volume gains (+4%). Adjusted EBITDA rose 21% to $157 million and adjusted EBITDA margin expanded to 2% (the highest in two years). Adjusted EPS was $0.44 vs. $0.10 a year ago. Free cash flow was $190 million for the quarter (YTD ≈ $150M; trailing 12 months ≈ $224M), enabling reduction of net debt to under $1.93 billion and net leverage to 3.3x (down 1.3 turns year-over-year). Management now expects to reach its ~2.5x net leverage target by end of fiscal 2026, roughly a year earlier than previously planned. Operationally, UNFI is advancing network optimization and Lean Daily Management (deployed in 20 of 52 DCs) to drive efficiency, lower shrink, and improve fill rates. Capital plan remains ~ $300M annually, split among safety/DC maintenance, technology, and automation.

Risks/near-term items: a cyber security incident (unauthorized activity detected June 5) led to network shutdowns and ongoing recovery efforts; management has activated incident response, implemented workarounds, and is prioritizing customer service while assessing financial impact — guidance for most non-GAAP metrics was left unchanged pending assessment. UNFI and Key Food mutually agreed to end their Northeastern distribution relationship, which triggered a $24M asset impairment and $4M severance in Q3 and an expected ~$53M contract termination payment to be recorded in Q4 (net cash impact partially offset by working capital release and expense reductions; payback expected within ~1 year). Management reiterated focus on deleveraging and will prioritize free cash flow toward debt paydown until leverage targets are met.