United Natural Foods, Inc. Provides Business Update
Highlights
- Management to host call discussing revised outlook and business update today at 8:30 a.m. ET
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Revised outlook reflects strong performance for first three quarters of fiscal year as well as the estimated impact of previously disclosed cyber incident. Previously disclosed performance through the third quarter vs. prior year:
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Net sales increased
5.5% -
Net loss improved by
$44 million dollars$0.75 -
Adjusted EBITDA(1) increased by
16% -
Operating cash flow increased to
$310 million -
Free cash flow(1) increased to
$153 million
-
Net sales increased
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Company continues to have high confidence in multi-year strategy and expects to realize previously announced long-term financial targets at an accelerated pace compared to its initial targets
- Expect to reduce net leverage(1) to nearly 2.5x by year-end fiscal 2026; around a year earlier than initially projected
“We are grateful to our customers, suppliers, and associates for their resilience and collaboration as we worked through a challenging period for all of us. With our operations returning to more normalized levels, we remain focused on adding value for our customers and suppliers while becoming a more efficient and effective partner,” said Sandy Douglas, UNFI’s CEO.
“With a proven multi-year strategy and consistent execution through the third quarter of fiscal 2025, we are confident in our underlying momentum and our ability to achieve our multi-year financial targets at an accelerated pace compared to the initial targets we communicated in October 2024.”
Updated Fiscal 2025 Outlook(2)
The Company is updating its full-year outlook to reflect its strong performance for the first three fiscal quarters of 2025 and the estimated costs and charges associated with the previously disclosed cyber incident. The Company estimates that the cyber incident will impact fiscal 2025 net sales by approximately
Fiscal Year Ending August 2, 2025 (52 weeks) |
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Net (loss) income ($ in millions) |
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(Loss) earnings per diluted share (EPS) (3) |
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Adjusted EPS (1)(3)(4)(5) |
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Adjusted EBITDA (1)(4) ($ in millions) |
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Capital and cloud implementation expenditures (1)(6) ($ in millions) |
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~ |
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(32.4)% |
Free cash flow (1)(6) ($ in millions) |
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(1) |
See additional information at the end of this release regarding non-GAAP financial measures. Net leverage refers to Net debt to Adjusted EBITDA leverage ratio. |
(2) |
The outlook provided above is for fiscal 2025 only. The outlook is forward-looking, is based on management’s current estimates and expectations and is subject to a number of risks, including many that are outside of management's control. See cautionary Safe Harbor Statement below. Fiscal 2024 was a 53 week year. Net sales for fiscal 2024 were |
(3) |
(Loss) earnings per share amounts as presented include rounding. |
(4) |
The Company is unable to provide a full reconciliation for outlook to the most comparable GAAP measure without unreasonable effort due to the difficulty in predicting the amounts for certain adjustment items. |
(5) |
The Company uses an adjusted effective tax rate in calculating Adjusted EPS. The outlook for Adjusted EPS currently reflects a tax rate of |
(6) |
The components of capital and cloud implementation expenditures for fiscal 2025 will be primarily dependent on the nature of certain contracts to be executed. As such, the Company is unable to reconcile the outlook for free cash flow as well as capital and cloud implementation expenditures in fiscal 2025 to the most directly comparable financial measures calculated in accordance with GAAP. |
Conference Call and Webcast
The Company has scheduled a conference call and audio webcast for today, Wednesday, July 16, 2025 at 8:30 a.m. ET to provide a business update and to discuss the Company’s revised outlook. A webcast of the conference call (and supplemental materials) will be available to the public, on a listen only basis, via the internet at the Investors section of the Company’s website www.unfi.com. The call can also be accessed at (800) 715-9871 (conference ID 5462932). An online archive of the webcast (and supplemental materials) will be available for 120 days.
About United Natural Foods
UNFI is North America’s premier grocery wholesaler delivering the widest variety of fresh, branded, and owned brand products to more than 30,000 locations throughout
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. The risks and uncertainties which could impact these statements are described in the Company’s filings under the Securities Exchange Act of 1934, as amended, including under the section entitled “Risk Factors” in the Company’s annual report on Form 10-K for the year ended August 3, 2024 filed with the Securities and Exchange Commission (the “SEC”) on October 1, 2024 and other filings the Company makes with the SEC, and include, but are not limited to, our dependence on principal customers; the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures and intense competition, including as a result of the continuing consolidation of retailers and the growth of consumer choices for grocery and consumable purchases; our ability to realize the anticipated benefits of our strategic initiatives; changes in relationships with our suppliers; our ability to operate, and rely on third parties to operate, reliable and secure technology systems, and the effectiveness of the Company’s business continuity plans in response to an incident impacting the Company’s technology systems, such as the unauthorized incident on its technology systems; labor and other workforce shortages and challenges; the addition or loss of significant customers or material changes to our relationships with these customers; our ability to realize anticipated benefits of strategic transactions; our ability to continue to grow sales, including of our higher margin natural and organic foods and non-food products; our ability to maintain sufficient volume in our wholesale distribution and services businesses to support our operating infrastructure; our ability to access additional capital; increases in healthcare, pension and other costs under our single employer benefit plan and multiemployer benefit plans; the potential for additional asset impairment charges; our sensitivity to general economic conditions including inflation, tariff policy and changes in disposable income levels and consumer purchasing habits; our ability to timely and successfully deploy our warehouse management system throughout our distribution centers and our transportation management system across the Company and to achieve efficiencies and cost savings from these efforts; the potential for disruptions in our supply chain or our distribution capabilities from circumstances beyond our control, including due to lack of long-term contracts, severe weather, labor shortages or work stoppages or otherwise; moderated supplier promotional activity, including decreased forward buying opportunities; union-organizing activities that could cause labor relations difficulties and increased costs; our ability to maintain food quality and safety; and volatility in fuel costs. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws. Any estimates of future results of operations are based on a number of assumptions, many of which are outside the Company’s control and should not be construed in any manner as a guarantee that such results will in fact occur. These estimates are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced estimates, but it is not obligated to do so.
Non-GAAP Financial Measures: To supplement the financial information presented on a
The reconciliation of these non-GAAP financial measures to their comparable GAAP financial measures and the calculation of net debt to Adjusted EBITDA leverage are presented in the tables appearing below, where practicable. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. The Company believes that presenting Adjusted EBITDA and Adjusted EPS aids in making period-to-period comparisons, assessing the performance of the Company’s business and understanding the underlying operating performance and core business trends by excluding certain adjustments not expected to recur in the normal course of business or that are not meaningful indicators of actual and estimated operating performance. The Company believes that providing the adjusted effective tax rate gives investors a meaningful, consistent comparison of the Company’s effective tax rate on ongoing operations. The inclusion of free cash flow assists investors in understanding the cash generating ability of the Company separate from cash generated by the sale of assets. Net debt to Adjusted EBITDA leverage ratio is a commonly used metric that assists investors in understanding and evaluating the Company’s capital structure and changes to its capital structure over time. The Company believes that providing capital and cloud implementation expenditures provides investors with better visibility into the Company's total investment expenditures. The components of capital and cloud implementation expenditures for fiscal 2025 will be primarily dependent on the nature of certain contracts to be executed. Management utilizes and plans to utilize these non-GAAP financial measures to compare the Company’s operating performance during fiscal 2025 to the comparable periods in fiscal 2024 and to internally prepared projections. These non-GAAP financial measures may differ from similarly titled measures of other companies.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (unaudited) UNITED NATURAL FOODS, INC.
Reconciliation of Net loss including noncontrolling interests to Adjusted EBITDA (unaudited) |
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39-Week Period Ended |
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(in millions) |
|
May 3, 2025 |
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April 27, 2024 |
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Percent Change |
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Net loss including noncontrolling interests |
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$ |
(29 |
) |
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$ |
(73 |
) |
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Adjustments to net loss including noncontrolling interests: |
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Less net income attributable to noncontrolling interests |
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(2 |
) |
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(2 |
) |
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Net periodic benefit income, excluding service cost |
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(15 |
) |
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(11 |
) |
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Interest expense, net |
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110 |
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112 |
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Other income, net |
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(3 |
) |
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(2 |
) |
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Benefit for income taxes |
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(16 |
) |
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(20 |
) |
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Depreciation and amortization |
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242 |
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228 |
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Share-based compensation |
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28 |
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26 |
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LIFO charge |
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5 |
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19 |
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Restructuring, acquisition and integration related expenses |
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35 |
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17 |
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Loss on sale of assets and other asset charges (1) |
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39 |
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37 |
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Business transformation costs (2) |
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40 |
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40 |
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Other adjustments (3) |
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2 |
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4 |
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Adjusted EBITDA |
|
$ |
436 |
|
|
$ |
375 |
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|
16 |
% |
(1) |
Fiscal 2025 primarily includes a |
(2) |
Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, and third-party professional service fees related to the board-led financial review and strategic initiatives, all of which are included within Operating expenses in the Condensed Consolidated Statements of Operations. |
(3) |
Fiscal 2025 primarily reflects certain estimated accrued legal-related costs, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. Fiscal 2024 primarily reflects third-party professional service fees related to shareholder negotiations, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. |
Reconciliation of Net loss including noncontrolling interests to Adjusted EBITDA (unaudited) |
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Fiscal Year Ended |
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(in millions) |
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August 3, 2024 (53 weeks) |
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Net loss including noncontrolling interests |
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$ |
(110 |
) |
Adjustments to net loss including noncontrolling interests: |
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Less net income attributable to noncontrolling interests |
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(2 |
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Net periodic benefit income, excluding service cost |
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(15 |
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Interest expense, net |
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162 |
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Other income, net |
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(2 |
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Benefit for income taxes |
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(27 |
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Depreciation and amortization |
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319 |
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Share-based compensation |
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37 |
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LIFO charge |
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|
7 |
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Restructuring, acquisition and integration related expenses(1) |
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|
36 |
|
Loss on sale of assets and other asset charges(2) |
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|
57 |
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Business transformation costs(3) |
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|
52 |
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Other adjustments(4) |
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4 |
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Adjusted EBITDA(5) |
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$ |
518 |
|
(1) |
Fiscal 2024 primarily reflects costs associated with certain employee severance. |
(2) |
Fiscal 2024 primarily includes a |
(3) |
Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, and third-party professional service fees related to the board-led financial review in fiscal 2024, all of which are included within Operating expenses in the Consolidated Statements of Operations. |
(4) |
Primarily reflects third-party professional service fees related to shareholder negotiations in the first quarter of fiscal 2024. |
(5) |
Adjusted EBITDA includes an estimated |
Reconciliation of Net loss attributable to United Natural Foods, Inc. to Adjusted net income and Adjusted EPS (unaudited) |
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Fiscal Year Ended |
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(in millions, except per share amounts) |
August 3, 2024 (53 weeks) |
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Net loss attributable to United Natural Foods, Inc. |
$ |
(112 |
) |
Restructuring, acquisition, and integration related expenses(1) |
|
36 |
|
Loss on sale of assets and other asset charges other than losses on sales of receivables(2) |
|
36 |
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LIFO charge |
|
7 |
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Surplus property depreciation and interest expense(3) |
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5 |
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Loss on debt extinguishment |
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10 |
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Business transformation costs(4) |
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52 |
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Other adjustments(5) |
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4 |
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Tax impact of adjustments and adjusted effective tax rate(6) |
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(29 |
) |
Adjusted net income |
$ |
9 |
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Diluted weighted average shares outstanding |
|
60.4 |
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Adjusted EPS(7) |
$ |
0.14 |
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(1) |
Fiscal 2024 primarily reflects costs associated with certain employee severance. |
(2) |
Loss on sale of assets and other asset charges, as reflected here, does not include losses on sales of receivables under the accounts receivable monetization program, which are included in Loss on sale of assets and other asset charges on the Consolidated Statements of Operations and are not adjusted in the calculation of Adjusted EPS. Fiscal 2024 primarily includes a |
(3) |
Reflects surplus, non-operating property depreciation and interest expense. |
(4) |
Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, and third-party professional service fees related to the board-led financial review in fiscal 2024, all of which are included within Operating expenses in the Consolidated Statements of Operations. |
(5) |
Primarily reflects third-party professional service fees related to shareholder negotiations in the first quarter of fiscal 2024. |
(6) |
Represents the tax effect of the pre-tax adjustments using an adjusted effective tax rate. The adjusted effective tax rate is calculated based on adjusted net income before tax, and its impact reflects the exclusion of changes to uncertain tax positions, valuation allowances, tax impacts related to the vesting of share-based compensation awards and discrete GAAP tax items which could impact the comparability of the operational effective tax rate. The Company believes using this adjusted effective tax rate will provide better consistency across the interim reporting periods since each of these discrete items can cause volatility in the GAAP tax rate that is not indicative of the true operations of the Company. By providing this non-GAAP measure, management intends to provide investors with a meaningful, consistent comparison of the Company’s effective tax rate on ongoing operations. |
(7) |
Adjusted earnings per share amount is calculated using actual unrounded figures. |
Reconciliation of Net cash provided by operating activities to Free cash flow (unaudited) |
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39-Week Period Ended |
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Fiscal Year Ended |
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(in millions) |
|
May 3, 2025 |
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August 3, 2024 (53 weeks) |
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Net cash provided by operating activities |
|
$ |
310 |
|
|
$ |
253 |
|
Payments for capital expenditures |
|
|
(157 |
) |
|
|
(345 |
) |
Free cash flow |
|
$ |
153 |
|
|
$ |
(92 |
) |
Reconciliation of Payments for capital expenditures to Capital and cloud implementation expenditures (unaudited) |
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|
||
|
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Fiscal Year Ended |
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(in millions) |
|
August 3, 2024 (53 weeks) |
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Payments for capital expenditures |
|
$ |
345 |
|
Cloud technology implementation expenditures (1) |
|
|
25 |
|
Capital and cloud implementation expenditures (2) |
|
$ |
370 |
|
(1) |
Cloud technology implementation expenditures are included in operating activities in the Consolidated Statements of Cash Flows. |
(2) |
Certain amounts in fiscal 2024 have been reclassified from Cloud technology implementation expenditures to Payments for capital expenditures. These reclassifications had no impact on total Capital and cloud implementation expenditures, or on prior year reported amounts. |
Reconciliation of actual 2024 U.S. GAAP effective tax rate to adjusted effective tax rate (unaudited) |
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|
Actual Fiscal 2024 |
|
|
|
20 |
% |
Discrete quarterly recognition of GAAP items (1) |
|
20 |
% |
Tax impact of other charges and adjustments (2) |
|
(24 |
)% |
Changes in valuation allowances (3) |
|
5 |
% |
Other (4) |
|
— |
% |
Adjusted effective tax rate (4) |
|
21 |
% |
(1) |
Reflects changes in tax laws, uncertain tax positions, the tax impacts related to the exercise of share-based compensation awards and any prior-year deferred tax or payable adjustments. This includes prior-year Internal Revenue Service or other tax jurisdiction audit adjustments. |
(2) |
Reflects the tax impact of pre-tax adjustments that are excluded from pre-tax income when calculating Adjusted EPS. |
(3) |
Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations. |
(4) |
The Company establishes an estimated adjusted effective tax rate at the beginning of the fiscal year based on the best available information. The Company re-evaluates its estimated adjusted effective tax rate as appropriate throughout the year and adjusts for any material changes. The actual adjusted effective tax rate at the end of the fiscal year is based on actual results and accordingly may differ from the estimated adjusted effective tax rate used during the year. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250716339609/en/
INVESTOR CONTACTS:
Steve Bloomquist
Vice President, Investor Relations
952-828-4144 sbloomquist@unfi.com
Kristyn Farahmand
Chief Strategy Officer
612-439-6625 kristyn.farahmand@unfi.com
Source: United Natural Foods, Inc.
