Press release·09/14/2026 12:20:54

Financial Performance Overview

United Natural Foods, Inc. (UNFI) is a leading grocery wholesaler and support services provider in the United States and Canada. In fiscal year 2026, the company reported net sales of $31.2 billion, a 2.0% decrease from the prior year. This decline was primarily driven by decreases in the Conventional and Retail segments, partially offset by growth in the Natural segment.

Gross profit decreased 0.6% to $4.2 billion, but the gross profit margin increased to 13.5% from 13.3% in the prior year. This improvement was driven by the positive impact of network optimization actions, customer mix, and higher procurement gains, which offset lower margins in the Retail segment.

Operating expenses decreased 5.1% to $3.9 billion, or 12.5% of net sales, down from 13.0% in the prior year. The decrease was primarily due to cost savings initiatives, including network and cost structure optimization, as well as $50 million in cybersecurity insurance recoveries, partially offset by higher employee benefit costs.

As a result of these factors, UNFI reported operating income of $211 million, a significant improvement from the $31 million operating loss in the prior year. Net income attributable to UNFI was $84 million, or $1.34 per diluted share, compared to a net loss of $118 million, or $1.95 per diluted share, in the prior year.

Segment Performance

UNFI’s business is organized into three reportable segments: Natural, Conventional, and Retail.

The Natural segment saw a 19.2% increase in Adjusted EBITDA to $527 million, driven by higher gross profit and the lapping of the prior year’s cybersecurity incident impact, partially offset by increased operating expenses. Gross profit in the Natural segment increased $132 million, but the gross profit rate declined slightly due to lower product margins and customer mix, which were partially offset by supplier programs and higher procurement gains. Operating expenses decreased as a percentage of sales due to cost savings initiatives and higher sales volume.

Adjusted EBITDA for the Conventional segment increased 55.2% to $270 million. Gross profit declined $65 million, but the gross profit rate improved by 86 basis points due to the positive impact of network optimization, customer and product mix, recoveries from customer and supplier settlements, and higher procurement gains. Operating expenses decreased significantly, driven by the benefits of network optimization and higher distribution center productivity, partially offset by higher employee benefit costs.

The Retail segment saw a $31 million decrease in Adjusted EBITDA. Gross profit declined $69 million, and the gross profit rate decreased by 102 basis points due to lower product margins from price investments and changes in product mix. Operating expenses decreased $38 million, but the rate increased by 40 basis points due to higher labor, employee benefits, and occupancy costs, partially offset by savings from store closures.

Liquidity and Capital Resources

As of August 1, 2026, UNFI had total liquidity of $1.3 billion, consisting of $1.2 billion in unused credit under its ABL Credit Facility and $37 million in cash and cash equivalents. Total debt decreased $299 million to $1.6 billion, primarily due to the redemption of $150 million in Senior Notes and a reduction in net borrowings under the ABL Credit Facility.

In the first quarter of fiscal 2026, UNFI paid the remaining $35 million related to the termination of a customer contract in the East region. The company also made a $9 million voluntary prepayment on its Term Loan Facility in the second quarter, funded by the sale of a distribution center.

During fiscal 2026, UNFI repurchased 1.2 million shares of its common stock for a total cost of $50 million. In the third quarter, the company refinanced its ABL Credit Facility, reducing the aggregate principal amount to $2.5 billion and extending the maturity to 2031. Additionally, in the fourth quarter, UNFI repriced its Term Loan Facility, reducing the applicable margin over SOFR from 4.75% to 4.00%.

Trends and Outlook

UNFI’s results are impacted by several macroeconomic, industry, demographic, and consumer-driven trends. Economic volatility and pressure on discretionary incomes have influenced consumer purchasing behavior, leading to a shift towards value-oriented products. Inflationary pressures and changes in pricing levels have also affected the company’s business, with fluctuating commodity, fuel, and labor costs impacting its cost structure and pricing dynamics.

The company continues to evaluate its distribution center network to optimize performance, including the termination of a customer contract in the East region, the consolidation of a distribution center in the West region, and the consolidation of a Natural segment distribution center into an automated facility in the Central region. These network optimization initiatives are expected to improve efficiency, but may result in incremental expenses.

In the Retail segment, UNFI closed two Cub Foods stores and eight Shoppers stores in fiscal 2026 as part of its strategic initiatives to optimize its retail footprint. The company plans to continue investing in and optimizing its Retail segment, focusing on customer-facing initiatives, physical facilities, technology, and operational tools.

Looking ahead, UNFI expects to continue using available capital to reinvest in the business, with a focus on improving free cash flow and financial leverage through improved profitability, disciplined capital investment, and strengthened working capital management. The company’s fiscal 2027 capital and cloud implementation spending is expected to be approximately $300 million, primarily for technology platform investments and projects to automate and optimize the distribution network.

Strengths and Weaknesses

UNFI’s key strengths include its position as a leading grocery wholesaler with a broad product assortment and service offerings, a diversified customer base, and a coast-to-coast distribution network. The company’s focus on controllable variables, such as network optimization, capital spending management, and cost structure optimization, positions it to improve operational effectiveness and profitability.

However, UNFI faces several challenges, including its relatively low margins that are sensitive to inflationary and deflationary pressures, intense competition, and the impact of retailer consolidation and the growth of consumer choices for grocery and consumable purchases. The company is also exposed to risks related to its dependence on principal customers, its ability to develop and maintain reliable technology systems, and potential disruptions in its supply chain or distribution capabilities.

Conclusion

UNFI’s financial performance in fiscal 2026 showed improvement, with the company reporting higher operating income and net income compared to the prior year. The Natural and Conventional segments drove this improvement, while the Retail segment faced challenges. The company’s focus on cost savings, network optimization, and capital discipline has helped strengthen its financial position and liquidity.

Looking ahead, UNFI faces a mix of opportunities and risks. The company’s diversified product portfolio, data-driven insights, and service offerings position it to help customers and suppliers navigate the evolving grocery landscape. However, macroeconomic and industry trends, such as consumer purchasing behavior shifts and inflationary pressures, could continue to impact the company’s performance. UNFI’s ability to adapt its operations, leverage its strengths, and mitigate its weaknesses will be crucial in driving sustainable growth and shareholder value creation.