United Natural Foods, Inc. (UNFI) Beats Q3 Expectations, Updates Outlook

United Natural Foods, Inc. (NYSE: UNFI) reported its financial results for the third quarter of fiscal 2025, showcasing a notable performance exceeding market expectations and providing updated guidance for the full fiscal year.

UNFI Reports 7.5% Increase in Net Sales for Third-Quarter

United Natural Foods, Inc. (UNFI) announced its financial results for the third quarter of fiscal 2025, ending on May 3, 2025. The company reported a 7.5% increase in net sales, reaching $8.1 billion compared to $7.5 billion in the same period last year. This growth was primarily driven by a 4% rise in wholesale unit volumes and continued expansion in natural product sales. Despite a net loss of $7 million, UNFI’s adjusted earnings per share (EPS) increased significantly to $0.44, well above the market expectation of $0.24.

The company’s gross profit for the quarter was $1.1 billion, a 6.1% increase from the previous year. However, the gross profit rate slightly declined to 13.4% from 13.6% due to lower product margin rates and business mix changes. Operating expenses were reduced to 12.7% of net sales from 13.2% in the prior year, reflecting the leveraging impact of higher sales and cost-saving initiatives.

Adjusted EBITDA for the quarter rose by 20.8% to $157 million, driven by solid business wins and efficient operational execution.

UNFI’s financial performance exceeded expectations, with adjusted EPS significantly higher than the anticipated $0.24, showcasing the company’s ability to drive stakeholder value and manage costs effectively. The company achieved a free cash flow improvement of approximately $70 million compared to the previous year, reflecting its focus on lean management and strategic growth initiatives.

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United Natural Foods Updates Fiscal 2025 Outlook

Looking ahead, United Natural Foods has updated its fiscal 2025 outlook, reflecting recent developments and strategic decisions. The company maintained its net sales guidance, projecting between $31.3 billion and $31.7 billion for the full fiscal year. However, it revised its net (loss) income outlook to a range of $(80) million to $(55) million, accounting for costs associated with exiting a customer contract and optimizing its distribution network in the Northeast.

Despite these adjustments, UNFI remains confident in its underlying business momentum and strategic initiatives. The company continues to project an adjusted EPS range of $0.70 to $0.90, supported by anticipated benefits from its strategic initiatives and operational efficiencies. Adjusted EBITDA guidance remains unchanged at $550 million to $580 million, reflecting the company’s focus on driving profitability and cash flow generation.

UNFI’s strategic priorities include enhancing its wholesale business, optimizing its distribution network, and expanding its product offerings. The company is also addressing a recent cyber incident, with efforts focused on rapidly restoring capabilities and supporting customers with short-term solutions. As UNFI navigates these challenges, it remains committed to delivering value for its stakeholders and achieving its long-term strategic goals.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.