United Natural Foods (UNFI) Reports Better-than-Expected Q4 Results

United Natural Foods, Inc. (NYSE: UNFI) has released its financial results for the fourth quarter and full fiscal year 2025. This article delves into the company’s performance in the recent quarter, comparing it with expectations, and outlines the guidance for the upcoming fiscal year.

UNIFI: Q4 Revenue Tops Expectations Despite Net Loss

United Natural Foods, Inc. reported net sales of $7.7 billion for the fourth quarter of fiscal 2025, marking a 1.6% increase on a comparable 13-week basis compared to the previous year. The company faced a net loss of $87 million, translating to a loss per diluted share of $1.43. However, the adjusted EPS was -$0.11, which is a significant improvement over the expected EPS of -$0.27. This performance indicates that the company exceeded market expectations, particularly in terms of revenue, which was anticipated at $7.62 billion but ended up slightly higher at $7.7 billion.

Despite the challenges posed by a cyber incident, UNFI managed to maintain its operational efficiency, reflected in its adjusted EBITDA of $116 million, although this was a decrease from the $143 million reported in the same quarter last year. The company’s net cash provided by operating activities stood at $160 million, with free cash flow improving to $86 million, a notable increase from the previous year’s $71 million. These figures highlight UNFI’s ability to generate cash flow and manage expenses effectively even in the face of unforeseen challenges.

Compared to the fourth quarter of fiscal 2024, which benefited from an additional week, the fiscal 2025 quarter’s performance was commendable. Excluding the extra week from the previous year, UNFI’s sales growth of 1.6% indicates a stable demand for its products. The company’s gross profit margin remained steady at 13.5% of net sales, despite the costs associated with the cyber incident. This consistency in gross profit margin underscores the company’s ability to manage costs effectively while sustaining sales growth.

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UNFI Targets Higher EPS, EBITDA, and Cash Flow in FY 2026

Looking ahead, United Natural Foods, Inc. has set forth an optimistic outlook for fiscal 2026, reflecting its strategic focus on accelerating business momentum. The company anticipates net sales to range between $31.6 billion and $32.0 billion, with net income projected to be between $0 and $50 million. This guidance suggests a potential turnaround from the net loss experienced in fiscal 2025, highlighting the company’s confidence in its strategic initiatives.

UNFI’s fiscal 2026 guidance also includes an expected EPS range of $0.00 to $0.80 and an adjusted EPS range of $1.50 to $2.30. The midpoint of the adjusted EBITDA range is expected to reflect an increase of about 20% from fiscal 2025, indicating a robust growth trajectory. The company plans to invest approximately $250 million in capital and cloud implementation expenditures, emphasizing its commitment to enhancing operational efficiency and expanding its technological capabilities.

Furthermore, UNFI aims to achieve a free cash flow of approximately $300 million in fiscal 2026, signaling its focus on generating sustainable cash flow to support growth initiatives and enhance shareholder value. With a net leverage ratio of 3.3x as of August 2, 2025, the company is well-positioned to manage its debt levels while pursuing strategic investments. Overall, UNFI’s guidance for fiscal 2026 reflects its strategic focus on innovation, efficiency, and sustainable growth, positioning the company for long-term success.

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.