United Natural Foods reported fiscal fourth-quarter net sales of $7.6 billion, down 0.7% year over year, while significantly improving profitability and cash generation as supply-chain and operating initiatives gained traction.
Fourth-quarter net income was $35 million, or $0.57 per diluted share, compared with a net loss of $87 million, or $1.43 per share, a year earlier.
Adjusted EBITDA increased 48.3% to $172 million, while adjusted EPS improved to $0.69 from an adjusted loss of $0.11 per share.
For the full fiscal year, UNFI generated $31.2 billion in net sales, down 2%, while net income improved to $84 million from a $118 million loss. Full-year adjusted EBITDA increased 27% to $701 million, adjusted EPS rose to $2.65 from $0.71, and free cash flow increased 35.1% to $323 million.
The fourth-quarter sales decline reflected approximately a 500-basis-point impact from planned optimization actions and a 150-basis-point headwind from completed short-term project work. Those pressures were partly offset by comparison with the prior year’s cybersecurity disruption.
Gross profit increased 1.9% to $1.05 billion, and gross margin improved to 13.7% from 13.4%. Operating expenses decreased to 12.9% of net sales from 13.6%, benefiting from cost-saving initiatives, network optimization and improved distribution-center productivity.
UNFI has completed the initial deployment of Lean daily management across 44 distribution centers, contributing to four consecutive quarters of year-over-year improvements in fill rates, on-time deliveries and throughput. The company has also started onboarding additional business from new and existing customers that is expected to contribute to revenue growth in fiscal 2027.
Net debt declined by $295 million during fiscal 2026, leaving approximately $1.54 billion of debt net of cash and a net leverage ratio of 2.2x at year-end. UNFI had approximately $1.27 billion of liquidity.
Its board also authorized a new $200 million share repurchase program, replacing the previous authorization.
For fiscal 2027, UNFI expects $31.2 billion to $31.8 billion of net sales, $105 million to $145 million of net income, adjusted EBITDA of $730 million to $780 million and adjusted EPS of $3.00 to $3.50. Free cash flow is expected to range from $275 million to $325 million.
KEY QUOTE:
“UNFI delivered a strong fiscal year through disciplined execution of our strategy to add value for customers and suppliers while becoming a more effective and efficient company. We continued strengthening commercial and supply chain capabilities to better serve our partners, while generating solid growth in Adjusted EBITDA and Free cash flow, enabling us to further reduce net debt,” said Sandy Douglas, UNFI’s Chief Executive Officer.
“Our progress demonstrates the strength of our customer base and our commitment to creating long-term, shared value for all stakeholders. In fiscal 2027, we remain focused on helping our partners execute their growth strategies, accelerating our operating momentum, and returning to revenue growth.”
Sandy Douglas, Chief Executive Officer of United Natural Foods
