Mar 10, 2026 (MarketLine via COMTEX) --
United Natural Foods, Inc. reported financial results for the 13-week second quarter of fiscal 2026 ended January 31, 2026.
United Natural Foods, Inc. (NYSE: UNFI) (the "Company" or "UNFI") today reported financial results for the second quarter of fiscal 2026 (13 weeks) ended January 31, 2026.
Second Quarter Fiscal 2026 Performance (comparisons to second quarter fiscal 2025)
Net sales decreased 2.6% to $7.9 billion, including a nearly 500 basis point impact from optimization actions
Net income of $20 million; Net income per diluted share (EPS) of $0.31
Adjusted EBITDA(1) increased 23.4% to $179 million
Adjusted EPS(1) increased to $0.62
Net cash provided by operating activities was $283 million; Free cash flow(1) was $243 million
Recent Financial and Operational Summary
Updating outlook to increase all profitability metrics and raise free cash flow, while reducing net sales
Improving effectiveness and efficiency driven by network optimization, continued adoption of lean processes and high impact technology implementation
On-time deliveries and productivity increased compared to prior year quarter
Operating expenses declined nearly 6% and operating expense rate declined approximately 40 basis points
Net leverage ratio(1) declined sequentially to 2.7x, lowest since fiscal 2023; now expect to be ~2.3x by year-end, meaningfully lower than prior target of ≤ 2.5x by year-end fiscal 2026
Repurchased nearly 750,000 shares for approximately $25 million
"In the second quarter, disciplined execution of our value creation strategy delivered growth in profitability and free cash flow ahead of our projections, which enabled us to further strengthen our balance sheet and increase our financial flexibility. With a sharpened focus on our growing $90 billion target addressable market, we are working to help differentiating retailers continue to accelerate profitable growth in a dynamic marketplace," said Sandy Douglas, UNFI's CEO.
Douglas continued, "Looking ahead, our new business pipeline is strong. And we remain committed to continuously improving our effectiveness and efficiency, delivering our updated outlook and strengthening our capabilities to create long-term value for our customers, suppliers, associates, and shareholders."
Second Quarter Fiscal 2026 Summary
Net sales decreased 2.6% in the second quarter of fiscal 2026 compared to the same period in the prior year, and includes an a nearly 500 basis point impact from accretive optimization during the quarter. This was largely driven by an anticipated decrease in conventional sales primarily due to the transition out of the Allentown, Pennsylvania distribution center in the first quarter of fiscal 2026.
Gross profit in the second quarter of fiscal 2026 was $1.0 billion, a decrease of $26 million, or 2.4%, compared to the second quarter of fiscal 2025. The gross profit rate in the second quarter of fiscal 2026 was 13.2% of net sales compared to 13.1% of net sales in the second quarter of fiscal 2025. The gross profit rate was benefitted by network optimization and customer mix as well as higher levels of procurement gains, partially offset by a lower gross margin rate in the Retail segment.
Operating expenses in the second quarter of fiscal 2026 were $972 million, or 12.2% of net sales, compared to $1,031 million, or 12.6% of net sales, in the second quarter of fiscal 2025. The decrease in operating expenses as a percentage of net sales was driven by the benefits from cost saving initiatives, including network optimization and higher levels of distribution center productivity.
Interest expense, net for the second quarter of fiscal 2026 was $32 million compared to $38 million for the second quarter of fiscal 2025 driven by lower average outstanding debt balances.
Effective tax rate for the second quarter of fiscal 2026 was an expense rate of 13.0% on pre-tax income compared to a benefit rate of 60.0% on pre-tax loss for the second quarter of fiscal 2025. The change from the second quarter of fiscal 2025 was primarily driven by the increase in pre-tax income during the second quarter of fiscal 2026.
Net income for the second quarter of fiscal 2026 was $20 million. Net loss for the second quarter of fiscal 2025 was $3 million.
Adjusted EBITDA for the second quarter of fiscal 2026 increased 23.4% to $179 million from $145 million for the second quarter of fiscal 2025.
Net earnings per diluted share was $0.31 for the second quarter of fiscal 2026 compared to net loss per diluted share of $0.05 for the second quarter of fiscal 2025.
Adjusted earnings per share was $0.62 for the second quarter of fiscal 2026 compared to $0.22 in the second quarter of fiscal 2025.
Capital Structure and Financing Overview
Free Cash Flow – Net cash provided by operating activities was $283 million in the second quarter of fiscal 2026 compared to $247 million in the second quarter of fiscal 2025, reflecting higher profitability and more efficient working capital use. The Company made payments of $40 million for capital expenditures in the second quarter of fiscal 2026 compared to $54 million in the second quarter of fiscal 2025, with the lower spending driven by the timing of large-scale capital projects, such as automation. Free cash flow was $243 million in the second quarter of fiscal 2026, compared to free cash flow of $193 million in the second quarter of fiscal 2025.
Net Leverage – Total outstanding debt, net of cash, was $1.68 billion at the end of the second quarter of fiscal 2026, reflecting a decrease of $219 million compared to the end of the first quarter of fiscal 2026 and a decrease of $368 million compared to the end of the second quarter of fiscal 2025. The Net leverage ratio was 2.7x as of January 31, 2026.
Liquidity – As of January 31, 2026, total liquidity was approximately $1.34 billion, consisting of $52 million in cash, plus the unused capacity of approximately $1.29 billion under the Company's asset-based lending facility.
Repurchase program – During the second quarter of 2026, the Company repurchased 742,622 shares at an average price of $33.66 for an aggregate cost of approximately $25 million.
Conference Call and Webcast
The Company's second quarter fiscal 2026 conference call and audio webcast will be held today, Tuesday, March 10, 2026 at 8:30 a.m. ET.
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COMTEX_478973178/2227/2026-05-12T01:50:01
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