United Natural Foods, Inc. — Fourth Quarter and Full Year Fiscal 2026 Earnings Summary

Financial Performance

• Net sales decreased 0.7% to $7.6 billion for the fourth quarter of fiscal 2026 compared to $7.7 billion in the prior year period; full year net sales decreased 2.0% to $31.2 billion compared to $31.8 billion.
• Net income for the fourth quarter was $35 million, a turnaround from a net loss of $87 million in the prior year; full year net income was $84 million compared to a net loss of $118 million.
• Adjusted EBITDA increased 48.3% to $172 million in the fourth quarter from $116 million; full year Adjusted EBITDA increased 27.0% to $701 million from $552 million.
• Adjusted EPS was $0.69 for the fourth quarter, compared to an adjusted loss of $0.11; full year Adjusted EPS was $2.65, up from $0.71.
• Net cash provided by operating activities was $197 million in the fourth quarter (up 23.1% from $160 million); full year operating cash flow was $540 million (up 14.9% from $470 million).
• Free cash flow was $80 million in the fourth quarter (down 7.0% from $86 million); full year free cash flow was $323 million (up 35.1% from $239 million).
• Gross profit rate was 13.7% in the fourth quarter, up from 13.4% in the prior year period.
• Operating expenses were $984 million (12.9% of sales) in the fourth quarter, down from $1,046 million (13.6% of sales) in the prior year.
• Interest expense, net was $29 million in the fourth quarter, down from $36 million; full year interest expense was $126 million.
• Total outstanding debt, net of cash, was $1.54 billion at the end of the fourth quarter, a decrease of $295 million during fiscal 2026.
• Net leverage ratio was 2.2x as of August 1, 2026.
• Total liquidity was approximately $1.27 billion, consisting of $37 million in cash and $1.23 billion in unused capacity under the asset-based lending facility.

Guidance and Future Outlook

• Fiscal 2027 net sales guidance is $31.2 billion to $31.8 billion.
• Fiscal 2027 net income guidance is $105 million to $145 million.
• Fiscal 2027 Adjusted EPS guidance is $3.00 to $3.50.
• Fiscal 2027 Adjusted EBITDA guidance is $730 million to $780 million, reflecting high single-digit growth and a midpoint $25 million higher than guidance provided at the December 2025 Investor Day.
• Fiscal 2027 free cash flow guidance is $275 million to $325 million.
• Fiscal 2027 capital and cloud implementation expenditures are expected to be approximately $300 million.
• Management expects revenue growth in fiscal 2027 following the cycling of larger optimization actions in the current year.

Business Segments and Product Lines

• Natural segment net sales increased 6.6% in the fourth quarter to $4.26 billion and 7.0% for the full year to $17.1 billion.
• Conventional segment net sales decreased 8.6% in the fourth quarter to $3.12 billion and 11.5% for the full year to $12.97 billion.
• Retail segment net sales decreased 7.9% in the fourth quarter to $528 million and 7.9% for the full year to $2.16 billion.
• The company completed the initial deployment phase of Lean daily management to 44 distribution centers.
• The company delivered on updated fiscal 2026 outlook with year-over-year improvements in fill rates, on-time deliveries, and throughput.
• The company began onboarding additional business from new and existing customers expected to drive growth in fiscal 2027.

Market and Competitive Landscape

• Fourth quarter sales included a 500 basis point adverse impact from planned optimization actions and a 150 basis point headwind from the unwind of short-term project work.
• Fourth quarter sales benefited from lapping the prior year's cybersecurity event.
• The company serves over 30,000 retail locations with natural, organic, specialty, fresh, conventional, and private label products.

Risks and Challenges

• Sales were impacted by planned optimization actions and the unwind of short-term project work.
• The company faces risks related to inflationary and deflationary pressures, intense competition, retailer consolidation, and changes in consumer purchasing habits.
• Risks include dependence on principal customers, low margins, technology system reliability, and supply chain disruptions.
• The company disclosed a cybersecurity incident in June 2025 which impacted prior year results, with $24 million in costs and charges related to the incident included in the current year's reconciliation.

Management Commentary and Tone

• CEO Sandy Douglas stated the company delivered a "strong fiscal year through disciplined execution" of its strategy to add value and improve efficiency.
• Management expressed confidence in the strength of the customer base and commitment to creating long-term shared value.
• Management indicated a focus on helping partners execute growth strategies, accelerating operating momentum, and returning to revenue growth in fiscal 2027.

Other Key Points

• The Board of Directors approved a new stock repurchase program on September 3, 2026, authorizing the repurchase of up to $200 million of shares, replacing the previous program announced in September 2022.
• During the fourth quarter, the company repurchased 420,502 shares at an average price of $49.94 for an aggregate cost of approximately $21 million.
• Capital expenditures were $117 million in the fourth quarter and $217 million for the full year, driven by investments in supply chain and technology.
• Cloud technology implementation expenditures were $17 million in the fourth quarter and $35 million for the full year.
• The company recognized $45 million in insurance recoveries related to the June 2025 cybersecurity incident in the fourth quarter.
• The company serves independent, regional, and national grocers with a scaled, technology-enabled distribution network.