United Natural Foods, Inc.
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ITEM 1. BUSINESS
In this Annual Report on Form 10-K (“Annual Report” or “Report”), unless otherwise specified, references to “United Natural Foods”, “UNFI”, “we”, “us”, “our” or the “Company” mean United Natural Foods, Inc. together with its consolidated subsidiaries. We are a Delaware corporation based in Providence, Rhode Island. We conduct our business through various subsidiaries. Since the formation of our predecessor in 1976, we have grown our business both organically and through acquisitions, which have expanded our distribution network, product selection and customer base.
Our Background
UNFI is a leading distributor of grocery and non-food products, and support services provider to retailers in the United States and Canada. We believe we are uniquely positioned to provide the broadest array of products, programs and services to customers throughout North America. Our diversified customer base includes over 30,000 customer locations ranging from some of the largest grocers in the country to smaller retailers. We offer approximately 230,000 products consisting of national, regional and private label brands grouped into the following main product categories: grocery and general merchandise; perishables; frozen foods; wellness and personal care items; and bulk and foodservice products. We believe we are North America’s premier grocery wholesaler with 52 distribution centers and warehouses representing approximately 30 million square feet of warehouse space. We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in Canada, making us a desirable partner for retailers and consumer product manufacturers. We believe our total product assortment and service offerings are unmatched by our wholesale competitors. We plan to continue to pursue new business opportunities with independent retailers that operate diverse formats, regional and national chains, as well as international customers with wide-ranging needs. Our business is classified into three reportable segments: Natural, Conventional and Retail.
Our Strategic Priorities
We are continually striving to better serve our stakeholders, including our customers, suppliers, associates and communities, and to drive profitable growth and sustainable shareholder value creation. We completed the first fiscal year of the strategy we introduced in October 2024 designed to add value to our customers and suppliers while making the Company more effective and efficient, improving profitability and free cash flow generation and reducing net leverage.
Our strategy is centered on adding value to our customers and suppliers through our expansive assortment of products, programs, insights and services that help them grow and compete. Our strategy is highly focused on actively positioning our Company to add value to a resilient portion of the food retail industry estimated at over $90 billion, which includes many natural, organic, specialty, multi-cultural and differentiated conventional grocery retailers. This refreshed strategy capitalizes on UNFI’s strengths, including our heritage in natural and organic products, our growing, value-added digital and professional services portfolio and our private label Brands+ program.
Simultaneously, we are working to improve free cash flow generation and reduce net leverage by optimizing controllable variables, including through intensified network optimization, reduced capital intensity and optimized cost structure. Our efforts to optimize our distribution network include streamlining our distribution center footprint to create a more responsive and resilient supply chain with a lower level of fixed capital invested. As part of this, we implemented Lean daily management in 28 of our distribution centers in fiscal 2025 to further enhance effectiveness and efficiency, including measuring our success around four key performance metrics – safety, quality, delivery and cost. Additionally, we are prioritizing capital investment needs and reducing the overall level of spending, while continuing to emphasize maintenance and targeted network enablement and technology enhancements. We are also strengthening our working capital management processes as a part of our plan to improve working capital efficiency while driving higher customer satisfaction. Finally, we continue to reduce ongoing operating expenses and better align corporate resources to reflect our updated strategy and customer and supplier-facing work.
In the second quarter of fiscal 2025, we began realigning our commercial wholesale organization into two product-centered business divisions, Conventional Grocery Products (“Conventional”) and Natural, Organic, Specialty & Fresh Products (“Natural”), to enhance service to customers and suppliers through more customized, product- and service-focused commercial teams. Each division has focused sales teams aligned to the unique product and service needs of their customers and are supported by dedicated functional experts in merchandising, operations, procurement and supplier services. In addition, capability centers of excellence in areas such as supply chain, professional and digital services, and private brands work across the divisions to help create customized programs to help customers and suppliers accelerate their growth strategies.
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In the fourth quarter of fiscal 2025, we restructured our internal financial reporting and management processes to align with the new divisional structure. As a result, we realigned our operating and reportable segments based on how the Chief Operating Decision Maker (“CODM”) manages the business, makes decisions about the allocation of resources and assesses segment performance. This new external reporting structure provides insight into each division’s performance in line with how the business is now managed. Prior periods have been recast to conform to the new operating and reportable segments. Refer to Note 16—Business Segments in Part II, Item 8 of this Annual Report for additional information.
We expect to continue to use available capital to re-invest in our business and are committed to improving our free cash flow and financial leverage while reducing outstanding debt.
We believe we can optimize our performance and profitability through our improvement efforts, which we expect will improve our cost structure, increase sales of products and services, and position us to provide tailored, data-driven solutions to help our customers run their businesses more efficiently and expand our customer base.
Our Commitment to Sustainability
Creating a Better Future for Communities
At UNFI, we are committed to delivering value to our shareholders while also fostering long-term sustainability in every aspect of our business. Now in its fifth year, our sustainability strategy, Better for All, is designed to drive meaningful impact outcomes, while simultaneously supporting business efficiencies and creating shared value for our stakeholders.
In January 2025, we published our 14th annual Impact Report, which offers a summary of our sustainability initiatives and impact during fiscal 2024. The report demonstrates our enhanced focus on our six most pressing impact areas: safety, inclusion and well-being, waste, climate, sourcing and community. The report is available on the Investor Relations section of our website and highlights progress toward our goals, including waste reduction, associate engagement and belonging, food donations and food safety. The contents of our Impact Report are not incorporated by reference into or considered to be part of this Annual Report.
Upstream
Our impact begins with the decisions made by our partners and suppliers, well before products reach our distribution centers. We are investing in programs and partnerships that drive product quality and improve supply chain resilience. In fiscal 2023, we launched the UNFI Climate Action Partnership, encouraging suppliers to set credible climate goals. By the end of fiscal 2024, 69 UNFI suppliers had joined. In fiscal 2025, we hosted UNFI’s first in-person Climate Summit with over 80 attendees, including 34 UNFI Climate Action Partnership suppliers, to discuss the business and environmental value of working collectively to reduce shared Scope 3 emissions. UNFI’s Climate Action Hub, which offers suppliers a variety of tools and resources to innovate and scale climate solutions across the food system, hosted its second webinar series featuring industry leaders and exploring climate action topics. We made significant progress on our goal to promote soil health on one million acres by 2030 through UNFI Foundation grants and impact investments, and better quantifying the impact of procuring certified organic products. We also made progress on our Deforestation Policy, transitioning more than 100 of our owned brand SKUs to Roundtable on Sustainable Palm Oil (“RSPO”)-certified palm oil. Aligned with our Animal Welfare Position Statement, we enhanced our tracking of products sold in accordance with higher welfare standards. We believe these policies help us to work more efficiently and effectively with suppliers and vendors in pursuing our shared goals.
Operations
We remain focused on improving operational resilience, supporting the highest level of safety and cultivating a high-performing workforce. Our associates’ safety and well-being are of the utmost importance to us. Our primary goal is to cultivate a culture that values care and safety for all. Through continuous efforts we are dedicated to minimizing the risk of injuries and accidents, providing a safe and thriving environment for everyone. For the fourth year in a row, we received a score of 100 on the Disability Equality Index. Our seven associate-led Belonging and Innovation Groups also continued to cultivate a culture of innovation, learning and impact across the Company.
We continue to invest in projects that reduce operational cost while generating return on investment. In fiscal 2025, we completed construction on our roof-mounted solar array installation at our Riverside, California distribution center, our largest to date. We continued work on our energy efficiency tune ups across our distribution center network, completing seven in fiscal 2025, resulting in both financial and energy savings.
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Downstream
We aim to be responsible community members, from our waste and recycling initiatives to the local organizations our associates support through paid time off to volunteer. In fiscal 2025, we improved implementation of our Reverse Logistics Disposition Reporting (“RLDR”) system at all UNFI distribution centers to enhance inventory visibility and operational efficiency. Through RLDR we are helping reduce food waste and decrease shrink in the distribution centers, resulting in overall cost savings to the Company. The UNFI Foundation, a 501(c)(3) organization, continued to align its strategy with business and impact objectives by implementing new grantmaking programs and supporting inclusive procurement and regenerative agriculture efforts. In fiscal 2025, the UNFI Foundation awarded nearly $1.8 million in grants to nonprofits aligned with its funding priorities.
Our stakeholder-focused sustainability strategy has long been a part of UNFI’s success, unlocking efficiencies through collaboration across the business, and is key to our Company purpose: Better Food. Better Future. We continue to stay focused on the needs of our stakeholders and further prioritize the sustainability initiatives that strengthen the performance of our business.
Our Customers
We maintain long-standing relationships with many of our customers. Our diversified customer base includes over 30,000 customer locations, primarily located across the United States and Canada, which range from large grocery chains to smaller retailers.
One Natural customer, which includes customers under common control, constituted more than 10% of total Net sales in fiscal 2025. We continue to serve our largest customer pursuant to an amended and restated distribution agreement with a term through May 20, 2032.
Our international Net sales primarily reflect UNFI Canada, Inc. (“UNFI Canada”), which represented approximately 1% of our Net sales in fiscal 2025. International business excludes sales transacted in U.S. dollars and shipped internationally, which is an even smaller component of our business.
We also continue to invest in technology and systems with the intent of improving the efficiency of our operations, enhancing the customer experience and growing our services platform, including our eCommerce and innovation businesses. This includes sales to eCommerce companies as well as business-to-business sales to non-traditional customers. Marketplace by UNFI is our business-to-business digital eCommerce solution for emerging brands looking to expand distribution with UNFI customers. Through this virtual marketplace, suppliers gain expedited access to UNFI’s digital infrastructure to promote and sell their products to UNFI’s broad customer base while UNFI customers gain access to an even broader assortment of unique and local items with flexible order sizes and the convenience of ordering from multiple sources online in one place.
Natural and Conventional Wholesale
We organize and operate our wholesale business through two operating segments which represent our product-centered business divisions, as follows:
•Natural, which primarily reflects the wholesale distribution of natural, organic and specialty grocery and non-food products and services and includes the Company’s portfolio of natural owned brands and natural and organic snack food manufacturing business; and
•Conventional, which primarily reflects the wholesale distribution of conventional grocery and non-food products and services and includes the Company’s portfolio of conventional owned brands.
Each of these segments is led by a separate president responsible for product and service strategy, execution, and financial results, and has focused regional sales teams aligned to the unique product and service needs of the customers they serve. Product and service categories include grocery, fresh, private brands, wellness and personal care items, eCommerce and foodservice, as described further below.
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Operations
We have established a national network of strategically located distribution centers utilizing a multi-tiered logistics system. The network includes facilities that carry slow turn or fast turn groceries, perishables, general merchandise and home, health and beauty care products. For financial reporting purposes, intersegment sales from our distribution centers to our own Retail stores are eliminated from our Conventional segment.
We offer wholesale customers a wide variety of food and non-food products, and our own lines of private label products. We also offer a broad array of digital and professional services. As a logistics provider, efficiency is an important customer service measure. We are in the process of optimizing our facilities to implement leading warehouse technology, ranging from radio-frequency devices guiding selectors to mechanized facilities with completely automated order selection for dry groceries that help us deliver aisle-ready pallets to wholesale customers. Deployment of continuous improvement methodologies within our supply chain is focused on delivering labor and cost efficiencies while also improving our ability to more effectively service our customers.
To maintain our market position and improve our operating efficiencies, we seek to continually:
•expand our marketing and customer service programs across regions;
•expand our national purchasing opportunities;
•offer a broader product and value add service selection than our competitors;
•offer operational excellence with high service levels and a higher percentage of on-time deliveries and fill rates than our competitors;
•centralize and streamline general and administrative functions to reduce expenses;
•consolidate systems applications among physical locations and regions; and
•invest in our people, facilities, equipment and technology.
Procurement
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act, that involve substantial risks and uncertainties. In some cases you can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “seek,” “should,” “will” and “would,” or similar words. Statements that contain these words and other statements that are forward-looking in nature should be read carefully because they discuss future expectations, contain projections of future results of operations or of financial positions or state other “forward-looking” information.
Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect. These statements are based on our management’s beliefs and assumptions, which are based on currently available information. These assumptions could prove inaccurate. You are cautioned not to place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to:
•our dependence on principal customers;
•the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures and intense competition, including as a result of the continuing consolidation of retailers and the growth of consumer choices for grocery and consumable purchases;
•our ability to realize the anticipated benefits of our strategic initiatives;
•changes in relationships with our suppliers;
•our ability to develop, implement, operate and maintain, and rely on third parties to operate and maintain, reliable and secure technology systems, and the effectiveness of our business continuity plans in response to an incident impacting our technology systems, such as the unauthorized incident on our technology systems;
•labor and other workforce shortages and challenges;
•the addition or loss of significant customers or material changes to our relationships with these customers;
•our ability to realize anticipated benefits of strategic transactions;
•our ability to continue to grow sales, including of our higher margin natural and organic foods and non-food products;
•our ability to maintain sufficient volume in our Natural and Conventional businesses to support our operating infrastructure;
•our ability to access additional capital;
•increases in healthcare, pension and other costs under our single employer benefit plan and multiemployer benefit plans;
•the potential for additional asset impairment charges;
•our sensitivity to general economic conditions including inflation, tariff policy and changes in disposable income levels and consumer purchasing habits;
•our ability to timely and successfully deploy our warehouse management system throughout our distribution centers and our transportation management system across the Company and to achieve efficiencies and cost savings from these efforts;
•the potential for disruptions in our supply chain or our distribution capabilities from circumstances beyond our control, including due to lack of long-term contracts, severe weather, labor shortages or work stoppages or otherwise;
•the effect of adverse decisions in, or settlement of, litigation or other proceedings to which we are subject;
•moderated supplier promotional activity, including decreased forward buying opportunities;
•union-organizing activities that could cause labor relations difficulties and increased costs;
•changes in tax laws and regulations, and actions by federal, state and local taxing authorities related to the interpretation and application of such tax laws and regulations;
•our ability to maintain food quality and safety; and
•volatility in fuel costs.
You should carefully review the risks described under “Risk Factors” included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended August 2, 2025 (the “Annual Report”), as well as any other cautionary language in this Quarterly Report, as the occurrence of any of these events could have an adverse effect, which may be material, on our business, results of operations, financial condition or cash flows.
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EXECUTIVE OVERVIEW
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto contained in this Quarterly Report on Form 10-Q, the information contained under the caption “Cautionary Note Regarding Forward-Looking Statements,” and the information in the Annual Report.
Business Overview
United Natural Foods, Inc. and its subsidiaries (“UNFI”, “we”, “us”, “our”, the “Company”) is a leading distributor of grocery and non-food products, and support services provider to retailers in the United States and Canada. We believe we are uniquely positioned to provide the broadest array of products, programs and services to customers throughout North America. Our diversified customer base includes over 30,000 customer locations ranging from some of the largest grocers in the country to smaller retailers. We offer approximately 230,000 products consisting of national, regional and private label brands grouped into the following main product categories: grocery and general merchandise; perishables; frozen foods; wellness and personal care items; and bulk and foodservice products. We believe we are North America’s premier grocery wholesaler with 47 distribution centers and warehouses representing approximately 27 million square feet of warehouse space. We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in Canada, making us a desirable partner for retailers and consumer product manufacturers. We believe our total product assortment and service offerings are unmatched by our wholesale competitors. We plan to continue to pursue new business opportunities with independent retailers that operate diverse formats, regional and national chains, as well as international customers with wide-ranging needs. Our business is classified into three reportable segments: Natural, Conventional and Retail.
We are executing against our value creation strategy, which seeks to build capabilities that add value to our customers and suppliers through our portfolio of products, programs, insights and services, while improving our effectiveness and efficiency. We are focused on controllable variables in several key areas: network optimization; managing annual capital spending; and optimizing our cost structure and net working capital position.
We expect to continue to use available capital to re-invest in our business and are committed to improving our free cash flow and financial leverage while reducing outstanding debt.
We believe we can optimize our performance and profitability through our improvement efforts, which we expect will improve our cost structure, increase sales of products and services, and position us to provide tailored, data-driven solutions to help our customers run their businesses more efficiently and expand our customer base.
Trends and Other Factors Affecting Our Business
Our results are impacted by macroeconomic and demographic trends, changes in the food distribution market structure and changes in consumer behavior, which may result from factors beyond our control, including geopolitical events and other events that may trigger economic volatility and negatively impact discretionary income levels and consumer confidence, social trends, changes in the levels of disposable income and the health of the economy in which our customers and stores operate.
The U.S. economy continues to experience economic volatility, which has had, and we expect may continue to have, an impact on consumer confidence and behavior. Consumer spending may continue to be impacted by levels of discretionary income with consumers trading down to a less expensive mix of products for grocery items or buying fewer items. In addition, changes in pricing levels continue to affect our business, and fluctuating commodity, fuel and labor input costs may continue to impact the prices of products we procure from manufacturers. We believe our product mix, which ranges from high-quality natural and organic products to national and local conventional brands, including cost conscious private label brands, positions us to serve a broad cross section of North American retailers and end customers, and may lessen the impact of any further shifts in consumer and industry trends in grocery product mix. We continue to monitor the impacts of the evolving macroeconomic and geopolitical landscape, including rapidly evolving tariff and global trade policies and rising fuel costs, on all aspects of our business.
We are also impacted by changes in food distribution trends affecting our wholesale customers, such as direct store deliveries and other methods of distribution. Our wholesale customers manage their businesses independently and operate in a competitive environment.
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Impact of Product Cost Changes
We experienced a mix of inflation and deflation across product categories during the third quarter of fiscal 2026. In the aggregate across our businesses, including the mix of products, management estimates our businesses experienced product cost inflation of approximately four percent in the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025. Cost inflation and deflation estimates are based on individual like items sold during the periods being compared. Our pricing to our customers is determined at the time of sale, primarily based on the then prevailing vendor listed base cost, and includes discounts we offer to our customers. Changes in merchandising, customer buying habits and competitive pressures create inherent difficulties in measuring the impact of inflation and deflation on Net sales and Gross profit.
In an inflationary environment, rising vendor costs typically increase Net sales for wholesalers, driven by higher vendor prices when other variables such as quantities sold, mix of units sold and vendor promotions are constant. Under the last-in, first out (“LIFO”) method of inventory accounting, product cost increases are recognized within Cost of sales based on expected year-end inventory quantities and costs, which generally has the effect of decreasing Gross profit and the carrying value of inventory during periods of inflation.
Wholesale Distribution Network Optimization
We continue to evaluate our distribution center network to better and more efficiently service customers and suppliers and further optimize performance. In connection with the termination of our supply agreement with a customer in the East region in fiscal 2025, we ceased operations at our Allentown, Pennsylvania distribution center in the first quarter of fiscal 2026 with the remaining volume consolidated into other facilities in the Northeast. Business with this customer in the Northeast accounted for approximately $1 billion in annual sales. The termination enables us to accelerate progress toward our longer-term strategic and three-year financial objectives. Additionally, in the third quarter of fiscal 2026, we consolidated the volume of a distribution center into a nearby facility in the West region and announced the planned consolidation of a facility in the Central region, which is expected to occur in the fourth quarter of fiscal 2026.
We could incur incremental expenses related to any future network realignment, expansion or improvements, including network optimization and automation initiatives. We are working to both minimize future costs and obtain new business to further improve the efficiency of our distribution network.
Retail Operations
We operated 66 grocery stores, including 53 Cub Foods stores and 13 Shoppers stores, as of May 2, 2026. In addition, we supplied another 24 Cub Foods stores operated by our wholesale customers through franchise and minority equity ownership arrangements. We operated 77 pharmacies primarily within the stores we operate and the stores of our franchisees. In addition, we operated 23 “Cub Wine and Spirits” and “Cub Liquor” stores.
We plan to continue to invest in and optimize our Retail segment in areas such as customer-facing merchandising initiatives, physical facilities, technology and operational tools.
Composition of Condensed Consolidated Statements of Operations and Business Performance Assessment
Net Sales
Our Net sales consist primarily of product sales of natural, organic, specialty, produce, and conventional grocery and non-food products, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue. Net sales also include amounts charged by us to customers for shipping and handling and fuel surcharges.
Cost of Sales and Gross Profit
The principal components of our Cost of sales include the amounts paid to suppliers for product sold, plus transportation costs necessary to bring the product to, or move product between, our distribution centers and retail stores, partially offset by consideration received from suppliers in connection with the purchase, transportation or promotion of the suppliers’ products.
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Operating Expenses
Operating expenses include distribution expenses of warehousing, delivery, purchasing, receiving, selecting, and outbound transportation expenses, and selling and administrative expenses. These expenses include salaries and wages, employee benefits, occupancy, insurance, depreciation and amortization expense and share-based compensation expense.
Restructuring, Acquisition and Integration Related Expenses
Restructuring, acquisition and integration related expenses reflect expenses resulting from restructuring activities, including severance costs, facility closure costs, contract exit-related costs, share-based compensation acceleration charges and acquisition and integration related expenses. Integration related expenses include certain professional consulting expenses and incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions.
Loss on Sale of Assets and Other Asset Charges
Loss on sale of assets and other asset charges primarily includes losses (gains) on sales of assets, losses on sales of financial assets, and asset impairments.
Net Periodic Benefit Income, Excluding Service Cost
Net periodic benefit income, excluding service cost reflects the recognition of expected returns on benefit plan assets and interest costs on plan liabilities.
Interest Expense, Net
Interest expense, net includes primarily interest expense on long-term debt, net of capitalized interest, loss on debt extinguishment, interest expense on finance lease obligations, amortization of financing costs and discounts, and interest income.
Adjusted EBITDA
Our Condensed Consolidated Financial Statements are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”). In addition to the GAAP results, we consider certain non-GAAP financial measures to assess the performance of our business and understand underlying operating performance and core business trends, which we use to facilitate operating performance comparisons of our business on a consistent basis over time. Adjusted EBITDA is provided as a supplement to our results of operations and related analysis, and should not be considered superior to, a substitute for or an alternative to, any financial measure of performance prepared and presented in accordance with GAAP. Adjusted EBITDA excludes certain items because they are non-cash items or items that do not reflect management’s assessment of ongoing business performance.
We believe Adjusted EBITDA is useful because it provides additional information regarding factors and trends affecting our business, which are used in the business planning process to understand expected operating performance, to evaluate results against those expectations, and because of its importance as a measure of underlying operating performance, as the primary compensation performance measure under certain compensation programs and plans. We believe Adjusted EBITDA is reflective of factors that affect our underlying operating performance and facilitate operating performance comparisons of our business on a consistent basis over time. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Certain adjustments to our GAAP financial measures reflected below exclude items that may be considered recurring in nature and may be reflected in our financial results for the foreseeable future. These measurements and items may be different from non-GAAP financial measures used by other companies. Adjusted EBITDA should be reviewed in conjunction with our results reported in accordance with GAAP in this Quarterly Report on Form 10-Q.
There are significant limitations to using Adjusted EBITDA as a financial measure including, but not limited to, it not reflecting the cost of cash expenditures for capital assets or certain other contractual commitments, finance lease obligation and debt service expenses, income taxes and any impacts from changes in working capital.
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We define Adjusted EBITDA as a consolidated measure which we reconcile by adding Net income (loss) including noncontrolling interests, less Net income attributable to noncontrolling interests, plus Non-operating income and expenses, including Net periodic benefit income, excluding service cost, Interest expense, net and Other (income) expense, net, plus (Benefit) provision for income taxes and Depreciation and amortization all calculated in accordance with GAAP, plus adjustments for Share-based compensation, non-cash LIFO charge or benefit, Restructuring, acquisition and integration related expenses, Goodwill impairment charges, Loss (gain) on sale of assets and other asset charges, certain legal charges and gains, and certain other non-cash charges or other items, as determined by management.
Assessment of Our Business Results
The following table sets forth a summary of our results of operations and Adjusted EBITDA for the periods indicated.
| 13-Week Period Ended | 39-Week Period Ended | |||||||||||||||||||||||||||||||
| (in millions) | May 2, 2026 | May 3, 2025 | Change | May 2, 2026 | May 3, 2025 | Change | ||||||||||||||||||||||||||
| Net sales | $ | 7,723 | $ | 8,059 | $ | (336) | $ | 23,510 | $ | 24,088 | $ | (578) | ||||||||||||||||||||
| Cost of sales | 6,674 | 6,977 | (303) | 20,364 | 20,896 | (532) | ||||||||||||||||||||||||||
| Gross profit | 1,049 | 1,082 | (33) | 3,146 | 3,192 | (46) | ||||||||||||||||||||||||||
| Operating expenses | 954 | 1,025 | (71) | 2,922 | 3,071 | (149) | ||||||||||||||||||||||||||
| Restructuring, acquisition and integration related expenses | 10 | 14 | (4) | 40 | 35 | 5 | ||||||||||||||||||||||||||
| Loss on sale of assets and other asset charges | 19 | 28 | (9) | 42 | 39 | 3 | ||||||||||||||||||||||||||
| Operating income | 66 | 15 | 51 | 142 | 47 | 95 | ||||||||||||||||||||||||||
| Net periodic benefit income, excluding service cost | (6) | (5) | (1) | (18) | (15) | (3) | ||||||||||||||||||||||||||
| Interest expense, net | 31 | 36 | (5) | 97 | 110 | (13) | ||||||||||||||||||||||||||
| Other (income) expense, net | (1) | — | (1) | 7 | (3) | 10 | ||||||||||||||||||||||||||
| Income (loss) before income taxes | 42 | (16) | 58 | 56 | (45) | 101 | ||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 9 | (9) | 18 | 7 | (16) | 23 | ||||||||||||||||||||||||||
| Net income (loss) including noncontrolling interests | 33 | (7) | 40 | 49 | (29) | 78 | ||||||||||||||||||||||||||
| Less net income attributable to noncontrolling interests | — | — | — | — | (2) | 2 | ||||||||||||||||||||||||||
| Net income (loss) attributable to United Natural Foods, Inc. | $ | 33 | $ | (7) | $ | 40 | $ | 49 | $ | (31) | $ | 80 | ||||||||||||||||||||
Adjusted EBITDA | $ | 183 | $ | 157 | $ | 26 | $ | 529 | $ | 436 | $ | 93 | ||||||||||||||||||||
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The following table reconciles Net income (loss) including noncontrolling interests to Adjusted EBITDA:
| 13-Week Period Ended | 39-Week Period Ended | |||||||||||||||||||||
| (in millions) | May 2, 2026 | May 3, 2025 | May 2, 2026 | May 3, 2025 | ||||||||||||||||||
| Net income (loss) including noncontrolling interests | $ | 33 | $ | (7) | $ | 49 | $ | (29) | ||||||||||||||
Adjustments to net income (loss) including noncontrolling interests: | ||||||||||||||||||||||
| Less net income attributable to noncontrolling interests | — | — | — | (2) | ||||||||||||||||||
Net periodic benefit income, excluding service cost | (6) | (5) | (18) | (15) | ||||||||||||||||||
| Interest expense, net | 31 | 36 | 97 | 110 | ||||||||||||||||||
| Other (income) expense, net | (1) | — | 7 | (3) | ||||||||||||||||||
| Provision (benefit) for income taxes | 9 | (9) | 7 | (16) | ||||||||||||||||||
| Depreciation and amortization | 74 | 81 | 225 | 242 | ||||||||||||||||||
| Share-based compensation | 18 | 10 | 45 | 28 | ||||||||||||||||||
| LIFO charge (benefit) | 8 | (5) | 18 | 5 | ||||||||||||||||||
Restructuring, acquisition and integration related expenses(1) | 10 | 14 | 40 | 35 | ||||||||||||||||||
Loss on sale of assets and other asset charges(2) | 19 | 28 | 42 | 39 | ||||||||||||||||||
Business transformation costs(3) | 7 | 14 | 24 | 40 | ||||||||||||||||||
Cybersecurity incident(4) | (19) | — | (18) | — | ||||||||||||||||||
Other adjustments(5) | — | — | 11 | 2 | ||||||||||||||||||
| Adjusted EBITDA | $ | 183 | $ | 157 | $ | 529 | $ | 436 | ||||||||||||||
(1)Fiscal 2026 primarily reflects distribution center and store closure charges, adjustments to previously recorded multiemployer pension plan withdrawal liabilities and costs associated with certain employee severance and other employee separation costs. Fiscal 2025 primarily reflects costs associated with certain employee severance and other employee separation costs, outsourcing certain corporate functions under restructuring initiatives and distribution center and store closure charges. See Notes to Condensed Consolidated Financial Statements for additional information.
(2)Fiscal 2026 primarily includes a $14 million non-cash asset impairment charge in the third quarter of fiscal 2026 related to the decision to close a leased retail store location, $5 million in non-cash impairment charges in the second quarter of fiscal 2026 related to the decision to discontinue operations at certain distribution centers, warehouses or offsite storage facilities, a $10 million non-cash asset impairment charge in the first quarter of fiscal 2026 related to the decision to close certain retail store locations and losses on the sales of receivables under the accounts receivable monetization program. Fiscal 2025 primarily includes a $24 million non-cash asset impairment charge related to a distribution center in our East region and losses on the sales of receivables under the accounts receivable monetization program. See Notes to Condensed Consolidated Financial Statements for additional information.
(3)Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, which are included within Operating expenses in the Condensed Consolidated Statements of Operations.
(4)Fiscal 2026 includes insurance recoveries and costs and charges related to the Cybersecurity Incident. See Notes to Condensed Consolidated Financial Statements for additional information.
(5)Fiscal 2026 reflects accrued costs related to an agreement to settle certain legal proceedings, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. Fiscal 2025 reflects certain estimated accrued legal-related costs, which are included within Operating expenses in the Condensed Consolidated Statements of Operations.
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RESULTS OF OPERATIONS
Net Sales
The following table sets forth Net sales by segment. Prior periods have been recast to conform to our current period presentation. Refer to Note 14—Business Segments in Part 1, Item 1 of this Quarterly Report on Form 10-Q for our category definitions and additional information.
13-Week Period Ended | Change | 39-Week Period Ended | Change | |||||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | May 2, 2026 | May 3, 2025 | $ | % | May 2, 2026 | May 3, 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||
| Natural | $ | 4,342 | $ | 4,160 | $ | 182 | 4.4 | % | $ | 12,872 | $ | 12,019 | $ | 853 | 7.1 | % | ||||||||||||||||||||||||||||||
| Conventional | 3,136 | 3,628 | (492) | (13.6) | % | 9,853 | 11,253 | (1,400) | (12.4) | % | ||||||||||||||||||||||||||||||||||||
| Retail | 515 | 573 | (58) | (10.1) | % | 1,629 | 1,769 | (140) | (7.9) | % | ||||||||||||||||||||||||||||||||||||
| Eliminations | (270) | (302) | 32 | 10.6 | % | (844) | (953) | 109 | 11.4 | % | ||||||||||||||||||||||||||||||||||||
| Total net sales | $ | 7,723 | $ | 8,059 | $ | (336) | (4.2) | % | $ | 23,510 | $ | 24,088 | $ | (578) | (2.4) | % | ||||||||||||||||||||||||||||||
N/M - not meaningful
Third Quarter
Our Net sales for the third quarter of fiscal 2026 decreased approximately 4.2% from the third quarter of fiscal 2025. The decrease in Net sales was primarily driven by a decrease in Conventional and Retail Net Sales, partially offset by an increase in Natural Net Sales.
Natural Net sales for the third quarter of fiscal 2026 increased approximately 4.4% from the third quarter of fiscal 2025. The increase was primarily driven by a low single digit increase from inflation and a less than 1% increase in unit volumes, including new business with existing and new customers, offset by a decrease in volume from anticipated lost sales related to the unwind of short-term project-based work.
Conventional Net sales for the third quarter of fiscal 2026 decreased approximately 13.6% from the third quarter of fiscal 2025. The decrease was driven by a mid-teens decline in unit volumes including the high single digit impact from network optimization actions, largely driven by the transition out of our Allentown, Pennsylvania distribution center completed in the first quarter of fiscal 2026, partially offset by a low single digit increase from inflation.
Retail Net sales for the third quarter of fiscal 2026 decreased approximately 10.1% from the third quarter of fiscal 2025. The decrease was primarily driven by store closures and a 4.4% decrease in identical store sales from lower volume.
Lower eliminations of Net sales for the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025 were primarily due to a decrease in Conventional to Retail sales, which are eliminated upon consolidation.
Year-to-Date
Our Net sales for fiscal 2026 year-to-date decreased approximately 2.4% from fiscal 2025 year-to-date. The decrease in Net sales was primarily driven by a decrease in Conventional and Retail Net Sales, partially offset by an increase in Natural Net Sales.
Natural Net sales for fiscal 2026 year-to-date increased approximately 7.1% from fiscal 2025 year-to-date. The increase was primarily driven by a low single digit increase in unit volumes, including new business with existing and new customers, as well as a low single digit increase from inflation.
Conventional Net sales for fiscal 2026 year-to-date decreased approximately 12.4% from fiscal 2025 year-to-date. The decrease was driven by a mid-teens decline in unit volumes including the high single digit impact from network optimization actions, largely driven by the transition out of our Allentown, Pennsylvania distribution center completed in the first quarter of fiscal 2026, partially offset by a low single digit increase from inflation.
Retail Net sales for fiscal 2026 year-to-date decreased approximately 7.9% from fiscal 2025 year-to-date. The decrease was primarily driven by store closures and a 3.1% decrease in identical store sales from lower volume.
34
Lower eliminations of Net sales for fiscal 2026 year-to-date as compared to fiscal 2025 year-to-date were primarily due to a decrease in Conventional to Retail sales, which are eliminated upon consolidation.
Cost of Sales and Gross Profit
Our Gross profit decreased $33 million, or 3.0%, to $1,049 million for the third quarter of fiscal 2026, from $1,082 million for the third quarter of fiscal 2025. Our Gross profit as a percentage of Net sales increased to 13.6% for the third quarter of fiscal 2026 compared to 13.4% for the third quarter of fiscal 2025. The increase in gross profit rate was primarily driven by the positive impact of network optimization actions and customer mix, which were partially offset by a lower margin rate in the Retail segment.
Our Gross profit decreased $46 million, or 1.4%, to $3,146 million for fiscal 2026 year-to-date, from $3,192 million for fiscal 2025 year-to-date. Our Gross profit as a percentage of Net sales increased to 13.4% for fiscal 2026 year-to-date compared to 13.3% for fiscal 2025 year-to-date. The increase in gross profit rate was primarily driven by the positive impact of network optimization actions and customer mix as well as higher levels of procurement gains, which were partially offset by a lower margin rate in the Retail segment and $20 million of charges associated with the previously disclosed Cybersecurity Incident.
Operating Expenses
Operating expenses decreased $71 million, or 6.9%, to $954 million, or 12.4% of Net sales, for the third quarter of fiscal 2026 compared to $1,025 million, or 12.7% of Net sales, for the third quarter of fiscal 2025. The decrease in Operating expenses as a percentage of Net sales was primarily driven by $20 million in cybersecurity insurance proceeds and the benefits from cost saving initiatives, including network optimization actions and higher levels of distribution center productivity that improved labor cost rates.
Operating expenses decreased $149 million, or 4.9%, to $2,922 million, or 12.4% of Net sales, for fiscal 2026 year-to-date compared to $3,071 million, or 12.7% of Net sales, for fiscal 2025 year-to-date. The decrease in Operating expenses as a percentage of Net sales was primarily driven by the benefits from cost saving initiatives, including network optimization actions and higher levels of distribution center productivity that improved labor cost rates, as well as $40 million in cybersecurity insurance recoveries, partially offset by higher costs associated with union and other employee benefits.
Restructuring, Acquisition and Integration Related Expenses
Restructuring, acquisition and integration related expenses decreased $4 million to $10 million for the third quarter of fiscal 2026, compared to $14 million for the third quarter of fiscal 2025. The decrease was primarily driven by a decrease in costs associated with outsourcing certain corporate functions under restructuring initiatives and certain employee severance and other employee separation costs, partially offset by an increase in closed property charges and costs.
Restructuring, acquisition and integration related expenses increased $5 million to $40 million for fiscal 2026 year-to-date, compared to $35 million for fiscal 2025 year-to-date. The increase was primarily driven by higher closed property charges and costs for fiscal 2026 year-to-date and an adjustment to previously recorded multiemployer pension plan withdrawal liabilities in the first quarter of fiscal 2026, partially offset by a decrease in certain employee severance and other employee separation costs and costs associated with outsourcing certain corporate functions under restructuring initiatives.
Loss on Sale of Assets and Other Asset Charges
Loss on sale of assets and other asset charges decreased $9 million to $19 million for the third quarter of fiscal 2026, from $28 million for the third quarter of fiscal 2025. The third quarter of fiscal 2026 primarily included a $14 million non-cash asset impairment charge related to the decision to close a leased retail store location. The third quarter of fiscal 2025 primarily included a $24 million non-cash asset impairment charge related to the Allentown, Pennsylvania distribution center. The third quarters of fiscal 2026 and 2025 included losses on the sales of receivables under the accounts receivable monetization program.
Loss on sale of assets and other asset charges increased $3 million to $42 million for fiscal 2026 year-to-date, from $39 million for fiscal 2025 year-to-date. Fiscal 2026 year-to-date primarily included $29 million in non-cash asset impairment charges related to decisions to close certain retail store locations and discontinue operations at certain distribution centers, warehouses or offsite storage facilities. Fiscal 2025 year-to-date primarily included a $24 million non-cash asset impairment charge related to the Allentown, Pennsylvania distribution center. Fiscal 2026 and 2025 year-to-date included losses on the sales of receivables under the accounts receivable monetization program.
35
Operating Income
Reflecting the factors described above, Operating income increased $51 million to $66 million for the third quarter of fiscal 2026, compared to Operating income of $15 million for the third quarter of fiscal 2025. The increase in Operating income was primarily driven by a decrease in Operating expenses, Loss on sale of assets and other asset charges and Restructuring, acquisition and integration related expenses, partially offset by a decrease in Gross profit in the third quarter of fiscal 2026, each as described above.
Reflecting the factors described above, Operating income increased $95 million to $142 million for fiscal 2026 year-to-date, compared to Operating income of $47 million for fiscal 2025 year-to-date. The increase in Operating income was primarily driven by a decrease in Operating expenses, partially offset by a decrease in Gross profit and an increase in Restructuring, acquisition and integration related expenses and Loss on sale of assets and other asset charges in fiscal 2026 year-to-date, each as described above.
Interest Expense, Net
| 13-Week Period Ended | 39-Week Period Ended | |||||||||||||||||||||||||
| (in millions) | May 2, 2026 | May 3, 2025 | May 2, 2026 | May 3, 2025 | ||||||||||||||||||||||
| Interest expense on long-term debt, net of capitalized interest | $ | 29 | $ | 35 | $ | 92 | $ | 106 | ||||||||||||||||||
| Interest expense on finance lease obligations | — | — | 1 | 1 | ||||||||||||||||||||||
| Amortization of financing costs and discounts | 2 | 2 | 5 | 5 | ||||||||||||||||||||||
| Loss on debt extinguishment | 1 | — | 1 | — | ||||||||||||||||||||||
| Interest income | (1) | (1) | (2) | (2) | ||||||||||||||||||||||
| Interest expense, net | $ | 31 | $ | 36 | $ | 97 | $ | 110 | ||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-06 | Benedict Danielle | Chief Human Resources Officer | Sell | -4,807 | $52.00 | -$249,964 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-09-30 10-K expected by 2026-10-01 (in 111 days)
- ~2026-12-01 10-Q expected by 2026-12-03 (in 173 days)
- ~2027-03-09 10-Q expected by 2027-03-11 (in 271 days)
- ~2027-06-08 10-Q expected by 2027-06-10 (in 362 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-09 8-K Earnings Release; Financial Statements and Exhibits
- 2026-06-09 10-Q Quarterly Report
- 2026-04-02 8-K Material Agreement Entered; Material Financial Obligation
- 2026-03-10 10-Q Quarterly Report
- 2026-03-10 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-17 8-K Officer/Director Change; Shareholder Vote Results; Other Events; Financial Statements and Exhibits
- 2025-12-02 10-Q Quarterly Report
- 2025-12-02 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-01 10-K Annual Report
- 2025-09-30 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-21 8-K Officer/Director Change
- 2025-06-26 8-K Cybersecurity Incident; Regulation FD Disclosure
- 2025-06-10 10-Q Quarterly Report
- 2025-06-10 8-K Earnings Release; Financial Statements and Exhibits
- 2025-06-09 8-K Other Events