On Dec. 2, United Natural Foods Inc. (UNFI) reported first quarter fiscal 2026 results for the 13 weeks ended Nov. 1, with adjusted EBITDA increasing 24.6 percent to $167 million despite a slight decline in net sales.
The Providence, Rhode Island-based wholesaler posted net sales of $7.8 billion, down 0.4 percent from the prior year period. The company reported a net loss of $4 million, or $0.06 per diluted share, while adjusted EPS increased to $0.56.
“We started fiscal 2026 with another quarter of solid execution and continued progress in delivering more value to our customers and suppliers as we strengthen effectiveness and efficiency,” said Sandy Douglas, UNFI’s CEO. “Our network optimization is proceeding ahead of schedule, and the benefits of recent supply chain investments, coupled with process improvements, is enabling us to strengthen service levels and increase throughput.”
Natural Segment Growth Offsets Conventional Decline
Growth in the natural products segment, up 11 percent year over year, largely offset declines in conventional sales. The conventional segment fell approximately 12 percent, primarily due to the company’s planned transition out of its Allentown, Pennsylvania, distribution center and strategic store closures in its retail operations.
Gross profit for the quarter reached $1.1 billion, an increase of $13 million, or 1.3 percent, compared to the first quarter of fiscal 2025. The gross profit rate improved to 13.4 percent of net sales from 13.2 percent, driven by network optimization, customer mix, supplier programs and higher procurement gains.
Operating expenses decreased to $996 million, or 12.7 percent of net sales, compared to $1.015 billion, or 12.9 percent, in the prior year quarter. The improvement was driven by cost-saving initiatives and higher distribution center productivity.
Supply Chain Investments
UNFI has implemented lean daily management across 34 distribution centers, a sequential increase of six facilities during the quarter. The company also continued its rollout of Relex, an AI-powered demand forecasting and inventory management platform that has improved fill rates and inventory effectiveness.
Free cash flow improved by $105 million compared to last year’s first quarter. The company’s net leverage ratio declined sequentially to 3.2x, the lowest since fiscal 2023.
“As we move further into fiscal 2026, our focus remains on continuing to improve service levels while building tailored solutions and enhanced capabilities to help our customers and suppliers execute their unique growth strategies,” Douglas said.
Fiscal 2026 Outlook
UNFI affirmed its fiscal 2026 outlook, projecting net sales between $31.6 billion and $32 billion, adjusted EBITDA of $630 million to $700 million, and adjusted EPS of $1.50 to $2.30. The company expects capital and cloud implementation expenditures of approximately $250 million and free cash flow of approximately $300 million.
As of Nov. 1, total liquidity was approximately $1.33 billion, consisting of $38 million in cash plus unused capacity of approximately $1.29 billion under the company’s asset-based lending facility.
UNFI is North America’s largest grocery wholesaler, delivering products to more than 30,000 locations including natural product superstores, independent retailers, conventional supermarket chains, e-commerce providers and foodservice customers.
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