Dj United Natural Foods Price Target Raised To $37.00/Share From $36.00 By Wells Fargo

(14:53 GMT) United Natural Foods Price Target Raised to $37.00/Share From $36.00 by Wells Fargo

United Natural Foods, Inc. (UNFI) reported first-quarter fiscal 2026 results, wherein the bottom line improved year over year and beat the Zacks Consensus Estimate. The top line declined year over year and missed the consensus mark.

United Natural reported adjusted earnings of 56 cents per share for the quarter under review, beating the Zacks Consensus Estimate earnings of 39 cents. Also, the bottom line increased from 16 cents reported in the year-earlier quarter.

United Natural Foods, Inc. Price, Consensus and EPS Surprise

United Natural Foods, Inc. price-consensus-eps-surprise-chart | United Natural Foods, Inc. Quote

Net sales decreased 0.4% year over year to $7,840 million, missing the Zacks Consensus Estimate of $7,886 million. The decline was caused by lower conventional sales, primarily due to the transition out of the Allentown, Pennsylvania distribution center and strategic retail store closures. These pressures were partially offset by continued growth in the natural segment.

UNFI’s Quarterly Performance by Division

Natural experienced year-over-year sales growth of 10.5%. The Conventional and retail segments witnessed a year-over-year sales decline of 11.7% and 5.5%, respectively.

Analysis of UNFI’s Costs & Margins

UNFI’s gross profit rose 1.3% year over year to $1,051 million. The gross profit margin of 13.4% expanded 20 basis points (bps) from 13.2% reported in the year-ago quarter. This expansion was driven by benefits from network optimization and a favorable customer mix, as well as stronger supplier program performance and higher procurement gains.

Operating expenses were $996 million compared with $1,015 million in the year-ago quarter. As a percentage of sales, operating expenses were 12.7% compared with 12.9% in the year-ago period. The reduction in operating expenses as a percentage of net sales reflects the benefits of cost-saving initiatives, including improved distribution center productivity.

Adjusted EBITDA came in at $167 million, up 24.6% from $134 million in the year-ago quarter.

UNFI’s Financial Health Snapshot

The company had a total liquidity of $1.33 billion as of Nov. 1, 2025, including cash of nearly $38 million and $1.29 billion under its asset-backed lending facility.

In the first quarter of fiscal 2026, free cash flow used was $54 million compared with $159 million in the prior-year quarter. The reported figure reflects $38 million in net cash used in operating activities, offset by $16 million in capital expenditure.

Total outstanding debt, net of cash, was $1.90 billion at the end of the first quarter of fiscal 2026. The net leverage ratio was 3.2x as of Nov. 1, 2025.

United Natural’s Guidance for FY26

UNFI reaffirmed its fiscal 2026 outlook. For the full year, the company continues to expect net sales between $31.6 billion and $32 billion.

Adjusted EPS is projected to be $1.50 to $2.30, with adjusted EBITDA expected to land between $630 million and $700 million.

The company projects capital and cloud implementation expenditure of around $250 million for fiscal 2026. It anticipates a free cash flow of approximately $300 million for fiscal 2026.

Shares of this Zacks Rank #3 (Hold) company have risen 24.4% in the past three months against the industry’s decline of 7.1%.

Net loss narrowed to $4 million on $7.84 billion in sales, with gross margin and Adjusted EBITDA both improving year-over-year. Natural segment sales grew, while Conventional and Retail segments declined, and the company managed significant restructuring and cybersecurity costs.

Original document: United Natural Foods, Inc. [UNFI] SEC 10-Q Quarterly Report — Dec. 2 2025

United Natural Foods is benefiting from recent supply chain investments and process improvements, which CEO Sandy Douglas says on a call with analysts have strengthened service levels and increased throughout. The wholesale grocery distributor says it recently deployed a new supply chain technology, dubbed Relex, across about half its distribution network. "This solution is helping us partner with our customers and suppliers to make smarter procurement decisions by using an AI-based platform to predict demand, avoid waste and reduce out-of-stock," Douglas says. "It is helping to deliver improved fill rates and inventory effectiveness as we expected, and we anticipate further benefits as we complete the rollout this year." Shares rise 7.6%. (connor.hart@wsj.com)