UNFI Continues to Improve Performance in Q2
For its 13-week second quarter of fiscal 2025 ended Feb. 1, United Natural Foods Inc. (UNFI) reported a net sales increase of 4.9% to $8.2 billion, a net loss of $3 million and a loss per diluted share of 5 cents, while adjusted EBITDA rose 13.3% to $145 million and adjusted EPS increased to 22 cents.
Among its recent actions, UNFI noted the expansion of its work to bolster partnership and value creation for customers and suppliers; that it had completed the closure of its Fort Wayne, Ind., distribution center in February; and that the previously revealed product-centered realignment of its wholesale business was driving further specialization and streamlining. Based on its performance, the company raised its FY25 outlook for all metrics other than capital and cloud spending for a second consecutive quarter.
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“During the second quarter, we delivered solid sales growth and our sixth consecutive quarter of sequentially improving adjusted EBITDA,” observed UNFI CEO Sandy Douglas. “We also continued to execute against our multiyear strategic plan focused on creating sustainable value for our customers and suppliers while enhancing our profitability and free cash flow generation and reducing net leverage. Our continued positive volume trends serve as an indicator of the strength of our customer base and the unique role UNFI plays in the food distribution supply chain.”
Added Douglas: “As we look to the second half of the fiscal year, we remain focused on further execution of our plan and identifying new opportunities to bring increasing value while delivering our updated outlook and continuing to deleverage our balance sheet.”
According to UNFI, its net sales increase in Q2 of fiscal 2025 was primarily driven by a 3% increase in wholesale unit volumes, including the benefit of new business with existing and new customers, as well as inflation. This performance was led by natural product growth.
Gross profit in Q2 of fiscal 2025 was $1.1 billion, an increase of $37 million, or 3.6%, versus the year-ago period, while the gross profit rate in Q2 of fiscal 2025 was 13.1% of net sales compared with 13.3% of net sales in Q2 of fiscal 2024. The company attributed the decrease in the gross profit rate mainly to lower product margin rates and business mix, partly offset through supplier programs, lower shrink and a higher retail gross margin rate.
UNFI managed to narrow its net loss for Q2 of fiscal 2025 from the year-ago period’s $15 million, while its net less per diluted share decreased from 25 cents in Q2 fiscal 2024. Adjusted EPS for Q2 fiscal 2025 rose 15 cents from the year ago period.
Providence, R.I.-based UNFI delivers a wide variety of products to more than 30,000 customer locations throughout North America, including natural product superstores, independent retailers, conventional supermarket chains, e-commerce retailers and foodservice customers. The largest publicly traded grocery distributor in America, the company is No. 22 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
