Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores are indicators that help investors select stocks likely to outperform the market in the next 30 days, rated from A to F based on value, growth, and momentum characteristics [2][10] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [3] - The Growth Score assesses a company's financial health and future outlook through earnings and sales projections [4] - The Momentum Score identifies optimal times to invest based on price trends and earnings estimate changes [5] - The VGM Score combines all three Style Scores, providing a comprehensive evaluation of stocks based on value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.62% since 1988, significantly outperforming the S&P 500 [8] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for the best chances of high returns [10] Company Spotlight: United Natural Foods (UNFI) - United Natural Foods, Inc. is a leading distributor of natural and organic products in the U.S. and Canada, offering around 250,000 products across various categories [12] - UNFI holds a Zacks Rank of 3 (Hold) with a VGM Score of A and a Momentum Style Score of B, having seen a 10.8% increase in shares over the past four weeks [13] - The company's earnings estimate for fiscal 2025 has been revised upwards, with the Zacks Consensus Estimate increasing by $0.01 to $0.83 per share, and an average earnings surprise of +429.5% [13][14]

Core Viewpoint - United Natural Foods (UNFI) has seen a 4.1% increase in share price over the past month, outperforming the S&P 500, but there are concerns about potential pullbacks leading up to the next earnings release [1] Group 1: Earnings Report and Market Reaction - The consensus estimate for United Natural has shifted downward by 94.71% over the past month, indicating a negative trend in earnings expectations [2] - The stock has received a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [4] Group 2: VGM Scores - United Natural has a strong Growth Score of A, a Momentum Score of B, and a Value Score of A, placing it in the top quintile for investment strategies [3] - The aggregate VGM Score for the stock is A, which is significant for investors not focused on a single strategy [3]

Core Insights - The article discusses the investment potential of UNFI, highlighting its long-term growth prospects and market position [1][2]. Financial Performance - UNFI reported a revenue increase of 5% year-over-year, reaching $27 billion in the last fiscal year [1]. - The company's net income rose to $200 million, reflecting a 10% increase compared to the previous year [1]. Market Position - UNFI holds a significant market share in the grocery distribution sector, positioning itself as a key player among competitors [1]. - The company has expanded its customer base, adding over 1,000 new clients in the past year [1]. Strategic Initiatives - UNFI is focusing on enhancing its supply chain efficiency, which is expected to reduce operational costs by 15% over the next two years [1]. - The company is investing in technology upgrades to improve inventory management and customer service [1].

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving United Natural Foods, Inc. and its officers or directors [1] Group 1: Incident Disclosure - On June 9, 2025, United Natural disclosed unauthorized activity on its IT systems, prompting the activation of its incident response plan and containment measures, which temporarily affected its ability to fulfill and distribute customer orders [3] - Following this disclosure, United Natural's stock price dropped by $4.56 per share, or 10.18%, closing at $23.30 per share on June 10, 2025 [3] Group 2: Legal Context - Pomerantz LLP is recognized as a leading firm in corporate, securities, and antitrust class litigation, with a history of fighting for victims of securities fraud and corporate misconduct [4]

Core Viewpoint - United Natural Foods, Inc. is under investigation for potential securities fraud and unlawful business practices following a cybersecurity incident that affected its operations [1][2]. Group 1: Investigation Details - Pomerantz LLP is investigating claims on behalf of investors of United Natural Foods, focusing on whether the company and its officers engaged in securities fraud or other unlawful practices [1]. - The investigation was prompted by a recent disclosure from United Natural regarding unauthorized activity on its IT systems, which led to the activation of its incident response plan and temporary operational disruptions [2]. Group 2: Stock Market Reaction - Following the announcement of the cybersecurity incident, United Natural's stock price dropped by $4.56 per share, representing a decline of 10.18%, closing at $23.30 per share on June 10, 2025 [2]. Group 3: Firm Background - Pomerantz LLP is recognized as a leading firm in corporate, securities, and antitrust class litigation, with a history of fighting for victims of securities fraud and corporate misconduct [3]. - The firm has a legacy of recovering significant damages for class members over its 80-year history [3].

Group 1 - The analyst has over 15 years of investment experience, focusing on mid-sized hedge funds with assets between $100 million and $500 million [1] - The investment strategy includes medium-term investing in ideas with catalysts for value unlocking or short selling in case of downside catalysts [1] - The analyst has a generalist approach but has significant experience in the industrial, consumer, and technology sectors, where higher conviction investments are typically made [1] Group 2 - There is no current stock, option, or derivative position in any mentioned companies, but a potential long position in UNFI may be initiated within 72 hours [2] - The article expresses the analyst's own opinions and is not compensated for it, aside from Seeking Alpha [2] - Seeking Alpha does not provide recommendations or advice regarding investment suitability for particular investors [3]

Group 1 - United Natural Foods Inc (UNFI) reported fiscal Q3 2025 earnings that exceeded expectations, with a quarterly sales increase of 7.5% year-on-year to $8.06 billion, surpassing the analyst consensus estimate of $7.78 billion, driven by a 4% increase in wholesale unit volumes [1] - The adjusted EPS was 44 cents, beating the analyst consensus estimate of 21 cents [1] - The company reiterated its fiscal 2025 sales guidance of $31.3 billion to $31.7 billion, compared to the analyst consensus of $31.57 billion, and reaffirmed adjusted EPS guidance of 70-90 cents against a consensus estimate of 82 cents [2] Group 2 - United Natural Foods maintained its adjusted EBITDA outlook of $550 million to $580 million and announced the termination of a major supply agreement as part of a strategic pruning to enhance profitability [2] - Following the earnings announcement, shares of United Natural Foods fell 2.1% to trade at $21.67 [3] - Analysts adjusted their price targets for United Natural Foods, with BMO Capital lowering it from $32 to $25, Deutsche Bank from $33 to $24, and UBS from $30 to $26 [6]

Group 1 - A major distributor, United Natural Foods (UNFI), experienced a cyber attack that severely disrupted its logistics system, leading to empty shelves in supermarkets across the U.S. [2] - The attack prompted UNFI to shut down parts of its system to prevent further damage, which directly affected order processing and delivery, resulting in stock shortages at various grocery stores, including Whole Foods [2] - Whole Foods' parent company, Amazon, is working to replenish stock and has apologized to customers for the shortages [2] Group 2 - The incident highlights the vulnerability of the U.S. food supply chain, with UNFI's CEO stating that the company is using "alternative solutions" to maintain some customer services while working to restore its systems [3] - The cyber attack not only impacted retail stores but also affected numerous brand suppliers reliant on UNFI's distribution channels, with suppliers unable to communicate through internal systems [3] Group 3 - Following the attack, UNFI's stock price plummeted over 18% within five days, with an annual decline exceeding 15%, and the company lowered its profit expectations for the year due to the incident [5] - UNFI announced the termination of its partnership with Key Food and the closure of a distribution center in Pennsylvania as part of its response to the attack [5] - The CEO of UNFI emphasized that the company is still assessing the financial impact of the attack but believes it can manage the situation [5]

Core Insights - United Natural Foods, Inc. (UNFI) reported strong third-quarter fiscal 2025 results, with revenues and earnings exceeding expectations and showing year-over-year growth [1][3] - The company has achieved seven consecutive quarters of sequential adjusted EBITDA growth, reflecting effective execution of its multi-year strategy [1][6] Financial Performance - Adjusted earnings per share for Q3 were 44 cents, surpassing the Zacks Consensus Estimate of 24 cents and up from 10 cents in the same quarter last year [3][7] - Net sales increased by 7.5% year over year to $8,059 million, exceeding the Zacks Consensus Estimate of $7,846 million, driven by a 4% rise in wholesale unit volumes and inflation effects [3][7] - Gross profit rose 6.1% year over year to $1,082 million, with a gross margin of 13.4%, a slight contraction from 13.6% in the previous year [5][6] Segment Performance - Revenue from the Natural segment grew 12% to $4,160 million, Conventional sales increased by 2.7% to $3,628 million, and Retail sales saw a 0.4% rise to $573 million [4] Cost and Margin Analysis - Operating expenses were $1,025 million, up from $992 million in the prior year, but as a percentage of sales, they decreased to 12.7% from 13.2% [6] - Adjusted EBITDA reached $157 million, marking a 20.8% increase from $130 million in the same quarter last year [6] Financial Health - Total liquidity stood at $1.49 billion as of May 3, 2025, including nearly $52 million in cash and approximately $1.44 billion in unused capacity under its asset-based lending facility [7] - Free cash flow for Q3 was $119 million, up from $49 million in the prior-year quarter [7] - Total outstanding debt, net of cash, was $1.93 billion, a decrease of $118 million from the previous quarter [8] Future Guidance - For fiscal 2025, UNFI anticipates net sales between $31.3 billion and $31.7 billion, with adjusted EBITDA expected to be between $550 million and $580 million [9][10] - The company projects a net loss of $55 million to $80 million for fiscal 2025, contrasting with earlier expectations of a net loss of $13 million and net earnings of $3 million [9]

Financial Performance - Net sales for the 13-week period ended May 3, 2025, were $8,059 million, an increase of $561 million or 7.5% compared to $7,498 million for the same period in 2024 [126]. - Adjusted EBITDA for the 13-week period ended May 3, 2025, was $157 million, up $27 million or 20.8% from $130 million for the same period in 2024 [126]. - Gross profit for the 13-week period ended May 3, 2025, increased by $62 million or 6.1% to $1,082 million, with a gross profit margin of 13.4% compared to 13.6% in the same period of 2024 [135]. - Operating expenses for the 13-week period ended May 3, 2025, were $1,025 million, an increase of $33 million or 3.3%, representing 12.7% of net sales compared to 13.2% in the same period of 2024 [137]. - Net loss attributable to United Natural Foods, Inc. for the 13-week period ended May 3, 2025, was $7 million, a decrease of $14 million compared to a net loss of $21 million for the same period in 2024 [126]. - The company reported a year-to-date net sales increase of approximately 5.5% for fiscal 2025 compared to fiscal 2024, driven by higher Natural unit volumes and inflation [133]. - Operating income increased by $41 million to $47 million for fiscal 2025 year-to-date, compared to $6 million for fiscal 2024 year-to-date [144]. - Net loss attributable to United Natural Foods, Inc. was $7 million, or $0.12 per diluted common share, for the third quarter of fiscal 2025, down from a net loss of $21 million, or $0.34 per diluted common share, for the same quarter in fiscal 2024 [149]. Cost Management and Efficiency - In the third quarter of fiscal 2025, the company experienced product cost inflation of approximately 2% compared to the same period in fiscal 2024 [112]. - The company is consolidating two distribution centers in the Central region to achieve cost savings and improve customer experience [106]. - The company is focused on optimizing its distribution network to enhance efficiency and minimize future costs [109]. - Retail's Adjusted EBITDA increased by $4 million for the third quarter of fiscal 2025, driven primarily by lower operating expenses [158]. Distribution and Operations - A new distribution center in Manchester, Pennsylvania, with approximately 1.3 million square feet, began operations in the first quarter of fiscal 2025, focusing on natural products [108]. - The company operates 75 grocery stores, including 53 Cub Foods and 22 Shoppers stores, and plans to invest in customer-facing merchandising initiatives and technology [110]. - The company recognized a $118 million right-of-use asset and operating lease liability for a new distribution center in Sarasota, Florida, expected to begin operations in the first half of fiscal 2026 [108]. - The company is realigning its commercial wholesale organization into two product-centered divisions to enhance service to customers and suppliers [100]. Debt and Liquidity - Total liquidity as of May 3, 2025, was $1,494 million, consisting of $1,442 million in unused credit and $52 million in cash [161]. - Total debt decreased by $123 million to $1,962 million as of May 3, 2025, from $2,085 million as of August 3, 2024 [161]. - The company expects to continue replenishing operating assets and paying down debt obligations with internally generated funds [162]. - As of May 3, 2025, the company had $750 million of floating rate notional debt under interest rate swap contracts, with fixed rates ranging from 2.475% to 4.130% [169]. Capital Expenditures and Investments - Capital expenditures for fiscal 2025 year-to-date were $157 million, a decrease of $60 million compared to $217 million for fiscal 2024 year-to-date [171]. - Cloud technology implementation expenditures for fiscal 2025 year-to-date were $6 million, down from $28 million in fiscal 2024 year-to-date [171]. - The company expects total capital and cloud implementation spending for fiscal 2025 to be approximately $300 million, focusing on distribution network automation and technology platform investments [172]. Market Risks and Other Considerations - The company’s exposure to market risk includes fluctuations in interest rates and price increases in diesel fuel, with no material changes reported since the last annual report [187]. - The company expects to contribute approximately $51 million to multiemployer pension plans in fiscal 2025, up from $47 million in fiscal 2024 [180]. - The company did not repurchase any shares in fiscal 2025 year-to-date, managing repurchases based on market conditions [184]. - Restructuring, acquisition, and integration related expenses increased to $14 million for the 13-week period ended May 3, 2025, compared to $9 million for the same period in 2024 [139]. - The company experienced a decrease in retail net sales by 2.2% year-to-date due to lower volume and store closures [134]. - The gross profit as a percentage of net sales decreased to 13.3% for fiscal 2025 year-to-date compared to 13.5% for fiscal 2024 year-to-date [136]. - Wholesale net sales increased by 4% in unit volumes, contributing to the overall growth in net sales for fiscal 2025 year-to-date [153]. - Adjusted EBITDA for wholesale increased by $33 million, or 26.4%, for the third quarter of fiscal 2025 compared to the same period in fiscal 2024 [157].