Core Insights - United Natural Foods, Inc. (UNFI) is set to release its first-quarter earnings results on December 2, with analysts expecting earnings of 40 cents per share, a significant increase from 16 cents per share in the same period last year [1] - The consensus estimate for quarterly revenue is $7.91 billion, slightly up from $7.87 billion a year earlier [1] Recent Performance - On September 30, United Natural Foods reported better-than-expected fourth-quarter results and provided FY26 EPS guidance above estimates [2] - Following the announcement, shares rose by 1.5%, closing at $37.63 [2] Analyst Ratings and Price Targets - Goldman Sachs maintained a Neutral rating and increased the price target from $29 to $40 [4] - UBS also maintained a Neutral rating, raising the price target from $29 to $42 [4] - Wells Fargo kept an Equal-Weight rating and increased the price target from $26 to $36 [4] - BMO Capital maintained an Outperform rating, boosting the price target from $36 to $48 [4] - Deutsche Bank maintained a Hold rating but cut the price target from $33 to $24 [4]

Industry Overview - The health and fitness landscape has evolved into a powerful global force, driven by a shift towards healthier lifestyles, with consumers seeking nutritious eating habits and organized workout plans [2] - Major technology companies like Apple and Amazon are accelerating this transformation by integrating fitness and healthcare solutions, creating a seamless blend of wellness in daily routines [3] - The global health and wellness market is projected to reach $11 trillion by 2034, growing at a 5.4% CAGR from 2025, supported by preventive health efforts and employer wellness initiatives [4] Company Insights - United Natural Foods focuses on distributing natural and organic food products, catering to consumers prioritizing wellness, with a diverse catalog that includes grocery, supplements, and personal care items [7] - The Beachbody Company offers a comprehensive digital fitness platform with a vast library of workout videos and nutrition solutions, positioning itself as a holistic health provider [11] - Life Time Group Holdings has transformed into a wellness-driven brand, offering high-end fitness amenities and expanding its services to include nutrition-focused offerings and recovery spaces [14][15] - Peloton Interactive has shifted from a hardware-first strategy to a balanced mix of connected devices and subscription services, enhancing its digital fitness ecosystem [19][20]

Core Insights - Wall Street continues its strong performance in 2025, but the consumer staples sector is lagging, with the Consumer Staples Select Sector SPDR (XLP) down 1.7% year to date, the only sector in the S&P 500 Index in the red [1][2][8] Consumer Staples Sector Overview - The consumer staples sector is facing challenges due to rising living costs, which are impacting household budgets and leading to cautious consumer spending, resulting in margin compression [2] - Despite the overall sector's poor performance, five consumer staples stocks are highlighted for their potential to perform well in 2026: PepsiCo Inc. (PEP), Monster Beverage Corp. (MNST), Lamb Weston Holdings Inc. (LW), United Natural Foods Inc. (UNFI), and Ollie's Bargain Outlet Holdings Inc. (OLLI) [3][8] Company-Specific Insights PepsiCo Inc. (PEP) - PepsiCo, with a Zacks Rank of 2, is benefiting from strong beverage performance in international markets, particularly in Mexico, Brazil, Germany, and Thailand [6] - The company is focused on localizing flavors, expanding price-pack options, and enhancing productivity through digital transformation, with expected revenue and earnings growth rates of 3.3% and 5.6% for next year [7][9] Monster Beverage Corp. (MNST) - Monster Beverage, ranked 1, is capitalizing on the expanding energy drinks market, with a 16% sales growth in its energy drinks segment in Q3 2025 [10][11] - The company has expected revenue and earnings growth rates of 9.3% and 12.8%, respectively, for next year, supported by improving margins and easing supply-chain pressures [11] Lamb Weston Holdings Inc. (LW) - Lamb Weston, also ranked 1, is driving growth through its "Focus to Win" strategy, emphasizing operational efficiency and innovation [12] - The company expects a 4.1% volume increase year over year in fiscal 2026, with revenue and earnings growth rates of 1.3% and -6.3% for the current year [13] United Natural Foods Inc. (UNFI) - United Natural Foods, ranked 1, is showing strong growth driven by demand for natural and organic products, with strategic initiatives enhancing efficiency and service quality [14][15] - The company has an expected revenue growth rate of 2.5% and over 100% earnings growth for the current year, with a significant 24.2% improvement in earnings estimates over the last 60 days [16] Ollie's Bargain Outlet Holdings Inc. (OLLI) - Ollie's, with a Zacks Rank of 2, is leveraging a cost-effective business model and strategic investments to support growth, expecting a 16.3% revenue increase and 16.2% adjusted earnings per share improvement in fiscal 2025 [17][18] - The company plans to expand its store network significantly, aiming for over 1,300 stores, with a consistent CAGR of 9.5% from fiscal 2020 to fiscal 2024 [19][20]

Market Performance - Major U.S. indexes showed mixed performance last week, with the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average declining by 2.7%, 1.4%, and 0.5% respectively [1] - Investors are shifting focus from high-valuation technology and AI stocks to more defensive sectors due to market volatility [1] Federal Reserve and Economic Data - The end of a 43-day government standoff has reduced political risks, but delays in key economic data releases have created uncertainty for the Federal Reserve and investors [2] - The Fed is balancing economic growth and inflation, with inflation remaining above the 2% target and a resilient labor market casting doubt on December rate cut expectations [2] Zacks Research Performance - Zacks Research has provided guidance that led to significant stock performance, with Macy's shares increasing by 14.9% since its upgrade to Zacks Rank 1 on September 18, outperforming the S&P 500's 2.2% increase [3][4] - Fresnillo plc also saw a 7.2% return since its upgrade to Zacks Rank 1 on September 19, compared to the S&P 500's 1.8% increase [4] Zacks Model Portfolio Returns - A hypothetical portfolio of Zacks Rank 1 stocks returned +8.64% in 2025 through September 1, outperforming the S&P 500's +7.60% [4] - The Zacks Model Portfolio has outperformed the S&P 500 index by over 12 percentage points since 1988, with an annualized average return of +23.8% compared to +11.3% for the S&P 500 [5] Specific Stock Performances - United Natural Foods, Inc. (UNFI) shares increased by 32.4% after its Zacks Recommendation was upgraded to Outperform [7] - Caterpillar Inc. (CAT) gained 35.9% over the past 12 weeks, while CACI International Inc. (CACI) returned 20.1% during the same period [10] Earnings Certain Admiral Portfolio (ECAP) - The ECAP returned -1.30% in Q3 2025, underperforming the S&P 500's +8.1% gain, and +2.72% year-to-date compared to the S&P 500's +14.84% [15] - The portfolio aims to minimize capital loss by holding shares of companies with a proven track record of earnings stability [16] Earnings Certain Dividend Portfolio (ECDP) - Johnson & Johnson (JNJ) returned 10.9% over the past 12 weeks, while UnitedHealth Group (UNH) increased by 5.9% [18] - The ECDP returned -0.01% in Q3 2025, underperforming the S&P 500's +8.1% gain [20] Top 10 Stock Portfolio - MasTec, Inc. (MTZ) has jumped 41.2% year-to-date, outperforming the S&P 500's 14.7% increase [22] - The Top 10 portfolio has produced a cumulative return of +2,553.1% since 2012, significantly outperforming the S&P 500's +545.2% [24]

Group 1 - United Natural Foods (UNFI) is a notable stock within the Consumer Staples sector, currently outperforming the sector with a year-to-date return of 41.4% compared to the sector average of -1% [4] - UNFI holds a Zacks Rank of 1 (Strong Buy), indicating a strong earnings outlook and positive analyst sentiment, with a 23% increase in the consensus estimate for full-year earnings over the past 90 days [3][4] - The Consumer Staples sector is ranked 14 within the Zacks Sector Rank, which evaluates the strength of individual sector groups based on the average Zacks Rank of stocks [2] Group 2 - UNFI is part of the Food - Miscellaneous industry, which includes 42 companies and is currently ranked 182 in the Zacks Industry Rank, with this group experiencing a loss of about 13.6% year-to-date [6] - In contrast, Village Farms (VFF), another stock in the Consumer Staples sector, has achieved a remarkable year-to-date return of 363% and also holds a Zacks Rank of 1 (Strong Buy) [5][7] - The Consumer Products - Staples industry, which includes Village Farms, has 36 stocks and is ranked 174, with a year-to-date decline of -12.3% [7]

Industry Overview - The Zacks Food-Miscellaneous industry is experiencing challenges due to inflation, cautious consumer spending, and soft foodservice demand, leading to volume pressures and increased competition from private labels [1][4] - Companies in this industry manufacture and sell a variety of food products, including cereals, sauces, bakery items, and organic foods, primarily through wholesalers, retailers, and foodservice channels [3] Market Trends - The food industry is under pressure from sticky inflation and cautious consumer spending, resulting in a shift towards value offerings and private-label products [4] - Companies are responding to these challenges by enhancing value-driven marketing, promotions, and offering affordable pack sizes to maintain market share [4] Cost and Margin Management - Cost inflation is impacting profitability, with persistent volatility in input costs, labor, and packaging compressing margins despite previous pricing actions [5] - Companies are focusing on productivity initiatives, including supply-chain optimization and manufacturing efficiency, to improve cost leverage and recover margins [5] Brand and Innovation - Strong brand equity is crucial in a competitive market, with leading companies investing in health-forward product development to meet evolving consumer preferences [6] - Demand for high-protein, low-sugar, and functional nutrition products is driving innovation and portfolio modernization, which helps strengthen customer loyalty and enhance pricing power [6] Industry Performance - The Zacks Food-Miscellaneous industry ranks 185, placing it in the bottom 23% of over 250 Zacks industries, indicating weak near-term prospects [7][8] - The industry has underperformed the S&P 500, declining 17.5% over the past year compared to the S&P 500's growth of 16.7% [9] Valuation - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 14.65X, lower than the S&P 500's 23.74X and the sector's 16.49X [12] Company Highlights - **Lamb Weston**: This company has a Zacks Rank of 1 (Strong Buy) and is focusing on operational efficiency and customer engagement, with a 9.4% increase in EPS estimates to $3.14 [15][16] - **United Natural Foods**: Also a Zacks Rank 1 company, it is experiencing growth in its natural segment, with a 9% increase in the fourth quarter of fiscal 2025 and a rise in EPS estimates from $1.53 to $1.90 [19][20] - **The J.M. Smucker**: This Zacks Rank 2 company is leveraging its diverse brand portfolio and strong coffee unit, with a slight increase in EPS estimates to $9.13 [21][22]

Core Points - United Natural Foods, Inc. (UNFI) will release its financial results for the first quarter of fiscal 2026 on December 2, 2025 [1] - The conference call to discuss the results will take place at 8:30 a.m. ET on the same day [1][2] - UNFI is a leading grocery wholesaler in North America, serving over 30,000 locations with a wide variety of products [3] Financial Performance - For the fourth quarter of fiscal 2025, UNFI reported net sales of $7.7 billion, reflecting a growth of 1.6% compared to the same period in fiscal 2024 [6] - The company experienced a net loss of $87 million, translating to a loss per diluted share (EPS) of $1.43 [6] - Adjusted EBITDA for the fourth quarter was $116 million, with an adjusted EPS of $(0.11) [6]

Industry Overview - The natural foods industry is transitioning from a niche market to a mainstream powerhouse, driven by increased consumer awareness regarding personal health and environmental impact [2] - Consumers are prioritizing clean eating, ethical sourcing, and sustainability, leading to a preference for natural and organic products [2][3] - Government actions, including stricter food labeling regulations, are supporting this shift away from heavily processed foods [3] Market Growth and Trends - The global healthy foods market is projected to reach $2.26 trillion by 2035, indicating significant growth potential [5] - Companies are investing in plant-based alternatives, functional foods, and sustainable farming technologies to meet evolving consumer demands [5] - E-commerce is enhancing accessibility to natural foods, allowing consumers to easily shop for organic and gluten-free products [5] Key Companies Vital Farms, Inc. (VITL) - Vital Farms focuses on transparency and ethical farming practices, resonating with consumers who value sustainability and high-quality nutrition [7] - The company is scaling its supply chain to meet rising demand, working with over 500 family farms and managing more than 9 million hens [8] - Vital Farms aims for $1 billion in net revenues by 2027, supported by retail expansion and innovative marketing strategies [9] United Natural Foods, Inc. (UNFI) - UNFI is the leading distributor of natural, organic, and specialty foods, with a focus on creating long-term value in a $90 billion market [10] - The company’s Natural segment grew by 9% in fiscal 2025, outpacing broader market trends [11] - UNFI is enhancing its technological capabilities to support supplier success and improve product availability [12] Conagra Brands, Inc. (CAG) - Conagra is modernizing its portfolio to align with consumer demand for natural and high-quality foods, particularly in frozen and snack categories [13] - The company is introducing more natural, high-protein, and minimally processed meals, with recent product launches aimed at attracting health-conscious consumers [14] - Conagra's strategy includes blending convenience with quality ingredients to sustain growth in the natural and organic segments [15]

Industry Overview - Health and fitness companies are experiencing consistent demand due to increasing global awareness of health issues and the significance of physical fitness, driven by rising lifestyle-related diseases and a focus on preventive healthcare [1][10] - The industry's growth is supported by diverse revenue streams, including subscriptions, product sales, and services, making it appealing to long-term investors [2] Company Highlights Doximity Inc. (DOCS) - Doximity is a cloud-based digital platform for medical professionals in the U.S., covering over 80% of U.S. doctors and 60% of advanced practitioners, with a 95% subscription-based revenue model [7] - The company is expanding in a total addressable market of $18.55 billion and has integrated generative AI, enhancing product stickiness and physician utility [8] - Doximity's AI tools have seen a 5x usage growth year-over-year, supporting physicians in managing clinical documentation [9] - Expected revenue and earnings growth rates are 11.2% and 7%, respectively, for the current year [11] Planet Fitness Inc. (PLNT) - Planet Fitness is a leading franchisor and operator of fitness centers in the U.S., benefiting from higher royalties, new club openings, and member acquisitions [12] - The company ended Q2 with approximately 20.8 million members and over 2,762 clubs, achieving an 8.2% year-over-year increase in same-club sales [13] - Expected revenue and earnings growth rates are 10.2% and 13.1%, respectively, for the current year [14] United Natural Foods Inc. (UNFI) - United Natural Foods has shown strong growth supported by wholesale momentum and demand for natural and organic products, with strategic initiatives driving efficiency and cost savings [15][16] - The company has an expected revenue growth rate of 2.5% and earnings growth rate of over 100% for the current year [17] Peloton Interactive Inc. (PTON) - Peloton is evolving from a connected fitness brand to a broader wellness platform, leveraging commercial partnerships to drive growth [18] - The company has seen momentum in its Peloton for Business segment, with partnerships enhancing brand visibility [19] - Expected revenue and earnings growth rates are -1.1% and over 100%, respectively, for the current year [21] Performance Food Group Co. (PFGC) - Performance Food Group markets and distributes a wide range of food products, serving various sectors including restaurants and healthcare facilities [23][24] - The company has an expected revenue growth rate of 6.4% and earnings growth rate of 11.2% for the current year [25]

Group 1: Company Overview - Service Corp. (SCI) is a member of the Consumer Staples group, which includes 184 companies and is currently ranked 16 in the Zacks Sector Rank [2] - Service Corp. has a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] Group 2: Performance Metrics - Over the past three months, the Zacks Consensus Estimate for SCI's full-year earnings has increased by 1.9%, reflecting improved analyst sentiment [4] - Year-to-date, Service Corp. has returned 2.3%, outperforming the average gain of 1.2% for the Consumer Staples group [4] - In the Funeral Services industry, which includes 3 stocks, Service Corp. is performing better than the industry average return of 1.3% year-to-date [6] Group 3: Comparison with Peers - Another outperforming stock in the Consumer Staples sector is United Natural Foods (UNFI), which has returned 44.8% year-to-date and has a Zacks Rank of 1 (Strong Buy) [5] - The Food - Miscellaneous industry, to which United Natural Foods belongs, is currently ranked 196 and has declined by 9.3% year-to-date [6] Group 4: Investment Outlook - Both Service Corp. and United Natural Foods are expected to continue their solid performance, making them noteworthy for investors interested in Consumer Staples stocks [7]