Financial Data and Key Metrics Changes - The second quarter sales grew nearly 5% to $8.2 billion, with adjusted EBITDA growth of over 13% and significant improvement in year-over-year free cash flow [10][29][39] - Adjusted EBITDA reached $145 million, representing a 13% increase compared to the prior year quarter, with an adjusted EBITDA margin rate of nearly 1.8% [38][39] - Free cash flow generation climbed to $193 million in the quarter, approximately $77 million more than last year, bringing year-to-date free cash flow to slightly more than $30 million [40][41] Business Line Data and Key Metrics Changes - Sales in the natural products business increased by over 8% compared to last year's second quarter, while the conventional products business was up just over 2% [29] - Across the wholesale business, volumes were up about 3%, indicating sequential acceleration and favorable trends [30] - Retail business sales were down about 3% compared to last year, primarily due to five store closures over the past 12 months [31] Market Data and Key Metrics Changes - Inflation remained largely unchanged at approximately 1.5%, which was close to a percent lower than last year's second quarter [31] - The company expects a sequential deceleration in sales growth from 4.6% in the first half of fiscal 2025 to around 3% in the second half [44] Company Strategy and Development Direction - The company is focused on increasing value for customers and suppliers while improving free cash flow and strengthening its balance sheet [12][25] - A realignment of the wholesale business into two product-centered divisions is expected to enable more tailored solutions for customers and suppliers [20][21] - The company aims to embed lean management practices throughout the organization to enhance operational efficiency [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the multi-year strategy and the ability to deliver long-term financial objectives [27][42] - The company raised its full-year outlook for all financial metrics except capital spending, reflecting strong year-to-date performance [43][47] - Management noted that they have not seen significant changes in consumer behavior recently, maintaining strong performance across their customer base [84] Other Important Information - The company has successfully consolidated its Fort Wayne distribution center and is actively marketing other closed facilities [17][48] - The net leverage has been reduced to 3.7 times, the lowest level since fiscal 2023, keeping the company on track to achieve a long-term deleveraging goal of less than 2.5 times by the end of fiscal 2027 [41][42] Q&A Session Summary Question: Can you touch on the changes in the wholesale realignment and the benefits seen? - Management indicated that the realignment focuses on product expertise and functional dedication in sales, procurement, and merchandising, which is expected to better serve customers [55][56] Question: Were there duplicate costs during the closure of the Fort Wayne DC? - Management confirmed that there were some duplicative costs during the transition, but these will be significantly reduced moving forward [67][68] Question: How do you see the cross-selling opportunity for natural and organic products in conventional retailers? - Management affirmed that there is still a significant opportunity for natural and organic products in conventional retailers, with strong category momentum [111] Question: What is the outlook for customer additions and growth in the second half? - Management noted that while growth may decelerate due to tougher comparisons, the pipeline for new customer additions remains strong [117][118]

2nd Quarter Fiscal 2025 March 11, 2025 2 Disclaimer Certain information in this presentation and discussed on the conference call which this presentation accompanies constitutes forward -looking information within the meaning of the Private Securities Litigation Reform Act of 1995 . Statements in this presentation regarding the Company's business that are not historical facts are "forward -looking statements" that involve risks and uncertainties and are based on current expectations and management estimates ...

分组1 - United Natural Foods (UNFI) reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and showing an increase from $0.07 per share a year ago, representing an earnings surprise of 22.22% [1] - The company achieved revenues of $8.16 billion for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 2.52%, and up from $7.78 billion year-over-year [2] - Over the last four quarters, United Natural has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] 分组2 - The stock has underperformed the market, losing about 5.4% since the beginning of the year, compared to the S&P 500's decline of 4.5% [3] - The current consensus EPS estimate for the coming quarter is $0.22 on revenues of $7.59 billion, and for the current fiscal year, it is $0.76 on revenues of $31.07 billion [7] - The Zacks Industry Rank for Food - Miscellaneous is currently in the bottom 30% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Net sales increased by 4.9% to $8.2 billion compared to the second quarter of fiscal 2024[6] - Adjusted EBITDA rose by 13.3% to $145 million, reflecting continued operational improvements[6] - Free cash flow improved by 66.4% to $193 million, driven by net cash provided by operating activities of $247 million[6] - Net loss decreased to $(3) million, with loss per diluted share (EPS) of $(0.05), compared to a loss of $(15) million and EPS of $(0.25) in the prior year[6][12] - The company reported a net loss attributable to United Natural Foods, Inc. of $(3) million for the 13-week period ended February 1, 2025, compared to $(15) million in the same period of 2024, reflecting a 80% improvement[31] - The net loss attributable to United Natural Foods, Inc. for the 26-week period ended February 1, 2025, was $24 million, compared to a net loss of $54 million for the same period in 2024[22] - Adjusted EBITDA for the 13-week period ended February 1, 2025, was $145 million, up 13.3% from $128 million in the same period of 2024[27] - Adjusted EBITDA for the 26-week period is expected to be used for internal projections and comparisons with fiscal 2024[20] - The adjusted net income for the 26-week period ended February 1, 2025, was $23 million, compared to $2 million for the same period in 2024, indicating a significant increase of 1,050%[31] Debt and Liquidity - The net debt to Adjusted EBITDA ratio declined to 3.7x, a reduction of 0.6x over the past 12 months[6] - Total liquidity as of February 1, 2025, was approximately $1.31 billion, consisting of $44 million in cash and $1.27 billion in unused capacity[13] - The net carrying value of debt and finance lease liabilities as of February 1, 2025, was $2,046 million, down from $2,161 million as of January 27, 2024, indicating a reduction of 5.3%[33] - Interest expense for the 13-week period ended February 1, 2025, was $38 million, a decrease of 5% from $40 million in the same period of 2024[27] Operational Efficiency - Operating expenses as a percentage of net sales decreased to 12.6%, down from 13.0% in the prior year[9] - Capital expenditures for the 26-week period were $103 million, down from $141 million in the prior year, indicating a focus on cost management[25] - Payments for capital expenditures for the 13-week period ended February 1, 2025, were $54 million, down from $67 million in the same period of 2024, reflecting a decrease of 19.4%[37] - The company is focusing on a product-centered realignment to enhance customer service and streamline operations[3] Future Outlook - The company is raising its full-year outlook for net sales to between $31.3 billion and $31.7 billion[14] - Adjusted EPS is expected to be between $0.70 and $0.90, up from the previous outlook of $0.40 to $0.80[14] - The adjusted effective tax rate for fiscal 2025 is estimated at 26%, compared to the actual rate of 21% for fiscal 2024[38] - The company plans to continue utilizing non-GAAP financial measures to provide better visibility into its operating performance and investment expenditures[20] Restructuring and Expenses - The company incurred restructuring, acquisition, and integration-related expenses of $9 million for the 13-week period ended February 1, 2025, compared to $4 million in the same period of 2024, marking a 125% increase[31]

Group 1: Earnings Expectations - United Natural Foods, Inc. (UNFI) is expected to report growth in both revenue and earnings for the second quarter of fiscal 2025, with revenue estimated at $7.96 billion, reflecting a 2.3% increase year-over-year [1] - The consensus estimate for earnings per share is 18 cents, a significant rise from 7 cents reported in the same quarter last year [1] - UNFI has demonstrated a trailing four-quarter earnings surprise of 553.1% on average, indicating strong past performance [1] Group 2: Operational Performance - The company has shown growth and operational resilience, driven by strong demand in its wholesale segment and a focus on consumer trends favoring natural and organic products [3] - Strategic initiatives such as expanding the customer base, optimizing the distribution network, and investing in automation have improved efficiency and market penetration [3] - Lean management practices have enhanced operational effectiveness, aligning supply with customer needs and driving cost savings [3] Group 3: Challenges and Risks - UNFI is facing challenges in its Retail business, struggling to retain market share in a competitive environment [4] - There is sustained margin pressure due to an unfavorable customer and product mix, along with rising operational costs, which are impacting profitability [4] - The continuation of these trends poses a threat to UNFI's fiscal second-quarter performance [4] Group 4: Earnings Prediction Model - The current model does not predict a definitive earnings beat for UNFI, as it holds a Zacks Rank of 3 and an Earnings ESP of 0.00% [5]

Group 1 - United Natural Foods, Inc. (NYSE: UNFI) is scheduled to report its fiscal Q2 earnings on March 11 [1] - The analysis indicates a focus on long-term investment strategies, particularly valuing a mix of growth, value, and dividend-paying stocks [1] - The investor profile suggests a preference for value stocks, with occasional options trading [1]

Group 1 - United Natural Foods (UNFI) is a notable stock in the Consumer Staples sector, currently holding a Zacks Rank of 1 (Strong Buy) due to improved analyst sentiment and a 19.2% increase in full-year earnings estimates over the past 90 days [3] - UNFI has achieved a year-to-date return of approximately 17.1%, significantly outperforming the average return of 1.1% for Consumer Staples companies [4] - The company belongs to the Food - Miscellaneous industry, which includes 43 stocks and currently ranks 170 in the Zacks Industry Rank, with the industry experiencing an average loss of 3.5% this year [6] Group 2 - US Foods (USFD) is another stock in the Consumer Staples sector that has outperformed the sector, with a year-to-date increase of 3.6% [4] - US Foods has a Zacks Rank of 2 (Buy), with a slight increase of 0.1% in its consensus EPS estimate for the current year over the past three months [5] - Both United Natural Foods and US Foods are positioned well within the Consumer Staples sector and are expected to continue their strong performance [7]

Core Insights - United Natural Foods, Inc. (UNFI) is restructuring its wholesale business by separating its natural and organic divisions to strengthen market position and streamline operations [1][2] - The separation aims to enhance customized value for customers and suppliers while driving profitable growth [2][5] - Specialized sales teams will support the new divisions, focusing on the unique needs of the 30,000 retail locations served by UNFI [3] Operational Strategy - UNFI will establish capability centers of excellence in areas like supply chains and private brands to support sales leaders and create customized growth programs [4][6] - Lean management principles are being implemented to drive cost savings and improve efficiency, including the optimization of the distribution network [8] Performance Metrics - The natural and organic business segment is experiencing impressive growth, with private brand offerings showing growth rates from mid-single digits to mid-teens [7] - UNFI has closed underperforming facilities and transitioned operations to larger centers, streamlining logistics while retaining most business [9] - The company's shares have gained 47% in the past three months, contrasting with a 9.4% decline in the industry [9]

Core Viewpoint - United Natural Foods (UNFI) has shown strong performance in its first-quarter earnings for fiscal 2025, surpassing estimates and demonstrating year-over-year growth, driven by a strategic plan focused on operational efficiency and customer value [2][4]. Financial Performance - Adjusted earnings for the quarter were 16 cents per share, exceeding the Zacks Consensus Estimate of 1 cent, compared to an adjusted loss of 4 cents in the same period last year [3]. - Net sales increased by 4.2% year over year to $7,871 million, surpassing the Zacks Consensus Estimate of $7,619 million, supported by a 2% rise in wholesale unit volumes [4]. - Gross profit rose 0.8% year over year to $1,038 million, with a gross profit margin of 13.2%, down 40 basis points from the previous year [5]. Cost and Margin Analysis - Operating expenses were $1,015 million, down from $1,023 million in the prior year, representing 12.9% of sales compared to 13.5% previously, attributed to cost-saving initiatives [6]. - Adjusted EBITDA was $134 million, reflecting a 14.5% increase from $117 million in the year-ago quarter, marking the fifth consecutive quarter of growth [7]. Financial Health - Total liquidity stood at $1.17 billion as of November 2, 2024, with total outstanding debt reaching $2.23 billion, a $164 million increase from the previous quarter [8]. Guidance for Fiscal 2025 - The company anticipates net sales of $30.6-$31 billion for fiscal 2025, an increase from earlier expectations of $30.3-$30.8 billion [9]. - Adjusted EBITDA is projected to be $530-$580 million, with adjusted earnings expected between 40 cents and 80 cents, up from the previous range of 20 cents to 80 cents [10]. Market Sentiment - Despite recent positive performance, there has been a downward trend in estimates, with a consensus estimate shift of -5.79% [12]. - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [14].

Core Insights - United Natural Foods, Inc. (UNFI) is restructuring its wholesale business by separating its natural and organic divisions to strengthen market position and streamline operations [1][2] - The separation aims to enhance customized value for customers and suppliers while driving profitable growth [2][5] Business Strategy - UNFI will realign its commercial wholesale organization into two divisions: Conventional Grocery Products and Natural, Organic, Specialty & Fresh Products [2] - Specialized sales teams will support each division, focusing on the unique needs of the 30,000 retail locations served [3] Operational Efficiency - UNFI plans to establish capability centers of excellence in areas like supply chains and private brands to support sales leaders and create customized growth programs [4] - Lean management principles are being implemented to drive cost savings and improve efficiency, including the optimization of the distribution network [8] Growth Potential - The natural and organic business segment is experiencing impressive growth due to increased consumer demand for healthier products, with private brand growth rates ranging from mid-single digits to mid-teens [7] - UNFI has closed underperforming facilities and transitioned operations to larger centers, streamlining logistics while retaining most business [9] Market Performance - UNFI's shares have gained 47% in the past three months, contrasting with a 9.4% decline in the industry [9]