United Natural Foods, Inc. (UNFI) is likely to register top- and bottom-line growth when it reports fourthquarter fiscal 2024 earnings on Oct. 1. The Zacks Consensus Estimate for revenues is pegged at $7.9 billion, suggesting an increase of 6.2% from the prior-year quarter's reported figure. The consensus mark for UNFI's fiscal 2024 revenues is pegged at $30.7 billion, indicating a 1.4% increase from the year-ago period's figure. The Zacks Consensus Estimate for the bottom line has remained unchanged in the ...

United Natural Foods Inc. (UNFI) is undergoing a major transformation aimed at improving its margins and cash flow. The company's strategic initiatives include optimizing its network, reducing capital expenditures, cutting costs and lowering net working capital. By focusing on these areas, UNFI aims to build on the $150 million in expense efficiencies already achieved. This transformation is designed to enhance operational efficiency and long-term value for stakeholders. UNFI's Strategic Investments and Ope ...

United Natural Foods (UNFI) shares ended the last trading session 7.1% higher at $16.20. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.7% gain over the past four weeks. United Natural is reaping the rewards of its transformation efforts. The company is advancing its margin improvement and cash flow generation through strategic initiatives focused on four key areas: enhancing network optimization, reducing annu ...

United Natural Foods, Inc. (UNFI) is in a tight spot thanks to macroeconomic headwinds like inflationary pressures. The leading provider of fresh, branded and owned brand products is facing weakness in the retail business, which is hurting its performance. These downsides have been hurting United Natural's performance, as seen in the third quarter of fiscal 2024. Unimpressively, the Zacks Consensus Estimate for Hormel Foods' fiscal 2024 earnings of 6 cents suggests a decline of 97.3% from the year-ago perio ...

United Natural Foods, Inc. (UNFI) demonstrates its resilience through strong dedication to digital innovation and improvements in its supply chain. The leading food provider is actively engaged in a comprehensive transformation journey centered around various strategic initiatives. However, UNFI is bearing the brunt of macroeconomic factors, including inflationary pressures. Let's delve deeper. Strength in E-commerce Business United Natural's sales are being positively impacted by its strong presence in e-c ...

United Natural Foods, Inc. (UNFI) is undergoing a thorough transformation journey focusing on several strategic initiatives. This leading food provider is seeing growth thanks to its improved e-commerce solutions. Additionally, UNFI is making strides in reducing shrinkage and enhancing supply chain efficiency despite facing challenges within the industry. The company intends to allocate around $300 million towards capital expenditures in fiscal 2025, focusing on maintenance, targeted network enhancements, a ...

United Natural Foods, Inc. (UNFI) posted soft third-quarter fiscal 2024 results, as both the top and bottom lines declined year over year, and sales fell short of the Zacks Consensus Estimate. However, the company has been on track with operational and efficiency initiatives to drive cost reductions and supply chain efficiencies. Additionally, United Natural is nearing a new multi-year strategic plan set to commence in fiscal 2025. The updated strategy is expected to generate nearly $100 million in free cas ...

Financial Performance - Net sales for the 13-week period ended April 27, 2024, were $7,498 million, a decrease of $9 million or 0.1% compared to $7,507 million for the same period in 2023[133]. - Gross profit for the 13-week period increased by $20 million, or 2.0%, to $1,020 million, with a gross profit margin of 13.6% compared to 13.3% in the prior year[138]. - Operating expenses for the 13-week period increased by $25 million, or 2.6%, to $992 million, representing 13.2% of net sales, up from 12.9% in the same period last year[140]. - Operating income decreased by $27 million to $6 million for the 13-week period, primarily due to increased operating expenses and restructuring costs[146]. - Net loss attributable to United Natural Foods, Inc. for the 13-week period was $21 million, compared to a net income of $7 million in the same period last year, reflecting a decrease of $28 million[131]. - Adjusted EBITDA for the 13-week period was $130 million, down from $159 million in the prior year, a decrease of $29 million or 18.2%[132]. - Year-to-date net sales for fiscal 2024 decreased approximately 0.1% from fiscal 2023, primarily driven by a decline in unit volumes[136]. - Retail's net sales decreased by $27 million in Q3 fiscal 2024 compared to Q3 fiscal 2023, primarily due to a 4.0% decrease in identical store sales[156]. - Wholesale net sales for fiscal 2024 year-to-date decreased by $4 million to $22,004 million compared to $22,008 million in fiscal 2023 year-to-date[155]. - Adjusted EBITDA for wholesale decreased by 12.6% in Q3 fiscal 2024, totaling $125 million compared to $143 million in Q3 fiscal 2023[160]. Cost and Expenses - The company reported a product cost inflation of approximately 2% in Q3 fiscal 2024 compared to Q3 fiscal 2023[117]. - The company aims to improve profitability through near-term initiatives, including optimizing SKU assortment and reviewing commercial contracts[106]. - The company evaluates its distribution center network to optimize performance and expects to incur incremental expenses related to future improvements[113]. - The company reported a LIFO charge of $6 million for the 13-week period, compared to $33 million in the same period last year[138]. - Restructuring, acquisition, and integration-related expenses were $9 million for the 13-week period, compared to a benefit of $4 million in the same period last year[142]. - Loss on sale of assets and other asset charges increased to $13 million for the 13-week period, up from $4 million in the same period last year[144]. Debt and Capital Management - Total debt increased by $188 million to $2,151 million as of April 27, 2024, from $1,963 million as of July 29, 2023[171]. - The company expects to fund debt maturities and finance lease liabilities through fiscal 2024 with internally generated funds and borrowings under the ABL Credit Facility[167]. - The company currently does not pay a dividend on its common stock and is limited in the aggregate amount of dividends that may be paid under the terms of its debt agreements[170]. - The company entered into an amendment to the ABL Loan Agreement, creating a FILO tranche of $130 million with an applicable margin of SOFR plus 2.50% per annum[173]. - The principal amount of the Term Loan Facility was reduced to $500 million, with maturity extended to May 1, 2031, and a change in the applicable margin from 2.25% to 3.75% per annum[173]. Investments and Expenditures - Capital expenditures for fiscal 2024 year-to-date were $217 million, a slight decrease from $218 million in fiscal 2023 year-to-date[177]. - Cloud technology implementation expenditures for fiscal 2024 year-to-date were $28 million, compared to $9 million in fiscal 2023 year-to-date[177]. - Fiscal 2024 capital and cloud implementation spending is expected to be approximately $370 million, focusing on distribution network automation and technology platform investments[178]. Cash Flow - Net cash provided by operating activities for the 39-week period ended April 27, 2024, was $54 million, a decrease of $348 million compared to $402 million in the prior year[179]. - Net cash used in investing activities increased to $226 million in fiscal 2024 year-to-date, compared to $211 million in fiscal 2023 year-to-date[180]. Distribution and Operations - The company operates 75 retail grocery stores, including 53 Cub Foods corporate stores and 22 Shoppers Food Warehouse stores[115]. - The company operates 81 pharmacies primarily within its stores and franchisees[115]. - A new distribution center in Manchester, Pennsylvania, is under development, covering approximately 1.3 million square feet, with a recognized right-of-use asset of $205 million[114]. - The company has been the primary distributor to Whole Foods Market for over 20 years, with an amended distribution agreement extending through May 20, 2032[109]. - The company believes its product mix positions it to serve a broad cross-section of North American retailers and end customers[111].

Financial Data and Key Metrics Changes - Sales for the quarter were $7.5 billion, roughly flat compared to the same quarter last year [47] - Adjusted EBITDA declined by $29 million year-over-year, but excluding incentive compensation impacts, it would have increased by $4 million [49][50] - Free cash flow generated was approximately $49 million, allowing for a reduction in net debt by $30 million during the quarter [21] Business Line Data and Key Metrics Changes - Wholesale gross margin rate improved by about 10 basis points, while retail gross margin rate declined by more than 100 basis points [19] - Unit volume showed sequential improvement, with wholesale volumes declining nearly 100 basis points less than in the previous quarter [18] Market Data and Key Metrics Changes - The resilient segment of the industry totals over $90 billion in sales, expected to grow at a low-single digit rate, primarily driven by natural and specialty volumes [10] - The retail business faced top-line pressure due to consumer price sensitivity, but actions are being taken to improve performance [48] Company Strategy and Development Direction - A new multiyear strategic plan is set to begin in fiscal 2025, focusing on resource reallocation to enhance customer and supplier success [8][37] - The company aims to streamline its supply chain and reduce capital expenditures, with a planned reduction from $370 million to approximately $300 million in fiscal 2025 [41] - The expansion of high-margin services is a key focus, expected to improve profitability and cash flow [37][42] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment has changed significantly compared to three years ago, necessitating a refreshed long-term strategy [9] - There is optimism about generating free cash flow approaching $100 million in the next fiscal year, with plans to use these funds to reduce net debt [44] Other Important Information - The company has extended its relationship with Whole Foods through 2032, indicating a strong strategic commitment [36] - Management is focused on improving working capital management to enhance cash flow without compromising customer experience [14][22] Q&A Session All Questions and Answers Question: Can you provide more detail on the working capital improvements highlighted? - Management indicated that improvements in inventory days on hand are achievable in the near term, with structural fixes taking longer to implement [25][26] Question: How is promotional activity trending relative to expectations? - Promotions are gradually increasing but remain slightly below pre-pandemic levels, with expectations for continued increases [59] Question: Can you discuss the working capital line item from the past six months? - Management explained that last year's monetization program created a benefit, while ongoing work on inventory is expected to yield improvements [61] Question: What is the scope of the opportunity from Centralia automation? - The cost opportunity from Centralia is expected to be significant, with a similar sized opportunity anticipated over the next few years [64] Question: How is demand for value-add services for independents trending? - Demand for value-add services is growing as retailers seek opportunities to save money and grow [78] Question: Can you provide insights on the margin differences between various business segments? - Services are the highest margin segment, with growth expected to accelerate significantly compared to the total company [87]

United Natural Foods (UNFI) came out with quarterly earnings of $0.10 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.54 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this organic and specialty foods distributor would post earnings of $0.01 per share when it actually produced earnings of $0.07, delivering a surprise of 600%. Over the last four quarters, the company has surpassed consensus EPS estimates thre ...