United Natural Foods(UNFI) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for the first quarter of fiscal 2025 increased by 4.2% to $7,871 million, compared to $7,552 million in the first quarter of fiscal 2024[137] - Gross profit rose by $8 million, or 0.8%, to $1,038 million, with a gross profit margin of 13.2%, down from 13.6% in the prior year[141] - Operating expenses decreased by $8 million, or 0.8%, to $1,015 million, representing 12.9% of net sales, down from 13.5%[142] - Operating income improved by $21 million to $5 million, compared to an operating loss of $16 million in the first quarter of fiscal 2024[145] - Net loss attributable to United Natural Foods, Inc. was $21 million, or $0.35 per diluted share, compared to a net loss of $39 million, or $0.67 per diluted share, in the prior year[151] - Adjusted EBITDA increased by $17 million to $134 million, driven by gross profit growth and decreased operating expenses[153] - Wholesale net sales increased by $309 million to $7,590 million, primarily due to higher unit volumes and inflation[153] - Retail net sales decreased by $20 million to $586 million, primarily due to a 1.4% decrease in identical store sales[155] Cost and Expenses - The company reported a product cost inflation of approximately 1% in Q1 fiscal 2025 compared to Q1 fiscal 2024[117] - Restructuring, acquisition, and integration-related expenses rose to $12 million from $4 million, driven by higher employee severance costs[143] - Interest expense increased to $36 million from $35 million, primarily due to higher average interest rates[146] Liquidity and Debt - Total liquidity as of November 2, 2024, was $1,174 million, consisting of $1,137 million in unused credit and $37 million in cash[159] - Total debt increased by $162 million to $2,247 million as of November 2, 2024, primarily due to additional net borrowings under the ABL Credit Facility[159] - Working capital rose by $176 million to $1,213 million as of November 2, 2024, driven by seasonal increases in inventory and accounts receivable[159] Capital Expenditures and Investments - Capital expenditures for the first quarter of fiscal 2025 were $49 million, a decrease of $25 million compared to $74 million in the first quarter of fiscal 2024[170] - Fiscal 2025 capital and cloud implementation spending is expected to be approximately $300 million, focusing on distribution network automation and technology platform investments[171] - The company anticipates financing fiscal 2025 capital and cloud implementation expenditures with cash generated from operations and borrowings under the ABL Credit Facility[171] Distribution and Operations - A new distribution center in Manchester, Pennsylvania, with approximately 1.3 million square feet, began operations in Q1 fiscal 2025[113] - The company has 53 distribution centers and warehouses, totaling approximately 31 million square feet of warehouse space across North America[104] - The company is optimizing its distribution center network to achieve cost savings and improve customer experience[112] - The company plans to evaluate its distribution center network for further optimization and efficiency improvements[114] Market Risks - The company's exposure to market risk is primarily due to fluctuations in interest rates on borrowings and interest rate swap agreements[191] - Price increases in diesel fuel also contribute to the company's market risk exposure[191] - There have been no material changes to the company's exposure to market risks compared to those disclosed in the Annual Report[191] Shareholder Actions - The company did not repurchase any shares in the first quarter of fiscal 2025, with $138 million remaining authorized under the 2022 Repurchase Program[185] Pension Contributions - The company expects to contribute approximately $51 million to multiemployer pension plans in fiscal 2025, subject to collective bargaining outcomes[182]