United Natural Foods(US:UNFI)2025-03-11 20:35Financial Performance - Net sales for the second quarter of fiscal 2025 increased by 4.9% to $8,158 million compared to $7,775 million in the second quarter of fiscal 2024[132]. - Gross profit for the second quarter of fiscal 2025 increased by $37 million, or 3.6%, to $1,072 million, with a gross profit margin of 13.1%[137]. - Operating expenses for the second quarter of fiscal 2025 increased by $21 million, or 2.1%, to $1,031 million, representing 12.6% of net sales[139]. - Adjusted EBITDA for the second quarter of fiscal 2025 was $145 million, up from $128 million in the second quarter of fiscal 2024, reflecting a $17 million increase[130]. - Net loss attributable to United Natural Foods, Inc. was $3 million for the second quarter of fiscal 2025, compared to a net loss of $15 million in the second quarter of fiscal 2024[130]. - Year-to-date net sales for fiscal 2025 increased by 4.6% to $16,029 million compared to $15,327 million for fiscal 2024[135]. - Gross profit for fiscal 2025 year-to-date increased by $45 million, or 2.2%, to $2,110 million, with a gross profit margin of 13.2%[138]. - Operating income for fiscal 2025 year-to-date increased to $32 million, compared to $0 million for fiscal 2024 year-to-date[146]. - Total net sales for Q2 fiscal 2025 increased by $383 million, reaching $8,158 million, compared to $7,775 million in Q2 fiscal 2024[154]. - Wholesale net sales increased by $385 million, or 5.1%, in Q2 fiscal 2025, driven by a 3% increase in unit volumes[155]. - Adjusted EBITDA for wholesale increased by $18 million, or 15.3%, in Q2 fiscal 2025, reaching $136 million, compared to $118 million in Q2 fiscal 2024[159]. Cost and Expenses - The company reported a product cost inflation of approximately 2% in Q2 of fiscal 2025 compared to Q2 of fiscal 2024[115]. - Restructuring, acquisition, and integration related expenses increased to $9 million in the second quarter of fiscal 2025 from $4 million in the second quarter of fiscal 2024[141]. - Interest expense, net, decreased to $38 million in the second quarter of fiscal 2025 from $40 million in the second quarter of fiscal 2024, primarily due to lower outstanding debt balances[147]. - The effective tax rate for Q2 fiscal 2025 was a benefit rate of 60.0% on pre-tax loss, compared to 26.3% in Q2 fiscal 2024[149]. Distribution and Operations - A new distribution center in Manchester, Pennsylvania, with approximately 1.3 million square feet, began operations in Q1 of fiscal 2025 and will be automated later in the fiscal year[111]. - The company has 53 distribution centers and warehouses totaling approximately 31 million square feet of warehouse space across North America[102]. - The company is optimizing its distribution center network to achieve cost savings and improve customer experience[110]. - The company is realigning its commercial wholesale organization into two product-centered divisions to enhance service to customers and suppliers[104]. - The company recognized a $118 million right-of-use asset and operating lease liability for a new distribution center in Sarasota, Florida, in Q1 of fiscal 2025[111]. Cash Flow and Liquidity - Total liquidity as of February 1, 2025, was $1,312 million, consisting of $1,268 million in unused credit and $44 million in cash[164]. - Net cash provided by operating activities increased by $208 million in fiscal 2025 year-to-date compared to fiscal 2024 year-to-date, reaching $137 million[175]. - Net cash used in investing activities decreased by $42 million in fiscal 2025 year-to-date, totaling $100 million, primarily due to lower capital expenditures[176]. - Net cash used in financing activities increased by $242 million in fiscal 2025 year-to-date, resulting in a net cash outflow of $32 million, attributed to increased repayments under the ABL Credit Facility[177]. - Cash and cash equivalents at the end of the period increased by $10 million, totaling $44 million, compared to $34 million at the end of the previous period[175]. - Total debt decreased by $14 million to $2,071 million as of February 1, 2025, from $2,085 million as of August 3, 2024[164]. Capital Expenditures and Investments - Capital expenditures for fiscal 2025 year-to-date were $103 million, a decrease of $38 million from $141 million in fiscal 2024 year-to-date[173]. - Fiscal 2025 capital and cloud implementation spending is expected to be approximately $300 million, focusing on distribution network automation and technology platform investments[174]. Shareholder Returns and Pension Contributions - As of February 1, 2025, the company had $138 million remaining authorized under the $200 million share repurchase program initiated in September 2022[185]. - The company did not repurchase any shares of common stock in fiscal 2025 year-to-date[185]. - The company expects to contribute approximately $51 million to multiemployer pension plans in fiscal 2025, an increase from $47 million in fiscal 2024[182]. - The company assesses the attractiveness of cash contributions to pension plans based on factors such as expected return on assets and cost of debt[180]. - The company anticipates that contributions to multiemployer pension plans could increase in the near term due to various factors, including collective bargaining outcomes[182]. Retail Performance - Retail's net sales decreased by $21 million, or 3.3%, in Q2 fiscal 2025, primarily due to a 0.4% decrease in identical store sales[156]. Economic Outlook - The company anticipates continued economic volatility impacting consumer confidence and spending behavior[108]. Operational Strategy - The company plans to continue investing in its Retail segment, focusing on customer-facing merchandising initiatives and technology improvements[114]. - Overall product sales are balanced throughout the year, with working capital needs peaking during high sales periods, such as the holiday season[188].