United Natural Foods(US:UNFI)2025-06-10 20:43Financial Performance - Net sales for the 13-week period ended May 3, 2025, were $8,059 million, an increase of $561 million or 7.5% compared to $7,498 million for the same period in 2024 [126]. - Adjusted EBITDA for the 13-week period ended May 3, 2025, was $157 million, up $27 million or 20.8% from $130 million for the same period in 2024 [126]. - Gross profit for the 13-week period ended May 3, 2025, increased by $62 million or 6.1% to $1,082 million, with a gross profit margin of 13.4% compared to 13.6% in the same period of 2024 [135]. - Operating expenses for the 13-week period ended May 3, 2025, were $1,025 million, an increase of $33 million or 3.3%, representing 12.7% of net sales compared to 13.2% in the same period of 2024 [137]. - Net loss attributable to United Natural Foods, Inc. for the 13-week period ended May 3, 2025, was $7 million, a decrease of $14 million compared to a net loss of $21 million for the same period in 2024 [126]. - The company reported a year-to-date net sales increase of approximately 5.5% for fiscal 2025 compared to fiscal 2024, driven by higher Natural unit volumes and inflation [133]. - Operating income increased by $41 million to $47 million for fiscal 2025 year-to-date, compared to $6 million for fiscal 2024 year-to-date [144]. - Net loss attributable to United Natural Foods, Inc. was $7 million, or $0.12 per diluted common share, for the third quarter of fiscal 2025, down from a net loss of $21 million, or $0.34 per diluted common share, for the same quarter in fiscal 2024 [149]. Cost Management and Efficiency - In the third quarter of fiscal 2025, the company experienced product cost inflation of approximately 2% compared to the same period in fiscal 2024 [112]. - The company is consolidating two distribution centers in the Central region to achieve cost savings and improve customer experience [106]. - The company is focused on optimizing its distribution network to enhance efficiency and minimize future costs [109]. - Retail's Adjusted EBITDA increased by $4 million for the third quarter of fiscal 2025, driven primarily by lower operating expenses [158]. Distribution and Operations - A new distribution center in Manchester, Pennsylvania, with approximately 1.3 million square feet, began operations in the first quarter of fiscal 2025, focusing on natural products [108]. - The company operates 75 grocery stores, including 53 Cub Foods and 22 Shoppers stores, and plans to invest in customer-facing merchandising initiatives and technology [110]. - The company recognized a $118 million right-of-use asset and operating lease liability for a new distribution center in Sarasota, Florida, expected to begin operations in the first half of fiscal 2026 [108]. - The company is realigning its commercial wholesale organization into two product-centered divisions to enhance service to customers and suppliers [100]. Debt and Liquidity - Total liquidity as of May 3, 2025, was $1,494 million, consisting of $1,442 million in unused credit and $52 million in cash [161]. - Total debt decreased by $123 million to $1,962 million as of May 3, 2025, from $2,085 million as of August 3, 2024 [161]. - The company expects to continue replenishing operating assets and paying down debt obligations with internally generated funds [162]. - As of May 3, 2025, the company had $750 million of floating rate notional debt under interest rate swap contracts, with fixed rates ranging from 2.475% to 4.130% [169]. Capital Expenditures and Investments - Capital expenditures for fiscal 2025 year-to-date were $157 million, a decrease of $60 million compared to $217 million for fiscal 2024 year-to-date [171]. - Cloud technology implementation expenditures for fiscal 2025 year-to-date were $6 million, down from $28 million in fiscal 2024 year-to-date [171]. - The company expects total capital and cloud implementation spending for fiscal 2025 to be approximately $300 million, focusing on distribution network automation and technology platform investments [172]. Market Risks and Other Considerations - The company’s exposure to market risk includes fluctuations in interest rates and price increases in diesel fuel, with no material changes reported since the last annual report [187]. - The company expects to contribute approximately $51 million to multiemployer pension plans in fiscal 2025, up from $47 million in fiscal 2024 [180]. - The company did not repurchase any shares in fiscal 2025 year-to-date, managing repurchases based on market conditions [184]. - Restructuring, acquisition, and integration related expenses increased to $14 million for the 13-week period ended May 3, 2025, compared to $9 million for the same period in 2024 [139]. - The company experienced a decrease in retail net sales by 2.2% year-to-date due to lower volume and store closures [134]. - The gross profit as a percentage of net sales decreased to 13.3% for fiscal 2025 year-to-date compared to 13.5% for fiscal 2024 year-to-date [136]. - Wholesale net sales increased by 4% in unit volumes, contributing to the overall growth in net sales for fiscal 2025 year-to-date [153]. - Adjusted EBITDA for wholesale increased by $33 million, or 26.4%, for the third quarter of fiscal 2025 compared to the same period in fiscal 2024 [157].