United Natural Q4 Earnings Beat, UNFI Sales Rise on Unit Volume Hike

Core Insights - United Natural Foods, Inc. (UNFI) reported strong fourth-quarter fiscal 2024 results, with revenues and earnings exceeding expectations and showing year-over-year growth [1][3] - The company has achieved four consecutive quarters of increasing profitability, driven by same-customer growth, an extended agreement with its largest customer, and efficiency initiatives [1][2] Financial Performance - Adjusted earnings for the quarter were 1 cent per share, surpassing the Zacks Consensus Estimate of a loss of 8 cents, compared to an adjusted loss of 25 cents in the same period last year [3] - Net sales increased by 10% year over year to $8,155 million, exceeding the Zacks Consensus Estimate of $7,874 million, with a $582 million gain attributed to an extra week in fiscal 2024 [4] - Excluding the impact of the additional week, sales grew by 2.1%, supported by improving unit volumes and inflation [4] Sales Growth by Channel - Year-over-year sales growth was observed across various channels: Chains (9%), Independent retailers (4.5%), Supernatural (18.6%), and Retail (3.1%), with Other channels rising by 9.6% [5] Profitability Metrics - Gross profit rose 15.5% year over year to $1.12 billion, with a gross margin of 13.7% for the fourth quarter, compared to 13% in the previous year [6] - Operating expenses were $1.08 billion, up from $1 billion in the prior year, but as a percentage of sales, they decreased to 13.2% from 13.5% [7] - Adjusted EBITDA increased by 53.8% to $143 million from $93 million in the year-ago quarter [7] Financial Health - Total liquidity stood at $1.28 billion as of August 3, 2024, with free cash flow reported at $71 million, down from $117 million in the prior year [8] - Total outstanding debt reached $2.06 billion, with a net debt to adjusted EBITDA leverage ratio of 4.0X [9] Future Guidance - For fiscal 2025, UNFI anticipates net sales between $30.3 billion and $30.8 billion, with adjusted EBITDA expected to be between $520 million and $580 million [9][10] - The company projects a net loss of $41 million to $3 million for fiscal 2025 and adjusted earnings between 20 cents and 80 cents [10] Stock Performance - Shares of UNFI have increased by 82.2% over the past three months, significantly outperforming the industry growth of 9% [11]