United Natural Foods Reports $7 Million Net Loss, 7.5% Increase in Net Sales

United Natural Foods, Inc. (UNFI) reported a net loss of $7 million, or $0.12 per diluted share, for the 13-week period ending May 3, 2025, a significant improvement compared to a net loss of $21 million, or $0.34 per diluted share, in the same period last year. The company's net sales increased by 7.5% to $8.059 billion, up from $7.498 billion, driven primarily by a 12% increase in sales of natural products and a 2.7% increase in conventional grocery sales. Year-to-date, net sales reached $24.088 billion, a 5.5% increase from $22.825 billion in the previous year.

The company's gross profit for the third quarter rose to $1.082 billion, reflecting a 6.1% increase from $1.020 billion in the prior year. However, the gross profit margin slightly decreased to 13.4% from 13.6% due to lower product margin rates and changes in customer and product mix. Operating expenses also increased to $1.025 billion, up from $992 million, but as a percentage of net sales, they improved to 12.7% from 13.2%, indicating better cost management relative to sales growth.

UNFI has been actively restructuring its operations, including the realignment of its commercial wholesale organization into two product-centered divisions: Conventional Grocery Products and Natural, Organic, Specialty & Fresh Products. This strategic move aims to enhance service delivery to customers and suppliers. The company also reported restructuring and integration-related expenses of $14 million for the quarter, up from $9 million in the prior year, primarily due to costs associated with outsourcing certain corporate functions.

Operationally, UNFI's total assets increased to $7.617 billion as of May 3, 2025, compared to $7.528 billion at the end of the previous fiscal year. The company reported a decrease in long-term debt to $1.962 billion from $2.085 billion, reflecting a reduction in borrowings under its asset-based revolving credit facility. The company’s liquidity position remains strong, with total liquidity of $1.494 billion, including $1.442 billion of unused credit under its ABL Credit Facility.

Looking ahead, UNFI anticipates continued challenges from inflation and changing consumer behaviors, which may impact sales and profitability. The company plans to focus on optimizing its distribution network and enhancing operational efficiencies to improve financial performance. Additionally, UNFI expects to incur a $53 million contract termination payment related to a supply agreement with a customer in the Northeast, which will be recorded in the fourth quarter of fiscal 2025. The company remains committed to improving its free cash flow and reducing outstanding debt as part of its long-term strategic objectives.