United Natural Foods (UNFI) Q2 2025 earnings summary

Executive summary

• Net sales rose 4.9% year-over-year to $8.2 billion in Q2 FY25, driven by higher wholesale volumes, new business, and growth in natural products.

• Adjusted EBITDA increased 13.3% to $145 million, marking the sixth consecutive quarter of sequential improvement, with margin rate expanding to 1.8%.

• Adjusted EPS rose to $0.22 from $0.07 in last year's Q2, reflecting improved profitability.

• Free cash flow surged 66.4% to $193 million, supported by higher profitability and working capital efficiencies.

• Strategic initiatives included a product-focused realignment, closure of the Fort Wayne distribution center, and accelerated deleveraging.

Financial highlights

• Q2 FY25 net sales: $8.2 billion (+4.9% YoY), led by 8.2% growth in natural products and 2.1% in conventional products.

• Adjusted EBITDA: $145 million (+13.3% YoY); margin improved to 1.8%, the highest since Q3 FY23.

• Adjusted EPS: $0.22 (+214.3% YoY).

• Free cash flow: $193 million (+66.4% YoY); year-to-date free cash flow improved by nearly $250 million.

• Net leverage reduced to 3.7x, the lowest since fiscal 2023.

Outlook and guidance

• Full-year net sales guidance raised to $31.3–$31.7 billion, a 3.6% increase at midpoint versus fiscal 2024.

• Adjusted EBITDA guidance increased to $550–$580 million, up over 11% year-over-year at midpoint.

• Adjusted EPS now expected at $0.70–$0.90, up from $0.14 last year.

• Free cash flow guidance raised to at least $150 million, up from prior outlook of $100 million.

• Capital and cloud implementation expenditures for FY25 expected to be ~$300 million.