United Natural Foods (UNFI) Q2 2025 earnings summary

Executive summary

• Net sales rose 4.9% year-over-year to $8.16–$8.2 billion in Q2 FY25, driven by higher wholesale volumes, new business, and inflation.

• Adjusted EBITDA increased 13.3% to $145 million, marking the sixth consecutive quarter of sequential improvement, supported by higher gross profit, supplier programs, and cost-saving initiatives.

• Adjusted EPS rose to $0.22 from $0.07 in the prior year, reflecting improved profitability.

• Free cash flow surged 66.4% to $193 million, reflecting stronger operating cash generation and working capital efficiencies.

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

Financial highlights

• Gross profit increased 3.6% to $1.07–$1.1 billion; gross margin declined to 13.1% from 13.3% year-over-year.

• Operating expenses were $1.03 billion (12.6% of net sales), down as a percentage of sales due to higher revenue and cost savings.

• Net interest expense fell to $38 million, reflecting lower debt balances.

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

• Total liquidity at quarter-end was $1.31 billion, including $44 million cash and $1.27 billion in unused credit.

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, over 11% higher than last year at midpoint.

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

• Free cash flow expected to exceed $150 million; capital and cloud spending unchanged at ~$300 million.

• Sequential deceleration in sales growth expected in the second half due to cycling of new customer additions.