United Natural Foods (UNFI) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 FY26 decreased 2.6% year-over-year to $7.95 billion, driven by network optimization and declines in Conventional and Retail segments, partially offset by nearly 7% growth in the Natural segment.

• Adjusted EBITDA rose 23.4% to $179 million, reflecting improved cost controls, segment performance, and efficiency initiatives.

• Net income was $20 million, reversing a net loss of $3 million in Q2 FY25, with operating income up to $57 million from $27 million.

• Free cash flow improved 25.9% to $243 million, with net cash from operations at $283 million and disciplined capital expenditures.

• Celebrated 50th anniversary, emphasizing long-term partnerships and industry leadership.

Financial highlights

• Q2 FY26 net sales: $7,947M, down from $8,158M in Q2 FY25; gross profit was $1.05 billion, down 2.4%, but gross margin improved to 13.2%.

• Adjusted EBITDA: $179M, up from $145M in Q2 FY25; Adjusted EBITDA margin up to 2.3%.

• Adjusted EPS rose to $0.62 from $0.22 year-over-year; diluted EPS was $0.31, compared to a loss of $0.05 in Q2 FY25.

• Free cash flow: $243M, up from $193M in Q2 FY25; net leverage reduced to 2.7x, lowest since 2018.

• Operating expenses fell 5.7% to $972 million (12.2% of sales), aided by cost-saving initiatives and insurance proceeds.

Outlook and guidance

• FY26 net sales outlook lowered to $31.0–$31.4 billion (down 1.9% at midpoint); sales growth expected to resume in fiscal 2027.

• Adjusted EBITDA guidance raised to $680–$710 million; Adjusted EPS to $2.30–$2.70; net income guidance now $50–$75 million.

• Free cash flow guidance increased to ~$330 million; year-end net leverage target now ~2.3x.

• Capital and cloud implementation expenditures expected at ~$250 million.

• Management remains focused on network optimization, cost structure improvements, and capital spending discipline.