United Natural Foods (UNFI) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 finished at the upper end of guidance for net sales, adjusted EBITDA, and adjusted EPS, driven by strong customer growth, efficiency initiatives, and reduced shrink.

• Sequential quarterly adjusted EBITDA growth was achieved throughout the year, with a new strategy emphasizing value for customers and suppliers and targeting increased free cash flow and balance sheet strength.

• Extended largest customer agreement to 2032 and lengthened term loan maturity to 2031.

• Network optimization and a new three-year plan aim to drive value, margin expansion, free cash flow, and deleveraging.

• Fiscal 2025 is positioned for improved free cash flow and deleveraging, supported by digital offerings and value-added services.

Financial highlights

• Q4 FY24 net sales were $8.2B, up 10.0% year-over-year (2.1% comparable 13-week basis); full-year sales reached $31.0B, up 2.3% (0.4% excluding the 53rd week).

• Q4 FY24 adjusted EBITDA was $143M, up 53.8% year-over-year; full-year adjusted EBITDA was $518M, down 19.1%.

• Q4 FY24 adjusted EPS was $0.01, up from $(0.25) last year; full-year adjusted EPS was $0.14, down from $2.23.

• Free cash flow for Q4 was $71M; full-year free cash flow was $92M, down from $301M.

• Net debt at year-end was $2.06B, with net leverage at 4.0x adjusted EBITDA, down from 4.6x sequentially.

Outlook and guidance

• FY25 net sales expected between $30.3B–$30.8B, up 0.5% at midpoint (adjusted for 53rd week).

• FY25 adjusted EBITDA projected at $520M–$580M, up 8% at midpoint; adjusted EPS expected between $0.20–$0.80, more than triple FY24.

• Capital and cloud implementation expenditures expected to be ~$300M, down from $370M in FY24.

• FY25 free cash flow targeted at ~$100M, nearly $200M higher year-over-year, with proceeds directed to debt reduction.

• Three-year plan targets high single-digit adjusted EBITDA CAGR and net leverage below 2.5x by FY27.