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UNFI reported Q3 adjusted EPS of $0.44, up from $0.10 and well above the consensus estimate of $0.24.
Sales rose 7.5% to $8.06B, driven by 4% growth in wholesale unit volumes and inflation impact.
UNFI achieved its seventh straight quarter of adjusted EBITDA growth, reaching $157M in Q3.
United Natural Foods, Inc. (UNFI - Free Report) delivered an impressive third-quarter fiscal 2025 performance, with revenues and earnings beating the Zacks Consensus Estimate and increasing year over year.
The third-quarter results underscore UNFI’s continued execution of its multi-year strategy, highlighted by seven straight quarters of sequential adjusted EBITDA growth. Strong operational discipline and a focus on efficiency are driving sustained momentum across the business.
UNFI continues to benefit from lean management practices, wholesale business realignment and the optimization of unprofitable operations. With lean daily management expanding across its network and ongoing customer support efforts, the company remains committed to long-term value creation, despite recent cybersecurity challenges.
UNFI’s Quarterly Performance: Key Metrics and Insights
United Natural reported adjusted earnings of 44 cents per share, beating the Zacks Consensus Estimate of 24 cents. Also, the bottom line increased from 10 cents reported in the year-earlier quarter. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
United Natural Foods, Inc. Price, Consensus and EPS Surprise
Net sales rose 7.5% year over year to $8,059 million, surpassing the Zacks Consensus Estimate of $7,846 million. The increase was driven by a 4% rise in wholesale unit volumes, reflecting new business with existing and new customers, along with the effects of inflation. The increase was led by natural product growth.
UNFI’s Segmental Performance
The company disaggregates revenues into the following three categories based on product and service offerings: Natural, Conventional and Retail. Natural sales grew 12% to $4,160 million, Conventional sales increased 2.7% to $3,628 million and the Retail segment saw a 0.4% rise in sales to $573 million.
Analysis of UNFI’s Costs & Margins
UNFI’s gross profit rose 6.1% year over year to $1,082 million. The gross margin of 13.4% contracted 20 basis points from 13.6% reported in the year-ago quarter. The factors attributable to the decline of gross margin were lower product margin rates and changes in the business mix, partially offset by supplier programs and reduced shrinkage.
Operating expenses were $1,025 million compared with $992 million in the year-ago quarter. As a percentage of sales, operating expenses were 12.7% compared with 13.2% in the year-ago period. The decrease was led by the leveraging impact of increased sales and the benefits of cost-saving initiatives.
Adjusted EBITDA was $157 million, up 20.8% from $130 million in the year-ago quarter. This marks the seventh consecutive quarter of sequential growth in adjusted EBITDA.
UNFI’s Financial Health Snapshot
The company had a total liquidity of $1.49 billion as of May 3, 2025, including cash of nearly $52 million and the unused capacity of approximately $1.44 billion under its asset-based lending facility.
In the third quarter of fiscal 2025, the free cash flow was $119 million, up from $49 million in the prior-year quarter. The reported figure reflects $173 million in net cash provided by operating activities, offset by $54 million in capital expenditure.
Total outstanding debt, net of cash, reached $1.93 billion at the end of the quarter, representing a $118 million decrease from the second quarter of fiscal 2025. The net debt to adjusted EBITDA leverage ratio was 3.3 as of May 3, 2025.
United Natural’s Guidance for FY25
For fiscal 2025, the company anticipates net sales of $31.3-$31.7 billion. The company reported net sales of $31 billion in fiscal 2024.
Adjusted EBITDA is expected to be $550-$580 million. UNFI anticipates to deliver a net loss of $55-$80 million in fiscal 2025, in contrast to the net loss of $13 million and net earnings of $3 million expected earlier.
United Natural envisions fiscal 2025 adjusted earnings per share between 70 cents and 90 cents compared with 14 cents in fiscal 2024.
The company projects capital and cloud implementation expenditure of around $300 million for fiscal 2025. It anticipates a free cash flow of more than $150 million for fiscal 2025.
Shares of this Zacks Rank #3 (Hold) company have lost 5.1% in the past three months compared with the industry’s decline of 3.4%.
NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average. The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 4.6% and 7.3%, respectively, from the year-ago number.
Mondelez International (MDLZ - Free Report) manufactures, markets and sells snack food and beverage products. It presently has a Zacks Rank of 2 (BUY). MDLZ delivered a trailing four-quarter earnings surprise of 9.8%, on average.
The consensus estimate for Mondelez’s current fiscal-year sales implies growth of 5.3% from the year-ago figures.
BRF S.A. (BRFS - Free Report) raises, produces and slaughters poultry and pork for the processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank #2. BRFS delivered a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for BRF S.A.'s current fiscal-year sales and earnings implies growth of 0.3% and 11.1%, respectively, from the prior-year levels.
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UNFI's Q3 Earnings & Sales Beat Estimates on Wholesale Volume Growth
Key Takeaways
United Natural Foods, Inc. (UNFI - Free Report) delivered an impressive third-quarter fiscal 2025 performance, with revenues and earnings beating the Zacks Consensus Estimate and increasing year over year.
The third-quarter results underscore UNFI’s continued execution of its multi-year strategy, highlighted by seven straight quarters of sequential adjusted EBITDA growth. Strong operational discipline and a focus on efficiency are driving sustained momentum across the business.
UNFI continues to benefit from lean management practices, wholesale business realignment and the optimization of unprofitable operations. With lean daily management expanding across its network and ongoing customer support efforts, the company remains committed to long-term value creation, despite recent cybersecurity challenges.
UNFI’s Quarterly Performance: Key Metrics and Insights
United Natural reported adjusted earnings of 44 cents per share, beating the Zacks Consensus Estimate of 24 cents. Also, the bottom line increased from 10 cents reported in the year-earlier quarter. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
United Natural Foods, Inc. Price, Consensus and EPS Surprise
United Natural Foods, Inc. price-consensus-eps-surprise-chart | United Natural Foods, Inc. Quote
Net sales rose 7.5% year over year to $8,059 million, surpassing the Zacks Consensus Estimate of $7,846 million. The increase was driven by a 4% rise in wholesale unit volumes, reflecting new business with existing and new customers, along with the effects of inflation. The increase was led by natural product growth.
UNFI’s Segmental Performance
The company disaggregates revenues into the following three categories based on product and service offerings: Natural, Conventional and Retail. Natural sales grew 12% to $4,160 million, Conventional sales increased 2.7% to $3,628 million and the Retail segment saw a 0.4% rise in sales to $573 million.
Analysis of UNFI’s Costs & Margins
UNFI’s gross profit rose 6.1% year over year to $1,082 million. The gross margin of 13.4% contracted 20 basis points from 13.6% reported in the year-ago quarter. The factors attributable to the decline of gross margin were lower product margin rates and changes in the business mix, partially offset by supplier programs and reduced shrinkage.
Operating expenses were $1,025 million compared with $992 million in the year-ago quarter. As a percentage of sales, operating expenses were 12.7% compared with 13.2% in the year-ago period. The decrease was led by the leveraging impact of increased sales and the benefits of cost-saving initiatives.
Adjusted EBITDA was $157 million, up 20.8% from $130 million in the year-ago quarter. This marks the seventh consecutive quarter of sequential growth in adjusted EBITDA.
UNFI’s Financial Health Snapshot
The company had a total liquidity of $1.49 billion as of May 3, 2025, including cash of nearly $52 million and the unused capacity of approximately $1.44 billion under its asset-based lending facility.
In the third quarter of fiscal 2025, the free cash flow was $119 million, up from $49 million in the prior-year quarter. The reported figure reflects $173 million in net cash provided by operating activities, offset by $54 million in capital expenditure.
Total outstanding debt, net of cash, reached $1.93 billion at the end of the quarter, representing a $118 million decrease from the second quarter of fiscal 2025. The net debt to adjusted EBITDA leverage ratio was 3.3 as of May 3, 2025.
United Natural’s Guidance for FY25
For fiscal 2025, the company anticipates net sales of $31.3-$31.7 billion. The company reported net sales of $31 billion in fiscal 2024.
Adjusted EBITDA is expected to be $550-$580 million. UNFI anticipates to deliver a net loss of $55-$80 million in fiscal 2025, in contrast to the net loss of $13 million and net earnings of $3 million expected earlier.
United Natural envisions fiscal 2025 adjusted earnings per share between 70 cents and 90 cents compared with 14 cents in fiscal 2024.
The company projects capital and cloud implementation expenditure of around $300 million for fiscal 2025. It anticipates a free cash flow of more than $150 million for fiscal 2025.
Shares of this Zacks Rank #3 (Hold) company have lost 5.1% in the past three months compared with the industry’s decline of 3.4%.
Image Source: Zacks Investment Research
Stocks to Consider
Nomad Foods (NOMD - Free Report) , which manufactures frozen foods, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average. The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 4.6% and 7.3%, respectively, from the year-ago number.
Mondelez International (MDLZ - Free Report) manufactures, markets and sells snack food and beverage products. It presently has a Zacks Rank of 2 (BUY). MDLZ delivered a trailing four-quarter earnings surprise of 9.8%, on average.
The consensus estimate for Mondelez’s current fiscal-year sales implies growth of 5.3% from the year-ago figures.
BRF S.A. (BRFS - Free Report) raises, produces and slaughters poultry and pork for the processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank #2. BRFS delivered a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for BRF S.A.'s current fiscal-year sales and earnings implies growth of 0.3% and 11.1%, respectively, from the prior-year levels.