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Why Is United Natural (UNFI) Up 14.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for United Natural Foods (UNFI - Free Report) . Shares have added about 14.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is United Natural due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for United Natural Foods, Inc. before we dive into how investors and analysts have reacted as of late.
United Natural Foods Q2 Earnings Beat Estimates, Sales Guidance Lowered
United Natural Foods reported second-quarter fiscal 2026 results, wherein the bottom line improved year over year and beat the Zacks Consensus Estimate. The top line declined year over year and missed the consensus mark. Management also updated its fiscal 2026 guidance.
United Natural Foods posted adjusted earnings of 62 cents per share for the quarter under review, beating the Zacks Consensus Estimate of 51 cents. Also, the bottom line increased from 22 cents reported in the year-earlier quarter.
Net sales decreased 2.6% year over year to $7,947 million, missing the Zacks Consensus Estimate of $8,151 million. This decline includes an approximately 500 basis point (bps) impact from accretive optimization initiatives in the quarter. The decrease reflects an anticipated decline in conventional sales, primarily due to the transition out of the Allentown, PA, distribution center in the first quarter of fiscal 2026.
The Natural segment experienced year-over-year sales growth of 6.7%. The Conventional and Retail segments witnessed a year-over-year sales decline of 12.1% and 8.2%, respectively.
Analysis of United Natural Foods’ Costs & Margins
United Natural Foods' gross profit fell 2.4% year over year to $1,046 million. The gross profit margin of 13.2% expanded 10 bps from 13.1% reported in the year-ago quarter. This expansion was driven by benefits from network optimization and a favorable customer mix, as well as higher procurement gains, partially offset by a lower gross margin rate in the Retail segment.
Operating expenses were $972 million compared with $1,031 million in the year-ago quarter. As a percentage of sales, operating expenses were 12.2% compared with 12.6% in the year-ago period. The reduction in operating expenses as a percentage of net sales reflects the benefits of cost-saving initiatives, including network optimization and improved distribution center productivity.
Adjusted EBITDA came in at $179 million, up 23.4% from $145 million in the year-ago quarter.
United Natural Foods’ Financial Health Snapshot
The company had a total liquidity of $1.34 billion as of Jan. 31, 2026, including cash of nearly $52 million and $1.29 billion of available capacity under its asset-based lending facility.
In the second quarter of fiscal 2026, free cash flow was $243 million compared with $193 million in the prior-year quarter. The reported figure reflects $283 million in net cash provided by operating activities and $40 million in capital expenditure.
Total outstanding debt, net of cash, was $1.68 billion at the end of the second quarter of fiscal 2026. The net leverage ratio was 2.7x as of Jan. 31, 2026..
United Natural Foods' Guidance for FY26
United Natural Foods updated its fiscal 2026 outlook. For the full year, the company now expects net sales between $31 billion and $31.4 billion compared with its prior forecast of $31.6 billion and $32 billion.
Adjusted EPS is now projected to be $2.30-$2.70, higher than the earlier guidance of $1.50 to $2.30. Adjusted EBITDA is now expected to land between $680 million and $710 million compared with its prior forecast of $630 million and $700 million.
The company projects capital and cloud implementation expenditure of around $250 million for fiscal 2026. It anticipates a free cash flow of approximately $330 million for fiscal 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 23.24% due to these changes.
VGM Scores
At this time, United Natural has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock has a grade of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, United Natural has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is United Natural (UNFI) Up 14.3% Since Last Earnings Report?
A month has gone by since the last earnings report for United Natural Foods (UNFI - Free Report) . Shares have added about 14.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is United Natural due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for United Natural Foods, Inc. before we dive into how investors and analysts have reacted as of late.
United Natural Foods Q2 Earnings Beat Estimates, Sales Guidance Lowered
United Natural Foods reported second-quarter fiscal 2026 results, wherein the bottom line improved year over year and beat the Zacks Consensus Estimate. The top line declined year over year and missed the consensus mark. Management also updated its fiscal 2026 guidance.
United Natural Foods posted adjusted earnings of 62 cents per share for the quarter under review, beating the Zacks Consensus Estimate of 51 cents. Also, the bottom line increased from 22 cents reported in the year-earlier quarter.
Net sales decreased 2.6% year over year to $7,947 million, missing the Zacks Consensus Estimate of $8,151 million. This decline includes an approximately 500 basis point (bps) impact from accretive optimization initiatives in the quarter. The decrease reflects an anticipated decline in conventional sales, primarily due to the transition out of the Allentown, PA, distribution center in the first quarter of fiscal 2026.
The Natural segment experienced year-over-year sales growth of 6.7%. The Conventional and Retail segments witnessed a year-over-year sales decline of 12.1% and 8.2%, respectively.
Analysis of United Natural Foods’ Costs & Margins
United Natural Foods' gross profit fell 2.4% year over year to $1,046 million. The gross profit margin of 13.2% expanded 10 bps from 13.1% reported in the year-ago quarter. This expansion was driven by benefits from network optimization and a favorable customer mix, as well as higher procurement gains, partially offset by a lower gross margin rate in the Retail segment.
Operating expenses were $972 million compared with $1,031 million in the year-ago quarter. As a percentage of sales, operating expenses were 12.2% compared with 12.6% in the year-ago period. The reduction in operating expenses as a percentage of net sales reflects the benefits of cost-saving initiatives, including network optimization and improved distribution center productivity.
Adjusted EBITDA came in at $179 million, up 23.4% from $145 million in the year-ago quarter.
United Natural Foods’ Financial Health Snapshot
The company had a total liquidity of $1.34 billion as of Jan. 31, 2026, including cash of nearly $52 million and $1.29 billion of available capacity under its asset-based lending facility.
In the second quarter of fiscal 2026, free cash flow was $243 million compared with $193 million in the prior-year quarter. The reported figure reflects $283 million in net cash provided by operating activities and $40 million in capital expenditure.
Total outstanding debt, net of cash, was $1.68 billion at the end of the second quarter of fiscal 2026. The net leverage ratio was 2.7x as of Jan. 31, 2026..
United Natural Foods' Guidance for FY26
United Natural Foods updated its fiscal 2026 outlook. For the full year, the company now expects net sales between $31 billion and $31.4 billion compared with its prior forecast of $31.6 billion and $32 billion.
Adjusted EPS is now projected to be $2.30-$2.70, higher than the earlier guidance of $1.50 to $2.30. Adjusted EBITDA is now expected to land between $680 million and $710 million compared with its prior forecast of $630 million and $700 million.
The company projects capital and cloud implementation expenditure of around $250 million for fiscal 2026. It anticipates a free cash flow of approximately $330 million for fiscal 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 23.24% due to these changes.
VGM Scores
At this time, United Natural has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock has a grade of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, United Natural has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.