It has been about a month since the last earnings report for United Natural Foods (UNFI Quick QuoteUNFI - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is United Natural due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.

UNFI Q4 Earnings Beat Estimates on Margin Gains and Cost Savings

United Natural Foods reported fourth-quarter fiscal 2026 results, wherein both the top and bottom lines beat the Zacks Consensus Estimate. However, the top line declined year over year but the bottom line improved.

United Natural posted adjusted earnings of 69 cents per share, up from an adjusted loss of 11 cents a year earlier. That beat the consensus estimate of 62 cents.

Net sales fell 0.7% year over year to $7,642 million but topped the consensus estimate of $7,576 million by 0.87%. The decline included an approximately 500-basis-point adverse impact from planned accretive optimization actions and a 150-basis-point headwind from the completed unwind of short-term project work. These pressures were partly offset by the comparison with the prior-year cybersecurity incident.

UNFI’s Quarterly Performance by Division

Natural segment sales increased 6.6% year over year to $4,260 million, reflecting continued demand for natural, organic, fresh and specialty products. 

Conventional sales fell 8.6% to $3,121 million, while Retail sales declined 7.9% to $528 million.

Analysis of UNFI’s Costs & Margins

Gross profit increased 1.9% year over year to $1,050 million. The gross profit rate improved to 13.7% of net sales from 13.4%, helped by network optimization actions and customer mix, partly offset by a lower gross margin rate in Retail.

Operating expenses declined to $984 million from $1,046 million. As a percentage of sales, operating expenses improved to 12.9% from 13.6%, primarily on cost-saving initiatives and higher distribution-center productivity. 

Adjusted EBITDA margin was approximately 2.3% of net sales, while adjusted EBITDA rose 48.3% to $172 million.

United Natural’s Financial Position

Net cash provided by operating activities totaled $197 million in the quarter, while capital expenditures were $117 million. Free cash flow came in at $80 million compared with $86 million a year earlier.

Net debt ended fiscal 2026 at $1.54 billion, with the net leverage ratio at 2.2x. Liquidity was approximately $1.27 billion. UNFI repurchased 420,502 shares for about $21 million during the quarter, and its board authorized a new $200 million share repurchase program.

UNFI Sets Fiscal 2027 Growth Framework

For fiscal 2027, UNFI expects net sales of $31.2-$31.8 billion and net income of $105-$145 million. GAAP earnings are projected at $1.70-$2.30 per share, while adjusted earnings are forecast at $3.00-$3.50 per share.

Adjusted EBITDA is expected at $730-$780 million, representing high-single-digit growth. The company also projects about $300 million of capital and cloud implementation expenditures and free cash flow of $275-$325 million.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a flat trend in estimates revision.

VGM Scores

At this time, United Natural has a great 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 quintile for this investment strategy.

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

United Natural has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.