Q4 2025 United Natural Foods Inc Earnings Call Transcript
Key Points
- United Natural Foods Inc (UNFI) delivered solid fourth-quarter results, aligning with their fiscal 2025 outlook for net sales and adjusted EBITDA, and exceeded expectations for free cash flow.
- The company reduced net debt to approximately $1.8 billion, the lowest level since fiscal 2018, and decreased net leverage by 0.7 turns compared to the previous year.
- UNFI's Refresh strategy has shown progress, with growth in both existing and new customer bases, and improvements in category merchandising and account management capabilities.
- The company expanded its digital and professional services, enhancing customer relationships and operational efficiency.
- UNFI's fiscal 2026 outlook includes expectations for continued profitable growth, with net sales projected to grow in the low-single digits and adjusted EBITDA growth in the low-double-digit range.
- Fourth-quarter sales decreased to $7.7 billion from $8.2 billion the previous year, partly due to a cyber incident that impacted revenues.
- The company's gross margin rate decreased to 13.4% from 13.7% in the prior year quarter, affected by the cyber incident and elevated shrink.
- Operating expenses increased to 13.6% of net sales compared to 13.2% last year, due to the deleveraging impact of lost sales and additional costs from the cyber incident.
- Adjusted EBITDA for the fourth quarter was $116 million, down from $133 million in the previous year's fourth quarter, excluding the additional week in fiscal 2024.
- The company faced unexpected challenges from a cyber incident, impacting their financial performance and requiring significant remediation efforts.
Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the UNFI fourth-quarter 2025 earnings conference call. (Operator Instructions)
I would now like to turn the conference over to Steve Bloomquist, Vice President of Investor Relations. Please go ahead.
Good morning, everyone, and thank you for joining us for UNFI's fourth-quarter fiscal 2025 earnings conference call. By now, you should have received a copy of the earnings release from this morning. The press release and earnings presentation, which management will speak to, are available under the Investors section of the company's website at www.unfi.com. We've also included a supplemental disclosure file in Microsoft Excel with key financial information.
Joining me for today's call are Sandy Douglas, our Chief Executive Officer; and Matteo Tarditi, our
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