United Natural Foods, Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results
United Natural Foods, Inc. (NYSE: UNFI), a leading grocery wholesaler in North America, announced its financial results for the fourth quarter (14 weeks) and fiscal year (53 weeks) ended August 3, 2024.
Key Financial Metrics
| Financial Metric | Q4 FY2024 | Q4 FY2023 | Year-over-Year Change | Consensus Estimate |
|---|---|---|---|---|
| Net Sales | $8.2B | $7.4B | +10.0% | $7.94B |
| EPS (Loss per Share) | $(0.63) | $(1.15) | -45.2% | $(0.1) |
| Adjusted EPS | $0.01 | $(0.25) | - | |
| Net Loss | $37M | $68M | -45.6% | |
| Adjusted EBITDA | $143M | $93M | +53.8% |
The financial performance for Q4 FY2024 shows notable improvements. Net sales rose by 10% compared to Q4 FY2023, reaching $8.2 billion, aided by an additional week in the quarter and improving unit volumes. While the company experienced a net loss of $37 million, this reflected a substantial improvement over the previous year's same-quarter loss. Moreover, Adjusted EBITDA saw a considerable increase of 53.8%, indicative of operational efficiencies.
Revenue Performance by Segment
| Segment | Revenue Q4 FY2024 | Previous Guidance/Comparison |
|---|---|---|
| Core Wholesale | Significant growth beyond expectations due to new business with existing customers. | Guidance not provided. |
| Other Segments | Performance aligned with strategic initiatives. | Guidance not provided. |
The revenue growth was primarily driven by the core wholesale segment, which benefited from existing customer relationships and strategic efficiency initiatives.
Key Developments and Operational Highlights
- Improved volume trends and efficiency initiatives supported performance.
- Consolidation of Billings and Bismarck distribution centers for enhanced operational efficiency.
- Introduced a three-year business plan focusing on margin expansion and free cash generation.
Executive Commentary
Sandy Douglas, UNFI's Chief Executive Officer, highlighted the delivery of strong sequential profitability throughout FY2024, with significant structural efficiency benefits amounting to approximately $150 million. The company also extended its largest customer agreement and focused on optimizing its distribution network to enhance shareholder value moving into FY2025.
Capital Allocation and Financing
- Free cash flow for Q4 FY2024 was $71 million, down from $117 million in the prior year.
- Net debt was reduced sequentially, ending at $2.06 billion with a leverage ratio of 4.0x.
Forward Guidance and Market Reaction
The company did not provide detailed forward guidance for revenue and earnings for fiscal 2025. Following the earnings release, the company's stock price decreased by approximately 1.87%.
Conclusion
United Natural Foods, Inc. demonstrated a strong end to fiscal 2024 with improved operational efficiencies and strategic growth initiatives, setting a positive tone as it enters fiscal 2025.
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