The chart below shows how UNFI performed 10 days before and after its earnings report, based on data from the past quarters. Typically, UNFI sees a +11.41% change in stock price 10 days leading up to the earnings, and a -2.23% change 10 days following the report. On the earnings day itself, the stock moves by -5.44%. This data can give you a slight idea of what to expect for the next quarter's release.
Positive
Earnings Per Share Beat: United Natural Foods, Inc. reported an EPS of $0.22, exceeding expectations of $0.18.
Sales Growth Overview: Sales grew nearly 5% to $8.2 billion, driven by an 8% increase in the natural products business.
Adjusted EBITDA Increase: Adjusted EBITDA grew over 13% to $145 million, marking the highest adjusted EBITDA margin rate since Q3 of fiscal 2023.
Free Cash Flow Increase: Free cash flow generation reached $193 million in the quarter, an increase of approximately $77 million compared to last year.
Net Leverage Reduction: Net leverage was reduced to 3.7 times, the lowest level since fiscal 2023, keeping the company on track for long-term deleveraging goals.
Increased Sales Outlook: The company raised its full-year outlook for net sales to a range of $31.3 billion to $31.7 billion, reflecting higher customer retention than previously expected.
Increased Adjusted EBITDA Expectations: Adjusted EBITDA expectations were increased by $20 million, bringing the new range to $550 million to $580 million, representing an 11% increase over last year.
Lean Management Implementation: The company is focused on continuous improvement and has rolled out lean daily management to nine distribution centers, leading to initial productivity gains.
Negative
Retail Sales Decline: Sales in the retail business decreased by about 3% compared to last year, primarily due to five store closures over the past 12 months.
Same-Store Sales Decline: Same-store sales were down about 40 basis points, indicating a slight decline in customer traffic or spending.
Gross Margin Decline: Consolidated gross margin rate declined by 20 basis points compared to the prior year, driven by a lower wholesale margin rate and changes in customer and product mix.
Gross Margin Decline: The wholesale gross margin rate declined about 10 basis points versus last year’s Q2, indicating challenges in maintaining profitability amidst changing market conditions.
Sales Growth Concerns: Despite an increase in adjusted EBITDA, the anticipated sequential deceleration in sales growth from 4.6% in the first half to around 3% in the second half raises concerns about future performance.
Cautious Growth Outlook: The company has not included any incremental strategic actions in their updated outlook, suggesting a cautious approach to future growth initiatives.
United Natural Foods, Inc. (NYSE:UNFI) Q2 2025 Earnings Call Transcript
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