UNFI ends fiscal 2026 with adjusted EBITDA up 27% as net sales fall 2%
United Natural Foods closed its fiscal 2026 with net sales of $31.152bn for the 52 weeks to Aug. 1, down 2.0% on the prior year, and adjusted EBITDA of $701m, up 27.0%, according to results the NYSE-listed distributor released on Sept. 8. The two numbers moving in opposite directions is the whole story of the year.
Fourth-quarter net sales were $7.642bn, down 0.7% over the 13 weeks. The company attributes part of that to deliberate action: the quarter's sales included, in the release's wording, "an approximately 500 basis point impact from planned accretive optimization actions and a 150 basis point headwind from the completed unwind of short-term project work." In plain terms, UNFI shed volume it had chosen to shed, and lapped project revenue that had already ended.
Profitability ran the other way. Fourth-quarter adjusted EBITDA, a non-GAAP measure, was $172m, a 48.3% increase. On a GAAP basis the company reported fourth-quarter net income of $35m, or $0.57 a share, and full-year net income of $84m, or $1.34 a share. Adjusted earnings per share, also non-GAAP, were $0.69 for the quarter and $2.65 for the year. Fourth-quarter gross margin was 13.7% of net sales.
Against sell-side expectations the quarter split. Investing.com reported that UNFI's $0.69 adjusted EPS beat a $0.61 consensus while the $7.64bn revenue figure fell short of a $7.69bn estimate. The same report said shares edged up 0.09% in pre-market trading on Sept. 8 following the announcement.
The segment detail shows where the mix is shifting. Natural revenue grew 7.0% to $17.132bn for the year, while conventional fell 11.5% to $12.974bn and retail fell 7.9% to $2.157bn. Natural is now comfortably the larger of the two wholesale segments, and the conventional decline is where the planned optimisation actions are concentrated.
Cash generation improved. Free cash flow was $323m for the year, up 35.1%, including $80m in the fourth quarter. Net debt stood at $1.54bn against $37m of cash, with total liquidity of roughly $1.27bn and a net leverage ratio of 2.2x.
UNFI also stepped up returns to shareholders. It repurchased 420,502 shares during the fourth quarter at an average price of $49.94, and disclosed that on Sept. 3, 2026 the board approved a new stock repurchase program authorising the company to buy back up to $200m of its shares. Buyback authorisations are permissions rather than commitments, and the release does not put a completion timetable on the program.
For fiscal 2027, which is also a 52-week year, the company guided to net sales of $31.2bn to $31.8bn, GAAP net income of $105m to $145m and GAAP EPS of $1.70 to $2.30, adjusted EPS of $3.00 to $3.50, adjusted EBITDA of $730m to $780m, and free cash flow of $275m to $325m. Capital and cloud implementation expenditures are guided at approximately $300m.
Investing.com framed that outlook as mixed against consensus: the $3.25 adjusted EPS midpoint sits marginally above a $3.21 estimate, while the $31.5bn revenue midpoint sits below a $31.87bn estimate. That is a continuation of the pattern in the quarter just reported — margin ahead, volume behind.
Chief executive Sandy Douglas said in the release that "UNFI delivered a strong fiscal year through disciplined execution of our strategy to add value for customers and suppliers while becoming a more effective and efficient company."
On the operating side, the company said it completed the initial deployment phase of Lean daily management to 44 distribution centres, which it credits with supporting a fourth consecutive quarter of year-over-year improvement in fill rates, on-time deliveries and throughput. Warehouse productivity is where a wholesaler with a 13.7% gross margin has to find its earnings, since there is very little room between the price it pays and the price it charges.
The arithmetic of the guidance is worth spelling out. Adjusted EBITDA at the fiscal 2027 midpoint of $755m would be about 7.7% above the $701m just delivered — a marked step down from the 27.0% growth recorded in fiscal 2026. That is what laps of a cost-reduction programme normally look like, but it means the next year's earnings progression depends more on volume and less on self-help than the year just closed.
The outlook also lands into an uncertain rate backdrop for leveraged mid caps. The Federal Open Market Committee meets on Sept. 15-16, a meeting the Federal Reserve's published calendar marks as including a Summary of Economic Projections. UNFI carries $1.54bn of net debt against $701m of adjusted EBITDA, so the path of financing costs matters to the free cash flow guidance even before the operating assumptions are tested.
