United Natural Foods (NASDAQ:UNFI) reported mixed results for its fourth quarter of calendar 2025, with shares falling about 2.5% following the release.
Revenue for the quarter came in at $7.95 billion, down 2.6% year-over-year and slightly below analyst expectations of $8.11 billion.
Adjusted earnings per share (EPS) of $0.62 exceeded forecasts of $0.51.
Adjusted EBITDA reached $179 million, above the estimated $167.2 million, reflecting a 2.3% margin.
Operating performance remained largely stable, with an operating margin of 0.7% and free cash flow margin of 3.1%, similar to the prior-year quarter.
The company also updated its full-year fiscal 2026 guidance, lowering net sales expectations to $31 billion to $31.4 billion from the prior range of $31.6 billion to $32 billion.
At the same time, UNFI raised profitability projections, with net income now expected at $50 million to $75 million, up from $0 to $50 million, and adjusted EPS forecast at $2.30 $to 2.70, above the previous $1.50 to $2.30 range.
Adjusted EBITDA guidance was slightly raised to $680 million to $710 million from $630 million to $700 million, and free cash flow is projected at approximately $330 million, up from $300 million. Capital and cloud implementation expenditures remain around $250 million.
UNFI highlighted ongoing efforts to improve operational efficiency through network optimization, lean processes, and technology adoption.
Operating expenses declined nearly 6%, and the company reduced its net leverage ratio to 2.7x, the lowest since fiscal 2023, with expectations to reach approximately 2.3x by year-end.
“In the second quarter, disciplined execution of our value creation strategy delivered growth in profitability and free cash flow ahead of our projections, which enabled us to further strengthen our balance sheet and increase our financial flexibility,” CEO Sandy Douglas said.
He added that the company’s business pipeline remains strong, with a continued focus on helping retailers drive profitable growth.