United Natural Foods (UNFI) Q2 2026 earnings summary

Executive summary

• Q2 FY26 net sales declined 2.6% year-over-year to $7.95 billion, mainly due to network optimization in the Conventional segment, while Natural segment sales grew nearly 7%.

• Adjusted EBITDA rose 23% to $179 million, driven by network optimization, efficiency initiatives, and improved cost controls.

• Net income was $20 million, reversing a prior year loss, and adjusted EPS increased to $0.62 from $0.22.

• Free cash flow improved to $243 million, reflecting higher profitability and disciplined capital expenditures.

• Operating expenses declined nearly 6%, and net leverage dropped to 2.7x, the lowest since 2018.

Financial highlights

• Q2 FY26 net sales: $7.95 billion, down 2.6% year-over-year; gross profit was $1.05 billion, with gross margin improving to 13.2%.

• Adjusted EBITDA: $179 million, up from $145 million in Q2 FY25; adjusted EBITDA margin up to 2.3%.

• Adjusted EPS: $0.62, up from $0.22 in Q2 FY25; diluted EPS was $0.31, reversing a loss.

• Free cash flow: $243 million, up from $193 million year-over-year; net leverage ratio improved to 2.7x.

• Operating expenses fell to $972 million (12.2% of sales), and interest expense declined to $32 million.

Outlook and guidance

• FY26 net sales outlook lowered to $31.0–$31.4 billion, down 1.9% at midpoint, due to optimization and softer trends.

• Adjusted EBITDA guidance raised to $680–$710 million; adjusted EPS guidance increased to $2.30–$2.70.

• Free cash flow guidance raised to ~$330 million; net leverage target for year-end FY26 improved to ~2.3x.

• Capital and cloud implementation expenditures expected at ~$250 million.

• Expect sales growth to resume in fiscal 2027 as optimization cycles and new business pipeline mature.