United Natural Foods (UNFI) The 38th Annual Roth Conference summary

Strategic focus and financial performance

• Strategy centers on adding value for customers and suppliers while improving operational effectiveness and efficiency, with seven core capabilities executed in parallel.

• EBITDA grew 23% in Q2, with a $50 million increase in free cash flow; full-year EBITDA outlook revised to $685 million for fiscal 2026.

• Network optimization is used as a revenue management tool, with new automated facilities and ongoing market analysis to support customer growth.

• Lean management practices implemented in 75% of distribution centers, resulting in improved safety, reduced shrink by 11%, and increased productivity by 6%.

• Focused on a $90 billion market segment within the $1 trillion U.S. food market, emphasizing differentiated, health, and wellness-oriented products.

Operational initiatives and growth plans

• Seven capabilities include customer stewardship, merchandising, supplier management, professional and digital services, brands, technology, and supply chain optimization.

• Continuous improvement and lean initiatives drive efficiency, with 12 improvement processes completed in Q2 and ongoing KPI-driven management.

• Retail banners serve as a lab for innovation, with a focus on revitalizing customer experience and leveraging learnings across the network.

• Services such as credit card platforms, equipment services, and media networks are expanding, aiming to deepen customer relationships and create new revenue streams.

• Free cash flow outlook projects $330 million in 2026 and $300 million in both 2027 and 2028, supporting organic investments and deleveraging.

Market trends and customer engagement

• Health and wellness trends remain strong, supporting low single-digit growth in the core $90 billion market segment.

• Top decile customers source 80% of their products, with opportunities to increase penetration among others through tailored solutions.

• Promotional activity from suppliers remains rational and seasonal, with no significant uptick expected in financial modeling.

• Inflation is expected to remain low and stable, with ongoing efforts to keep prices predictable for customers.

• Industry growth is anticipated to resume in 2027 and 2028 after network optimization, with continued focus on efficiency, services, and brand opportunities.