UNFI Q4 Earnings Beat Estimates on Margin Gains and Cost Savings

United Natural Foods, Inc. UNFI reported fourth-quarter fiscal 2026 results, wherein both the top and bottom lines beat the Zacks Consensus Estimate. However, the top line declined year over year but the bottom line improved.

United Natural posted adjusted earnings of 69 cents per share, up from an adjusted loss of 11 cents a year earlier. That beat the consensus estimate of 62 cents.

United Natural Foods, Inc. Price, Consensus and EPS Surprise

United Natural Foods, Inc. price-consensus-eps-surprise-chart | United Natural Foods, Inc. Quote

Net sales fell 0.7% year over year to $7,642 million but topped the consensus estimate of $7,576 million by 0.87%. The decline included an approximately 500-basis-point adverse impact from planned accretive optimization actions and a 150-basis-point headwind from the completed unwind of short-term project work. These pressures were partly offset by the comparison with the prior-year cybersecurity incident.

UNFI’s Quarterly Performance by Division

Natural segment sales increased 6.6% year over year to $4,260 million, reflecting continued demand for natural, organic, fresh and specialty products. 

Conventional sales fell 8.6% to $3,121 million, while Retail sales declined 7.9% to $528 million.

Analysis of UNFI’s Costs & Margins

Gross profit increased 1.9% year over year to $1,050 million. The gross profit rate improved to 13.7% of net sales from 13.4%, helped by network optimization actions and customer mix, partly offset by a lower gross margin rate in Retail.

Operating expenses declined to $984 million from $1,046 million. As a percentage of sales, operating expenses improved to 12.9% from 13.6%, primarily on cost-saving initiatives and higher distribution-center productivity. 

Adjusted EBITDA margin was approximately 2.3% of net sales, while adjusted EBITDA rose 48.3% to $172 million.

United Natural’s Financial Position

Net cash provided by operating activities totaled $197 million in the quarter, while capital expenditures were $117 million. Free cash flow came in at $80 million compared with $86 million a year earlier.

Net debt ended fiscal 2026 at $1.54 billion, with the net leverage ratio at 2.2x. Liquidity was approximately $1.27 billion. UNFI repurchased 420,502 shares for about $21 million during the quarter, and its board authorized a new $200 million share repurchase program.

UNFI Sets Fiscal 2027 Growth Framework

For fiscal 2027, UNFI expects net sales of $31.2-$31.8 billion and net income of $105-$145 million. GAAP earnings are projected at $1.70-$2.30 per share, while adjusted earnings are forecast at $3.00-$3.50 per share.

Adjusted EBITDA is expected at $730-$780 million, representing high-single-digit growth. The company also projects about $300 million of capital and cloud implementation expenditures and free cash flow of $275-$325 million. 

Shares of this Zacks Rank #3 (Hold) company have fallen 11.2% in the past three months against the industry’s growth of 4.1%.

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Stocks to Consider

The Vita Coco Company, Inc. COCO develops, manufactures, markets and distributes coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa and the Asia Pacific. COCO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Vita Coco’s current fiscal-year sales and earnings indicates growth of 31.6% and 64.7%, respectively, from the year-ago reported numbers. The company delivered a trailing four-quarter earnings surprise of 21.9%, on average.

The Chefs' Warehouse, Inc. CHEF distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF carries a Zacks Rank #2 (Buy). Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.

The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.6% and 33.7%, respectively, from the year-ago reported figures. 

Luckin Coffee Inc. LKNCY offers retail services of freshly brewed drinks and pre-made food and beverage items in the People's Republic of China. The company currently carries a Zacks Rank of 2. LKNCY delivered a trailing four-quarter earnings surprise of 6.6%, on average.

The Zacks Consensus Estimate for Luckin Coffee’s current financial year sales and earnings indicates growth of 32% and 40.8%, respectively, from the prior-year reported levels.

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