Key Points – UNFI posted better profitability and cash flow in Q3 even as sales fell 4.2% to about $7.7 billion.
Adjusted EBITDA rose nearly 17% to $183 million, free cash flow hit $54 million, and net leverage improved to 2.5x. – Efficiency initiatives are driving margins higher, with gross margin up to 13.6% and operating expenses down nearly 7%
Management said distribution center productivity increased more than 7% thanks to network optimization, supply chain investments and lean practices. – Natural products remain a key growth area, with sales up more than 4% and underlying growth outperforming the market. UNFI also reiterated its fiscal 2026 outlook and said it expects wholesale sales growth to return in fiscal 2027 as optimization impacts lapse. – US Foods is Managing Inflation Deceleration the Right Way United Natural Foods (NYSE:UNFI) reported stronger third-quarter fiscal 2026 profitability and cash flow despite lower sales, as management said network optimization, productivity initiatives and supply chain investments continued to reshape the business. On the company’s earnings call, CEO Sandy Douglas said UNFI made “steady progress” on its value creation strategy, which is focused on adding value for customers and suppliers while making the company more effective and efficient.
He said the company generated “strong profitability and free cash flow” during the quarter while strengthening its balance sheet and improving financial flexibility. – The Turnaround in United Natural Foods is Ripening President and Chief Financial Officer Matteo Tarditi said third-quarter sales were approximately $7.7 billion, down 4.2% from the prior year. He said the decline included an approximately 450-basis-point impact from what the company calls “accretive optimization actions,” similar to the impact in the second quarter and in line with expectations. Sales also reflected the beginning of the unwind of short-term project work for a single customer.