PROVIDENCE, RI - United Natural Foods, Inc. reported financial results for the second quarter of fiscal 2025 (13 weeks) ended February 1, 2025.

Second Quarter Fiscal 2025 Performance (comparisons to second quarter fiscal 2024)

• Net sales increased 4.9% to $8.2 billion
• Net loss of $(3) million; Loss per diluted share (EPS) of $(0.05)
• Adjusted EBITDA(1) increased 13.3% to $145 million
• Adjusted EPS(1) increased to $0.22
• Recent Financial and Operational Summary

Raising FY25 outlook for all metrics other than capital and cloud spending for second consecutive quarter

• Continued focus on stakeholder value creation and lean management delivered 13.3% Adjusted EBITDA growth and approximately $77 million free cash flow(1) improvement compared to the prior year quarter
• Continuing to execute multi-year strategy
  • Expanding work to strengthen partnership and value creation for customers and suppliers
  • Completed Fort Wayne distribution center closure in February
  • Previously announced product-centered realignment driving further specialization and streamlining
  • Deleveraging progressing faster than anticipated as net debt to
  • Adjusted EBITDA ratio(1) declined to 3.7x, a decline of 0.6x over the past 12 months

“During the second quarter, we delivered solid sales growth and our sixth consecutive quarter of sequentially improving Adjusted EBITDA. We also continued to execute against our multi-year strategic plan focused on creating sustainable value for our customers and suppliers, while enhancing our profitability and free cash flow generation and reducing net leverage. Our continued positive volume trends serve as an indicator of the strength of our customer base and the unique role UNFI plays in the food distribution supply chain,” said Sandy Douglas, UNFI’s CEO, in a recent press release.

“We are currently working to complete the previously announced product-focused realignment of our wholesale business designed to create more customized service for our customers and suppliers. As we look to the second half of the fiscal year, we remain focused on further execution of our plan and identifying new opportunities to bring increasing value, while delivering our updated outlook and continuing to deleverage our balance sheet.”

Second Quarter Fiscal 2025 Summary

Net sales increased 4.9% in the second quarter of fiscal 2025 compared to the same period in the prior year, primarily driven by a 3% increase in wholesale unit volumes, including the benefit of new business with existing and new customers, as well as inflation. This performance was led by natural product growth.

Gross profit in the second quarter of fiscal 2025 was $1.1 billion, an increase of $37 million, or 3.6%, compared to the second quarter of fiscal 2024. The gross profit rate in the second quarter of fiscal 2025 was 13.1% of net sales compared to 13.3% of net sales in the second quarter of fiscal 2024. The decrease in the gross profit rate was primarily driven by lower product margin rates and business mix partly offset through supplier programs, lower shrink and a higher retail gross margin rate.

Operating expenses in the second quarter of fiscal 2025 were $1,031 million, or 12.6% of net sales, compared to $1,010 million, or 13.0% of net sales, in the second quarter of fiscal 2024. The decrease in operating expenses as a percentage of net sales was driven by the leveraging impact of higher sales and the benefits from cost saving initiatives.

Interest expense, net for the second quarter of fiscal 2025 was $38 million compared to $40 million for the second quarter of fiscal 2024 driven by lower average outstanding debt balances.

View the full report here.