United Natural Foods Reports Strong Q2 Earnings

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United Natural Foods (NYSE:UNFI) reported fiscal second-quarter 2024 results that management said reflected disciplined execution of its value creation strategy, with gains in profitability and free cash flow more than offsetting near-term sales pressure tied to network optimization initiatives. The company saw strong growth in natural product sales and improved profitability, with adjusted EBITDA increasing over 23% and adjusted EBITDA margin rising to 2.3% of net sales.

Why it matters

United Natural Foods is a leading distributor of natural, organic and specialty foods in North America, serving retail, foodservice and e-commerce customers. The company's strong Q2 performance, driven by profitability gains and free cash flow improvement, demonstrates its ability to execute on its value creation strategy despite near-term sales challenges from network optimization efforts.

The details

Despite a sales decline, profitability improved significantly. Adjusted EBITDA increased more than 23% to $179 million, and adjusted EBITDA margin rose to 2.3% of net sales, up about 50 basis points year-over-year. Adjusted EPS was $0.62, up from $0.22 a year earlier, which management attributed to higher adjusted EBITDA, lower net interest expense from reduced debt levels, and lower depreciation expense. Natural product sales grew 7% and 'outperformed the market,' while conventional product sales declined 12% due to strategic network optimization. Retail sales fell 8%, largely driven by strategic store closures. The company's supply chain modernization efforts, including the rollout of an AI-powered planning platform, are improving customer service, fill rates, and inventory management.

• United Natural Foods reported fiscal second-quarter 2024 results on March 11, 2026.

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