Financial Results United Natural Foods Announces Fourth-Quarter and Full-Year Fiscal 2026 Results
United Natural Foods, Inc. (UNFI) has reported a significant improvement in profitability and cash generation for the fourth quarter and full fiscal year ended August 1, 2026, highlighting the company’s progress in strengthening its operations, improving efficiency and reducing debt.
The company reported results for its fourth quarter, covering 13 weeks, and full fiscal year, covering 52 weeks. While net sales were affected by planned network optimization initiatives and the completion of short-term project work, UNFI delivered substantial growth in adjusted earnings and EBITDA while continuing to improve its balance sheet.
For the fourth quarter of fiscal 2026, UNFI generated net sales of approximately $7.6 billion, representing a 0.7% decline compared with the same period a year earlier. Despite the lower revenue, the company reported net income of $35 million, compared with a net loss of $87 million in the fourth quarter of fiscal 2025.
Adjusted EBITDA rose sharply during the quarter, increasing 48.3% to $172 million, compared with $116 million in the prior-year period. Adjusted earnings per share also improved considerably, reaching $0.69, compared with an adjusted loss per share of $0.11 in the fourth quarter of fiscal 2025.
On a full-year basis, UNFI reported net sales of $31.2 billion, down 2.0% from fiscal 2025. The company generated net income of $84 million, or $1.34 per diluted share, while adjusted EBITDA increased 27.0% to $701 million. Adjusted earnings per share climbed to $2.65.
The company also generated $540 million in net cash from operating activities for the full year and $323 million in free cash flow, providing additional financial flexibility and supporting debt reduction.
Stronger Profitability Despite Lower Sales
UNFI said fourth-quarter sales were affected by several planned factors. Approximately 500 basis points of the sales performance impact came from accretive optimization actions, while another 150 basis points reflected the completion of short-term project work.
These pressures were partially offset by the comparison with the fourth quarter of fiscal 2025, when the company’s results were negatively affected by a previously disclosed cybersecurity incident.
Despite the revenue decline, UNFI improved its gross profit performance. Fourth-quarter gross profit reached $1.05 billion, an increase of $20 million, or 1.9%, from the prior-year period.
The gross profit rate increased to 13.7% of net sales, compared with 13.4% a year earlier. UNFI attributed the improvement primarily to network optimization initiatives and changes in customer mix. These gains were partially offset by a lower gross margin rate in the company’s Retail segment.
Operating expenses also declined substantially. Fourth-quarter operating expenses were $984 million, equivalent to 12.9% of net sales, compared with $1.046 billion, or 13.6% of net sales, in the fourth quarter of fiscal 2025.
The reduction reflects the impact of cost-saving programs, network optimization and stronger productivity levels across the company’s distribution centers. UNFI noted that operating expenses in the year-ago quarter had also been elevated by investments required to continue serving customers during the cybersecurity incident.
Lower Interest Expense Supports Bottom Line
UNFI also benefited from lower financing costs during the quarter. Net interest expense declined to $29 million, compared with $36 million in the fourth quarter of fiscal 2025.
The company attributed the improvement primarily to lower average outstanding debt balances, reflecting progress in reducing its overall debt burden.
The effective tax rate for the quarter was an expense rate of 23.9% on pre-tax income, compared with a benefit rate of 21.1% on a pre-tax loss in the prior-year quarter. UNFI said the change was mainly related to higher pre-tax income and discrete tax benefits associated with employee stock award vestings during fiscal 2026.
Together, stronger operating performance and lower interest expense helped the company move from a quarterly loss to profitability.
Lean Management Program Expands Across Distribution Network
UNFI’s operational transformation remained a major component of its fiscal 2026 performance.
During the year, the company completed the initial deployment phase of its Lean daily management program across 44 distribution centers. The initiative is designed to improve operational discipline, productivity and consistency throughout the company’s supply chain.
UNFI reported that the program has contributed to a fourth consecutive quarter of year-over-year improvement in fill rates, on-time deliveries and throughput.
The company believes these improvements will strengthen its ability to serve grocery retailers and other customers while creating a more efficient distribution platform.
UNFI also began onboarding additional business from both new and existing customers. The company expects this activity to contribute to revenue growth in fiscal 2027, particularly as it moves beyond the larger optimization actions that affected fiscal 2026 sales.
Cash Flow Helps Reduce Debt
Cash generation remained another important area of progress for UNFI.
During the fourth quarter, net cash provided by operating activities totaled $197 million, compared with $160 million in the year-ago period. The increase was primarily driven by higher profitability.
The company invested $117 million in capital expenditures during the quarter, up from $74 million in fiscal 2025. The higher level of investment was primarily directed toward supply chain and technology initiatives.
As a result, fourth-quarter free cash flow was $80 million, compared with $86 million in the prior-year quarter.
For the full fiscal year, UNFI generated $540 million in operating cash flow and $323 million in free cash flow, giving the company additional resources to reduce debt and invest in its operations.
At the end of fiscal 2026, total outstanding debt net of cash stood at approximately $1.54 billion. This represented a $93 million reduction from the end of the third quarter and a $295 million decrease during fiscal 2026.
UNFI’s net leverage ratio stood at 2.2 times as of August 1, 2026.
The company ended the fiscal year with approximately $1.27 billion in total liquidity, including $37 million in cash and approximately $1.23 billion of unused borrowing capacity under its asset-based lending facility.
Share Repurchases and Fiscal 2027 Outlook
UNFI also continued returning capital to shareholders. During the fourth quarter, the company repurchased 420,502 shares at an average price of $49.94, representing an aggregate investment of approximately $21 million.
On September 3, 2026, UNFI’s Board of Directors approved a new $200 million share repurchase authorization. The new program replaces the company’s previous repurchase program, which was announced in September 2022.
Looking ahead, UNFI expects its operational improvements and customer growth initiatives to support stronger performance in fiscal 2027. The company’s guidance calls for high-single-digit growth in adjusted EBITDA, with the midpoint of its outlook approximately $25 million higher than the guidance provided at its December 2025 Investor Day.
UNFI CEO Sandy Douglas said the company delivered a strong fiscal year through disciplined execution of its strategy, with continued investment in commercial and supply chain capabilities.
According to Douglas, the company’s progress demonstrates the strength of its customer base and its focus on creating long-term value for customers, suppliers, employees and shareholders.
For fiscal 2027, UNFI plans to focus on helping customers execute their growth strategies, maintaining its operating momentum and returning the business to revenue growth.
Overall, fiscal 2026 represented a year of meaningful operational and financial improvement for United Natural Foods. Although planned optimization activities weighed on sales, stronger margins, cost controls, distribution-center productivity, improved cash generation and debt reduction positioned the company for a potentially stronger fiscal 2027.
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