United Natural Foods Reports Q2 Fiscal 2025 Results with Net Loss of $3 Million

United Natural Foods, Inc. (UNFI) reported its financial results for the second quarter of fiscal 2025, revealing a net loss of $3 million, or $0.05 per diluted share, compared to a net loss of $15 million, or $0.25 per diluted share, in the same period last year. The company's net sales increased by 4.9% to $8.158 billion, up from $7.775 billion in the prior year, driven primarily by a rise in unit volumes of natural products and inflationary pressures. Gross profit for the quarter rose to $1.072 billion, a 3.6% increase from $1.035 billion, although the gross profit margin slightly decreased to 13.1% from 13.3% year-over-year.

In terms of operational performance, UNFI's wholesale segment saw net sales increase to $7.872 billion, a 5.2% rise from $7.487 billion in the previous year, attributed to a 3% increase in unit volumes and new business with existing customers. Conversely, the retail segment experienced a decline in net sales to $610 million, down 3.3% from $631 million, primarily due to a decrease in identical store sales and store closures. The company also reported an increase in operating expenses, which rose to $1.031 billion, reflecting a 2.1% increase compared to the same quarter last year.

Strategically, UNFI is undergoing a realignment of its commercial wholesale organization into two product-centered divisions: Conventional Grocery Products and Natural, Organic, Specialty & Fresh Products. This restructuring aims to enhance service delivery to customers and suppliers. The company has also initiated the closure of a distribution center in the Central region and opened a new facility in Manchester, Pennsylvania, which is expected to be automated later in the fiscal year. These changes are part of UNFI's broader strategy to optimize its distribution network and improve operational efficiencies.

As of February 1, 2025, UNFI's total assets increased to $7.731 billion from $7.528 billion at the end of the previous fiscal year, with cash and cash equivalents rising to $44 million. The company reported total debt of $2.071 billion, a slight decrease from $2.085 billion, primarily due to reduced borrowings under its asset-based revolving credit facility. UNFI's liquidity position remains strong, with $1.312 billion in total liquidity, including $1.268 billion of unused credit under its ABL Credit Facility.

Looking ahead, UNFI anticipates continued challenges from inflation and changing consumer behaviors, which may impact sales and profitability. The company is focused on improving its cost structure and cash flow while investing in its distribution network and technology to enhance operational efficiency. UNFI remains committed to its strategic initiatives aimed at driving growth and improving financial performance in the coming quarters.