United Natural Foods Inc. (NYSE:UNFI) returned to profitability in its fiscal fourth quarter despite another decline in sales, as cost reductions, distribution-center improvements and network changes helped strengthen the grocery wholesaler’s margins.
The Providence, R.I.-based company reported net income of $35 million, or 57 cents per diluted share, for the 13 weeks ended Aug. 1. That compared with a net loss of $87 million, or $1.43 per share, during the year-ago quarter.
Net sales declined 0.7% to $7.64 billion from $7.7 billion. Adjusted earnings were 69 cents per share, compared with an adjusted loss of 11 cents per share a year earlier. Adjusted EBITDA increased 48.3% to $172 million.
For the full fiscal year, UNFI earned $84 million, or $1.34 per diluted share, reversing a $118 million loss in fiscal 2025. Full-year sales declined 2% to $31.15 billion, while adjusted EBITDA increased 27% to $701 million.
Sales trends varied sharply across UNFI’s business. Fourth-quarter natural-product sales increased 6.6% to $4.26 billion, while conventional-product sales declined 8.6% to $3.12 billion. Retail sales, which include UNFI’s Cub Foods and Shoppers operations, fell 7.9% to $528 million.
UNFI said fourth-quarter sales were reduced by approximately 5 percentage points as a result of planned network-optimization actions and another 1.5 percentage points from the end of temporary project work. Those pressures were partially offset by the comparison with last year’s cybersecurity disruption. Excluding those factors, the company said underlying sales increased by a low-single-digit percentage.
Gross profit increased 1.9% to $1.05 billion and represented 13.7% of sales, up from 13.4% a year earlier. Operating expenses declined to 12.9% of sales from 13.6%, reflecting cost reductions and improved distribution-center productivity.
CEO Sandy Douglas said UNFI’s strategy is strengthening its commercial and supply-chain capabilities while helping the company reduce debt; net debt declined by $295 million during fiscal 2026 to $1.54 billion.
UNFI also reported year-over-year improvements in fill rates, on-time deliveries and throughput for the fourth consecutive quarter. The company has expanded its Lean Daily Management program to 44 distribution centers and completed the rollout of an artificial intelligence-powered supply-chain and procurement-planning platform.
For fiscal 2027, UNFI expects sales of $31.2 billion to $31.8 billion, net income of $105 million to $145 million and adjusted EBITDA of $730 million to $780 million. The company is projecting adjusted earnings of $3 to $3.50 per share and free cash flow of $275 million to $325 million.
UNFI’s board also authorized a new $200 million share-repurchase program.