UNFI Reports Q3 Fiscal 2026 Results, Showing Steady Progress on Value Creation Strategy
June 9, 2026 3 minute read
Today, UNFI reported third quarter fiscal 2026 results that reflect steady progress on the company’s strategy to add value for customers and suppliers and become a more effective and efficient company.
UNFI delivered strong profitability, with Adjusted EBITDA up nearly 17% versus last year’s third quarter, driven in part by continued growth in natural and organic product sales as shoppers increasingly reach for healthier products.
Total net sales were down 4.2% due to the impact of accretive network optimization actions and the upcoming completion of a short-term customer project. Excluding these factors, underlying sales grew low single-digits, outperforming the broader food retail industry. The company expects to return to sales growth in fiscal 2027 after cycling its network optimization actions.
Fiscal year-to-date, UNFI generated Free Cash Flow of $243 million, an increase of $90 million compared to the prior year period.
“Through disciplined execution of our value creation strategy, we delivered underlying sales growth, higher profitability, and strong free cash flow, which strengthened our balance sheet and increased our financial flexibility,” said UNFI CEO Sandy Douglas. “At the same time, we advanced capabilities to help our customers and suppliers grow profitably, while continuing to invest in next generation supply chain solutions that are steadily improving our effectiveness and efficiency.”
Adding Value for Customers & Suppliers
During the quarter, UNFI continued strengthening capabilities to help customers execute their growth strategies in a dynamic marketplace – and in turn, to help suppliers build their brands within the company’s diverse retailer network.
For example, UNFI rolled out a new digital marketplace, Endless Aisle, designed to help retailers more easily access innovative brands and to help emerging suppliers expand their reach. The company also introduced more than 30 new private brands SKUs to help customers differentiate their assortments and remain competitive on price, while meeting growing demand for nutritious choices.
Improving Effectiveness & Efficiency
UNFI also continued investing in next-generation supply chain capabilities to more effectively and efficiently serve customers and suppliers. During the quarter, the company expanded its AI-powered supply chain and procurement planning platform across its full distribution network, supporting improvements in fill rates and inventory management.
UNFI also expanded the use of an AI-powered fleet management platform to enhance driver safety and delivery execution. Through the third quarter, on-time deliveries increased by more than 4% compared to the prior year period, while reducing average miles per delivery by nearly 5%.
In addition, the company expanded lean daily management to 40 distribution centers, supporting continued improvements in safety, quality, delivery, and cost.
“Looking ahead, we have reiterated our financial outlook midpoints across all key metrics, reflecting our high-confidence plan and disciplined execution in a dynamic operating environment,” said Matteo Tarditi, UNFI’s Chief Financial Officer. “We see significant opportunity to continue strengthening capabilities to help our customers and suppliers succeed, while becoming an even more effective and efficient company.”
For more details, read UNFI’s press release or listen to the recording of its public earnings call.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. The risks and uncertainties which could impact these statements are described in the Company’s filings under the Securities Exchange Act of 1934, as amended, including under the section entitled “Risk Factors” in the Company’s annual report on Form 10-K for the year ended August 3, 2024 filed with the Securities and Exchange Commission (the “SEC”) on October 1, 2024 and other filings the Company makes with the SEC, and include, but are not limited to, our dependence on principal customers; the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures and intense competition, including as a result of the continuing consolidation of retailers and the growth of consumer choices for grocery and consumable purchases; our ability to realize the anticipated benefits of our strategic initiatives; changes in relationships with our suppliers; our ability to develop, implement, operate and maintain, and rely on third parties to operate and maintain, reliable and secure technology systems, and the effectiveness of the Company’s business continuity plans in response to an incident impacting the Company’s technology systems, such as the unauthorized incident on its technology systems; labor and other workforce shortages and challenges; the addition or loss of significant customers or material changes to our relationships with these customers; our ability to realize anticipated benefits of strategic transactions; our ability to continue to grow sales, including of our higher margin natural and organic foods and non-food products; our ability to maintain sufficient volume in our Natural and Conventional businesses to support our operating infrastructure; our ability to access additional capital; increases in healthcare, pension and other costs under our single employer benefit plan and multiemployer benefit plans; the potential for additional asset impairment charges; our sensitivity to general economic conditions including inflation, tariff policy and changes in disposable income levels and consumer purchasing habits; our ability to timely and successfully deploy our warehouse management system throughout our distribution centers and our transportation management system across the Company and to achieve efficiencies and cost savings from these efforts; the potential for disruptions in our supply chain or our distribution capabilities from circumstances beyond our control, including due to lack of long-term contracts, severe weather, labor shortages or work stoppages or otherwise; the effect of adverse decisions in, or settlement of, litigation or other proceedings to which we are subject; moderated supplier promotional activity, including decreased forward buying opportunities; union-organizing activities that could cause labor relations difficulties and increased costs; changes in tax laws and regulations, and actions by federal, state and local taxing authorities related to the interpretation and application of such tax laws and regulations; our ability to maintain food quality and safety; and volatility in fuel costs. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws. Any estimates of future results of operations are based on a number of assumptions, many of which are outside the Company’s control and should not be construed in any manner as a guarantee that such results will in fact occur. These estimates are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced estimates, but it is not obligated to do so.
Non-GAAP Financial Measures: To supplement the financial information presented on a U.S. generally accepted accounting principles (“GAAP”) basis, the Company has included in this press release the non-GAAP financial measures Adjusted EBITDA, Adjusted EPS, adjusted effective tax rate, free cash flow, net debt to Adjusted EBITDA leverage ratio and Capital and cloud implementation expenditures. Adjusted EBITDA is a consolidated measure which the Company reconciles by adding Net (loss) income including noncontrolling interests, less Net income attributable to noncontrolling interests, plus Non-operating income and expenses, including Net periodic benefit income, excluding service cost, Interest expense, net and Other (income) expense, net, plus (Benefit) provision for income taxes and Depreciation and amortization all calculated in accordance with GAAP, plus adjustments for Share-based compensation, non-cash LIFO charge or benefit, Restructuring, acquisition and integration related expenses, Goodwill impairment charges, Loss (gain) on sale of assets and other asset charges, certain legal charges and gains, and certain other non-cash charges or other items, as determined by management. Adjusted EPS is a consolidated measure, which the Company reconciles by adding Net (loss) income attributable to UNFI plus the LIFO charge or benefit, Goodwill impairment benefits and charges, Restructuring, acquisition, and integration related expenses, gains and losses on sales of assets, certain legal charges and gains, surplus property depreciation and interest expense, losses on debt extinguishment, the impact of diluted shares when GAAP earnings is presented as a loss and non-GAAP earnings represent income, and the tax impact of adjustments and the adjusted effective tax rate, which tax impact is calculated using the adjusted effective tax rate, and certain other non-cash charges or items, as determined by management. The adjusted effective tax rate is calculated based on adjusted net income before tax and excludes the potential impact of changes to uncertain tax positions, valuation allowances, tax impacts related to the vesting of share-based compensation awards and discrete GAAP tax items which could impact the comparability of the operational effective tax rate. Free cash flow is defined as net cash provided by operating activities less payments for capital expenditures. Net debt to Adjusted EBITDA leverage ratio is defined as the total carrying value of the Company’s outstanding short- and long-term debt and finance lease liabilities less net cash and cash equivalents, the sum of which is divided by the trailing four quarters Adjusted EBITDA. Capital and cloud implementation expenditures is defined as the sum of payments for capital expenditures and cloud technology implementation expenditures.