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United Natural Foods (UNFI)
NYSE:UNFI
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United Natural Foods
(NYSE:UNFI)66Neutral
Positive Factors
Earnings
United Natural Foods posted an eventful earnings result highlighted by sales upside and a welcome return to positive volume.
Operational Improvement
UNFI's management is executing a well-thought-out plan, delivering financial and operational improvement, and making positive culture changes.
Negative Factors
Competitive Industry
UNFI operates in a highly competitive industry with sub-scale customers that face sizable headwinds, making sustained earnings growth challenging.
United Natural Foods (UNFI) vs. S&P 500 (SPY)
Market Cap
$1.68B
Dividend YieldN/A
Average Volume (3M)642.87K
Price to Earnings (P/E)―
Beta (1Y)1.60
Revenue Growth3.32%
EPS Growth-13.76%
CountryUS
Employees28,333
SectorConsumer Defensive
Sector Strength73
IndustryRetailers - Staples
Share Statistics
EPS (TTM)-1.58
Shares Outstanding59,919,098
10 Day Avg. Volume760,073
30 Day Avg. Volume642,872
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.05
Price to Cash Flow (P/CF)-3.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$28.83Price Target Upside7.13% Upside
Rating ConsensusHold
Number of Analyst Covering7
United Natural Foods Business Overview & Revenue Model
Company DescriptionUnited Natural Foods, Inc. (UNFI) is a leading distributor of natural, organic, and specialty foods in North America. The company serves a wide range of customers, including independent retailers, supermarket chains, and foodservice operators, by providing a comprehensive selection of grocery and non-food products. UNFI is committed to sustainability and innovation, offering an extensive portfolio that includes fresh produce, grocery items, and wellness products to meet the diverse needs of its clientele.
How the Company Makes MoneyUNFI generates revenue primarily through the wholesale distribution of natural, organic, and specialty foods and products. The company earns money by purchasing products from manufacturers and selling them to a diverse customer base, including supermarkets, independent retailers, and foodservice operators. UNFI's revenue streams are bolstered by its extensive distribution network, which ensures efficient delivery and availability of products across North America. Additionally, strategic partnerships with leading brands and the expansion of its private label offerings contribute to its earnings by capturing a larger market share and improving profit margins.
United Natural Foods Financial Statement Overview
Summary
United Natural Foods shows revenue growth but is facing profitability challenges with negative net income and declining margins. High debt levels pose financial risk, though cash flow management has improved, indicating better operational cash handling.Income Statement
United Natural Foods has shown a modest revenue growth but struggles with profitability as indicated by negative net income and declining gross profit margins in the TTM. The EBIT and EBITDA margins are also under pressure, reflecting challenges in operational efficiency.60
Neutral
Balance Sheet
The balance sheet indicates a high debt-to-equity ratio, suggesting significant leverage which poses financial risk. Return on Equity is negative due to losses, while the equity ratio shows moderate financial stability with equity covering a reasonable portion of assets.55
Neutral
Cash Flow
The cash flow statement shows positive operating cash flow, but the net income loss affects ratios like operating cash flow to net income. Free cash flow has improved in the TTM, indicating better cash management, albeit with historical volatility.65
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 31.30B | 30.98B | 30.27B | 28.93B | 26.95B | 26.51B | Gross Profit |
| 4.06B | 4.20B | 4.13B | 4.18B | 3.94B | 3.87B | EBIT |
| 84.00M | 8.00M | 120.00M | 423.00M | 439.00M | 376.07M | EBITDA |
| 413.00M | 356.00M | 502.00M | 684.00M | 599.00M | 115.00M | Net Income Common Stockholders |
| -94.00M | -112.00M | 24.00M | 248.00M | 149.00M | -254.01M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 49.52M | 40.00M | 37.00M | 44.00M | 41.00M | 46.99M | Total Assets |
| 7.40B | 7.53B | 7.39B | 7.63B | 7.53B | 7.59B | Total Debt |
| 3.23B | 3.55B | 3.27B | 3.38B | 3.43B | 3.66B | Net Debt |
| 3.18B | 3.51B | 3.23B | 3.34B | 3.39B | 3.61B | Total Liabilities |
| 5.91B | 5.89B | 5.65B | 5.84B | 6.01B | 6.44B | Stockholders Equity |
| 1.49B | 1.64B | 1.74B | 1.79B | 1.51B | 1.14B |
| Cash Flow | Free Cash Flow | ||||
| 126.00M | -92.00M | 301.00M | 80.00M | 304.00M | 283.97M | Operating Cash Flow |
| 397.00M | 253.00M | 624.00M | 331.00M | 614.00M | 456.54M | Investing Cash Flow |
| -317.00M | -342.00M | -339.00M | -49.00M | -237.00M | -1.47M | Financing Cash Flow |
| -80.00M | 92.00M | -292.00M | -279.00M | -384.00M | -453.07M |
United Natural Foods Technical Analysis
Neutral
26.91
Price Trends
29.48
Negative
26.27
Positive
20.33
Positive
Market Momentum
-0.47
Positive
33.57
Neutral
5.98
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNFI, the sentiment is Neutral. The current price of 26.91 is below the 20-day moving average (MA) of 30.99, below the 50-day MA of 29.48, and above the 200-day MA of 20.33, indicating a neutral trend. The MACD of -0.47 indicates Positive momentum. The RSI at 33.57 is Neutral, neither overbought nor oversold. The STOCH value of 5.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UNFI.
United Natural Foods Risk Analysis
United Natural Foods disclosed 25 risk factors in its most recent earnings report. United Natural Foods reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
United Natural Foods Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $12.30B | 31.41 | 9.54% | ― | 3.85% | -9.74% | |
75 Outperform | $36.74B | 19.29 | 87.49% | 2.70% | 3.95% | -5.04% | |
75 Outperform | $2.38B | 43.63 | 11.18% | ― | 10.50% | 59.18% | |
74 Outperform | $455.72B | 59.93 | 32.89% | 0.45% | 5.35% | 16.22% | |
66 Neutral | $1.68B | ― | -5.66% | ― | 3.32% | -13.76% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
63 Neutral | $659.43M | 2,244.83 | 0.01% | 4.45% | -2.66% | 8.18% |
* Consumer Defensive Sector Average
Performance Comparison
UNFI
United Natural Foods
26.91
14.99
125.76%
COST
Costco
964.31
254.12
35.78%
SPTN
SpartanNash Co
20.26
0.81
4.16%
SYY
Sysco
76.55
-1.33
-1.71%
CHEF
The Chefs' Warehouse
56.68
20.10
54.95%
PFGC
Performance Food Group
77.93
2.86
3.81%
United Natural Foods Earnings Call Summary
Earnings Call Date: Dec 10, 2024 | % Change Since: 9.04% | Next Earnings Date: Mar 11, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with significant operational improvements, revenue growth, and a raised financial outlook. However, challenges remain in the retail segment and gross margin pressures. The focus on efficiency through Lean management and strategic supplier programs are expected to drive further growth.Highlights
Revenue Growth and Raised Outlook
Revenue growth of over 4%, driven by positive volume growth in the wholesale business. Raised full-year outlook for all financial metrics except capital spending.
Adjusted EBITDA Improvement
Adjusted EBITDA grew nearly 15% compared to the prior year first quarter, marking the fifth consecutive quarter of sequentially improving adjusted EBITDA.
Operational Efficiency Gains
Implemented Lean management principles leading to a 5% improvement in cases per hour and a sequential improvement in throughput for three consecutive quarters.
Successful Supplier Program
Large suppliers experienced volume gains surpassing their peer group due to new supplier programs and insights provided by UNFI.
Strong Free Cash Flow Management
Free cash flow improved by approximately $170 million compared to prior years, aided by better working capital management.
Lowlights
Retail Sales Decline
Total retail sales fell 3% year-over-year with ID sales down 1.4%, attributed to targeted promotional investments.
Gross Margin Decline
Gross margin rate, excluding LIFO, was 13.3%, down about 40 basis points compared to last year, driven by changes in business mix and lower procurement gains.
Challenges in Conventional Segment
More modest volume declines in the conventional segment, alongside pressure from large discounters affecting central-positioned retailers.
Company Guidance
During the UNFI Q1 2025 earnings call, management provided guidance indicating a positive start to the fiscal year with a revenue growth of over 4%, driven primarily by a 2% volume increase in their wholesale business. They raised their full-year outlook for all financial metrics except capital spending, anticipating net sales between $30.6 billion and $31.0 billion, and adjusted EBITDA in the range of $530 million to $580 million, reflecting a 9% growth over the previous year at the midpoint. Additionally, UNFI reported a 15% year-over-year growth in adjusted EBITDA for the first quarter and a 6% increase in net sales per employee, reflecting improved operational efficiency. The company highlighted their focus on Lean management principles and network optimization, which contributed to a 5% improvement in cases per hour and an 11% enhancement in fulfillment quality at their pilot distribution centers. UNFI is also working on reducing shrink, which has returned to pre-COVID levels, and expects to generate more than $100 million in free cash flow for the year, a significant increase from prior guidance.United Natural Foods Corporate Events
Regulatory Filings and Compliance
United Natural Foods Clarifies Legal Status of 8-K Report
Neutral
Mar 4, 2025
United Natural Foods has issued a Current Report on Form 8-K, clarifying that the information provided is not considered ‘filed’ under the Securities Exchange Act of 1934, nor subject to its liabilities. This announcement ensures stakeholders understand the legal status of the information and its limitations regarding incorporation into future filings.
Business Operations and Strategy
United Natural Foods Releases FY2024 Impact Report
Neutral
Jan 22, 2025
On January 22, 2025, United Natural Foods, Inc. released its FY2024 Impact Report, highlighting the company’s sustainability efforts throughout fiscal year 2024. The release of this report demonstrates United Natural Foods’ commitment to transparency and sustainability, potentially impacting its industry positioning and stakeholder relations.
Shareholder MeetingsBusiness Operations and Strategy
United Natural Foods Updates Equity Plan and Governance
Neutral
Dec 18, 2024
At its Annual Meeting of Stockholders, United Natural Foods, Inc. approved the Fourth Amended and Restated 2020 Equity Incentive Plan, increasing the shares issuable under the plan by 1,200,000 and implementing several changes including a release requirement before vesting upon retirement. Additionally, 52,548,560 shares were represented at the meeting, where stockholders also elected directors, ratified KPMG LLP as the accounting firm, and approved executive compensation. These decisions are anticipated to impact the company’s equity distribution and governance structure, potentially influencing its operational dynamics and investor relations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.