United Natural Foods, Inc. (NYSE: UNFI) (the “Company” or “UNFI”) today reported financial results for the second quarter of fiscal 2025 (13 weeks) ended February 1, 2025.
Second Quarter Fiscal 2025 Performance (comparisons to second quarter fiscal 2024)
- Net sales increased 4.9% to $8.2 billion
- Net loss of $(3) million; Loss per diluted share (EPS) of $(0.05)
- Adjusted EBITDA(1) increased 13.3% to $145 million
- Adjusted EPS(1) increased to $0.22
Recent Financial and Operational Summary
- Raising FY25 outlook for all metrics other than capital and cloud spending for second consecutive quarter
- Continued focus on stakeholder value creation and lean management delivered 13.3% Adjusted EBITDA growth and approximately $77 million free cash flow(1) improvement compared to the prior year quarter
-
Continuing to execute multi-year strategy
- Expanding work to strengthen partnership and value creation for customers and suppliers
- Completed Fort Wayne distribution center closure in February
- Previously announced product-centered realignment driving further specialization and streamlining
- Deleveraging progressing faster than anticipated as net debt to Adjusted EBITDA ratio(1) declined to 3.7x, a decline of 0.6x over the past 12 months
“During the second quarter, we delivered solid sales growth and our sixth consecutive quarter of sequentially improving Adjusted EBITDA. We also continued to execute against our multi-year strategic plan focused on creating sustainable value for our customers and suppliers, while enhancing our profitability and free cash flow generation and reducing net leverage. Our continued positive volume trends serve as an indicator of the strength of our customer base and the unique role UNFI plays in the food distribution supply chain,” said Sandy Douglas, UNFI’s CEO.
“We are currently working to complete the previously announced product-focused realignment of our wholesale business designed to create more customized service for our customers and suppliers. As we look to the second half of the fiscal year, we remain focused on further execution of our plan and identifying new opportunities to bring increasing value, while delivering our updated outlook and continuing to deleverage our balance sheet.”
Second Quarter Fiscal 2025 Summary
|
13-Week Period Ended |
|
Percent Change |
|||||||
($ in millions, except for per share data) |
February 1, 2025 |
|
January 27, 2024 |
|
||||||
Net sales (2) |
$ |
8,158 |
|
|
$ |
7,775 |
|
|
4.9 |
% |
Natural |
$ |
4,021 |
|
|
$ |
3,715 |
|
|
8.2 |
% |
Conventional |
$ |
3,861 |
|
|
$ |
3,783 |
|
|
2.1 |
% |
Retail |
$ |
610 |
|
|
$ |
631 |
|
|
(3.3 |
)% |
Eliminations |
$ |
(334 |
) |
|
$ |
(354 |
) |
|
(5.6 |
)% |
Net loss |
$ |
(3 |
) |
|
$ |
(15 |
) |
|
N/M |
|
Adjusted EBITDA (1) |
$ |
145 |
|
|
$ |
128 |
|
|
13.3 |
% |
Loss per diluted share (EPS) |
$ |
(0.05 |
) |
|
$ |
(0.25 |
) |
|
N/M |
|
Adjusted earnings per diluted share (Adjusted EPS) (1) |
$ |
0.22 |
|
|
$ |
0.07 |
|
|
214.3 |
% |
Net cash provided by operating activities |
$ |
247 |
|
|
$ |
183 |
|
|
35.0 |
% |
Payments for capital expenditures |
$ |
(54 |
) |
|
$ |
(67 |
) |
|
N/M |
|
Free cash flow (1) |
$ |
193 |
|
|
$ |
116 |
|
|
66.4 |
% |
| N/M - not meaningful | |
| (1) | Please refer to the tables in this press release for a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. |
| (2) | In the second quarter of fiscal 2025, we updated revenue categories to align with how management evaluates our top-line commercial and financial performance. Prior period amounts have been recast to conform with our current period presentation. |
Net sales increased 4.9% in the second quarter of fiscal 2025 compared to the same period in the prior year, primarily driven by a 3% increase in wholesale unit volumes, including the benefit of new business with existing and new customers, as well as inflation. This performance was led by natural product growth.
Gross profit in the second quarter of fiscal 2025 was $1.1 billion, an increase of $37 million, or 3.6%, compared to the second quarter of fiscal 2024. The gross profit rate in the second quarter of fiscal 2025 was 13.1% of net sales compared to 13.3% of net sales in the second quarter of fiscal 2024. The decrease in the gross profit rate was primarily driven by lower product margin rates and business mix partly offset through supplier programs, lower shrink and a higher retail gross margin rate.
Operating expenses in the second quarter of fiscal 2025 were $1,031 million, or 12.6% of net sales, compared to $1,010 million, or 13.0% of net sales, in the second quarter of fiscal 2024. The decrease in operating expenses as a percentage of net sales was driven by the leveraging impact of higher sales and the benefits from cost saving initiatives.
Interest expense, net for the second quarter of fiscal 2025 was $38 million compared to $40 million for the second quarter of fiscal 2024 driven by lower average outstanding debt balances.
Effective tax rate for the second quarter of fiscal 2025 was a benefit of 60.0% on pre-tax loss compared to a benefit of 26.3% on pre-tax loss for the second quarter of fiscal 2024. The change from the second quarter of fiscal 2024 was primarily driven by an increase in discrete tax benefits related to employee stock award vestings in the second quarter of fiscal 2025.
Net loss for the second quarter of fiscal 2025 was $(3) million. Net loss for the second quarter of fiscal 2024 was $(15) million.
Net loss per diluted share (EPS) was $(0.05) for the second quarter of fiscal 2025 compared to net loss per diluted share of $(0.25) for the second quarter of fiscal 2024. Adjusted EPS was $0.22 for the second quarter of fiscal 2025 compared to $0.07 in the second quarter of fiscal 2024.
Adjusted EBITDA for the second quarter of fiscal 2025 was $145 million compared to $128 million for the second quarter of fiscal 2024.
Capital Allocation and Financing Overview
- Free Cash Flow – During the second quarter of fiscal 2025, free cash flow was $193 million compared to $116 million in the second quarter of fiscal 2024. Free cash flow for the second quarter of fiscal 2025 reflects net cash provided by operating activities of $247 million less payments for capital expenditures of $54 million.
- Leverage – Total outstanding debt, net of cash, was $2.05 billion at the end of the second quarter of fiscal 2025, reflecting a decrease of $182 million compared to the end of the first quarter of fiscal 2025. The net debt to Adjusted EBITDA leverage ratio was 3.7x as of February 1, 2025.
- Liquidity – As of February 1, 2025, total liquidity was approximately $1.31 billion, consisting of $44 million in cash, plus the unused capacity of approximately $1.27 billion under the Company’s asset-based lending facility.
Fiscal 2025 Outlook (1)
The Company is increasing its full-year outlook for all metrics other than capital and cloud implementation expenditures:
Fiscal Year Ending August 2, 2025 (52 weeks) |
|
Previous Full Year Outlook Provided December 10, 2024 |
|
Updated Full Year Outlook |
Net sales ($ in billions) |
|
$30.6 - $31.0 |
|
$31.3 - $31.7 |
Net (loss) income ($ in millions) |
|
$(31) - $(3) |
|
$(13) - $3 |
EPS (2) |
|
$(0.45) - $(0.05) |
|
$(0.15) - $0.05 |
Adjusted EPS (2)(3)(4) |
|
$0.40 - $0.80 |
|
$0.70 - $0.90 |
Adjusted EBITDA (3) ($ in millions) |
|
$530 - $580 |
|
$550 - $580 |
Capital and cloud implementation expenditures (3)(5) ($ in millions) |
|
~ $300 |
|
~ $300 |
Free cash flow (3)(5) ($ in millions) |
|
> $100 |
|
> $150 |
(1) |
The outlook provided above is for fiscal 2025 only. The outlook is forward-looking, is based on management’s current estimates and expectations and is subject to a number of risks, including many that are outside of management's control. See cautionary Safe Harbor Statement below. |
(2) |
(Loss) earnings per share amounts as presented include rounding. |
(3) |
See additional information at the end of this release regarding non-GAAP financial measures. The Company is unable to provide a full reconciliation to the most comparable GAAP measure without unreasonable effort due to the difficulty in predicting the amounts for certain adjustment items. |
(4) |
The Company uses an adjusted effective tax rate in calculating Adjusted EPS. The outlook for Adjusted EPS reflects a tax rate of 26%. See additional information at the end of this release regarding the non-GAAP financial measure adjusted effective tax rate. |
(5) |
The components of capital and cloud implementation expenditures for fiscal 2025 will be primarily dependent on the nature of certain contracts to be executed. As such, the Company is unable to reconcile the outlook for free cash flow as well as capital and cloud implementation expenditures in fiscal 2025 to the most directly comparable financial measures calculated in accordance with GAAP. |
Conference Call and Webcast
The Company’s second quarter fiscal 2025 conference call and audio webcast will be held today, Tuesday, March 11, 2025 at 8:30 a.m. ET. A webcast of the conference call (and supplemental materials) will be available to the public, on a listen only basis, via the internet at the Investors section of the Company’s website www.unfi.com. The call can also be accessed at (888) 660 - 6768 (conference ID 1099581). An online archive of the webcast (and supplemental materials) will be available for 120 days.
About United Natural Foods
UNFI is North America’s premier grocery wholesaler delivering the widest variety of fresh, branded, and owned brand products to more than 30,000 locations throughout North America, including natural product superstores, independent retailers, conventional supermarket chains, eCommerce providers, and foodservice customers. UNFI also provides a broad range of value-added services and segmented marketing expertise, including proprietary technology, data, market insights, and shelf management to help customers and suppliers build their businesses and brands. As the largest full-service grocery partner in North America, UNFI is committed to building a food system that is better for all and is uniquely positioned to deliver great food, more choices, and fresh thinking to customers. To learn more about how UNFI is delivering value for its stakeholders, visit www.unfi.com.
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 its 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 operate, and rely on third parties to operate, reliable and secure 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 wholesale distribution and services 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, 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; moderated supplier promotional activity, including decreased forward buying opportunities; union-organizing activities that could cause labor relations difficulties and increased costs; 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 earnings per diluted common share (“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 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 (used in) 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.
The reconciliation of these non-GAAP financial measures to their comparable GAAP financial measures and the calculation of net debt to Adjusted EBITDA leverage are presented in the tables appearing below, where practicable. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. The Company believes that presenting Adjusted EBITDA and Adjusted EPS aids in making period-to-period comparisons, assessing the performance of the Company’s business and understanding the underlying operating performance and core business trends by excluding certain adjustments not expected to recur in the normal course of business or that are not meaningful indicators of actual and estimated operating performance. The Company believes that providing the adjusted effective tax rate gives investors a meaningful, consistent comparison of the Company’s effective tax rate on ongoing operations. The inclusion of free cash flow assists investors in understanding the cash generating ability of the Company separate from cash generated by the sale of assets. Net debt to Adjusted EBITDA leverage ratio is a commonly used metric that assists investors in understanding and evaluating the Company’s capital structure and changes to its capital structure over time. The Company believes that providing capital and cloud implementation expenditures provides investors with better visibility into the Company's total investment expenditures. The components of capital and cloud implementation expenditures for fiscal 2025 will be primarily dependent on the nature of certain contracts to be executed. Management utilizes and plans to utilize these non-GAAP financial measures to compare the Company’s operating performance during fiscal 2025 to the comparable periods in fiscal 2024 and to internally prepared projections. These non-GAAP financial measures may differ from similarly titled measures of other companies.
UNITED NATURAL FOODS, INC. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
||||||||||||||||
(in millions, except for per share data) |
||||||||||||||||
|
|
13-Week Period Ended |
|
26-Week Period Ended |
||||||||||||
|
|
February 1,
|
|
January 27,
|
|
February 1,
|
|
January 27,
|
||||||||
Net sales |
|
$ |
8,158 |
|
|
$ |
7,775 |
|
|
$ |
16,029 |
|
|
$ |
15,327 |
|
Cost of sales |
|
|
7,086 |
|
|
|
6,740 |
|
|
|
13,919 |
|
|
|
13,262 |
|
Gross profit |
|
|
1,072 |
|
|
|
1,035 |
|
|
|
2,110 |
|
|
|
2,065 |
|
Operating expenses |
|
|
1,031 |
|
|
|
1,010 |
|
|
|
2,046 |
|
|
|
2,033 |
|
Restructuring, acquisition and integration related expenses |
|
|
9 |
|
|
|
4 |
|
|
|
21 |
|
|
|
8 |
|
Loss on sale of assets and other asset charges |
|
|
5 |
|
|
|
5 |
|
|
|
11 |
|
|
|
24 |
|
Operating income |
|
|
27 |
|
|
|
16 |
|
|
|
32 |
|
|
|
— |
|
Net periodic benefit income, excluding service cost |
|
|
(5 |
) |
|
|
(4 |
) |
|
|
(10 |
) |
|
|
(7 |
) |
Interest expense, net |
|
|
38 |
|
|
|
40 |
|
|
|
74 |
|
|
|
75 |
|
Other income, net |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
Loss before income taxes |
|
|
(5 |
) |
|
|
(19 |
) |
|
|
(29 |
) |
|
|
(67 |
) |
Benefit for income taxes |
|
|
(3 |
) |
|
|
(5 |
) |
|
|
(7 |
) |
|
|
(14 |
) |
Net loss including noncontrolling interests |
|
|
(2 |
) |
|
|
(14 |
) |
|
|
(22 |
) |
|
|
(53 |
) |
Less net income attributable to noncontrolling interests |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
Net loss attributable to United Natural Foods, Inc. |
|
$ |
(3 |
) |
|
$ |
(15 |
) |
|
$ |
(24 |
) |
|
$ |
(54 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Basic loss per share |
|
$ |
(0.05 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.92 |
) |
Diluted loss per share |
|
$ |
(0.05 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.92 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
60.2 |
|
|
|
59.4 |
|
|
|
59.9 |
|
|
|
59.0 |
|
Diluted |
|
|
60.2 |
|
|
|
59.4 |
|
|
|
59.9 |
|
|
|
59.0 |
|
UNITED NATURAL FOODS, INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) |
||||||||
(in millions, except for par values) |
||||||||
|
|
February 1,
|
|
August 3,
|
||||
ASSETS |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
44 |
|
|
$ |
40 |
|
Accounts receivable, net |
|
|
1,030 |
|
|
|
953 |
|
Inventories, net |
|
|
2,227 |
|
|
|
2,179 |
|
Prepaid expenses and other current assets |
|
|
180 |
|
|
|
230 |
|
Total current assets |
|
|
3,481 |
|
|
|
3,402 |
|
Property and equipment, net |
|
|
1,790 |
|
|
|
1,820 |
|
Operating lease assets |
|
|
1,549 |
|
|
|
1,370 |
|
Goodwill |
|
|
19 |
|
|
|
19 |
|
Intangible assets, net |
|
|
611 |
|
|
|
649 |
|
Deferred income taxes |
|
|
85 |
|
|
|
87 |
|
Other long-term assets |
|
|
196 |
|
|
|
181 |
|
Total assets |
|
$ |
7,731 |
|
|
$ |
7,528 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Accounts payable |
|
$ |
1,768 |
|
|
$ |
1,688 |
|
Accrued expenses and other current liabilities |
|
|
271 |
|
|
|
288 |
|
Accrued compensation and benefits |
|
|
190 |
|
|
|
197 |
|
Current portion of operating lease liabilities |
|
|
156 |
|
|
|
181 |
|
Current portion of long-term debt and finance lease liabilities |
|
|
9 |
|
|
|
11 |
|
Total current liabilities |
|
|
2,394 |
|
|
|
2,365 |
|
Long-term debt |
|
|
2,068 |
|
|
|
2,081 |
|
Long-term operating lease liabilities |
|
|
1,473 |
|
|
|
1,263 |
|
Long-term finance lease liabilities |
|
|
13 |
|
|
|
12 |
|
Pension and other postretirement benefit obligations |
|
|
15 |
|
|
|
15 |
|
Other long-term liabilities |
|
|
143 |
|
|
|
151 |
|
Total liabilities |
|
|
6,106 |
|
|
|
5,887 |
|
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock, $0.01 par value, authorized 5.0 shares; none issued or outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, authorized 100.0 shares; 63.0 shares issued and 60.5 shares outstanding at February 1, 2025; 62.0 shares issued and 59.5 shares outstanding at August 3, 2024 |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
642 |
|
|
|
635 |
|
Treasury stock at cost |
|
|
(86 |
) |
|
|
(86 |
) |
Accumulated other comprehensive loss |
|
|
(46 |
) |
|
|
(47 |
) |
Retained earnings |
|
|
1,114 |
|
|
|
1,138 |
|
Total United Natural Foods, Inc. stockholders’ equity |
|
|
1,625 |
|
|
|
1,641 |
|
Noncontrolling interests |
|
|
— |
|
|
|
— |
|
Total stockholders’ equity |
|
|
1,625 |
|
|
|
1,641 |
|
Total liabilities and stockholders’ equity |
|
$ |
7,731 |
|
|
$ |
7,528 |
|
UNITED NATURAL FOODS, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
||||||||
|
|
26-Week Period Ended |
||||||
(in millions) |
|
February 1,
|
|
January 27,
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
||||
Net loss including noncontrolling interests |
|
$ |
(22 |
) |
|
$ |
(53 |
) |
Adjustments to reconcile loss to net cash provided by (used in) operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
161 |
|
|
|
152 |
|
Share-based compensation |
|
|
18 |
|
|
|
16 |
|
Gain on sale of assets |
|
|
(1 |
) |
|
|
(7 |
) |
Long-lived asset impairment charges |
|
|
1 |
|
|
|
21 |
|
Net pension and other postretirement benefit income |
|
|
(10 |
) |
|
|
(7 |
) |
LIFO charge |
|
|
10 |
|
|
|
13 |
|
Provision for losses on receivables |
|
|
1 |
|
|
|
2 |
|
Non-cash interest expense and other adjustments |
|
|
3 |
|
|
|
5 |
|
Changes in operating assets and liabilities |
|
|
|
|
||||
Accounts and notes receivable |
|
|
(78 |
) |
|
|
(104 |
) |
Inventories |
|
|
(59 |
) |
|
|
(33 |
) |
Prepaid expenses and other assets |
|
|
155 |
|
|
|
(198 |
) |
Accounts payable |
|
|
83 |
|
|
|
(57 |
) |
Accrued expenses and other liabilities |
|
|
(125 |
) |
|
|
179 |
|
Net cash provided by (used in) operating activities |
|
|
137 |
|
|
|
(71 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
||||
Payments for capital expenditures |
|
|
(103 |
) |
|
|
(141 |
) |
Proceeds from dispositions of assets |
|
|
5 |
|
|
|
11 |
|
Payments for investments |
|
|
(2 |
) |
|
|
(12 |
) |
Net cash used in investing activities |
|
|
(100 |
) |
|
|
(142 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
||||
Proceeds from borrowings under revolving credit line |
|
|
1,120 |
|
|
|
1,422 |
|
Proceeds from issuance of other loans |
|
|
— |
|
|
|
14 |
|
Repayments of borrowings under revolving credit line |
|
|
(1,133 |
) |
|
|
(1,180 |
) |
Repayments of long-term debt and finance leases |
|
|
(7 |
) |
|
|
(37 |
) |
Payments of employee restricted stock tax withholdings |
|
|
(9 |
) |
|
|
(6 |
) |
Payments for debt issuance costs |
|
|
(1 |
) |
|
|
— |
|
Distributions to noncontrolling interests |
|
|
(2 |
) |
|
|
(2 |
) |
Other |
|
|
— |
|
|
|
(1 |
) |
Net cash (used in) provided by financing activities |
|
|
(32 |
) |
|
|
210 |
|
EFFECT OF EXCHANGE RATE ON CASH |
|
|
(1 |
) |
|
|
— |
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
4 |
|
|
|
(3 |
) |
Cash and cash equivalents, at beginning of period |
|
|
40 |
|
|
|
37 |
|
Cash and cash equivalents, at end of period |
|
$ |
44 |
|
|
$ |
34 |
|
Supplemental disclosures of cash flow information: |
|
|
|
|
||||
Cash paid for interest |
|
$ |
77 |
|
|
$ |
74 |
|
Cash refunds for federal, state, and foreign income taxes, net |
|
$ |
(1 |
) |
|
$ |
(13 |
) |
Leased assets obtained in exchange for new operating lease liabilities |
|
$ |
283 |
|
|
$ |
298 |
|
Leased assets obtained in exchange for new finance lease liabilities |
|
$ |
5 |
|
|
$ |
— |
|
Additions of property and equipment included in Accounts payable |
|
$ |
19 |
|
|
$ |
31 |
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (unaudited) |
|||||||||||||||
UNITED NATURAL FOODS, INC. |
|||||||||||||||
|
|
|
|
||||||||||||
Reconciliation of Net loss including noncontrolling interests to Adjusted EBITDA (unaudited) |
|||||||||||||||
|
13-Week Period Ended |
|
26-Week Period Ended |
||||||||||||
(in millions) |
February 1, 2025 |
|
January 27, 2024 |
|
February 1, 2025 |
|
January 27, 2024 |
||||||||
Net loss including noncontrolling interests |
$ |
(2 |
) |
|
$ |
(14 |
) |
|
$ |
(22 |
) |
|
$ |
(53 |
) |
Adjustments to net loss including noncontrolling interests: |
|
|
|
|
|
|
|
||||||||
Less net income attributable to noncontrolling interests |
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
Net periodic benefit income, excluding service cost |
|
(5 |
) |
|
|
(4 |
) |
|
|
(10 |
) |
|
|
(7 |
) |
Interest expense, net |
|
38 |
|
|
|
40 |
|
|
|
74 |
|
|
|
75 |
|
Other income, net |
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
Benefit for income taxes |
|
(3 |
) |
|
|
(5 |
) |
|
|
(7 |
) |
|
|
(14 |
) |
Depreciation and amortization |
|
81 |
|
|
|
74 |
|
|
|
161 |
|
|
|
152 |
|
Share-based compensation |
|
11 |
|
|
|
10 |
|
|
|
18 |
|
|
|
16 |
|
LIFO charge |
|
3 |
|
|
|
6 |
|
|
|
10 |
|
|
|
13 |
|
Restructuring, acquisition and integration related expenses |
|
9 |
|
|
|
4 |
|
|
|
21 |
|
|
|
8 |
|
Loss on sale of assets and other asset charges (1) |
|
5 |
|
|
|
5 |
|
|
|
11 |
|
|
|
24 |
|
Business transformation costs (2) |
|
8 |
|
|
|
14 |
|
|
|
26 |
|
|
|
29 |
|
Other adjustments (3) |
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
4 |
|
Adjusted EBITDA |
$ |
145 |
|
|
$ |
128 |
|
|
$ |
279 |
|
|
$ |
245 |
|
(1) |
Fiscal 2024 primarily includes a $21 million non-cash asset impairment charge related to one of our corporate-owned office locations. |
(2) |
Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. |
(3) |
Fiscal 2025 primarily reflects certain estimated accrued legal-related costs, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. Fiscal 2024 primarily reflects third-party professional service fees related to shareholder negotiations, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. |
Reconciliation of Net loss attributable to United Natural Foods, Inc. to Adjusted net income and Adjusted EPS (unaudited) |
||||||||||||||||
|
|
13-Week Period Ended |
|
26-Week Period Ended |
||||||||||||
(in millions, except per share amounts) |
|
February 1, 2025 |
|
January 27, 2024 |
|
February 1, 2025 |
|
January 27, 2024 |
||||||||
Net loss attributable to United Natural Foods, Inc. |
|
$ |
(3 |
) |
|
$ |
(15 |
) |
|
$ |
(24 |
) |
|
$ |
(54 |
) |
Restructuring, acquisition and integration related expenses |
|
|
9 |
|
|
|
4 |
|
|
|
21 |
|
|
|
8 |
|
Loss on sale of assets and other asset charges other than losses on sales of receivables (1) |
|
|
1 |
|
|
|
— |
|
|
|
2 |
|
|
|
14 |
|
LIFO charge |
|
|
3 |
|
|
|
6 |
|
|
|
10 |
|
|
|
13 |
|
Surplus property depreciation and interest expense (2) |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
Business transformation costs (3) |
|
|
8 |
|
|
|
14 |
|
|
|
26 |
|
|
|
29 |
|
Other adjustments (4) |
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
4 |
|
Tax impact of adjustments and adjusted effective tax rate (5) |
|
|
(8 |
) |
|
|
(6 |
) |
|
|
(15 |
) |
|
|
(14 |
) |
Adjusted net income |
|
$ |
13 |
|
|
$ |
4 |
|
|
$ |
23 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average shares outstanding |
|
|
61.7 |
|
|
|
60.0 |
|
|
|
61.4 |
|
|
|
59.9 |
|
Adjusted EPS (6) |
|
$ |
0.22 |
|
|
$ |
0.07 |
|
|
$ |
0.38 |
|
|
$ |
0.03 |
|
(1) |
Loss on sale of assets and other asset charges, as reflected here, does not include losses on sales of receivables under the accounts receivable monetization program, which are included in Loss on sale of assets and other asset charges on the Condensed Consolidated Statements of Operations and are not adjusted in the calculation of Adjusted EPS. Fiscal 2024 primarily includes a $21 million non-cash asset impairment charge related to one of our corporate-owned office locations. |
(2) |
Reflects surplus, non-operating property depreciation and interest expense. |
(3) |
Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. |
(4) |
Fiscal 2025 primarily reflects certain estimated accrued legal-related costs, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. Fiscal 2024 primarily reflects third-party professional service fees related to shareholder negotiations, which are included within Operating expenses in the Condensed Consolidated Statements of Operations. |
(5) |
Represents the tax effect of the pre-tax adjustments using an adjusted effective tax rate. The adjusted effective tax rate is calculated based on adjusted net income before tax, and its impact reflects the exclusion 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. The Company believes using this adjusted effective tax rate will provide better consistency across the interim reporting periods since each of these discrete items can cause volatility in the GAAP tax rate that is not indicative of the underlying ongoing operations of the Company. By providing this non-GAAP measure, management intends to provide investors with a meaningful, consistent comparison of the Company’s effective tax rate on ongoing operations. |
(6) |
Adjusted earnings per share amounts are calculated using actual unrounded figures. |
Calculation of net debt to Adjusted EBITDA leverage ratio (unaudited) |
|||||||
(in millions, except ratios) |
February 1, 2025 |
|
January 27, 2024 |
||||
Current portion of long-term debt and finance lease liabilities |
$ |
9 |
|
|
$ |
12 |
|
Long-term debt |
|
2,068 |
|
|
|
2,176 |
|
Long-term finance lease liabilities |
|
13 |
|
|
|
7 |
|
Less: Cash and cash equivalents |
|
(44 |
) |
|
|
(34 |
) |
Net carrying value of debt and finance lease liabilities |
|
2,046 |
|
|
|
2,161 |
|
Adjusted EBITDA (1) |
$ |
552 |
|
|
$ |
497 |
|
Adjusted EBITDA leverage ratio |
3.7x |
|
4.3x |
||||
| (1) | Adjusted EBITDA for purposes of this calculation reflects the summation of the trailing four quarters ended February 1, 2025 and January 27, 2024, respectively. Refer to the following table for the reconciliation of Adjusted EBITDA trailing four quarters. |
Reconciliation of trailing four quarters Net loss including noncontrolling interests to Adjusted EBITDA (unaudited) |
|||||||
(in millions) |
53-Week Period Ended February 1, 2025 |
|
52-Week Period Ended January 27, 2024 |
||||
Net loss including noncontrolling interests |
$ |
(79 |
) |
|
$ |
(112 |
) |
Adjustments to net loss including noncontrolling interests: |
|
|
|
||||
Less net income attributable to noncontrolling interests |
|
(3 |
) |
|
|
(3 |
) |
Net periodic benefit income, excluding service cost |
|
(18 |
) |
|
|
(22 |
) |
Interest expense, net |
|
161 |
|
|
|
145 |
|
Other income, net |
|
(4 |
) |
|
|
(2 |
) |
Benefit for income taxes |
|
(20 |
) |
|
|
(51 |
) |
Depreciation and amortization |
|
328 |
|
|
|
309 |
|
Share-based compensation |
|
39 |
|
|
|
31 |
|
LIFO charge |
|
4 |
|
|
|
82 |
|
Restructuring, acquisition and integration related expenses |
|
49 |
|
|
|
11 |
|
Loss on sale of assets and other asset charges |
|
44 |
|
|
|
58 |
|
Multiemployer pension plan withdrawal charges |
|
— |
|
|
|
1 |
|
Other retail expense |
|
— |
|
|
|
1 |
|
Business transformation costs |
|
49 |
|
|
|
45 |
|
Other adjustments |
|
2 |
|
|
|
4 |
|
Adjusted EBITDA (1) |
$ |
552 |
|
|
$ |
497 |
|
| (1) | Adjusted EBITDA for purposes of this calculation reflects the summation of the trailing four quarters ended February 1, 2025 and January 27, 2024, respectively. |
Reconciliation of Net cash provided by (used in) operating activities to Free cash flow (unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
13-Week Period Ended |
|
26-Week Period Ended |
||||||||||||
(in millions) |
February 1, 2025 |
|
January 27, 2024 |
|
February 1, 2025 |
|
January 27, 2024 |
||||||||
Net cash provided by (used in) operating activities |
$ |
247 |
|
|
$ |
183 |
|
|
$ |
137 |
|
|
$ |
(71 |
) |
Payments for capital expenditures |
|
(54 |
) |
|
|
(67 |
) |
|
|
(103 |
) |
|
|
(141 |
) |
Free cash flow |
$ |
193 |
|
|
$ |
116 |
|
|
$ |
34 |
|
|
$ |
(212 |
) |
Reconciliation of Payments for capital expenditures to Capital and cloud implementation expenditures (unaudited) |
|||||||||||
|
13-Week Period Ended |
|
26-Week Period Ended |
||||||||
(in millions) |
February 1, 2025 |
|
January 27, 2024 |
|
February 1, 2025 |
|
January 27, 2024 |
||||
Payments for capital expenditures |
$ |
54 |
|
$ |
67 |
|
$ |
103 |
|
$ |
141 |
Cloud technology implementation expenditures (1) |
|
1 |
|
|
8 |
|
|
5 |
|
|
17 |
Capital and cloud implementation expenditures |
$ |
55 |
|
$ |
75 |
|
$ |
108 |
|
$ |
158 |
| (1) | Cloud technology implementation expenditures are included in operating activities in the Condensed Consolidated Statements of Cash Flows. |
Reconciliation of estimated 2025 and actual 2024 U.S. GAAP effective tax rate to adjusted effective tax rate (unaudited) |
||||||
|
|
Estimated Fiscal 2025 |
|
Actual Fiscal 2024 |
||
U.S. GAAP effective tax rate |
|
24 |
% |
|
20 |
% |
Discrete quarterly recognition of GAAP items (1) |
|
9 |
% |
|
20 |
% |
Tax impact of other charges and adjustments (2) |
|
(13 |
)% |
|
(24 |
)% |
Changes in valuation allowances (3) |
|
6 |
% |
|
5 |
% |
Other (4) |
|
— |
% |
|
— |
% |
Adjusted effective tax rate (4) |
|
26 |
% |
|
21 |
% |
| Note: As part of the year-end reconciliation, we update the reconciliation of the GAAP effective tax rate for actual results. | |
(1) |
Reflects changes in tax laws, uncertain tax positions, the tax impacts related to the exercise of share-based compensation awards and any prior-year deferred tax or payable adjustments. This includes prior-year Internal Revenue Service or other tax jurisdiction audit adjustments. |
(2) |
Reflects the tax impact of pre-tax adjustments that are excluded from pre-tax income when calculating Adjusted EPS. |
(3) |
Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations. |
(4) |
The Company establishes an estimated adjusted effective tax rate at the beginning of the fiscal year based on the best available information. The Company re-evaluates its estimated adjusted effective tax rate as appropriate throughout the year and adjusts for any material changes. The actual adjusted effective tax rate at the end of the fiscal year is based on actual results and accordingly may differ from the estimated adjusted effective tax rate used during the year. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250311859805/en/
Contacts
INVESTOR CONTACTS:
Steve Bloomquist
Vice President, Investor Relations
952-828-4144 sbloomquist@unfi.com
Kristyn Farahmand
Senior Vice President, Investor Relations and Corporate Development
612-439-6625 kristyn.farahmand@unfi.com
