United Natural Foods, Inc. (NYSE: UNFI), a leading distributor of natural, organic, and conventional products, has announced its financial results for the second quarter of fiscal 2025, covering the 13-week period ending 1st February 2025. The company’s performance highlights its commitment to strategic growth, profitability, and operational efficiency, as well as its continued focus on customer and supplier value creation.
With a 4.9% increase in net sales to $8.2 billion, a 13.3% rise in Adjusted EBITDA, and improved free cash flow, UNFI continues to demonstrate resilience and adaptability in the evolving food distribution landscape.
Let’s dive into the key takeaways from UNFI’s latest quarterly results and what they mean for investors, stakeholders, and the broader food distribution industry.
Second Quarter Fiscal 2025: Key Financial Highlights
UNFI’s second-quarter performance shows solid top-line growth and a steady reduction in net loss, despite ongoing industry challenges. Here’s a breakdown of the key financial metrics:
- Net Sales: $8.2 billion (+4.9% YoY)
- Net Loss: $(3) million, improved from $(15) million in Q2 FY24
- Loss Per Share (EPS): $(0.05), compared to $(0.25) in Q2 FY24
- Adjusted EPS: $0.22, a 214.3% increase from $0.07 in Q2 FY24
- Adjusted EBITDA: $145 million, up 13.3% YoY
- Free Cash Flow: $193 million, reflecting a 66.4% improvement from Q2 FY24
The company has raised its full-year fiscal 2025 outlook for all key financial metrics except capital and cloud implementation expenditures, indicating confidence in sustained growth and operational efficiency.
Operational and Strategic Progress
1. Strengthening Customer and Supplier Partnerships
UNFI’s commitment to enhancing customer and supplier value is a core pillar of its multi-year strategic plan. The company is actively working on:
- A product-focused realignment in its wholesale business to deliver more customized service offerings
- Expanding initiatives that strengthen supplier partnerships, ensuring better product availability and pricing for customers
- Enhancing supply chain efficiency, evidenced by the successful closure of the Fort Wayne distribution centre in February 2025
2. Lean Management Driving Profitability
UNFI’s lean management approach is yielding positive results, reflected in:
- Lower operating expenses as a percentage of net sales (12.6% in Q2 FY25 vs. 13.0% in Q2 FY24)
- A focus on cost-saving initiatives, contributing to higher margins and cash flow improvements
- Deleveraging efforts, with net debt to Adjusted EBITDA declining to 3.7x, a 0.6x reduction over the past 12 months
3. Sustainable Cash Flow and Capital Allocation
UNFI’s strong free cash flow of $193 million in Q2 FY25 underscores its ability to generate cash while managing expenditures effectively. Key financial management strategies include:
- A reduction in outstanding debt, with total net debt standing at $2.05 billion
- Interest expense savings, with Q2 FY25 net interest expense at $38 million, down from $40 million in Q2 FY24
- Maintaining $1.31 billion in liquidity, including $44 million in cash and $1.27 billion in available credit
These measures support future investments in technology, infrastructure, and customer service improvements, ensuring long-term stability and growth.
What’s Next for UNFI? Fiscal 2025 Outlook
Upgraded Full-Year Financial Projections
As a result of its solid first-half performance, UNFI has raised its full-year fiscal 2025 outlook for key financial metrics:
| Metric | Previous Outlook (Dec 2024) | Updated Outlook (Mar 2025) |
|---|---|---|
| Net Sales ($B) | $30.6 – $31.0 | $31.3 – $31.7 |
| Net (Loss) Income ($M) | $(31) – $(3) | $(13) – $3 |
| EPS | $(0.45) – $(0.05) | $(0.15) – $0.05 |
| Adjusted EPS | $0.40 – $0.80 | $0.70 – $0.90 |
| Adjusted EBITDA ($M) | $530 – $580 | $550 – $580 |
| Free Cash Flow ($M) | > $100 | > $150 |
These revised projections reflect UNFI’s confidence in its operational execution, cost efficiencies, and demand trends for natural and organic products.
Continued Execution of Multi-Year Strategy
Looking ahead, UNFI remains focused on:
- Further enhancing product specialization through its wholesale realignment
- Improving supply chain efficiency to drive cost savings and better serve customers
- Identifying new revenue opportunities, particularly within the high-growth natural and organic segment
- Sustaining profitability while maintaining its commitment to deleveraging and cash flow growth
Challenges and Risks to Watch
While UNFI’s performance has been strong, a few external factors could impact future results:
- Inflationary pressures on product pricing and operational costs
- Evolving consumer demand in the natural and organic space
- Macroeconomic conditions, including interest rate fluctuations affecting debt management
However, UNFI’s strategic cost management and strong industry positioning should help mitigate these risks over time.
 reports a 4.9% increase in net sales to $8.2 billion for Q2 2025, with Adjusted EBITDA rising 13.3% to $145 million. The company raises its full-year outlook as free cash flow improves by 66.4%.){kind=link}