TLDR
- UNFI stock surges 20% on Q4 beat, stronger cash flow, and bullish 2026 outlook
- United Natural Foods rallies as debt drops, cash flow grows, FY26 forecast shines
- UNFI jumps on Q4 surprise, free cash flow boost, and upbeat FY26 growth outlook
- United Natural Foods rises 20% after Q4 strength and optimistic 2026 guidance
- UNFI beats estimates with higher sales, stronger cash flow, and debt reduction
United Natural Foods stock rallied sharply, climbing nearly 20% to $38.03 following stronger-than-expected Q4 results and a bullish outlook.
The company reported financials for the fourth quarter and full year ended August 2, 2025, exceeding initial projections. The market responded to signs of improved free cash flow, reduced debt, and a promising FY 2026 forecast.
Q4 Earnings Reveal Operational Resilience
UNFI posted net sales of $7.7 billion in Q4 2025, which marked a 1.6% increase on a comparable 13-week basis. Despite a reported net loss of $87 million, the company’s adjusted EBITDA stood at $116 million. Moreover, adjusted earnings per share came in at $(0.11), close to flat compared to $(0.01) last year.
The cyber incident earlier this year had an impact on operations; however, the company mitigated disruptions through coordinated execution with its suppliers and customers. Excluding one-time cyber-related expenses and accounting adjustments, margins held steady year-over-year. Notably, free cash flow increased to $86 million, reflecting stronger cost discipline and improved working capital.
UNFI’s operating expenses increased slightly to $1.046 billion, primarily due to fixed cost pressures and additional service costs resulting from the cyber event. However, gross profit margins remained flat at 13.5% after adjustments, reflecting effective cost control. Interest expenses fell to $36 million, helped by lower debt and reduced refinancing charges.
Full-Year Highlights Point to Financial Strength
For fiscal year 2025, UNFI generated $31.78 billion in revenue, a 2.6% rise compared to the previous year. Adjusted EBITDA improved 6.6% year-over-year to $552 million, while adjusted EPS surged over 400% to $0.71. Strong operational execution and leaner cost structure helped offset headwinds and industry-wide challenges.
Natural segment sales rose 7.2% to $16 billion, outperforming the conventional and retail segments, which saw minor declines. The company also achieved $239 million in free cash flow, reversing a negative figure from fiscal 2024. Capital expenditures declined by a third, contributing to healthier cash generation.
UNFI’s net debt fell by $230 million to $1.83 billion, the lowest level since 2018. Liquidity remained robust, totaling $1.5 billion including access to the asset-based lending facility. The company closed the fiscal year with strong cash flow momentum and disciplined capital allocation.
Positive FY 2026 Outlook Fuels Market Optimism
UNFI projects continued progress in fiscal 2026, expecting adjusted EBITDA to grow 20% year-over-year. The outlook reflects consistent execution, enhanced service offerings, and strategic cost reductions. Leadership emphasized the focus on expanding supply chain solutions and value-added services.
The company anticipates sustaining above-industry growth through partnerships, innovation, and distribution network efficiency. With net leverage down to 3.3x, UNFI enters the new fiscal year on stable financial footing. Momentum from lean daily management and stronger alignment with suppliers further boosts confidence.
