United Natural Foods: Turned a Loss into a Profit, and EBITDA Rose 48.3% in Q4 2026

United Natural Foods closed fiscal year 2026 in a way that could significantly influence investors’ outlook on the company’s future development. Behind the latest quarterly figures lies a significant turnaround in the company’s performance and a sign that the food distributor is entering a new phase. The market is now waiting to see whether this marks the beginning of a steady improvement or is merely a short-term fluctuation. [1]

About the company

United Natural Foods, Inc., known as UNFI, is a U.S. publicly traded company headquartered in Providence, Rhode Island. The company is engaged in the wholesale distribution of food and related services to retailers in the United States and Canada. Its history dates back to 1976, and the current form of United Natural Foods was established in 1996 through the merger of the distribution companies Cornucopia Natural Foods and Mountain People’s Warehouse. Today, UNFI supplies more than 30,000 retail locations and offers approximately 230,000 products from thousands of suppliers. The company’s distribution network includes 47 distribution centers with a total warehouse space of approximately 31 million square feet.[1][2]

Earnings beat expectations, revenue fell slightly short

United Natural Foods ended fiscal year 2026 with results that showed a significant improvement in profitability, though revenue fell slightly short of expectations. In the fourth quarter, the company reported revenue of $7.642 billion, representing a year-over-year decline of 0.7% and falling short of analysts’ expectations of approximately $7.71 billion. However, the earnings side of the business fared much better. Adjusted earnings per share reached $0.69, while analysts had expected approximately $0.61. UNFI thus beat the consensus in this area by about 13%. Net income reached $35 million, and diluted earnings per share amounted to $0.57. In the same period of the previous year, the company reported a net loss of $87 million and a loss per share of $1.43. Furthermore, the decline in revenue itself was influenced by planned optimization measures, which had a negative impact of approximately 500 basis points, and the completion of short-term projects, which had an additional impact of approximately 150 basis points. For the full fiscal year 2026, UNFI generated revenue of $31.152 billion, representing a 2% year-over-year decline, but net income climbed to $84 million.[3]

Profitability is growing despite weaker revenue

The strongest aspect of United Natural Foods’ results was a significant improvement in profitability and operational efficiency. Adjusted EBITDA reached $172 million in the fourth quarter, up 48.3% year-over-year from $116 million. At the same time, gross profit rose by 1.9% to $1.050 billion, even though the company’s total revenue declined. The gross margin increased from 13.4% to 13.7%; according to management, this improvement was driven by optimization measures in the distribution network and a more favorable customer mix. There was also a significant shift in costs. Operating expenses totaled $984 million, representing 12.9% of revenue, compared to $1.046 billion and 13.6% of revenue a year earlier. The company thus managed to reduce its operating costs even amid stagnant revenue. Cost-saving programs, distribution network optimization, and higher productivity at distribution centers were the primary factors contributing to this improvement. For the full fiscal year 2026, adjusted EBITDA increased by 27% to $701 million, and adjusted earnings per share rose to $2.65, compared to $0.71 in the previous year. These results demonstrate that UNFI’s current strategy is primarily focused on improving the efficiency and profitability of its existing business.3

The natural segment continues to

A look at individual product groups reveals significantly different trends within United Natural Foods’ business. The Natural segment’s revenue reached $4.260 billion in the fourth quarter, up 6.6% year-over-year from $3.998 billion. For the full fiscal year, this segment generated revenue of $17.132 billion, representing 7% growth. The Conventional category saw the opposite trend, with quarterly revenue falling 8.6% to $3.121 billion. For the full year, revenue totaled $12.974 billion, down 11.5% year-over-year. The retail segment of the business also posted weaker performance. Its quarterly revenue fell by 7.9% to $528 million, and for the full year totaled $2.157 billion, representing the same percentage decline. For UNFI, the growth of the natural products category is thus an important source of stability at a time when other parts of the portfolio are experiencing declines. The company also completed the initial rollout of its Lean daily management system across 44 distribution centers, recording year-over-year improvements in order fulfillment rates, on-time delivery, and distribution network throughput for the fourth consecutive quarter. The company has also begun integrating new business volume from both existing and new customers, which is expected to support a return to overall revenue growth during fiscal year 2027.3 [2]

Stronger cash flow helps reduce debt

United Natural Foods’ improving financial performance was also reflected in cash generation and a gradual reduction in debt. Operating cash flow reached $197 million in the fourth quarter, representing year-over-year growth of 23.1% from $160 million. At the same time, capital expenditures rose from $74 million to $117 million as the company continued to invest in its distribution network and technology infrastructure. As a result of higher investments, free cash flow for the quarter reached $80 million, down slightly from last year’s $86 million. For the full fiscal year, however, UNFI generated free cash flow of $323 million, representing year-over-year growth of 35.1% from $239 million. Stronger cash generation enabled the company to continue reducing its debt. Net debt at the end of the fiscal year stood at approximately $1.54 billion and decreased by $295 million during the year. In the fourth quarter alone, it fell by an additional $93 million. The net debt-to-adjusted EBITDA ratio reached 2.2x. At the same time, UNFI had total liquidity of approximately $1.27 billion, consisting of $37 million in cash and approximately $1.23 billion in undrawn credit facilities. The lower debt level has already had an impact on interest expenses, which fell from $36 million to $29 million in the fourth quarter.3

Outlook for 2027 and a new share buyback program

Following a significant improvement in profitability in 2026, United Natural Foods’ management expects this positive trend to continue into fiscal year 2027. The company forecasts full-year revenue of between $31.2 billion and $31.8 billion, anticipating a return to growth following a decline to $31.152 billion in 2026. Net income is expected to reach between $105 million and $145 million, with earnings per share in the range of $1.70 to $2.30. Management expects more significant growth in adjusted metrics. Adjusted earnings per share are projected to reach $3.00 to $3.50, and adjusted EBITDA is projected to reach $730 million to $780 million. The midpoint of the projected EBITDA range is $755 million, which is $25 million higher than the outlook the company presented at its Investor Day in December 2025. UNFI also plans to spend approximately $300 million on capital and technology expenditures and expects free cash flow of $275 million to $325 million. Another sign of management’s confidence is a new share repurchase program worth up to $200 million, which the board of directors approved on September 3, 2026. Already in the fourth quarter, the company repurchased 420,502 of its own shares at an average price of $49.94, spending a total of approximately $21 million on them. The combination of rising profitability, debt reduction, and the new buyback program is thus among the key points that investors will be watching during fiscal year 2027.3 [3]

Conclusion

United Natural Foods is now at a point where investors’ attention is focused not only on revenue growth itself, but increasingly on the company’s ability to increase profitability, generate cash, and operate its distribution network more efficiently. Significant growth in adjusted EBITDA, a return to net income, stronger free cash flow, and a gradual reduction in debt indicate that the company’s transformation efforts are beginning to yield tangible results. Other positive signs include growth in the Natural segment, the expected improvement in financial performance in fiscal year 2027, and a new $200 million share buyback program. On the other hand, the company still faces pressure on revenue in certain segments and will need to demonstrate that it can sustain the current improvement in margins even as it returns to growth. If United Natural Foods manages to meet its adjusted earnings per share guidance of $3.00 to $3.50, continue to reduce debt, and simultaneously restore revenue growth, 2026 may be viewed in retrospect as a key turning point in the company’s future direction. [4]

[1,2,3,4] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which is subject to change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.

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[1] https://ir.unfi.com/overview/

[2] https://www.unfi.com/about-us.html

[3] https://ir.unfi.com/news/press-release-details/2026/United-Natural-Foods-Inc--Reports-Fourth-Quarter-and-Full-Year-Fiscal-2026-Results/default.aspx