United Natural Foods 2026 Q1 Earnings 82.9% Earnings Improvement Despite Revenue Decline

United Natural Foods (UNFI) reported fiscal 2026 Q1 results on Dec 2, 2025, surpassing adjusted EPS estimates while reaffirming full-year guidance. The company narrowed losses significantly and highlighted operational efficiency gains, though revenue dipped slightly year-over-year.

Revenue

Total revenue declined 0.4% to $7.84 billion in 2026 Q1, with the Natural segment leading at $4.24 billion. The Conventional segment contributed $3.33 billion, while Retail sales totaled $554 million. Eliminations reduced net sales by $279 million, reflecting intercompany transactions.

Earnings/Net Income

UNFI reduced its per-share loss to $0.06 from $0.35, an 82.9% improvement, and narrowed net losses to $4 million versus $20 million. The significant EPS improvement signals strong cost control and operational efficiency.

Post-Earnings Price Action Review

A strategy of buying UNFI when revenues miss and holding for 30 days yielded a 29.62% return, underperforming the 85.80% benchmark. The Sharpe ratio of 0.10 indicated modest risk-adjusted returns, while the 0.00% maximum drawdown highlighted resilience during volatility.

CEO Commentary

CEO James Alexander Douglas emphasized progress in the Natural Products segment, driven by organic demand and retail execution. Network optimization, including the Allentown exit, improved profitability, with plans to deploy AI-driven supply chain tools and lean management across 34 distribution centers.

Guidance

UNFI guided FY2026 revenue of $31.6B–$32B, adjusted EBITDA of $630M–$700M (20% YoY growth), and adjusted EPS of $1.50–$2.30. Free cash flow is projected at ~$300M, with net leverage expected to fall below 2.5x by year-end.

Additional News

1. Operational Efficiency: UNFI’s CEO highlighted accelerated supply chain technology adoption, including the Relex AI platform, to enhance demand forecasting and reduce waste.

2. Leadership Change: A new private brands leader was appointed to strengthen merchandising capabilities and drive differentiation for retail partners.

3. Network Optimization: The Allentown facility exit, completed ahead of schedule, is expected to boost long-term profitability despite short-term sales headwinds.