United Natural Foods 2026 Q1 Earnings Narrows Losses by 80% as Adjusted EBITDA Rises 24.6%

United Natural Foods (UNFI) reported fiscal 2026 Q1 earnings on Dec 2, 2025, with a non-GAAP EPS of $0.56, surpassing estimates of $0.39. Despite a 0.4% revenue decline to $7.84 billion, the company reaffirmed its full-year guidance, projecting $31.6B–$32B revenue and $630M–$700M adjusted EBITDA.

Revenue

Total revenue fell 0.4% year-over-year to $7.84 billion, driven by a 0.4% decline in the Conventional segment to $3.33 billion and a 3.4% drop in Retail to $554 million. The Natural segment, however, remained resilient at $4.24 billion, offsetting declines through sustained growth in organic and specialty products. Eliminations reduced net sales by $279 million, resulting in total net sales of $7.84 billion.

Earnings/Net Income

UNFI narrowed its net loss to $4 million in Q1 2026, a 80.0% improvement from $20 million in Q1 2025. Earnings per share also improved significantly, with losses per share decreasing to $0.06 from $0.35. This reflects strong operational efficiency and cost control, despite the revenue dip.

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 benchmark’s 85.80%. The Sharpe ratio of 0.10 indicated modest risk-adjusted returns, while a 0.00% maximum drawdown highlighted the strategy’s ability to minimize losses during volatility.

CEO Commentary

CEO James Alexander Douglas emphasized progress in network optimization and supply chain investments, noting adjusted EBITDA and free cash flow outperformed prior years. Strategic priorities include scaling lean daily management and enhancing merchandising capabilities, with optimism about achieving full-year targets.

Guidance

UNFI reiterated FY26 guidance: $31.6B–$32B revenue, $630M–$700M adjusted EBITDA, and $1.50–$2.30 adjusted EPS. The company aims to reduce net leverage below 2.5x by year-end, driven by margin expansion and productivity programs.

Additional News

Recent non-earnings updates include UNFI’s acceleration of supply chain digitization, including Relex technology adoption, to enhance throughput and service levels. The company also announced a $300 million free cash flow target for FY26, underscoring its focus on de-leveraging and operational efficiency. Additionally, UNFI confirmed the closure of its Allentown, PA distribution center as part of network optimization efforts, aiming to streamline operations and reduce costs.