United Natural Foods, Inc. (UNFI) delivered robust financial results for the third quarter of fiscal 2025, surpassing Wall Street expectations with solid revenue growth and improved operational efficiency. For the quarter ending May 3, 2025, the company reported a 7.5% increase in net sales, reaching $8.1 billion, up from $7.5 billion during the same period last year. This growth was fueled primarily by a 4% rise in wholesale unit volumes and expanding demand for natural products.
Despite posting a net loss of $7 million for the quarter, United Natural Foods’s adjusted earnings per share (EPS) rose to $0.44 significantly beating analysts’ forecast of $0.24. Gross profit increased to $1.1 billion, representing a 6.1% year-over-year growth. However, the gross profit margin saw a slight dip from 13.6% to 13.4%, attributed to changes in product mix and reduced margins on some items. Operating expenses were lowered to 12.7% of net sales from 13.2%, reflecting success in cost-saving efforts and better operational leverage.
Adjusted EBITDA surged by 20.8% to $157 million, highlighting gains from new business wins and efficient execution. The company also marked a $70 million improvement in free cash flow, a sign of strengthened cash management and strategic alignment.
Revised Fiscal 2025 Guidance Reflects Operational Adjustments
In tandem with its earnings announcement, UNFI updated its guidance for the full fiscal year 2025. The company reaffirmed its net sales projection of $31.3 billion to $31.7 billion but revised its expected net income to a loss ranging between $80 million and $55 million. This adjustment factors in the costs tied to exiting a key customer contract and the reconfiguration of its Northeast U.S. distribution network.
Despite the revised bottom-line outlook, United Natural Foods maintained its adjusted EPS forecast of $0.70 to $0.90, demonstrating confidence in its ongoing transformation efforts. Adjusted EBITDA guidance remains unchanged at $550 million to $580 million, supported by continued improvements in productivity and profitability.
Company executives expressed optimism about the strategic progress made so far. Their emphasis remains on strengthening the core wholesale segment, improving operational infrastructure, and accelerating product innovation to better serve retail and independent food service customers.
Navigating Headwinds and Executing Long-Term Strategy
UNFI’s leadership acknowledged current challenges, including the financial impact of organizational changes and an ongoing response to a recent cybersecurity incident. The company is actively working to restore affected systems and ensure continuity for its customers. Short-term mitigation strategies are being deployed while long-term security enhancements are underway.
Looking ahead, the company aims to build on its momentum by deepening relationships with retail partners, increasing the efficiency of its supply chain, and broadening its range of natural and organic offerings. These efforts are central to its long-term vision of delivering sustainable value to customers, suppliers, and shareholders alike.
As United Natural Foods continues to adjust to evolving market dynamics, its third-quarter performance reinforces investor confidence and illustrates its resilience in executing a multi-pronged growth strategy.
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