UNFI reports lower sales in Q4
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United Natural Foods Inc. reported lower sales for its fourth quarter and fiscal 2026 on Tuesday, but improved profitability and cash flow as the grocery distributor continued to streamline its distribution network and invest in technology.
Net sales declined 0.7% in the fourth quarter and 2% for the full year compared with fiscal 2025. UNFI attributed the decreases primarily to planned network optimization actions and the completion of short-term project work. The company said those factors were partially offset by the comparison with last year's cyber security event.
Excluding those factors, underlying sales increased at a low-single-digit rate, according to the company.
Adjusted EBITDA rose 48.3% in the fourth quarter and 27% for the full year. Free cash flow declined by $6 million in the quarter but increased by $84 million for the year, reaching $323 million, UNFI's highest annual total in more than a decade.
CEO Sandy Douglas said the company is focused on helping grocery retailers distinguish themselves from mass and discount competitors, particularly as differentiated retailers continue to gain market share.
"Food retailers with differentiated value propositions have steadily gained share within the grocery industry over time," Douglas said during the company's investor call. "We continue to see this trend across a wide range of retailers, including natural and organic grocers, as well as smaller chains and independents with unique, locally relevant offerings."
UNFI's strategy includes expanding private brands, merchandising support and services designed to help retail customers compete. During fiscal 2026, the distributor introduced more than 130 private brand SKUs, including products aimed at health-conscious shoppers.
The company also added AI-enabled capabilities to its UNFI Insights platform to help suppliers analyze store-level performance and improve demand planning.
On the distribution side, UNFI recently expanded its Joliet, Illinois, facility with full-case automation, which is in the early stages of implementation. The company also completed the rollout of an AI-powered supply chain and procurement planning platform across its distribution network and expanded Lean Daily Management practices to 44 distribution centers.
Chief Operating Officer Matteo Tarditi said fill rates, on-time deliveries and throughput improved year over year for the fourth consecutive quarter.
