Dive Brief:
- United Natural Foods, Inc. recorded net sales of $7.6 billion during the fourth quarter of fiscal 2026, reflecting a year-over-year decline of just under 1%, the grocery distributor reported Tuesday.
- UNFI’s natural segment generated a sales increase of more than 6% during Q4 while conventional sales fell by over 8%. Net income came in at $35 million for the quarter compared with a loss during the same period a year ago, while adjusted EBITDA rose by nearly half.
- The grocery company remains on track to return to sales growth in 2027, CEO Sandy Douglas said Tuesday morning during an earnings call.
Dive Insight:
UNFI’s Q4 results reflected the continuing rise of grocers with “differentiated value propositions,” including natural and organic retailers, smaller chains and independents, Douglas said during the earnings call.
“Our focus is helping these [retailers] execute growth strategies to differentiate their shopping experiences in the marketplace and better compete with mass and discount retailers,” Douglas said.
Douglas noted that UNFI added more than 130 private label products to its offerings over the past year, which he said reflects the fact that many retailers are relying on store brands to help them stand out. In addition, the company refreshed one of its seafood brands during Q4, he said.
Douglas added that while many grocers are putting a premium on healthier products, standard groceries remain an important part of its distribution business.
“Our product set is designed to serve the assortments of our customers, and so the natural evolution would be that customers are beginning to focus more on healthier, more differentiated product sets, which drives growth in natural,” he said “But our conventional products are particularly important products in many assortments. And while their year-over-year growth may be negative, the total combination adds value to customers and drives our growth proposition.”
UNFI’s quarterly net sales remained off in FY 2026 after rising in the prior fiscal year
For all of fiscal 2026, which ended Aug. 1, UNFI generated net sales of $31.2 billion, down 2% from the previous year. The company’s natural sales were up 7% during the year, while sales for its conventional segment dropped more than 11%.
UNFI’s retail operations saw sales sag by just under 8% in fiscal 2026 and during Q4.
UNFI made progress during Q4 in using technology including artificial intelligence to help the retailers it serves keep their shelves stocked. The company still sees automation as one of its most significant opportunities for improvement, according to Douglas.
“[T]he ultimate position that we want to put our customers in is being in stock at really very, very high levels,” Douglas said.
Douglas noted that part of its business is still in the “early stages” of implementing a turnaround strategy and saw “sequential improvement” in its top- and bottom-line results. The unit, which includes Minneapolis supermarket chain Cub Foods and East Coast grocery banner Shoppers, is letting UNFI glean insights that it applies to its role as a distributor to other retailers, he said.
Douglas indicated that UNFI is taking advantage of its experience rejuvenating its own retail operations to sharpen its understanding of the challenges other grocers face.
“Our focus is trying to help retailers wherever they’re segmented, particularly those that may not have been as differentiated in the past, like Cub, for example, to really take the actions necessary to create a winning strategy for their business on value, on assortment and on unique experiences,” Douglas said.
