With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are diversified, electronics, and food and grocery.

Fortune Sector Leaders: Wholesalers

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

As the largest publicly traded wholesale distributor of health and specialty food in the U.S. and Canada, the company acts as Whole Foods' main supplier. United Natural Foods (UNFI) has been focused on diversifying revenue streams—Whole Foods made up 18% of UNFI's revenue in 2020—and recently launched Community Marketplace, an online platform connecting retailers with smaller suppliers who aren’t stocked in UNFI’s own warehouses.

Fortune Global 500

This year’s Fortune 500 marks the 67th running of the list.

This year's Fortune 500 marks the 66th running of the list.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

United Natural Foods, or UNFI, distributes natural, organic, and specialty foods, as well as produce and conventional grocery and non-grocery products in the U.S. and Canada. Its product portfolio includes perishable and frozen foods, personal care and wellness items, bulk foods, and pet food. UNFI markets products under several brand names including Wild Harvest, Albert’s Organics, and Woodstock Farms. The company operates in wholesale and retail segments, offering retail store support, pricing strategy, advertising, store design, network and data housing, and administrative back-office solution services.

Q4 2026

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United Natural Foods (UNFI): Company Profile, Stock Price, News, Rankings

legacy

United Natural Foods

united natural foods

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time I would like to welcome everyone to the UNFI. fourth quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star then the number one on your telephone keypad. To withdraw your question, press Star one again. I would now like to turn the conference over to Steve Bloomquist, Vice President of Investor Relations. Please go ahead.

Good morning everyone, and thank you for joining us for UNFI's fourth quarter fiscal.

Copy of the earnings release from this morning, the press release and earnings presentation, which.

Management will speak to are available under.

The Investors section of the company's website at www.unfi.com.

We've also included a supplemental disclosure file.

In Microsoft Excel with key financial information.

Joining me for today's call are Sandy Douglas.

Douglas, our Chief Executive Officer, and Matteo Tarditi, our President and Chief Financial Officer.

Sandy and Matteo will provide a business.

Update after which we will take your questions.

Before we begin, I'd like to remind everyone that comments made by management during.

Today's call may contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that might involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Actual results may differ materially from the results discussed in these forward-looking statements.

Today's call management will refer to certain non-GAAP financial measures. Definitions and reconciliations to the most comparable GAAP financial measures are included in our press release and the end of our earnings presentation.

Thanks, Steve, and thank you, everyone, for joining us this morning. UNFI delivered solid fourth quarter results that drove fiscal 2025 performance in line with our previously provided outlook ranges for net sales and adjusted EBITDA and above our outlook for free cash flow. Notably, our strong free cash flow generation enabled us to reduce net debt to around $1.8 billion, the lowest level since the end of fiscal 2018, and reduce net leverage by 0.7 turns compared to last year. Our fiscal 2025 results reflect the strength and resiliency of our customer base combined with disciplined execution against the multi-year strategic plan we detailed a year ago. We're building momentum as we enter year two of our strategic plan. We're increasingly confident in our trajectory and in our ability to create sustainable long-term value for our customers, suppliers, associates, and shareholders.

With that backdrop, I want to take a few minutes to walk through the progress that we've made in the first year of our refresh strategy as well as the opportunities ahead to further accelerate our performance. At UNFI, we aspire to become the food industry's most valued partner by bringing innovative products, programs, and services designed to help retailers and suppliers profitably grow their businesses and ours. We believe that UNFI's scale, heritage, and enduring high-growth categories like natural, organic, and specialty products, our merchandising programs, private brands, and our value-adding services make us uniquely suited to help retailers differentiate and compete in a dynamic marketplace. As a result, we are building significant capabilities to help our suppliers build their brands and accelerate their growth within our diverse retailer network.

Based on these core strengths, we believe that we are well positioned to drive profitable growth within a growing $90 billion target addressable market that includes many natural, organic, specialty, multicultural, and conventional grocery retailers, all of whom can benefit from our differentiated products, programs, insights, and services today and in the future. As expected, the refresh strategy and multi-year plan we announced last October have been steadily driving growth within this market, anchored by two primary focus areas: creating more value for customers and suppliers and becoming a more effective and efficient business. Over the past year, we've made meaningful progress in both areas, starting with our focus on adding value for customers and suppliers. In fiscal 2025, we grew our business with both existing and new customers by providing customized product, supply chain, and programmatic solutions for customers to meet their short and long term needs.

At the same time, we're taking action to improve our category merchandising and account management capabilities by realigning our sales and merchandising teams to better meet the unique needs of the customers and suppliers they serve across the natural, organic, specialty, fresh, and conventional product sets. We also continue to expand our digital and professional services, which create deeper and stronger customer relationships and range from credit card processing, shelf management, and store remodeling to digital solutions like the Unified Media Network and electronic shelf labels. Some of our long-standing customers increased their business with us to add these services last year, helping them save money, operate more efficiently, and compete more effectively for suppliers. We continue to roll out our revamped commercial Go to Market program, which streamlines fees and adds access to proprietary insights that help them build and profitably grow their brands within our retail network.

We also created a dedicated cross-functional team that has been building new and improving existing processes to enhance the supplier experience. Together, these efforts underscore our commitment to create meaningful value for both our customers and suppliers while strengthening our own market position for the future. Next, I'll focus on our progress towards becoming a more effective and efficient company, which has been driven by four areas: network optimization, cost efficiency, working capital management, and reducing capital intensity. Over the past few quarters, we've outlined our efforts to optimize our distribution network to better serve customers and suppliers over the long term. During fiscal 2025, we consolidated volumes from four distribution centers into larger, more modern facilities with broader assortments to benefit customers in these regions. These actions will also further improve our network profitability in fiscal 2026. In parallel, we've optimized capacity and enhanced capabilities across our network.

This includes strategic investments in automation and approximately 400,000 incremental square feet in Manchester, Pennsylvania and Sarasota, Florida, which should enable growth in both regions, improve product restocking speed and order accuracy over time while reducing our operating costs to further improve our service levels. We've deployed lean daily management in 28 of our 52 distribution centers through the end of fiscal 2025, which is strengthening our performance across safety, quality, delivery, and cost metrics. We continue to embed lean management routines across our organization and create greater accountability through real-time tracking of key performance metrics. From adding new capabilities to embedding lean processes across our operations, we're building a more responsive and resilient supply chain that is well positioned to support customer needs across a range of macro and competitive backdrops.

Our nimble, solutions-oriented approach helped us drive above industry growth in fiscal 2025, and we expect to continue building on this strength in the year ahead. In fiscal 2025, we improved free cash flow by reducing capital intensity and strengthening our working capital management processes. Rigorous prioritization helped drive our approximately $130 million reduction in capital investment spend during the fiscal year. We also reduced inventory days on hand to pre-COVID levels while working to improve fill rates for our customers. Finally, we've continued to optimize spending through disciplined SG&A cost management across the enterprise. This included streamlining our processes and corporate support structure to enable key business functions to serve our customers and suppliers more quickly, effectively, and cost efficiently, which resulted in an approximate 30 basis point reduction in full-year operating expenses as a percentage of sales in fiscal 2026.

We expect to continue to make progress in each of these areas while also focusing on capability building and incremental initiatives to accelerate long-term profitable growth. For example, we see a meaningful opportunity to improve the experience for independent customers and emerging, innovative suppliers who are critical to the vitality of our industry. We will also make our portfolio of value-adding supplier programs more accessible to these operators in terms of driving greater effectiveness and efficiency. We're focused on building a strategic roadmap for technology investments and streamlining more of our internal processes to drive even greater adaptability as well as margin and free cash flow benefits. Turning to our fiscal 2026 outlook, which Matteo will provide more detail on shortly, we are confident in our continued execution of our strategy and ability to deliver another year of profitable growth while further strengthening our balance sheet.

Looking ahead and turning to page six in the presentation, we are accelerating and raising the multi-year objectives we previously set and announced one year ago for the fiscal 2025 to fiscal 2027 period. We now expect net sales to grow in the low single digits on average from fiscal 2024 to 2027, which compares to our previous expectation for fiscal 2027 net sales to be roughly flat to fiscal 2024. This reflects better than projected organic growth driven by growing customers as well as new customers, new categories with existing customers, customer retention, and growth within natural, organic, specialty, and fresh products, which is supported by enduring consumer tailwinds towards health, wellness, and differentiated products. In addition, we now expect average annual adjusted EBITDA growth from fiscal 2024 to fiscal 2027 to be well above our prior expectations and projected.

The growth for the period will be in the low double-digit range with adjusted EBITDA margin growing by almost 40 basis points in fiscal 2026. Our updated multi-year objectives imply that we will deliver adjusted EBITDA of over $730 million in fiscal 2027. This higher profitability, as well as our continued focus on optimizing capital investments and achieving pre-COVID levels of working capital, is expected to generate free cash flow of around $300 million in both fiscal 2026 and fiscal 2027, roughly double the expectations that we communicated a year ago. Combining our higher adjusted EBITDA and free cash flow generation, we expect to reduce net leverage to around 2.5x by the end of fiscal 2026 and to further reduce this to under 2x by the end of fiscal 2027.

As we reduce our debt levels and interest expense and improve profitability, we expect adjusted EPS will continue to grow faster than adjusted EBITDA. In summary, despite the unexpected challenges we faced as we navigated the cyber incident with our customers and suppliers in the fourth quarter of fiscal 2025. We continue to maintain our underlying business momentum through strong partnerships and a collaborative, solutions-oriented culture. I'd be remiss if I didn't once again thank all of our customers and suppliers for their partnership and resilience during a challenging time. We learned a lot, and we're putting our learnings into action as we focus on helping our customer and supplier community execute their strategies during the upcoming holiday selling season and beyond.

Now, a month into year two of our refresh strategy, we are focused on accelerating our momentum by building on UNFI's unique ability to provide differentiated products, services, and well-scaled supply chain solutions that help our customers and suppliers grow profitably. We look forward to discussing our path to long-term value creation in greater detail at our Investor Day in December. We are grateful to our customers and our suppliers for their continued partnership and the UNFI associates for delivering on our commitments over the past year. We still believe our future value creation opportunities far exceed what we've achieved so far. With that, let me turn it over to Matteo to provide more detail about our financial performance and our fiscal 2026 outlook.

Thank you, Sandy, and good morning, everyone. As Sandy stated, we finished fiscal 2025 in line with the revised outlook ranges we provided in July during our business update call for sales, adjusted EBITDA, and adjusted EPS. While we outperformed our free cash flow target, today I will provide additional insight into our fourth quarter results, our year-end financial position and capital structure, and our fiscal 2026 outlook. Our expectations for the new year include incremental benefits as we accelerate the execution of our multi-year strategy, build upon the early success of our lean operating approach, and look to achieve our previously stated 2.5 turns leverage target in 2026, one year ahead of our initial plans. With that, let's review our Q4 results. If you look at Slide eight, our fourth quarter sales came in at $7.7 billion compared to $8.2 billion last year.

Excluding the $582 million benefit from the extra week in last year's fourth quarter, net sales grew by 1.6%. This growth rate reflects a volume decline of around 3% driven by the lost revenues from the cyber incident, which was more than offset by inflation of about 2% and positive product mix. The sales growth rate also includes an estimated impact of 5% from the cyber incident. Our natural segment growth of 9% on a comparable 13-week basis again outperformed the market with growth from both smaller and larger customers as well as the secular tailwind from increasing customer adoption of these products. Conventional segment sales declined 6%, partially reflecting the lapping of a large new customer addition and the beginning of the optimization and accretive transition out of Allentown.

For the full year, on a comparable 52-week basis, net sales rose 4.6%, volumes grew 1.4%, inflation was about 1.8%, and a favorable mix shift accounted for the balance. Notably, full-year volume growth outperformed Nielsen's industry benchmarks. This was largely the result of the strength of our customer base, including the benefit of new business with existing customers and the onboarding of new customers in retail. Sales fell 1.7% in the quarter on a 13-week comparable basis. We believe that absent the cyber incident, total sales would have been positive as would ID sales at Cub. Our new Retail CEO, David Best, parted at the beginning of the new fiscal year. David is focused on working with our retail team to improve the customer experience, store traffic and operations, and financial results.

We are confident that under David's leadership and with his deep knowledge of the local market that CAB serves, we can enhance our offering while deepening our franchisee partnerships to drive improved performance. Moving to Slide nine, let's review profitability drivers in the quarter. Our gross margin rate in the fourth quarter was 13.4%, which compares to 13.7% in the prior year quarter. Excluding LIFO in both years and the impact of the cyber incident in this year's fourth quarter, which drove elevated shrink, the gross margin rate was 13.5% in Q4 of both years and represented the highest quarterly rate this fiscal year. This performance reflects another solid quarter in managing shrink, the further benefits from our supplier programs, and early progress with incremental Win Win value creation solutions with customers.

Gross profit dollars on a comparable 13-week basis increased about $13 million, resulting from the 1.6% increase in sales for the same period. Our operating expense rate was 13.6% of net sales compared to 13.2% last year. The higher rate is largely attributable to the deleveraging impact on fixed cost of the estimated $400 million in lost sales as well as our meaningful investment in servicing our customers during the cyber incident, which included additional overtime and other expenses from manual processes during fiscal 2024. We fully expect our OpEx rate to return to the pre-cyber incident trends we experienced in the first three quarters of fiscal 2024 and believe the benefit of lean initiatives will continue to deliver better throughput and supply chain efficiency over time, supporting an improved customer experience. Adjusted EBITDA for the fourth quarter was $116 million compared to $133 million in last year's fourth quarter.

Excluding the additional week in fiscal 2024, this brought full year adjusted EBITDA to $552 million, slightly above the midpoint of the outlook we provided on July Business Update call as well as our original outlook provided one year ago. All in, we estimate that the cyber incident impacted adjusted EBITDA by approximately $50 million in the quarter, which means our full year estimate adjusted EBITDA would have been roughly $600 million. Adjusted EPS for Q4 was a loss of $0.11, bringing full year adjusted EPS to $0.71, also above the midpoint of our most recent guidance. Turning to Slide 10, free cash flow in Q4 was $86 million. This brought full year free cash flow to around $240 million compared to an approximate $90 million use of cash in fiscal 2024.

This roughly $330 million improvement was largely a result of the work accomplished throughout the year to better forecast and manage the drivers of free cash flow, particularly returning inventory toward pre-COVID levels as well as the addition of free cash flow as an incentive compensation metric to drive focus and alignment within our organization. The free cash flow generated in Q4 enabled us to maintain leverage sequentially at 3.3 turns despite the reduced level of trailing 12-month adjusted EBITDA resulting from the cyber incident. Importantly, we reduced net leverage by around 0.7 turns from the end of last fiscal year. Net debt also fell to just above $1.8 billion, the lowest level since 2018. Flipping to Slide 11, we continue to deepen lean practices to drive benefits across safety, quality, delivery, and cost.

We implemented lean daily management in 28 distribution centers as of the end of the fiscal year, which was a key driver of our operating efficiency and throughput improvement. In fiscal 2025, we are actively increasing deployment of lean daily management throughout our distribution network and expect to drive further improvement to supply chain effectiveness and efficiency in fiscal 2026. Our lean initiatives in fiscal 2026 also include eliminating waste and optimizing and digitizing processes to improve distribution center performance. Our Value Delivery Office will also continue to generate further incremental savings with an emphasis this year on indirect spending. This relates to equipment and services not for retail and makes up a meaningful portion of our roughly $4 billion annual operating spend.

Additionally, we see further opportunities to improve the supplier experience as well as working capital efficiency and free cash flow generation by aligning and streamlining billing processes and payment standards. Simultaneously, we continue to refine and optimize our organizational structure to deliver even higher service levels and productivity. All these controllable actions should more than offset planned merit and other customary operating cost increases. As Andy highlighted earlier, we will also be focused on building enhanced capabilities within merchandising, revenue growth management, and technology, as well as making specific investments to the independent customers and emerging supplier experience. This builds on work done over the past few years to better understand the needs of all customers and suppliers. These capabilities are expected to enhance our longer term growth trajectory and margin potential, and we plan to provide more detail on these initiatives at our upcoming Investor Day in December.

If you go to slide 12, we finished fiscal 2025 with operating momentum and a high degree of conviction in our strategy. We remain focused on creating value for our customers and suppliers while becoming more effective and efficient as a business partner. As outlined in our press release, the guidance ranges and increases compared to fiscal 2025 include the sales that are expected to be in the range of $31.6 billion -  $32 billion. As a reminder, this includes a top line impact from the optimization and accretive transition out of Allentown within our conventional segment. This transition is expected to reduce our consolidated net sales growth rate by about 3% while improving our profitability and recurring free cash flow.

An expected range for adjusted EBITDA of $630 million - $700 million represents a year-over-year increase of about 20% at an average annual growth rate of close to 15% at the midpoint relative to our reported fiscal 2024 results. Using the midpoints for each of these ranges, we do expect to see year-over-year margin expansion largely driven by the various initiatives we have planned for the year and their anticipated contribution. Finally, an adjusted EPS range of $1.50 - $2.30 per share, a one year increase of about $1.20 per share at the midpoint and a two year increase of $1.75. Our outlook for capital spending, including cloud implementation spend, is around $250 million. Our CapEx plans reflect our focus on safety, modernization, and continued prioritization.

We always evaluate opportunities to reinvest some of the benefits of this prioritization and to support long run growth and improving supply chain value for customers and suppliers. This includes targeted automation and technology enablement investments. We're also actioning our fiscal 2026 plan to generate approximately $300 million in free cash flow in fiscal 2026. We will continue to prioritize reducing net debt to improve our leverage to approximately 2.5 turns or less by year end. This exceeds our prior stated long term goal of generating recurring free cash flow of well over 0.5% of sales. Like the initial outlook we provided for last fiscal year, we believe these ranges represent a high confidence case with multiple ways to achieve these targets.

As I highlighted on Slide 13, we made solid progress in fiscal 2025 to create incremental value for our customers and suppliers while taking actions to become a more effective and efficient business. We fully expect this momentum to continue in the new fiscal year as we further execute on our strategy. Having been here for about a year and a half now, I'm even more confident about the future of UNFI and the value we can generate for our shareholders after a successful fiscal 2025 of delivering and deleveraging. We are committed to accelerating the momentum we've built and again delivering our outlook in fiscal 2026. With that, operator, please open the line for questions.

We will now begin the question and answer session. In order to ask a question, press Star followed by the number one on your telephone keypad. Our first question will come from the line of John Heinbockel with Guggenheim Securities. Please go ahead.

Hey Sandy, I want to start with natural merchandising initiatives capabilities.

The biggest opportunity there, you know, is it? Obviously, the long tail is where the innovation is, but those guys don't have manufacturing capabilities, so there's some limitation on supply.

I guess would that allow you to continue to grow natural in the high single digits?

Good morning, John. I think of it as really three pieces depending on the customer segment. First, as you suggest, innovation is very important to natural retailers who are positioned that way. A lot of the merchandising work we're doing there is to simplify the experience for emerging suppliers and to facilitate more innovation through multiple platforms to our customers. On the more conventionally positioned side, our natural agenda is more about the roadmap to deepen their involvement in the categories, and depending on the region of the country and the development of the categories, we manage that specifically on a customer-by-customer basis. I think the punchline is that we think there's a significant opportunity for UNFI to help our customers merchandise their products and be more successful regardless of their positioning.

Now that you guys are obviously now disclosing segment segment EBITDA, you know, conventionals.

Half that, half the margin of natural products.

When you look at that margin, what's the opportunity to improve conventional profitability? Can it be meaningfully improved? I guess, and I don't know if you have an idea as to where.

Look, that's just structural, and we need to shrink that business thoughtfully over the next five years.

Hey, good morning, John. Natural, as you mentioned, has a higher profitability and historically had a higher margin profile due to the specialized and differentiated product assortments as well as their ability to or our ability to have higher operating leverage on warehousing and transportation costs just based on the network and the composition of the business. Now, across both segments, we are focused on driving greater profitability with a focus on three areas. The first one is to improve product and service mix. The second one is to continue to drive greater efficiency, so shrink indirect cost, operating expenses. The third element is how do we continue to embed lean into our operations and identify through lean ways to be both more effective and more efficient. If you think about the margin trajectory, we grew about 10 basis points, 2025 to 2024, with the headwind from the cyber incident.

We're growing at the midpoint of the guidance about 35 basis points between 2026 and 2025. With a $730 million EBITDA direction for 2027, that would be about 60 basis points of margin expansion versus 2024. We're working all the levers, balancing, creating customer value for customers and suppliers, becoming a more effective business partner, and then plan deficiencies.

Our next question comes from the line of Mark Carden with UBS. Please go ahead.

Morning. Thanks so much for taking the questions. To start on your updated three year guidance, you're boosting your sales growth expectations to low single digit range. You talked a bit about the stronger than anticipated organic growth. Are you guys any shifts to how you're approaching planned customer attrition or any assumptions for new account growth going forward? Just some more color on how you're thinking about the balance would be great. Thank you.

Hi, Mark. Our view is that as we migrate to our addressable market of $90 billion, we've done some optimization, particularly in the conventional side, which has been a headwind to overall growth. Beyond that, inside the addressable market, we've seen solid growth in our customer file, both from a new customer and expanding categories with existing customer perspective. I'd say the thing that's changed is the organic tailwind in natural organic and higher levels of customer file growth and customer retention. Our strategy on the whole for the various segments hasn't changed at all. We're just performing slightly better than we expected when we originally guided last year.

Okay, great. Thank you. In terms of the current backdrop, are you guys seeing any shifts to the industry promotional backdrop, and how is that shaping up relative to your expectations with all the unevenness in the conservative backdrop?

Good morning, Mark. We see the promotion cadence edging up, but it remains very disciplined. The share of volume sold on deal is still running below 2019. We see selectively lifting activities and kind of leaning harder into digital coupons and retail media placements to defer share, which also supports the future value proposition of our UMN. What we consider for our outlook for fiscal 2026 is basically an immaterial step change in promotion levels, very consistent with 2025.

Great, thanks so much. Good luck, guys. Thank you.

Our next question comes from the line of Kelly Bania with BMO Capital Markets. Please go ahead.

Hi. Thanks for taking our questions. First, I just want to clarify, I think I heard volume metrics that you gave. Are we right to assume that volumes would have been about +2% excluding the cyber incident in the quarter? Can you clarify how that.

Just assuming the incident was kind of equally distributed across the channels, is that a fair assumption?

Yeah. Good morning, Kelly. Volume was up about 1.5% for a full year in 2025. As you can imagine, with natural being up high single digit and then on a reported basis with the cyber headwind, conventional being flat-ish year-over-year, volumes were clearly more skewed towards natural than conventional. Overall, the cyber impact was probably a little bit heavier on the conventional front. Our ability to recover through some of the many, many processes we activated was quicker in natural. With that, we had probably a little bit more of an impact in conventional. You'll see it also as we think about year-on-year kind of tailwinds into a 2026 adjusted EBITDA.

Okay, that's helpful. As we just kind of step back and think about the updated algorithm over the next few years here, what is the biggest contributing factor that is leading you to raise the adjusted EBITDA algorithm?

Kelly, thanks. It's really three things, you know. First one is we were modeling a year ago to be flat in terms of top line growth, and now we are seeing low single digits through the combination of a strong, resilient natural business and also our ability to retain more customers as part of the network optimization. The second element is the continuous progress with shrink reduction and the supplier programs. These have been both positive in 2024 and 2025, and we continue to see the trend into 2026 with tight daily management. The third area is really the productivity effort. If you recall, in 2024 we remargined the business with about $150 million. In 2025 we reduced OpEx by about 50 basis points as a percentage of sales. That on $30 billion is about $150 million. The journey continues into 2026 and 2027.

2026 is going to be a full year realization of the actions that we launch in 2025. 2026 across 2027 is the focus that we're putting on indirect spend.

Our next question will come from the line of Scott Mushkin with R5 Capital. Please go ahead.

Hey guys, thanks for taking my questions and thanks for all the details.

It's really helpful. My question is really strategic and it really has to do with the relationship with Amazon and is there any way to make it more symbiotic? Amazon's out there creating a 3P network of grocers. The question would be, can you bundle your smaller and mid sized customers to participate in that network? Could you create a buying consortium since you guys sell a lot of the same products and you're obviously serving their Whole Foods banner and then, you know, could you put Cub into that 3P network? I just kind of want to get a feel for. Do you think this relationship could grow over time?

Scott? Sandy, as you know, we have a policy not to comment on specific customers and we'll continue to live by that policy in this answer.

What I would say though broadly is that particularly with our enterprise accounts, we develop a very customized and tailored strategy of creating value for and with them. That would include the widest possible range of values that we could mutually agree to pursue. I think you can be assured that that would include the customer you mentioned as a high priority for us. I would say in parallel though that we are working on a segmented basis to improve our ability to grow profitably and to help customers of all sizes, in particular small independents that are very agile and innovative, both from a wholesale supply standpoint and also for our suppliers. Think of it as a segmented approach with a range of enterprise value drivers up to and including our largest customer and then ranging down through the segments to independents as well.

It seems if you've teamed up, you could really help those smaller players over time. The second question is, you know, obviously you've been rationalizing distribution and automating, making it more efficient. If your volumes came in much stronger than you're anticipating over the next two to three years, walk us through whether you would need significant capital investment and facility expansion.

I guess the best way to describe that is that we have been both rationalizing to optimize distribution centers and expanding and growing. Most recently, as we mentioned in our prepared remarks in Natural, we opened a new DC in Manchester, Pennsylvania. That's an automated DC. Then we opened a new DC in Sarasota, Florida. Between them, 400,000 incremental square feet and different automation applications in each of the two to facilitate accelerated growth in those regions. We will continue to optimize the network as our technology roadmap takes hold, and we will develop more agility and flexibility in the network. At this stage, our growth is well contained in our three year plan and in the outlook we provided.

If I can add a couple of thoughts here also, Scott, in the $250 million capital investment that we have for 2026 and beyond, we always assign a portion of that to automation and modernization. As Sandy mentioned, we're going to have Sarasota going live with new automated technologies and also we're going to have Joliet going live in about 12 months. That brings a total count of automated distribution centers within our portfolio to six. We're also using Lean not only as a way to improve safety and improve quality and delivery and cost, but also as ways to optimize our layout and create more capacity. When you put both the $250 million envelope to work and a Lean lens on our processes, we have opportunities to expand capacity without necessarily going too long relative to CapEx.

Our next question comes from the line of Alex Slagle with Jefferies. Please go ahead.

All right, thanks and congrats. I wonder if you could talk about.

Through in 2026 would kind of come. I would imagine there'd be more of it on the OpEx side, net net. I think you mentioned you expect the OpEx margin, the return of the.

Just kind of curious how you're thinking about that for 2026.

Morning, Alexander. Let me walk you through the big pieces of the EBITDA expansion or the EBITDA growth. If you start with $752 million of adjusted EBITDA for 2025 as a jumping off point, then we would add the $50 million of the cyber incident related losses that are no repeat and so re-baseline as $600 million for 2025. From there, there is EBITDA accretion from the exit of an unprofitable customer and distribution center that builds on the $600 million. There is the continuous progress on shrink and supplier funds, and then there is the third element of productivity, which, as I was mentioning earlier on, is centered on three areas.

One is the full year realization of the 2025 actions, and the second area is really as we go and continue to deploy lean, finding more throughput opportunities, and then going after the indirect spend, which is a meaningful portion of the $4 billion spending. Think about really these four blocks as you walk 2025 to 2026: the $50 million no repeat of cyber, the exit of the unprofitable contract, the continuous programs in shrink and suppliers, and then the productivity actions.

United Natural Foods (UNFI) Q4 2025 Earnings Call Transcript

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