United Natural Foods: Net leverage continues consistent decline; maintain Marketweight

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United Natural Foods: Net leverage continues consistent decline; maintain Marketweight

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United Natural Foods

Net leverage continues consistent decline;

maintain Marketweight

Earnings Review

Solid outlook, but bonds are callable at par 17 June 2026

We maintain our Marketweight on the 6.75s as the company is benefitting from its High Yield Credit

leadership position in the natural and organic food industry, which continues to United States

experience mid-to-high single digit growth. In addition, we expect free cash flow to be Food Service Businesses

solid over the next two quarters and net leverage declines to 2.3x at year end. However,

upside in the bonds is limited as they trade at par and are currently callable at this price. William M. Reuter

Research Analyst

3Q26 results were solid BofAS+1 646 855 6363

3Q26 Adj EBITDA increased 17% to $183 million due to (1) solid sales of Natural william.m.reuter@bofa.com

products and (2) network optimization efforts. Results were slightly above our Adj Michael DeRienzo

EBITDA estimate of $181 million. Net sales decreased 4% to $7.7 billion due to (1) BofAS

optimization actions (-4.5%), including the transition out of the Allentown, PA michael.derienzo@bofa.com

distribution center and (2) challenging comparisons to a one-time project in the

comparable quarter. Sales by segment: Natural +4%, Conventional -14% and Retail - United Natural Foods (UNFI)

10%. Gross margin increased 20 bps to 13.6% due to (1) optimization efforts and (2) Key Data 3Q2025A 3Q2026A LTM

favorable customer mix, partially offset by lower gross margins in the retail segment. Operating (US$ mm)

Based upon debt of $1.70 billion and cash of $43 million, net leverage was 2.6x at the Revenues 8,059 7,723 31,206

end of the quarter.