Grocery Wholesaler United Natural Foods Terminates Supply Agreement, Still Sticks To Annual Outlook

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The stock has given up all its gains in a volatile premarket session.The company reported a quarterly sales increase of 7.5% year-on-year to $8.06 billion, beating the analyst consensus estimate of $7.78 billion. This increase was driven by a 4% increase in wholesale unit volumes.The quarter’s gross margin was 13.4% versus 13.6% last year, driven by lower product margin rates and business mix. The gross profit climbed 6.1% to $1.1 billion.Also Read: Grocery Wholesaler United Natural Foods Q2 Earnings: Sales And EPS Beat, Raised FY25 Outlook And MoreOperating income for the quarter was $15 million compared to $6 million last year.Adjusted EBITDA of $157 million improved 20.8% Y/Y. Adjusted EPS of 44 cents beat the analyst consensus estimate of 21 cents.As of May 3, the company held $52 million in cash and equivalents. Free cash flow for the quarter totaled $119 million, and operating cash flow was $173 million. Long-term debt was $1.96 billion at the end of the quarter.Sandy Douglas, CEO, said the quarter marked its seventh consecutive quarter of sequentially improving adjusted EBITDA.Outlook: United Natural Foods reiterated fiscal 2025 sales guidance of $31.3 billion-$31.7 billion, against the analyst consensus of $31.57 billion.It reaffirmed the adjusted EPS guidance of 70-90 cents against a consensus estimate of 82 cents. The company also maintained the adjusted EBITDA outlook of $550 million-$580 million.As part of a strategic pruning, the company announced the termination of a major supply agreement to enhance profitability.United Natural Foods and Key Food Stores Co-operative mutually agreed to terminate their northeast supply agreement, dated June 3, 2021. The agreement will come to an end on or around September 20, 2025.The company views this as a positive step, allowing it to exit an unprofitable relationship and advance its strategic financial goals.In conjunction with the termination, the company intends to discontinue operations at its Allentown, Pennsylvania distribution center, consistent with efforts to optimize its distribution network and improve service to local customers and suppliers.Other customers currently serviced out of Allentown will be serviced from nearby facilities that the company believes can continue to service them efficiently and effectively.Price Action: UNFI shares are trading lower by 4.59% at $24.75 premarket at the last check Tuesday.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,022.24 -16.57 (-0.27%)Dow 3042,865.77 -1.10 (-0.00%)Nasdaq19,615.88 -99.11 (-0.50%)Russell 20002,148.23 -8.17 (-0.38%)VIX17.26 +0.31 (+1.83%)Gold3,376.00 +32.60 (+0.98%)PortfolioSign in to access your portfolioSign inTop gainersOKLO Oklo Inc. 68.03 +15.49 (+29.48%)QUBT Quantum Computing Inc. 18.97 +3.84 (+25.38%)SMR NuScale Power Corporation 41.60 +7.05 (+20.41%)RGTI Rigetti Computing, Inc. 12.52 +1.28 (+11.39%)FLR Fluor Corporation 49.79 +4.92 (+10.97%)Top losersNEGG Newegg Commerce, Inc. 10.71 -1.74 (-13.98%)LYEL Lyell Immunopharma, Inc. 9.41 -1.39 (-12.87%)SMMT Summit Therapeutics Inc. 19.58 -2.50 (-11.32%)CHWY Chewy, Inc. 40.76 -5.03 (-10.98%)GTLB GitLab Inc. 43.37 -5.14 (-10.60%)Most activeRGTI Rigetti Computing, Inc. 12.52 +1.28 (+11.39%)NVDA NVIDIA Corporation 142.83 -1.12 (-0.78%)INTC Intel Corporation 20.68 -1.43 (-6.46%)QUBT Quantum Computing Inc. 18.97 +3.84 (+25.38%)TSLA Tesla, Inc. 326.43 +0.34 (+0.10%)Earnings eventsTrending tickersORCL Oracle Corporation 176.38 -1.10 (-0.62%)OKLO Oklo Inc. 68.03 +15.49 (+29.48%)VOYG Voyager Technologies, Inc. 56.48 +25.48 (+82.19%)QUBT Quantum Computing Inc. 18.97 +3.84 (+25.38%)RGTI Rigetti Computing, Inc. 12.52 +1.28 (+11.39%)Top economic events