United Natural Foods (UNFI) 10 Dec 242025 Q1 Earnings call transcript

Hello, and welcome to UNFI Fiscal 2025 First Quarter Earnings Conference Call. Please note that this call is being recorded. [Operator Instructions] I'd now like to turn the call over to Steve Bloomquist, Head of Investor Relations.

You may begin.

Good morning, everyone, and thank you for joining us on UNFI's first quarter fiscal 2025 earnings conference call. have morning. copy should release the you this issued now, received of a earnings By release earnings of press available at The and under to will www.unfi.com. the are speak Investors section the website presentation company's which management also Excel key Microsoft financial file with included a We've disclosure in supplemental information.

questions. Executive a we'll Chief Joining Sandy Financial today's Chief and Sandy business Tarditi, which Matteo Matteo Douglas, are for and your our provide update, Officer. take after me our will call Officer; President and

we to call release made contain the statements. results these Actual statements Before like significant by uncertainties. risks management and materially forward-looking results differ forward-looking risks discussed may in comments I'd everyone that involve These estimates are begin, remind These that SEC expectations, during may forward-looking include from earnings discussed and filings. might and company's projections in today's plans, statements. the

reconciliations to presentation. GAAP will financial release I'd measures. today's call, our earnings in end like management and and the out during press the to of certain non-GAAP that are included to our refer most point Definitions measures comparable

into And reporting finally, we of new the will to the for the We these multiyear beginning you press call. plan the and believe our our transparency on with To strategy presentation changes release. give assist face historical sales will the sales performance. insight provide quarter, figures prior to transition, we change with the and channels basis second and next earnings additional

to to as turn over I to Sandy. I'd presentation now the ask Slide X turn our of you call

this us for thank and Steve, Thanks, everyone, joining you, morning.

on driven growth positive over XXXX, drive actions delivered in the to our improving Based capital which and efficiencies our plan our objectives wholesale volume I'll will momentarily, financial lead and which believe business for in value across EBITDA sustainable cash the we X%, a metrics ability share other shareholder enhance primarily confident As the to included solid call, us creation. also multiyear start release, from spending. full all deliver outlook flow, year in and free to our and we October remain we performance financial we adjusted and progress by business. This our to our capabilities raise than growth updates strategy led resulting fiscal of to revenue in shared outlined our

made Now into quarter, our how we and I'll for experience on helping a how partner customers. creator efficient progress it's become the in go the working we're value detail more and to customer more and suppliers the

we expanding We natural, calls, scale, customers products our differentiate organic offering and in in successfully help and retailers can and points strategies dynamic of compete differentiation uniquely the these marketplace. makes see competitive supporting specialty environment. suited recent many on of UNFI's believe discussed they execute to heritage and we highly and their our As as value-added a services us

year, In contributed the the Volume the the Nielsen our positive X% continue into we've quarter, gains to trend QX. compared top strengthen performance trajectory. to volume growth prior above quarter seen supermarket gains space our about and customer helped base by expected were in line the and and for reported this

insights differentiated as Importantly, start XX,XXX this compete that but strategy, to effectively. we execution strategic providing by of store solid performance programs, them also demonstrates our products, it services our indicates to help sharpen the customer a execution on focus strong our over base, continue and

selling it. We service focused company season whole remain important across is know our this the the strengthening extend important help to business. time it while suppliers and performance, and on levels, focused increasing To to the how transparency on is deliver and in on in we customers efficiency full simplicity holiday

within our the and advantage items volume the taken discontinued to experienced which also aims back large simplify experience streamline network. their insights surpass on as to embraced to of retailer suppliers, during sales. help data their for We program diverse and COVID growth group in Several continue have revamped as bringing go-to-market that our suppliers have them roll our customer peer out they've that their program gains we and item or such provide new of placement areas accelerate

possible them. suppliers to opportunities maximize program continue able sizes on the into growth value available the We focus while sure best to that all is bringing have making participants the additional making the and of to are experience UNFI and

well plan and as We service our to our in trust optimize offerings, suppliers. with value will levels and strengthen pursue innovation help even greater continue to efficiency as to retailers execute drive

becoming taken our businesses, about we've let in a actions and turn the customer principles. improve color largely the played As a implementation few disciplined leadership removing Lean the more on provide we follow-through This of Six the me streamlining I'll Matteo's management momentarily, has improve progress. our benefiting deep He experience financial that let experience him more performance. and at has around talk operating and to rigorous overall organization. through role and efficient, and Sigma focus helping supplier and but already a and level while of high UNFI significant is in cost details

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is in mutual real accountability performance near course-corrected organization that the principle of the key indicators in as is measured get another and Lean, of development time. and responsibility Decentralizing

X we've of our distribution of Matteo As and operational operators our We creating plans of action problem-solving taking in begun involved creating distribution initial results. expectations. centers, the and where the are the KPIs. described last the centers with call, and performance are These framework pleased on Lean in into not where pushing center at is process ownership meeting are process local same the the process associates of piloted

across our further to deploy our organization aligning begin Next, more facilities. this methodology we'll of

focus Our optimization planned, Billings quarter. which our have network Bismarck last both and the distribution we we as and of described closure on centers, has proceeded conventional also continued completed

the We the majority vast is these larger modern have business new with assortments. facilities from from retained more of serviced nearby, DCs, being which UNFI now

We are real now estate. marketing the

close and level that benefits. Fort and the expect For to similar Illinois, transfer Indiana distribution and assortment to Pennsylvania we we reasons, center made to service our facilities volume neighboring in see where decision Wayne, customers

move to calendar in XXXX. of were early in and informed we Associates customers this this expect mid-November, and complete

DC, the at time. owned another is will which Wayne marketing begin Fort appropriate

continue other will similar evaluate We to optimization opportunities.

for support combination suppliers Manchester and we our adding suppliers volumes see yield our DC, and can value moved sales region. quarter, customers also UNFI XX% the improvement. efficiency and which tangible for our benefits from to the our of efficiency we service financial DC in alongside focus, into customers, will delivering their expect the We During quality operating larger, natural soon-to-be-automated York and

empowering cash the expanding by we by our sales above flow responsiveness make of with organization per As base structurally enhance able of associates improving and is customer as free have increase compared partially the combined the to profitability a X% been our sales is market sales employee to to real-time period, driven the our and This generation. which prior to we've growing improving success over volume deeper net and of organization relationships our well customer result in improvements. actions as efficiency,

our strong and improve the progress in, and delivered reducing our levels, year at compared reflects XX% targets, cash All fifth remain consecutive adjusted EBITDA on improving against This to sequentially efficiency service execution higher to free growth adjusted first and prior EBITDA drove flow will we continue leverage. while focused quarter of we quarter of to nearly executing levels dollars.

As value in across we our execute, confident even food and retail for suppliers ecosystem. and trajectory to long-term become our the objectives, we retailers add ability in multiyear more

focused on associates our the day. which approximately dedication more UNFI plan the are efficient, partner turn Together, creates our customers will opportunities we in our shareholder XX,XXX serve We every sustainable most who confident for remain for stakeholders, drive value-creating long-term becoming returns. with

progress that, let to it me results, discuss Matteo turn revised Matteo? our Lean and QX With over to outlook.

joining and and for good quarter you, first earnings morning, everyone, call. Thank thanks again Sandy, our

we're call. principles Today year-end flow strategy comment XXXX and into corresponding and solid free proof results, remain a multiyear initial provide our Lean our including cash the we've that, off XXXX. during early to will fiscal for outlined confident and updated in stated, insight the our dive QX some With our around start success and quarter we I Sandy results. into in fiscal capital outlook with had our let's on long-term first structure, As additional financial offer objectives our points

X. Turning to Slide

quarter we exited last we as quarter. than stronger improvement fiscal expanded seeing quarter billion, industry business, with X%, relationships new sales increases our in of wholesale, and nearly year's trends again, the $X.X volume significantly represented of compared well existing reflected which continuation experienced came natural higher up volumes sequential first trends the and X.X% across natural at to as and another acceleration XXXX. In Our were as conventional, These continued overall customers. first with

made compared and to declines X%, to ID result percentage Total fourth year. targeted sales year-over-year began X of to store largely lower year which X% promotional retail at points was the last sales down fell sequentially compared drive was the unchanged the investments partway approximately X.X%, down of prior quarter. the both Inflation quarter about with This partly traffic, through quarter.

an in conjunction we top year. and to continues fiscal Cub drive performance with bottom refine franchisees operating line the to into as improving Our move the further expected team, plan

profitability let's Moving quarter. review X, to drivers Slide the in

quarter, XX compared and gross XX.X% LIFO, our driven Our the about segments. both basis was in wholesale by net year, first last margin to points excluding retail sales of rate, down

wholesale These changes product basis lower XX the procurement at and points commercial by offset business partially QX programs and Our progress through to shrink. including mix innovation in versus ongoing supplier strategic declined last were and year's both due reduced gains the margin driving level, efficiency, investments. and customer rate approximately

been quarter a work supply identifying our broader teams centers period COVID management. challenges. and several around our our within eliminating where of One and principle focusing this in shrink chain creeped processes expense our following of was thoughtfully driver ratio key our on the Lean of distribution up waste, improvement has We've successful

operating led actions workflows have more Our reduced expense, efficient as spoilage. increased as to well capacity lower and

levels, our the More a last as driven decrease were QX and year's solid rate last than operating approximately by below targeted execution as made investments which, in of also primarily compared to of points basis were at percentage I offsetting margins was which, sales. net XX promotional expenses, margin declined drive by management gross traffic, earlier, mentioned price to gross year, and Retail Cub.

efficiency suppliers. This better a are becoming efficient and our that As business gains value compared year's led we've across on to quarters more quarter. cases in our and in last throughput consistent has per supply X% improvement Sandy improvement a X improving generated bring stated, in sequential focused levels we to is a where for to QX consecutive customers chain service and hour able to

first the additional Adjusted to the the to quarter EBITDA prior EBITDA year week quarter consecutive this fourth in nearly approximately Absent improving for dollars. fifth quarter, XX% was quarter million. adjusted of year's grew $XXX sequentially compared last

associated This costs our as investment EBITDA expense. than lower-than-expected offset Together, this increased net adjusted as some well facility and receivable amounts amortization interest during higher gains. by slightly for accounts monetization depreciation complemented more QX was and with

of compared share in a EPS net adjusted to year's first quarter. led $X.XX loss per per share last of to This $X.XX

Slide to Flipping XX.

transitioned throughout call, we the with our One are last we have completed last over on implementing forecasting, more operational operations. for financial more are We've we that having As bringing to team in procurement centralized inventory timely principles accurate customers improvement demand few from involved business results and and early function. This closer procurement our months and has teams encouraged our major of directly supply driven. Lean to organization, have and ordering. them undertaking and a empowered X I our the DC-based the chain decentralization is to be allowing discussed

adjustments is process, some embracing and along the improvement. been steadily way, team driving the there learning While initial the have

this better customer increase in to service multiyear align continue to will steadily help strategy. demand focus of driving our focus improvement a with and on core to area supply even level, sustained We

stakeholders, of UNFI warehouse order and priority, create on-time improvement delivery launch of gains in other The that all were routines including around all XX% chain of showed to key completed daily in results meant productivity. improvement fulfillment supply in in an distribution indicators for quality, and customers. and I centers suppliers that built would quality, where is management safety, our X% cost, labor for delivery success measures value performance initial initiative Initial and in highlight and the recently Texas Colorado Lean

Lean our move As quality we management plan while on through we value methodically and our scale processes focus XXXX, sustaining delivery. network throughout daily to fiscal

Turning flow flow helped we use Slide principles the was quarter. past about cash used years. was XXXX XX. in first the paying in Lean in close fiscal incentive over free each of on out the to the to in first few not which $XXX QX a paid roughly $XXX million profitability an of $XXX This quarter, million, drive emphasis and of million incremental these Free the the year cash years prior quarter in compensation million included to improvement which This of in fiscal due performance. $XX improvement

inventory decentralization customers, inventory. to we service our partially closer a were end faster-than-anticipated This focus driven holiday the is selling largely in to procurement management and important QX and through with we delivering customers. progress The the on how manage particularly quarter on which was first the due shift Our management. progress capital of to season working where as strong

quarters by of the cash a related, of of timing timing nature for is for remaining portion this flow. of year-over-year see to automation cash favorability favorability full X fiscal the outflows the free outlook of the is each Because we the and of in also Part last year. not chain for updated year our is to the the year same driven captured would nonlinear investments, our supply which expect

accounts decision receivable from also number QX to nearly Our our customers was the by program. of cash under flow $XX free monetization the reduce reduced strategic million

suggested I cost. last implemented call, borrowing our our this was program effective to originally on As reduce

it However, saving sources. benefit relative it makes the longer perspective other of and cost a cost no capital exist, neutral funding from to

so lower and usage these utilize to plan UNFI do our of future. the additional in choose programs, to we we the strategically similar should rate capacity flexibility retains Although to

range increasing in sequentially of QX, our X.X to the net net X.Xx, to ended turn a goals. during QX is seen the $X.X towards at and on our by quarter have holiday track increased contributed our we typical selling billion our the levels for net performance This As longer-term of season. leverage This typical of debt quarter increase debt. prepare in we keeps deleveraging with first is lower which the us historical as about

modestly for raising is spending. financial metrics and Slide our at to XXXX fiscal other Looking XX, full off year outlook a capital start, solid all we're than

updated guidance adjusting net compared increase dollar our billion in points outlined an a of to This outlook. a to the of As about terms sales $XX.X the our year. $XX press is release, when XXXX increase the represents the midpoint full basis which for billion, XXrd week range X.X% XX year last for prior midpoint at from in fiscal represents the

last is million, bottom end new the the to adjusted raised have over bringing midpoint. to year $XXX at the range by of expectations $XX million, our million $XXX which We for X% EBITDA increase a

will high implies results growth compared cadence actions back-half-weighted, range In as the how period. part year to half terms revised This slightly executing prior the we of EBITDA total single-digit the first be year, year. adjusted balance the to in of likely this cadence the expect and adjusted for double-digit generation over of builds strategy reflecting our we're of into the EBITDA low

is free $XXX compared million, our of compares cash expected in $X.XX improved represents EPS of fall year now cash items, flow. a share have to year. adjusted approximately increased EPS to $XXX with couple prior free expense outlook $XXX Including below-the-line expected adjusted of be our and to the as and to well lower range per and million year-over-year of more than within million, benefit forecasted around EPS the ranges last interest small $X.XX Full to flow now $X.XX which

which philosophy real completed mentioned, both serviced nearby process is centers marketing the retained and we future being we Sandy Wayne the business, and Bismarck of Billings for time As of sale. majority which the same apply sacrifice both the closure vast closure have distribution of underlying will our the estate for the but out will now We're value in facilities. and properties, the we Fort not of is

to last any have quarter, said the along lines, incremental we included will our I in other in opportunities but strategic As not these actions continue outlook. evaluate

Slide we with the first continued quarter through enter XX, momentum, foundation new XXXX the a which and fiscal Flipping stronger to year. operating of

Lean Our in day. the us efficiency generating initiatives, volume powered operating our customers in part place are as benefits principles, successful by execution they well expected the we while trust of reflect the our every trends as

optimistic and free customers to is through executing simple bringing are we of value entire and customer-facing future UNFI and and value the service a improving strategy and differentiated Our creation flow while strengthening against powerful, opportunity work value we as levels myself cash our suppliers and capabilities and it. team proposition leadership our the confident we our improve and have Sandy, remain about execution. to

and Our updating again next progress we focus to and remains on intact, our deleveraging March. delivering look forward you on

With for that, open please questions. line operator, the

[Operator Instructions] comes Your from question John Heinbockel Guggenheim Partners. from first

right, decentralized locally, talk Sandy, of manage it but do benefit buy the you want with with inventory to start procurement. Maybe just about want to scale. to balancing, the want you

you're managing that? how So

you then or make great, write changes compensation different? And your on want do to think there kind do you sort when might can be of make accountability to alter if about is side of what the accountability, you strengthen compensation the program -- but that

pre-COVID levels And delivering the those our focused plan. the of within we're fill that as their they John, multiyear on customers adding is of goal of set we've our the and need inventories is big a the scope to that place, on having stores in said a fashion. to we And timely suppliers. of call, to delivered goals key with strong value rates, customer a the and reducing products strategy tenet in back our overall, part

be pursuing and goal been decision-making this we And the we're both achieving to like And to expect the associates know, the for we in the with that serve business. the as efficiency, working view you the over and past partner. that to directly and the forecasting ways analysis. service. capital shrink significant working better capital opportunities store see the a in in Part closer so always compensation we're looking for efficient improvement of X to respects, outcomes quarters, involved in our and the and some the we've more be seeking view can align change better in moving is We customers

days refine the that process. exactly I'd make company. to delivers in to Lean model is that designed Matteo We're say it's also with this it's that continuing as the to this principles the early has brought sure it consistent and

X% maybe mentioned a the follow-up, in And as believe cases you I think per that hour. was improvement I number.

what was X the didn't you result in Now give the DCs.

we do X So Is I implement roll What's sort beyond line? think X, you Lean. out? hit to when Is it time the -- a see sort you Is productivity is Is as day productivity? longer? focus And on months year your out on improved time mean, stride I'm that you when of that, -- right, fair? you should curious, that of out? it it about

it's John, Matteo.

principles our and is As between as we and as benefits and MSD last automation our learning of efforts. call, in the that Lean that DCs, well combination target through a discussed at productivity is to the the from in we're the deploying, the goal HSD

the of So balance two. it's a

improvement to X fulfillment these safety, bear benefits in we weeks at management X% there a is lot daily there. Specifically also delivery, seeing productivity the piloted that quality, so mind some XX% to old where in up ramp quality, Lean initiatives, from on-time But are improvement X delivery centers in distribution KPIs, cost standpoint. X with a we're and the

from X from learning how the the to roughly to thinking months cost And X $X daily XX of the DCs Lean the right extracting of the of we're years. ramping management the next that's deployment of $XXX the framework, business is automation initiatives of billion in and and the between the total other framework costs and million the

Sachs. next comes from from Your Goldman Jordan question Leah

sales guide the basis. XX-week a year balance deceleration comparable of Your updated the for a implies on

for through underscoring you're and that. us Just about how could if inflation the year, thinking balance as the drivers walk of you volume

the through . wins in a not given surprised, Just that Why bigger flow called remainder year? a quarter, this new than coming expected. should in volumes of the that the business bit you way for out better

Leah, question. for thanks the

innings So that growth X.X%. in growing of ], wholesale, [ quarter. picked volumes second XX a into And recall, we as X% the up trend that total you and in early the saw of first about quarter, was we carried in fiscal delivering the

about remaining midpoint, as are X X now the growth the months which roughly X% rounding a balancing year, at guidance, So for of that basically the we $XX.X thinking new billion is is dynamics.

our we strength continue with is that One natural customers. to the see

we've Second DC the is ongoing optimization. declines more modest then with conventional. volume that the seen the And in dynamics third,

experience see vast as So with months. think also modest in able remaining declines in Wayne. but as X remaining the for strength more customers keep Bismarck. are that overall commercial about we dynamics, We're the the And months seeing that retain we we're go front going conventional. a that the business. the feel center and And And we X backdrop is, and for mentioned, we Sandy Fort Billings risk the to now execution again, through balance of the and natural no with to the again, majority our embedding no similar the we

more today? just And volume. new are then a a customers of how related engaged most why now? these business gains driving opportunities then you existing same to bit you're the that categories Or customers, follow-up, more digging think resonating now? for Which you on the this quarter do some think And do just presenting you more are

their general differentiated great well. And are obviously, focused and retailers performing providing the on segmented as Multicultural give customers markets most the Leah, Sandy. environment an I'll offer market is way many you things in they differentiated the are of guess and example. for focused we're materially very well. about support compete. this outperforming very, by is I one the broader that's interesting how them

driving performance as natural the significant seen growth organic well. You've

and we making programs that think sure show shop, and product is services growth the to mentioned well. drive -- customers helping multicultural of lot inside digital And that services bringing their about But also products we we as the we products. have need that the we're a there's compete natural And way professional strategy. up, in as and There's retailers so fresh. are

comes Wolf question CL next from Andrew King. from Your

margin ask outlook of to you the about want last and of quarters, a couple sequentially fiscal gross the rate in in year, pickup that end last least could quarter, any contraction I the if contraction. us at there? At the margin the last sense versus give of gross year, there was

little was? was it what's it into to quarter, the greater than it contraction been contract other outlook talked the you've the Why of been? shrink, our of to and have sort extent And some could about let's things. were sort investments, deeper commercial just you're of Could mix the So and talk you why might that helping things things than with the dive that? it, a about say, customer greater that has willing

the XX.X% XX.X% margin down the was gross QX of basis in first quarter. or versus the Andy, rate Slide versus at XX so and quarter in about points fourth year X last

volume Now, million if a you and grew EBITDA to in related million, saw of million retail. growth. and the it the $X growth wholesale to we in million about unpack $X notably, $X decline $XX million And of of contributed actually $XX

offset has mind programs. were and the are that we the planned mix, customer gross commented some with of and margin which drivers in lot key There the and that rate, our improvement Also as, OpEx drivers that were of facilities. and partially up X by mix fewer go product a supplier offset into the we bear in lower scale drops again, large some shrink in pressure customer

continue on to focused margin the including I would improvement. further -- improving very highlight shrink rate, that we the be

top we're and calories improvement As for brands, focused that our additional as retail. to We're both and the line on Sandy as levels, well Kaizen give private margin, bottom there. to grow and embrace services pre-COVID digital on the back clearly gross committed mentioned, we us business professional growing and but some continuous

also our we as and We're last revamping reworking the process, commented screening commercial in call.

look space, we recognition for the within and So customers billion get suppliers. $XX for create to and to with resilience value continue opportunities

in and we're margin sales see we So margin the conversion gross very gross growing. the increase focused conversion on as

the operating all with growth also of points floating as XX% the On XX fact line ] delivered to EBITDA. been [ top X%, down with we in side, leverage expense a has a percentage pleased that operating other we're sales, substantial up basis

that Great. I appreciate granularity.

think margin spoke So contraction like more I in though improving. even much same-store to guess, was it with mean, less was investment was down sales I obviously, retail, gross in some the rate it which sounds And to, that's so, gross wholesale, you the profit as there sales -- the was get dollars? I in growth. retail And year-over-year, why gross margin line

year also. grew by $X million This think prior its also that's I retail business right, Andy. is Sandy. would versus I point out our that EBITDA

it's strategy our the are -- our franchise in rebuild and community a Cities Twin leadership is our brand. that of the retail to galvanize with a a part So franchises working

we're would of funding the to early some we're, I Twin turnaround And in the price operations. so optimistic, days in it Cities. but investing be through And the we're but say, more retail competitive,

ask And will. focused a I much can question, if longer if I of kind

Lean processes sounds rapidly the new. think are pretty traction I they're productivity But efficiencies. pretty -- like they're in gaining and labor other

less assume head and the it's think I that count quite is that operating adjusted. reduction expenses really of So lower as it's the rightsizing facilities reasonable driving to

the end time, of what the the over would start to processes fiscal when change really want to back And to second back than get so imagine that expense will end drive heading 'XX of mix the be you of is, operating sort guidance, really start to to that half I the of is it going more labor efficiencies, more upfront? to Lean I

on works. and do process Matteo X dive out call me of I the first the our I'll the strategy let let components. half into Lean But Andy, then way key this would

in first designed a growth a we driven and seeing is organic segment segment very resilient serve The by company grow industry, differentiated segment retailers a the where as a of to a $XX where we're are way. billion

is Secondly, customers the that. added they how services key component and suppliers to win, and we're focus and value designing for to to products compete just do and on and a programs

that is line strategy our component All as It's incredibly core with value of part that then, operating to be sequentially efficiency creation. creates a clearly, $XX engine going huge billion of to a and our efficient. and the top company margins grow important margin in with a the we're

Our do our need -- suppliers do, to or and us customers be shareholders. so

as cash X-year levels to is to the And we we element committed in that flow the back critically important a lower plan. then optimizing final component, free deleverage company the

I view and really of principles drive sort forward. meeting it Lean as Matteo, so as lay out cycle. management go lean for sales And sequence maybe And capability-wise virtuous a the we to merchandising

Thank you, Sandy. Yes.

areas focused are moment on at We a standpoint. the from really line X

The deploy why selected a is the we to X create That's centers way to daily countermeasures quick one problem-solving management and distribution as Lean at point first impact. pilot. to of

Lean have management, We and we're implementing few the it a daily embracing the more also functions. in

very, to efficiency way applying create flow XXXX. generating UNFI on leverage build horizons. elimination, very this X.Xx takes less steps capacity, probably while the The and is second way to and by and lot of And customers longer But we suppliers that of area and focused build as to that a are is capabilities the a cash a remargining nonvalue-added efficiencies. and as to create methodology value free end identifying for a waste our process get discipline or

Kelly from from comes Capital question next Bania BMO Markets. Your

had to given are offerings? Ben demand with, I first, for Wood want is of your those how for Previously, some services is we tracking? start you was XX% and may at growing UNFI that longer the do be is a of we programs where it where now. on And EBITDA, and EBITDA closer disclosed in to XX% where expected see plus which evolution the This Kelly. mixing little services Is term? fair? about And of believe to

Yes.

X EBITDA. shared stack have in for than -- services buckets. digital save And them continue those There's to I and specific organic more that outgrow And the being their the natural little Brands put 'XX. and fiscal is I growing from a program fit that brand we said built the certainly the tech that last couple less retailers help that time, attract mid-double segmented in a to as and number services and into professional modernize ways beginning mid- run brand and portfolios years growth around they brands stores that our think we've our over begin to which at XX% the to described of broad network. we sets. the early a digits good mid-single portfolio, bit businesses. And to from perspective. that example to strategy them We've that is money media of company, days different our of And is of we retailers' is a investment Plus stores, their help like then their strategy

a So we profitability meaningful part disclose more of a as segment it's growth. segment, special still of don't meaningful part our but the operating and even our

other natural the more different of from by your kind in any assortment? natural adopt and them offerings Great. seems wholesale point volume to And their With up Sandy. there, chase organic customers following kind your you and then into channels, drastically categories? on your of and of some Are some seeing and those put are the growth more trying and pretty categories of of of interest universe kind of success, it organic last adding parts to

are it's our we're trend and going a certainly broadly healthier gaining standpoint. want customers product and merchandising traction, to that from consumer and I follow do products think to a what better-for-you

is So your think I assumption right.

the proposition the customers organic whole that specialty thing natural, a and we're your that one. in And is the mentioned important that And whatever presumption question winning. we're think their business important are the support interesting brings of good positioning. in I that. of products business, being do I And is The their though, retailer is our to earlier, that certainly, seeing

Okay. faster And are to then are we that? Where proportion adoption to X simplified follow-up, of fee your rollout that? some customers structure? And a if pushback I just main may the of What the what's you're in of the here. hearing quick on

into well of I of The supplier what We're is a year that. And program. customized program suppliers. Yes. our It's approach. that. go-to-market and program go-to-market into for think We're second is supplier the the referring simplified well to supplier large you're rollout

all a our smaller them some them suppliers of with early from adopted And suppliers. XX for really been simplified have replaces adopters. been to who that suppliers, we've broadly results the which compelling supplier single seen is subscription. approach, and one and The eliminate fees And across takes has XX

where are would say process, I'd answer I the we in maturation ways. the of it X

effort, of our to more make of the succeed the help to an transparency have easier. you First the have our tools to broadly supplier and is the on we're dialogue, experience. learned we review and every I that and program to about, But but we key have accessible think aspects the we in that whole-of-company Matteo improve opportunity in lot, I week, work take working supplier suppliers, process to suppliers learning friction with as hard more our a and asked add more broadly out, to we're a And ecosystem. the experience

and the to and that ecosystem important it's business brands in have can grow. they our that can Because because see our best they customers brands comfortable we invest their are to

why to big so of such priority that's it's their experience. ours And improve a

question next Slagle Jefferies. . from comes Your from Alex

then specifically. how Congrats. how sounds And curious and for Actually, the a go-to-market those that which on up supplier examples this bit into you provided couple so impactful, think feeds to programs, been points. a of and just that. of sort business I certain some more just successful on profitability on has just just wanted I your suppliers, maybe follow And pretty

Yes.

supply about build retailers launch one. that they of retail trying them capture be had for supplier up of COVID. I And our get way could the and during examples and would access those couple that built whether so to SKU name be big area. that would think taught that program an during But brands do got create try supplier a a and very one XX% what smaller the part distribution to goal, that's the retailers supplier to programming to it to the and we had give for obviously, I in won't to built. And of I'll we a a strategic off pilot, do. would XX,XXX the store us of that you large the fallen was brought chain X the we to objective effort And disruption opportunity unique the one opportunities suppliers,

the so now right programs, they products had of the they have out. And when sure have, to ones wanted to just that of the ran they've that's part customized got other a to some help ones not they want the retailers make

there. been And initiative a so that's big

biggest suppliers, with programming sales tool the work in doing their ability and are think the as stores is smaller try that target given For particularly into our system as they we've that them I to with sure brands to force to possible, make through sales that which, data, our see retail, can their are their growing. then well

fee, I XX a the to thing as higher low, the The to would slightly approximately the still XX. we fees on not X medium. Early but so describe whole the learning And bigger keep fees we process. then benefit And UNFI suppliers, it's is on days. make same

be to allows and to So suppliers able execute. it plan

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if you That's just portfolio clarify sounded have... mid-double -- growth maybe helpful. organic mentioned digits, and got number and could I And mentioned the earlier, you what you natural wrong, but

said brands our happens I about I growing was of to thinking within be And that, natural all Yes. private them probably the X And of mid-single. portfolio. X was confusing. and no, it platforms

them and X of of growing growing is One is about them about mid-teens. XX

brands. different So they're X

Cerankosky Your next Research. Chuck from from question comes Northcoast

been you're SUPERVALU lost you of it the And towards might most the to of how parts coming customers business difficult to the all the of the a that be question, to prior talking conventional integrating this a customers, new When to get acquisition? coming much quarter. organic goal getting from. of how during more business conventional the and complex back about organic It's of product but selling Nice new much is goal? sense might where is customers to more original have trying

from customers. across our us. Chuck. decided the of they're seeing us recently who into And that take the Yes, customer it's gains large natural had We're the natural The with relationship for us. is extending board existing some on portfolios. specialty customers products to tap answer is simple conventional We based a all majority major what buying from

by vary type. really it does So customer

have usually specialty I us activating. would don't customers what's organic say if it you largest all the That or expanding that be direction say were natural to we're opportunity would X. the it's goes, into that usually

go many conventional as retailers. see products don't You natural where situations into

almost do. you never In fact,

So some on hopefully, that what dimension gives is. you the pipeline

at the on side, the forward, it Sandy, was On see you where how has going slipped, actually where economy the that conventional a where pressure sort out playing volume of especially if do stays budget-constrained lot consumers? it's of

very very Chuck, Yes. well. brands is extraordinary it's There growing brush far conventional and hard retailers predominantly are in What I'd are say, are to very that retail. a paint

regional. are You but with around see of that that the country the chains big some

mentioned the in of I our some putting conventional best As earlier, are predominantly focused numbers products, but system. up multicultural retailers

where and more a getting with and retailers as is discounters big share. big price and gaining well, that's are our retail, others have strategy the more they're sharper that it's advantage centrally the compared there we the the the fairly think discounters. work do a place have as positioned least and challenge, at I to Right to substantial differentiated, do now,

the work proposition. by to there's so of value points find difference lot improve of the balance And a to whole done execute industry being of to and the well

luck Thank right. much. the rest year. All the of for you very Good

from question from RX Mushkin next Scott comes Capital. Your

layout with different you're if could UNFI legacy give if to it a wondering like revenue percentage quarter. us wondering the of was going SUPERVALU? was I you the maybe can us frame give associated So I next revenue you But legacy us, kind the sounds for and

provided basically half. It's have half we believe that and publicly. I

like And Okay. to talk, the the used are bill, I How Sandy, know -- this few this is how X now, we like X stage? a integrated how are integrated businesses facilities? at is the are years businesses? X truck, ago integrated

very particularly different. simple that And the are is SKUs are systems fulfillment reason The not the integrated.

drops very system, full deliveries. in multi-drop a and conventional the find in SKUs can range often natural, velocity of products with higher much truckload slower-moving wider Whereas you much have routes. typically smaller You

well. the process speak And happened, so so the on Lean And work making that's that And of about those because been we engaged. Lean optimistically where work interruption ahead. is largely of the we've because the systems COVID focused of why potential heretofore, it's very but now

those Okay. And what stuff SUPERVALU? I'm legacy UNFI sure and but I Are facilities have through that, filings closing? could or like legacy been you dig

and building, are that's able, that and that for Mid-Atlantic now us Billings, being operating They're to a all capacity. with SUPERVALU a all Manchester is feet moved DC continue that for that that gives drive XXX% all It was building, the to done we're Matteo Natural Bismarck have growth XX% been market to more square automation, reasons. Natural. growth what warehouses. closed, mentioned, almost of at We're been ones in chance has has but the to The capture for Wayne, a automating legacy Fort not X of closure closed, over York Wayne the yet Fort significant

Scott, all X of them are owned.

the as we So X we mentioned, process to starting properties. remarket these are

down is with there, those pay idea debt Matteo, to funds? the obviously And

priorities, X capital allocation our that's Number methodology. X, X and

to expect you do be material? that And

the in are We process.

are time for We trade to value. going not

probably end frame. in . we proceeds one them to the fiscal give of other us by of the some 'XX time and So the expect X XXXX

queue, the X or more? in else anyone there Is I can Okay. have

One more.

Okay.

Like think back and it Like to rid is about complicated that up a that that go so I it that, where back a could table? But a on with get Sandy, little and it's goes Matteo? long time, the Cities, bit again, is the something that I of and your get retail, know Twin my off in we've here nice this would know is business, something head mind. on. in So, be talked to but the possibility? kind of I around is cleaner

time. going to more table importantly, standpoint the and from the it. be said And at Scott, case, shareholders, in on hard last see and is what I I way for suppliers this looking if a most is we Everything create value that we're to think, this our customers

couple customers lot for brand retail positive is in there's do even by Twin the it's would #X Cities. though also up store of I what of say there. owned with Cub Cub the been years. soft for we of UNFI, only energy by food What a about And many can owned not our a is it's It's

that by put and thing a so all in to And standpoint, divest itself. sales it's not ecosystem customer linked one very easy from place, profit together it's and an

have. strategy for together So plan going us that to the is forward do best what's going And the Obviously, for But our keep the performance. that's we shareholders. it franchisees and we're best say drive and never never. to

from Mark UBS. comes question Carden last Your from

This is Matthew Rothway on for Mark Carden.

a the be You Would cost see earnings goal that that where achieving of on you this up? have you mentioned able $XXX year. outlook we and show call had there previous on to your of more able million another might share efficiencies be to any

Yes.

achieve of our mentioned part incremental with last cost we a out margins, is similar through you to to rate, that $XXX as is we remargin the a a lot million as were of what business about the run of deliver EBITDA discipline strategic as we able call plan million in the efforts, year. is of and and had exit in $XXX envelope X-year lot So think of XXXX lower we for which about the to a

by the quarter. are first So encouraged we

OpEx points or XX.X% X the by quarter. we're We billion have key XX.X% and leveraging about reduced year a from this X principles. to manage every really $X of quarter, to basis ago And total cost we XX

productivity. and The routes identification in already and and the of lean in improved were new waste finding daily X% is last capacity benefits to year-over-year. and in throughput quarters new first throughput and X find one sequentially capabilities. better That is We management the

have continue some been that costs, return the the higher which of a also We in allows decision-making of a number leaner and reduce total And effective then able X%, teams. and more is that on of and investments we made you decentralized we severance the some to work organization to as also XXXX. the rents transformation imagine. employees more setting by would we And do higher that also to running

Sandy of is through we variables ability our can said, So the a provided single-digit that a quarter, I EBITDA it's what of and point have as knowing growth control but our that innings, X good high for lot that to under proof next we years, control. first we control, think early that

we need continue points. disciplined And and continue proof be so Lean, to to apply to provide more

back I'd Douglas to remarks. now for like to hand over Sandy closing

Thank you, operator.

effective suppliers have points on early heard making strategy multiyear organization. our proof taking and strategy today's efficient a executing we've creating is you value our UNFI that hold customers progress and for while made call, more and As the and

our to quarter the improved in improving fifth EBITDA first cash prior compared growth the meaningfully adjusted We period quarter to consecutive flow including free delivered of prior the compared mid-teens years. year of quarter and

and our performance the year. of confidence Our increased outlook this for reflects the balance

remain embraced opportunity service shareholders. focused further for better large financial customers, path deliver improvement We the for and Lean every a levels creator and turn, objectives to to day value getting we ourselves. so management the are clear longer-term can on a set suppliers committed be remain on and improving for and, in our We've we've

suppliers, together. we we and continued you the do your customers business our and For for partnership thank

you business, you trust today, For we you place for of us. our customers, to continue and everything listening thank UNFI the the each thanks to you our shareholders, for our do And associates each communities our for for in other. that our

season. March. happy to look updating has hope on again we and healthy progress Thanks I us forward you in morning. this for joining And our everyone a holiday

today's call. concludes This

happy disconnect. now a may everyone. Have holidays, You