Categories Analysis, Retail

United Natural Foods (UNFI): A look at the grocery wholesaler’s expectations for the future

For FY2022, United Natural expects sales to be $28.8-29.1 billion

Shares of United Natural Foods, Inc. (NYSE: UNFI) were up 1.1% on Wednesday. The stock has gained 28% over the past 12 months and 17% over the past three months. The company delivered better-than-expected results for the third quarter of 2022 a day ago and raised its guidance for the full year. Here’s a look at its expectations for both the near and long term:


In Q3, UNFI’s sales grew 9.2% to $7.2 billion. The top line growth was driven by sales gains from both new and existing customers as well as inflation. The company’s success in selling more to existing customers, combined with new customer wins, helped yield volume gains of around 2.5% in the quarter.

Although restrictions have eased for the most part, people still continue to work from home or are opting for hybrid work models. This, coupled with the tightening of household budgets due to high food inflation, are expected to continue driving strong food-at-home sales.

UNFI’s sales growth in the quarter was broad-based across all divisions. Both Independent Retailers and Supernatural witnessed growth of more than 14%, which was the highest. Sales from Chains grew 5.2% while Retail sales rose 2% in the quarter.

Cross-selling gains with existing customers added an incremental $95 million in revenue during the quarter. UNFI remains on track to achieve nearly $1 billion in cross-selling revenue in fiscal year 2022.

For FY2022, United Natural raised its sales guidance to a range of $28.8-29.1 billion from the previous range of $27.8-28.3 billion. The current outlook represents a growth of 7% at the midpoint.


In Q3, UNFI’s net income increased 39.6% to $67 million and EPS was up 37.5% to $1.10. Adjusted EPS rose 10% to $1.10. Adjusted gross margin rate rose to 15% from 14.7% in the year-ago period, helped by improvements in the Wholesale segment margin rate, including the impact of inflation. Adjusted EBITDA rose 6% YoY to $196 million.  

UNFI raised its earnings guidance for fiscal year 2022 and now expects net income to range between $230-245 million, representing a growth of 59% at the midpoint. This compares to the previous outlook of $221-243 million.

GAAP EPS is projected to be $3.75-4.00, up 56% YoY, while adjusted EPS is expected to be $4.65-4.90, up 14%. This compares to the previous guidance ranges of $3.60-3.90 for GAAP EPS and $4.20-4.50 for adjusted EPS. Adjusted EBITDA is estimated to range between $810-830 million compared to the prior range of $785-815 million.  

Long-term targets

Looking ahead to FY2024, UNFI expects average annual growth rates for net sales to be 3-5%, adjusted EPS to be 12-18% and adjusted EBITDA to be 6-10%. The company estimates its targets for adjusted EBITDA to be at least $950 million and adjusted EPS to be at least $6.

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