UNFI guides fiscal 2027 adjusted EPS growth at close to three times its adjusted EBITDA growth
United Natural Foods reported fourth-quarter and full-year fiscal 2026 results before Tuesday's opening bell, covering the 13 weeks and 52 weeks ended 1 August 2026. The grocery distributor's fourth quarter produced GAAP net sales of $7.642 billion, down 0.7% from $7.696 billion, GAAP net income of $35 million and GAAP diluted EPS of $0.57. Adjusted, non-GAAP EPS for the quarter was $0.69 and adjusted EBITDA was $172 million, up 48.3% from $116 million.
For the full year, GAAP net sales were $31.152 billion, down 2.0% from $31.784 billion. GAAP net income was $84 million, against a $118 million GAAP net loss in fiscal 2025, and GAAP diluted EPS was $1.34. Adjusted EPS was $2.65, up 273.2% from $0.71, and adjusted EBITDA was $701 million, up 27.0%. Free cash flow was $323 million, up 35.1%, or about $84 million higher than the prior year.
The GAAP-to-adjusted distance is much wider on the year than on the quarter. Full-year adjusted EPS of $2.65 is 1.98 times the $1.34 GAAP figure - a gap of $1.31 a share. In the fourth quarter alone the gap was $0.12, with $0.69 adjusted against $0.57 GAAP, or about 21% above GAAP. Whatever UNFI added back over fiscal 2026, most of it landed in the first three quarters rather than the one just closed.
The forward-looking part of the release is where the quarter gets interesting. For fiscal 2027, UNFI published ranges for net sales of $31.2 billion to $31.8 billion, GAAP net income of $105 million to $145 million, GAAP diluted EPS of $1.70 to $2.30, adjusted EPS of $3.00 to $3.50, adjusted EBITDA of $730 million to $780 million, capital and cloud expenditures of approximately $300 million - an increase of roughly $50 million on fiscal 2026 - and free cash flow of $275 million to $325 million, with a stated goal of net leverage below 2.0 times by the end of the year.
Run the midpoints. Adjusted EBITDA of $755 million against the $701 million just delivered is growth of about 7.7%. Adjusted EPS of $3.25 against $2.65 is growth of about 22.6%. The per-share line is guided to grow roughly 2.9 times as fast as the earnings measure it is built on - close to three times, not the same rate, and the difference has to come from somewhere other than operations.
Most of it comes from below the operating line. On the earnings call, according to Investing.com's transcript summary, management described refinancing the term loan from SOFR plus 475 basis points to SOFR plus 400, worth an estimated $3 million a year in additional interest savings, and pointed to net debt of $1.54 billion, down $295 million, with net leverage of 2.2 times against 4.0 times in fiscal 2024. The company also authorised a new $200 million share repurchase programme.
Buybacks are the other lever on the denominator. UNFI repurchased roughly 1.25 million shares for about $50 million during fiscal 2026 at an average price of $40.15, including roughly 420,000 shares for about $21 million in the fourth quarter, according to the same transcript summary. A $200 million authorisation is four times the amount actually spent last year; how much of it is used will shape how much of the guided per-share growth arrives.
What the top line is not doing is carrying the story. The fiscal 2027 net sales range of $31.2 billion to $31.8 billion sits against fiscal 2026's $31.152 billion - growth of 0.2% to 2.1%, or about 1.1% at the midpoint, after a year in which sales fell 2.0%. UNFI's own materials attribute part of the sales pressure to planned optimisation actions rather than demand.
Margin, not volume, did the work in the fourth quarter. Gross margin was 13.7% of net sales against 13.4% a year earlier, up about 30 basis points. Operating expenses were $984 million, or 12.9% of net sales, against $1,046 million and 13.6% of net sales in the prior-year quarter. Management told analysts the fiscal 2027 plan embeds a low single-digit assumption for inflation, while noting that the environment is dynamic in areas such as energy and logistics.
The cash guide deserves a second look next to the earnings guide. Free cash flow is set at $275 million to $325 million for fiscal 2027 - a $300 million midpoint that is below the $323 million actually generated in fiscal 2026 - with capital and cloud expenditures of approximately $300 million. Adjusted EBITDA is guided higher and free cash flow at the midpoint is guided lower, with the investment programme in between.
It is worth being precise about how the outlook is framed, because the adjusted lines are not the whole of it. The fiscal 2027 guidance carries a GAAP pair alongside the non-GAAP ones: net income of $105 million to $145 million and GAAP diluted EPS of $1.70 to $2.30, sitting next to the adjusted EPS and adjusted EBITDA ranges. Net sales is a GAAP line as well. This is not an adjusted-only outlook, and any reading of it should carry the GAAP range as well as the adjusted one.
Run that GAAP pair through the same arithmetic and the picture changes. A $2.00 midpoint on guided GAAP diluted EPS against the $1.34 just reported is growth of about 49%, and a $125 million net income midpoint against the $84 million just reported is also about 49%. On the GAAP basis the guided per-share line and the guided dollar line grow at broadly the same rate. The wide spread described above is a property of the adjusted presentation, where the starting base is already lifted to $2.65 a share - not evidence that UNFI withholds a GAAP forecast.
On the retail side of the business, total sales fell 8%, which management attributed largely to planned strategic store actions. The rate of same-store sales decline narrowed by roughly 150 basis points sequentially from the third quarter, on management's account, even after adjusting for the prior year's cyber incident. On the wholesale side, the company said it has completed the rollout of an artificial-intelligence-based supply chain and procurement planning platform to all distribution centres in its network, and had deployed its Lean Daily Management programme at 44 distribution centres by year end.
Chief executive Sandy Douglas framed fiscal 2026 as a strong year delivered through disciplined execution of a strategy to add value for customers and suppliers while making the company more effective and efficient. On the call, management said net leverage had been cut from four times in fiscal 2024 to 2.2 times in fiscal 2026, and described the year's free cash flow as a record annual level. Douglas also pointed to demand across a wide range of retailers, including natural and organic grocers as well as smaller chains and independents with what he called unique, locally relevant offerings.
On the tape, this article carries no closing figure: the US equity session was still open as this went out at about 11:20 a.m. ET on Tuesday, and Monday was a Labor Day holiday, so this is the first of only four sessions this week. Investing.com's transcript write-up recorded the shares at $44.66 in premarket dealing on Tuesday against Friday's closing price of $43.93 - a pre-open indication, not a settled price for the day.
The question the fiscal 2027 guide leaves open is straightforward and will be answerable quarter by quarter: whether the roughly 15-percentage-point spread between guided adjusted EBITDA growth and guided adjusted EPS growth actually materialises from interest cost, leverage and share count, or whether the operating half of the plan has to make up the difference.
