United Natural Foods, Inc. (UNFI), the leading grocery wholesaler in North America, reported its second-quarter results for fiscal 2025, showing a growth in sales but a net loss. The company’s net sales rose to $8.2 billion, marking a 4.9% increase from the same period last year. The rise was largely fueled by a robust performance in the Natural Products division, which saw sales grow by 8.2%, compared to a 2.1% increase in the conventional products segment. However, the retail business experienced a decline of approximately 3.3% due to store closures.

The company recorded a net loss of $3 million for the quarter, an improvement compared to a net loss of $15 million in the previous year. Adjusted earnings per share (EPS) increased significantly to $0.22, compared to $0.07 in the prior year’s second quarter. Additionally, adjusted EBITDA saw notable growth of 13.3%, reaching $145 million, with an adjusted EBITDA margin that expanded to nearly 1.8%.

UNFI generated free cash flow of $193 million for the quarter, significantly up from $116 million reported in the second quarter of fiscal 2024. This cash flow is reflective of improved operations and working capital management, with operating cash flow reaching $247 million. The net debt to adjusted EBITDA ratio improved to 3.7x, a reduction of 0.6x year-over-year.

The company has updated its annual guidance, raising its outlook for net sales to a range of $31.3 billion to $31.7 billion, which represents a midpoint increase of 3.6% compared to the previous fiscal year. The adjusted EBITDA guidance has also been raised by $20 million, now expected to be in the range of $550 million to $580 million, indicating an increase of over 11% at the midpoint compared to last year.

Operating expenses improved as a percentage of net sales, decreasing to 12.6% from 13.0% a year ago. However, the gross profit margin declined from 13.3% to 13.1%, primarily due to lower product margins and shifts in business mix, even as gross profit dollars increased by $37 million.

Overall, UNFI’s operational performance demonstrates a focus on efficiency improvements and stakeholder value creation, leading to raised expectations for financial metrics for the remainder of the fiscal year.