UNFI Returns to Profitability with Strong Q3 Earnings

UNFI reported a $33M profit in Q3 despite a 4.2% sales decline. The company saw adjusted EBITDA growth and margin expansion, with net leverage decreasing to 2.5x. UNFI also reaffirmed its 2026 guidance and maintained its earnings consensus, but narrowed its revenue forecast.

UNFI returned to profitability in its fiscal third quarter, posting net income of $33 million, or $0.52 per diluted share, even as net sales fell 4.2% to about $7.7 billion. Roughly 450 basis points of that revenue decline came from the company's own optimization initiatives, as management prioritizes margin and efficiency over volume.

Profitability metrics moved in the right direction: adjusted EBITDA rose nearly 17% year over year to $183 million, gross margin expanded to 13.6%, operating expenses fell almost 7%, and net leverage improved to 2.5x. On an adjusted basis, EPS of $0.77 narrowly missed the $0.78 consensus by a penny, a reminder that the turnaround is still a work in progress.

UNFI reaffirmed its fiscal 2026 outlook while narrowing its revenue forecast, signaling confidence in the cost and execution story even amid soft top-line trends and macro pressures such as higher energy prices and SNAP cuts weighing on its customers. The quarter frames UNFI as an operational-discipline story: improving the quality of earnings while sales reset to a leaner base.