UNITED NATURAL FOODS INC

Previous wording

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and the notes thereto, “Risk Factors” included in Part I, Item IA, “Cautionary Note Regarding Forward-Looking Statements” and other risks described elsewhere in this Annual Report. The following includes a comparison of our consolidated results of operations, segment results and financial position for fiscal years 2025 and 2024. In evaluating financial performance in each business segment, management primarily uses Net sales and Adjusted EBITDA of its business segments as discussed and reconciled within Note 16—Business Segments in Part II, Item 8 of this Annual Report. For a comparison of our consolidated results of operations and financial position for fiscal years 2024 and 2023, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, in our Annual Report on Form 10-K for the fiscal year ended August 3, 2024, filed with the Securities and Exchange Commission on October 1, 2024, as supplemented by the additional discussion below, which includes a comparison of our segment results for fiscal years 2024 and 2023 reflecting our updated segments.

Current wording

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and the notes thereto, “Risk Factors” included in Part I, Item IA, “Cautionary Note Regarding Forward-Looking Statements” and other risks described elsewhere in this Annual Report. The following includes a comparison of our consolidated results of operations, segment results and financial position for fiscal years 2026 and 2025. In evaluating financial performance in each business segment, management primarily uses Net sales and Adjusted EBITDA of its business segments as discussed and reconciled within Note 16—Business Segments in Part II, Item 8 of this Annual Report. For a comparison of our consolidated results of operations, segment results and financial position for fiscal years 2025 and 2024, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended August 2, 2025, filed with the Securities and Exchange Commission on October 1, 2025.

Previous wording

•the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures and intense competition, including as a result of the continuing consolidation of retailers and the growth of consumer choices for grocery and consumable purchases;

Current wording

•our relatively low margins, which are sensitive to inflationary and deflationary pressures and intense competition, including as a result of the continuing retailer consolidation and the growth of consumer choices for grocery and consumable purchases;

Previous wording

•our ability to develop, implement, operate and maintain, and rely on third parties to operate and maintain, reliable and secure technology systems, and the effectiveness of our business continuity plans in response to an incident impacting our technology systems, such as the unauthorized incident on our technology systems;

Current wording

•our ability to develop, implement, operate and maintain, and rely on third parties to operate and maintain, reliable and secure technology systems;

Previous wording

•our ability to maintain food quality and safety; and

Current wording

•our ability to maintain food quality and safety;

Previous wording

•union-organizing activities that could cause labor relations difficulties and increased costs;

Current wording

•union-organizing activities that could cause labor relations difficulties and increased costs; and

Previous wording

UNFI is a leading distributor of grocery and non-food products, and support services provider to retailers in the United States and Canada. We believe we are uniquely positioned to provide the broadest array of products, programs and services to customers throughout North America. Our diversified customer base includes over 30,000 customer locations ranging from some of the largest grocers in the country to smaller retailers. We offer approximately 230,000 products consisting of national, regional and private label brands grouped into the following main product categories: grocery and general merchandise; perishables; frozen foods; wellness and personal care items; and bulk and foodservice products. We believe we are North America’s premier grocery wholesaler with 52 distribution centers and warehouses representing approximately 30 million square feet of warehouse space. We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in Canada, making us a desirable partner for retailers and consumer product manufacturers. We believe our total product assortment and service offerings are unmatched by our wholesale competitors. We plan to continue to pursue new business opportunities with independent retailers that operate diverse formats, regional and national chains, as well as international customers with wide-ranging needs. Our business is classified into three reportable segments: Natural, Conventional and Retail.

Current wording

UNFI is a leading grocery wholesaler and support services provider to retailers in the United States and Canada. We believe our broad array of products, data, insights, programs and services uniquely positions us to help meet a wide range of customer and supplier needs across North America. Our diversified customer base includes over 30,000 customer locations ranging from some of the largest grocers in North America to smaller retailers. We offer over 200,000 products consisting of national, regional and private label brands grouped into the following main product categories: center store and general merchandise; fresh and perishables; frozen; wellness and personal care; and bulk and foodservice. We believe we are North America’s premier grocery wholesaler with 46 distribution centers and warehouses representing approximately 26 million square feet of warehouse space. We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in Canada, making us a desirable partner for retailers and consumer product manufacturers. We believe our total product assortment and service offerings help differentiate UNFI in the wholesale marketplace. We plan to continue to pursue new business opportunities with independent retailers that operate diverse formats, regional and national chains and international customers with wide-ranging needs. Our business is classified into three reportable segments: Natural, Conventional and Retail.

Previous wording

We are executing against the strategy we introduced in October 2024 and three-year financial objectives that seek to add value to our customers and suppliers through our portfolio of products, programs, insights and services while improving our effectiveness, efficiency and cash flow. To accomplish the latter, we are focused on controllable variables in four key areas: intensifying and expanding our network optimization; reducing annual capital spending; optimizing our cost structure; and reducing our net working capital position. Our strategy includes the areas of focus detailed under “Business” included in Part 1, Item 1 of this Annual Report.

Current wording

We are executing against our value creation strategy, which seeks to build capabilities that add value to our customers and suppliers through our portfolio of products, programs, insights and services while improving our effectiveness and efficiency. We are focused on controllable variables in several key areas: network optimization; managing annual capital spending; optimizing our cost structure and net working capital position. We believe our strategy uniquely positions us to help our partners differentiate, compete and profitably grow.

Previous wording

We expect to continue to use available capital to re-invest in our business and are committed to improving our free cash flow and financial leverage while reducing outstanding debt.

Current wording

We expect to continue to use available capital to re-invest in our business and are committed to improving our free cash flow and financial leverage through working to improve our profitability, disciplined capital investment and strengthened working capital management, while reducing outstanding debt.

Previous wording

We believe we can optimize our performance and profitability through our improvement efforts, which we expect will improve our cost structure, increase sales of products and services, and position us to provide tailored, data-driven solutions to help our customers run their businesses more efficiently and expand our customer base.

Current wording

We believe we can optimize our performance and profitability through our improvement efforts, which we expect will improve our operational effectiveness and cost structure, increase sales of products and services to new and existing customers and position us to provide tailored, data-driven solutions to help our customers and suppliers run their businesses more efficiently.

Previous wording

Our results are impacted by macroeconomic and demographic trends, changes in the food distribution market structure and changes in consumer behavior, which may result from factors beyond our control, including geopolitical events and other events that may trigger economic volatility and negatively impact discretionary income levels and consumer confidence, social trends, changes in the levels of disposable income and the health of the economy in which our customers and stores operate.

Current wording

Our results are impacted by several macroeconomic, industry, demographic and consumer-driven trends that affect demand for grocery products, product mix, pricing and operating costs. These trends arise from factors largely outside our control, including broader economic conditions, geopolitical events and other events that may trigger economic volatility and negatively impact discretionary income levels and consumer confidence, social trends, changes in the levels of disposable income and structural shifts in the food distribution market structure.

Previous wording

The U.S. economy continues to experience economic volatility, which has had, and we expect may continue to have, an impact on consumer confidence and behavior. Consumer spending may continue to be impacted by levels of discretionary income with consumers trading down to a less expensive mix of products for grocery items or buying fewer items. In addition, inflation continues to affect our business, and fluctuating commodity and labor input costs may continue to impact the prices of products we procure from manufacturers. We believe our product mix, which ranges from high-quality natural and organic products to national and local conventional brands, including cost conscious private label brands, positions us to serve a broad cross section of North American retailers and end customers, and may lessen the impact of any further shifts in consumer and industry trends in grocery product mix. We are actively monitoring the impacts of the evolving macroeconomic and geopolitical landscape, including rapidly evolving tariff and global trade policies, on all aspects of our business.

Current wording

Economic volatility in the U.S. has persisted, which has had, and we expect may continue to have, an impact on consumer confidence and purchasing behavior. In response to pressure on discretionary income levels, certain consumers have increasingly prioritized value, including by trading down to a less expensive mix of products for grocery items or buying fewer items. This trend has influenced product mix and margin dynamics, with shifts towards lower-margin value-oriented categories. At the same time, there remains stable demand for essential food items and higher unit volumes in natural and organic categories. Based on current conditions, we believe these consumer purchasing patterns are reasonably likely to continue in the near term and could continue to affect our results of operations. We believe our diversified product assortment, which ranges from natural and organic products to national and local conventional brands, including cost conscious private label brands, helps mitigate the impact of adverse product mix shifts and positions us to serve a broad cross section of North American retailers and end customers.

Previous wording

We are also impacted by changes in food distribution trends affecting our wholesale customers, such as direct store deliveries and other methods of distribution. Our wholesale customers manage their businesses independently and operate in a competitive environment.

Current wording

In addition, changes in food distribution trends affecting our wholesale customers, such as the increased use of direct store delivery and alternative distribution models, have continued to affect competitive dynamics within the industry. Our wholesale customers manage their businesses independently and operate in a competitive environment.

Previous wording

Additionally, in the fourth quarter of fiscal 2025, we became aware of unauthorized activity on certain of our information technology systems. We promptly activated our incident response plan and implemented containment measures, including proactively taking certain systems offline (the “Cybersecurity Incident”, as discussed in Part I, Item 1C of this Annual Report). As a result, our ability to fulfill and distribute customer orders was temporarily impacted until the unauthorized activity could be contained, and we could safely restore the core systems that our customers and suppliers use, enabling business operations to normalize. As a result of the Cybersecurity Incident, we experienced reduced sales volume and increased operational costs in the fourth quarter of fiscal 2025, which negatively impacted our results of operations. We incurred incremental costs of approximately $26 million in the fourth quarter of fiscal 2025 as a result of the Cybersecurity Incident. These costs related to services provided to investigate and remediate the Cybersecurity Incident, such as third-party cybersecurity, legal and governance experts, as well as increased operating costs from the resulting disruption to our business operations. We have submitted, and intend to continue to submit, claims to our insurers for reimbursement of some of the costs, expenses, and losses stemming from the Cybersecurity Incident and expect that the full claim and settlement process will extend throughout fiscal 2026.

Current wording

As previously disclosed, in June 2025, we experienced a cybersecurity incident. We have submitted claims to our insurers for reimbursement of costs, expenses, and losses stemming from the cybersecurity incident, and continue our efforts to complete the full claim and settlement process.

Previous wording

We experienced a mix of inflation across product categories during fiscal 2025. In the aggregate across our businesses, including the mix of products, management estimates our businesses experienced product cost inflation of approximately two percent in fiscal 2025 as compared to fiscal 2024. Cost inflation estimates are based on individual like items sold during the periods being compared. Our pricing to our customers is determined at the time of sale, primarily based on the then prevailing vendor listed base cost, and includes discounts we offer to customers. Changes in merchandising, customer buying habits and competitive pressures create inherent difficulties in measuring the impact of inflation and deflation on Net sales and Gross profit.

Current wording

We experienced a mix of inflation and deflation across product categories during fiscal 2026. In the aggregate across our businesses, including the mix of products, management estimates our businesses experienced product cost inflation of approximately 3% in fiscal 2026 as compared to fiscal 2025. Cost inflation and deflation estimates are based on individual like items sold during the periods being compared. Our pricing to our customers is determined at the time of sale, primarily based on the then prevailing vendor listed base cost, and includes discounts we offer to customers. Changes in merchandising, customer buying habits and competitive pressures create inherent difficulties in measuring the impact of inflation and deflation on Net sales and Gross profit.

Previous wording

Generally, in an inflationary environment as a wholesaler, rising vendor costs result in higher Net sales driven by higher vendor prices when other variables such as quantities sold, mix of units sold and vendor promotions are constant. Under the last-in, first out (“LIFO”) method of inventory accounting, product cost increases are recognized within Cost of sales based on expected year-end inventory quantities and costs, which generally has the effect of decreasing Gross profit and the carrying value of inventory during periods of inflation. In fiscal 2025, we experienced fewer and less significant vendor product cost increases as compared to fiscal 2024. These decreases negatively impacted our gross profit rate when comparing fiscal 2025 to fiscal 2024.

Current wording

In an inflationary environment, rising vendor costs typically increase Net sales for wholesalers, driven by higher vendor prices when other variables such as quantities sold, mix of units sold and vendor promotions are constant. Under the last-in, first out (“LIFO”) method of inventory accounting, product cost increases are recognized within Cost of sales based on expected year-end inventory quantities and costs, which generally has the effect of decreasing Gross profit and the carrying value of inventory during periods of inflation.

Previous wording

In the fourth quarter of fiscal 2025, we came to a mutual agreement with a customer in the East region to terminate our supply agreement, pursuant to which we served as the primary grocery wholesaler to this customer’s locations in the Northeast. In connection with this termination, we ceased operations at our Allentown, Pennsylvania distribution center in early fiscal 2026 with the remaining volume consolidated into other facilities in the Northeast. Business with this customer in the Northeast accounted for approximately $1 billion in annual sales. The termination enables us to accelerate progress toward our longer-term strategic and three-year financial objectives.

Current wording

We continue to evaluate our distribution center network to more effectively and efficiently service customers and suppliers and further optimize performance. In connection with the termination of our supply agreement with a customer in the East region in fiscal 2025, we ceased operations at our Allentown, Pennsylvania, distribution center in the first quarter of fiscal 2026 with the remaining volume consolidated into other facilities in the Northeast. Business with this customer in the Northeast accounted for approximately $1 billion in annual sales. The termination enabled us to accelerate progress toward our longer-term strategic and three-year financial objectives. Additionally, we consolidated the volume of a distribution center into a nearby facility in the West region in the third quarter of fiscal 2026. In the fourth quarter of fiscal 2026, we consolidated the volume of a distribution center primarily serving the Natural segment into a nearby automated facility in the Central region.

Previous wording

We plan to continue to evaluate our distribution center network to further optimize performance and expect to incur incremental expenses related to any future network realignment, expansion or improvements, including network optimization and automation initiatives. We are working to both minimize future costs and obtain new business to further improve the efficiency of our distribution network.

Current wording

We could incur incremental expenses related to any future network realignment, expansion or improvements, including network optimization and automation initiatives. We are working to both minimize future costs and obtain new business to further improve the efficiency of our distribution network.

Previous wording

We operated 75 grocery stores, including 54 Cub Foods stores and 21 Shoppers stores, as of August 2, 2025. In addition, we supplied another 26 Cub Foods stores operated by our wholesale customers through franchise and minority equity ownership arrangements. We operated 80 pharmacies primarily within the stores we operate and the stores of our franchisees. In addition, we operated 24 “Cub Wine and Spirit” and “Cub Liquor” stores.

Current wording

We operated 65 grocery stores, including 52 Cub Foods stores and 13 Shoppers stores, as of August 1, 2026. In addition, we supplied another 24 Cub Foods stores operated by our wholesale customers through franchise and minority equity ownership arrangements. We operated 77 pharmacies primarily within the stores we operate and the stores of our franchisees. In addition, we operated 23 “Cub Wine and Spirits” and “Cub Liquor” stores.

Previous wording

We plan to continue to invest in and optimize our Retail segment in areas such as customer-facing merchandising initiatives, physical facilities, technology and operational tools.

Current wording

In fiscal 2026, we closed two Cub Foods stores and eight Shoppers stores related to our strategic initiatives focused on optimization of our retail footprint. We plan to continue to invest in and optimize our Retail segment in areas such as customer-facing merchandising initiatives, physical facilities, technology and operational tools.

Previous wording

Our Net sales consist primarily of product sales of natural, organic, specialty, produce, and conventional grocery and non-food products, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue. Net sales also include amounts charged by us to customers for shipping and handling and fuel surcharges.

Current wording

Our Net sales consist primarily of product sales of natural, organic, specialty and conventional food and non-food products, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue. Net sales also include amounts charged by us to customers for shipping and handling and fuel surcharges.

Previous wording

Restructuring, acquisition and integration related expenses reflect expenses resulting from restructuring activities, including severance costs, facility closure costs, contract exit-related costs, share-based compensation acceleration charges and acquisition and integration related expenses. Integration related expenses include certain professional consulting expenses and incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions.

Current wording

Restructuring, acquisition and integration related expenses reflect expenses resulting from restructuring activities, including severance costs, facility closure costs, contract exit-related costs, share-based compensation acceleration charges and acquisition and integration related expenses, when applicable. Integration related expenses, when incurred, can include certain professional consulting expenses and incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions.

Previous wording

Loss on sale of assets and other asset charges primarily includes losses (gains) on sales of assets, losses on sales of financial assets, and asset impairments.

Current wording

Loss (gain) on sale of assets and other asset charges primarily includes (gains) losses on sales of assets, losses on sales of financial assets, and asset impairments.

Previous wording

We define Adjusted EBITDA as a consolidated measure which we reconcile by adding Net (loss) income including noncontrolling interests, less Net income attributable to noncontrolling interests, plus Non-operating income and expenses, including Net periodic benefit income, excluding service cost, Interest expense, net and Other (income) expense, net, plus (Benefit) provision for income taxes and Depreciation and amortization all calculated in accordance with GAAP, plus adjustments for Share-based compensation, non-cash LIFO charge or benefit, Restructuring, acquisition and integration related expenses, Goodwill impairment charges, Loss (gain) on sale of assets and other asset charges, certain legal charges and gains, and certain other non-cash charges or other items, as determined by management.

Current wording

We define Adjusted EBITDA as a consolidated measure which we reconcile by adding Net income (loss) including noncontrolling interests, less Net income attributable to noncontrolling interests, plus Non-operating income and expenses, including Net periodic benefit income, excluding service cost, Interest expense, net and Other (income) expense, net, plus (Benefit) provision for income taxes and Depreciation and amortization all calculated in accordance with GAAP, plus adjustments for Share-based compensation, non-cash LIFO charge or benefit, Restructuring, acquisition and integration related expenses, Goodwill impairment charges, Loss (gain) on sale of assets and other asset charges, certain legal charges and gains, and certain other non-cash charges or other items, as determined by management.

Previous wording

The following table reconciles Net loss including noncontrolling interests to Adjusted EBITDA.

Current wording

The following table reconciles Net income (loss) including noncontrolling interests to Adjusted EBITDA.

Previous wording

(1)Fiscal 2025 primarily reflects the$53 million charge related to the Company’s termination of its supply agreement with a customer in the East region and costs associated with certain employee severance and other employee separation costs and outsourcing certain corporate functions under restructuring initiatives. Fiscal 2024 primarily reflects costs associated with certain employee severance and other employee separation costs.

Current wording

(1)Fiscal 2026 primarily reflects distribution center and store closure charges, costs associated with certain employee severance and other employee separation costs and adjustments to previously recorded multiemployer pension plan withdrawal liabilities. Fiscal 2025 primarily reflects the$53 million charge related to the Company’s termination of its supply agreement with a customer in the East region and costs associated with certain employee severance and other employee separation costs and outsourcing certain corporate functions under restructuring initiatives.

Previous wording

(2)Fiscal 2025 primarily includes a $24 millionnon-cash asset impairment charge related to a distribution center in our East region and $19 million in losses on the sales of receivables under the accounts receivable monetization program. Fiscal 2024 primarily includes a $21 million non-cash asset impairment charge related to one of our corporate-owned office locations, a $7 million non-cash asset impairment charge related to the decision to close certain retail store locations, a $15 million non-cash impairment charge related to the decision to close certain leased and owned distribution center locations and $21 million in losses on the sales of receivables under the accounts receivable monetization program. Refer to Note 3—Revenue Recognition and Note 5—Property and Equipment, Netin Part II, Item 8 of this Annual Report for additional information.

Current wording

(2)Fiscal 2026 primarily includes$30 million in non-cash asset impairment charges related to decisions to close certain retail store locations and discontinue operations at certain distribution centers, warehouses or offsite storage facilities, an $18 million gain on the sale of a surplus distribution center and $17 million in losses on the sales of receivables under the accounts receivable monetization program. Fiscal 2025 primarily includes a $24 millionnon-cash asset impairment charge related to a distribution center in our East region and$19 million in losses on the sales of receivables under the accounts receivable monetization program. Refer to Note 3—Revenue Recognition, Note 5—Property and Equipment, Net and Note 11—Leasesin Part II, Item 8 of this Annual Report for additional information.

Previous wording

(3)Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, and third-party professional service fees related to strategic initiatives and the board-led financial review in fiscal 2024, all of which are included within Operating expenses in the Consolidated Statements of Operations.

Current wording

(4)Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, which are included within Operating expenses in the Consolidated Statements of Operations.

Previous wording

The following table sets forth our Net sales by segment. Refer to Note 16—Business Segments in Part II, Item 8 of this Annual Report for additional information. Within the following table, we have estimated the impact of the additional 53rd week in fiscal 2024 to provide more comparable financial results on a year-over-year basis.

Current wording

The following table sets forth our Net sales by segment. Refer to Note 16—Business Segments in Part II, Item 8 of this Annual Report for additional information.

Previous wording

Natural Net sales increased $1,069, or 7.2%, to $16.0 billion in fiscal 2025, from $14.9 billion in fiscal 2024, which included an estimated $280 million benefit from the 53rd week. Natural Net sales increased approximately 9.2% when excluding the impact from the 53rd week in fiscal 2024. The increase in Natural Net sales, excluding the 53rd week, was primarily driven by an increase in unit volumes, including new business with existing and new customers, as well as inflation.

Current wording

Natural Net sales increased $1,115, or 7.0%, to $17.1 billion in fiscal 2026, from $16.0 billion in fiscal 2025. The increase in Natural Net sales was primarily driven by a low single digit increase in unit volumes, including new business with existing and new customers, as well as a low single digit increase from inflation and lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025.

Previous wording

Retail Net sales decreased $94 million, or 3.9%, to $2.3 billion in fiscal 2025, from $2.4 billion in fiscal 2024, which included an estimated $45 million benefit from the 53rd week. Retail Net sales decreased approximately 2.0% when excluding the impact from the 53rd week in fiscal 2024. The decrease in Retail Net sales was primarily driven by a 0.6% decrease in identical store sales from lower volume, and store closures.

Current wording

Retail Net sales decreased $185 million, or 7.9%, to $2.2 billion in fiscal 2026, from $2.3 billion in fiscal 2025. The decrease in Retail Net sales was primarily driven by a mid single digit decline from store closures and a 2.5% decrease in identical store sales from lower volume, partially offset by lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025.

Previous wording

Our Gross profit increased $21 million, or 0.5%, to $4,222 million in fiscal 2025, from $4,201 million in fiscal 2024. The 53rd week in fiscal 2024 contributed an estimated $82 million to Gross profit in fiscal 2024. Our Gross profit as a percentage of Net sales decreased to 13.3% in fiscal 2025 compared to 13.6% in fiscal 2024. The decrease in gross profit rate of 28 basis points was primarily driven by lower product margin rates and customer and product mix, which were partially offset through supplier programs and the benefit of lower shrink expense. The reduction in shrink expense was compressed due to the adverse impact of the Cybersecurity Incident in fiscal 2025.

Current wording

Our Gross profit decreased $26 million, or 0.6%, to $4,196 million in fiscal 2026, from $4,222 million in fiscal 2025. Our Gross profit as a percentage of Net sales increased to 13.5% in fiscal 2026 compared to 13.3% in fiscal 2025. The increase in gross profit rate was primarily driven by the positive impact of network optimization actions and customer mix as well as higher levels of procurement gains, which were partially offset by a lower margin rate in the Retail segment.

Previous wording

Operating expenses increased $17 million, or 0.4%, to $4,117 million, or 13.0% of Net sales, in fiscal 2025 compared to $4,100 million, or 13.2% of Net sales, in fiscal 2024. The 53rd week in fiscal 2024 contributed an estimated $78 million to Operating expenses in fiscal 2024. The decrease in Operating expenses as a percentage of Net sales was primarily driven by benefits from cost saving initiatives and the leveraging impact of higher sales, partially offset by higher costs associated with occupancy, union and other employee benefits and costs related to the Cybersecurity Incident in fiscal 2025.

Current wording

Operating expenses decreased $211 million, or 5.1%, to $3,906 million, or 12.5% of Net sales, in fiscal 2026 compared to $4,117 million, or 13.0% of Net sales, in fiscal 2025. The decrease in Operating expenses as a percentage of Net sales was primarily driven by the benefits from cost saving initiatives, including network and cost structure optimization actions and higher levels of distribution center productivity, as well as $50 million in cybersecurity insurance recoveries, partially offset by higher costs associated with union and other employee benefits.

Previous wording

Restructuring, acquisition and integration related expenses increased $58 million to $94 million for fiscal 2025, from $36 million for fiscal 2024. The increase was primarily driven by the $53 million charge related to the Company’s termination of its supply agreement with a customer in the East region, increased costs associated with outsourcing certain corporate functions under restructuring initiatives and higher closed property charges and costs, partially offset by a decrease in certain employee severance and other employee separation costs.

Current wording

Restructuring, acquisition and integration related expenses decreased $42 million to $52 million for fiscal 2026, from $94 million for fiscal 2025. The decrease was primarily driven by the non-recurrence of a $53 million charge in fiscal 2025 related to the Company’s termination of its supply agreement with a customer in the East region and a decrease in certain employee severance and other employee separation costs, as well as costs associated with outsourcing certain corporate functions under restructuring initiatives, partially offset by higher closed property charges and costs in fiscal 2026 and an adjustment to previously recorded multiemployer pension plan withdrawal liabilities in the first quarter of fiscal 2026.

Previous wording

Loss on sale of assets and other asset charges decreased $15 million to $42 million for fiscal 2025, from $57 million for fiscal 2024. The decrease in fiscal 2025 was primarily driven by lower asset impairment charges. Fiscal 2025 primarily included a $24 million asset impairment charge related to our Allentown, Pennsylvania distribution center and $19 million in losses on the sales of receivables. Fiscal 2024 primarily included $43 million in asset impairment charges related to one of our corporate-owned office locations, certain leased and owned distribution centers and certain retail store locations and $21 million in losses on the sales of receivables.

Current wording

Loss (gain) on sale of assets and other asset charges decreased $15 million to $27 million for fiscal 2026, from $42 million for fiscal 2025. The decrease in fiscal 2026 was primarily driven by higher gains on sales of assets, partially offset by higher asset impairment charges. Fiscal 2026 primarily included $30 million in non-cash asset impairment charges related to decisions to close certain retail store locations and discontinue operations at certain distribution centers, warehouses or offsite storage facilities, an $18 million gain on the sale of a surplus distribution center and $17 million in losses on the sales of receivables. Fiscal 2025 primarily included a $24 million asset impairment charge related to our Allentown, Pennsylvania, distribution center and $19 million in losses on the sales of receivables.

Previous wording

Reflecting the factors described above, Operating loss was $31 million for fiscal 2025, a $39 million decrease from Operating income of $8 million in fiscal 2024. The decrease was primarily driven by an increase in Restructuring, acquisition and integration related expenses and Operating expenses, partially offset by an increase in Gross profit and a decrease in Loss on sale of assets and other asset charges, each as described above.

Current wording

Reflecting the factors described above, Operating income was $211 million for fiscal 2026, a $242 million increase from Operating loss of $31 million in fiscal 2025. The increase was primarily driven by a decrease in Operating expenses, Restructuring, acquisition and integration related expenses and Loss (gain) on sale of assets and other asset charges, partially offset by a decrease in Gross profit, each as described above.

Previous wording

Net periodic benefit income, excluding service cost increased $5 million to $20 million in fiscal 2025, from $15 million in fiscal 2024. The increase in Net periodic benefit income, excluding service cost was primarily driven by lower interest costs from a lower discount rate utilized in the measurement of pension liabilities.

Current wording

Net periodic benefit income, excluding service cost increased $3 million to $23 million in fiscal 2026, from $20 million in fiscal 2025. The increase in Net periodic benefit income, excluding service cost was primarily driven by lower interest costs due to the reduction in pension liabilities and changes in the interest rate yield curve utilized in the measurement of Net periodic benefit income, excluding service cost.

Previous wording

The decrease in Interest expense, net for fiscal 2025 compared to fiscal 2024 includes an estimated $3 million impact from the 53rd week in fiscal 2024. The remaining decrease was primarily driven by lower outstanding long-term debt balances and lower losses on debt extinguishment.

Current wording

The decrease in Interest expense, net for fiscal 2026 compared to fiscal 2025 was primarily driven by lower outstanding long-term debt balances.

Previous wording

Net Loss Attributable to United Natural Foods, Inc.

Current wording

Net Income (Loss) Attributable to United Natural Foods, Inc.

Previous wording

Reflecting the factors described in more detail above, Net loss attributable to United Natural Foods, Inc. was $118 million, or $1.95 per diluted common share, for fiscal 2025, compared to Net loss attributable to United Natural Foods, Inc. of $112 million, or $1.89 per diluted common share, for fiscal 2024.

Current wording

Reflecting the factors described in more detail above, Net income attributable to United Natural Foods, Inc. was $84 million, or $1.34 per diluted common share, for fiscal 2026, compared to Net loss attributable to United Natural Foods, Inc. of $118 million, or $1.95 per diluted common share, for fiscal 2025.

Previous wording

Natural Adjusted EBITDA increased 26.3% for fiscal 2025 as compared to fiscal 2024. The increase was driven by an increase in gross profit, partially offset by an increase in operating expenses.

Current wording

Natural Adjusted EBITDA increased $85 million, or 19.2% for fiscal 2026 as compared to fiscal 2025. The increase was driven by an increase in gross profit and lapping the impact of the cybersecurity incident experienced in the fourth quarter of fiscal 2025, partially offset by an increase in operating expenses.