UNFI - Earnings call transcript Q4 2024 | United Natural Foods, Inc.

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Operator

Hello, and welcome to the UNFI Fiscal 2024 Q4 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Mr. Steve Bloomquist, Vice President of Investor Relations.

You may begin.

Steve Bloomquist

Good morning, everyone. us Fourth joining Earnings Fiscal for Call. Conference you on Quarter UNFI's XXXX Thank should a have earnings you now, By received this release copy morning. issued the of are which The company's the www.unfi.com. will earnings release at the presentation, press speak section and website to, available of under Investors management We've a file supplemental in key Excel with also information. included financial disclosure Microsoft

a and Chief business Matteo Matteo and Joining today's me Officer; and we'll which call for after Sandy our update, are Chief President take Executive will Officer. Sandy provide Douglas, our questions. Financial Tarditi, your

These discussed like Before we contain company's the measures. release results point will forward-looking the remind begin, end included statements and risks financial non-GAAP out from press may reconciliations made comments and risks financial in comparable by measures our release of during are These earnings the GAAP lastly, uncertainties. might statements. during I'd include to refer today's filings. that may materially are in presentation. to call, call discussed that management to the earnings Actual everyone expectations, results estimates Definitions I'd significant projections certain that in like our today's plans, most SEC forward-looking and these differ management involve and forward-looking and to statements. And

to of you our call Sandy. presentation turn X ask to Slide the I'd to as I over turn

James Alexander Douglas

you, joining this us thank morning. for and everyone, Steve, Thanks,

results our built XXXX enter significantly that we a As you've as previously foundation in capped fiscal seen This end XXXX. release, our and in outlook. year drove our strengthened quarter to fourth fiscal we provided the delivered performance we upper momentum of which

growth, customer structural mid-XXXX, maturity Tarditi. on we $XXX in onboarded realized until our agreement XXXX from our President reduced XXXX, with and our CFO, our drove the extended During benefits until and lengthened loan term strong new Matteo significantly approximately million same initiatives, shrink, efficiency customer fiscal largest

our our new Board strategy, ongoing will suppliers we by our review, into to strategy. objectives and continue the multiyear I strategy and this and to that more alongside financial expect will objectives, performance go confident drive executing customers for our shareholders. Today, deliver that business and and new our value financial are by accelerating management-led X-year plan We detail informed financial sustainable create around

I the base our of industry our billion in As outlined portion analysis resilient current today sales last of of over our totals potential identified call, that and a has customer wholesale $XX and be ethnic volumes. expected term natural, specialty, many and longer at segment single-digit grow a and includes will market led to likely low the natural operators. This by and is rate over specialty conventional

focused faster it We natural far broadly growing in QX are digital professional UNFI's on year industry compared which in are and on to XX-week as so on performing products, QX. Natural heritage value the services are basis Customers strengths, grew highly prior around customers organic this even are including comparable our strongly. UNFI's X% segment also and a business. margin-accretive gaining and in from capitalizes

and and our ourselves insights a succeed differentiated distribution to business, enabling products, what to businesses and our that efficient through deleveraging. a of positioning of on and are focusing control We become programs working intensity cash center we're capital add a optimize them can actively portfolio flow the free their we to services, organization, improve more reduce marketplace. Simultaneously, our steady by network customers to grow help both value dynamic suppliers in

our key strategy stakeholders, help work including creation of We expect shareholders. for our generate to these us X meaningful elements value will our together

start around adding a Let early with me our explain few value. few to take provide points execution. new strategy in greater minutes a and detail I'll proof

suppliers customer help strong network over large, retailers increasingly products relevant the while XX,XXX value-added an portfolio services of services right retailer providing on value that offering go-to-market focuses insights UNFI's strategy totaling and within that proposition, help grow locations. differentiated them grow of new with diverse Our a composed and profitably them

around now suppliers our revamped their together more and aligns The into We XX our data makes help enhanced commercial interest that and example, value doing more and base. and new one for go-to-market providing insights. profitably to faster for to them For to retailer growth easier. program partnership streamlined ultimately, more suppliers invest and UNFI's result XX suppliers is and with business access grow unique is mutual tools our brands a fees are model

go-to-market enrolled have including growth friction. a the early and suppliers, largest in that the faster are sizable new model already some of seeing less We in now base CPGs returns, America are of North and

value-added and suppliers, and be another UNFI. portfolio for economics customers important to services that professional is offering both increasingly differentiator and Our digital compelling them mutually will

last the continue Network interest help our described to We're insights We Media advantages enroll sizable services seeing includes lot that consumers' suppliers competitive suppliers our UMN relationships, retailers to to UMN to portfolio short, our platform. data, in offerings leverage to scale, continuing for UNFI quarter. are which launched retailers and their UNFI's and on more recently effectively our or through meet of needs. This I programs and add both and a

intensity, our drive that UNFI better more generation cash to on which We to believe is make free expect provide leverage. efficient and element structure an flow value center and to of cost distribution profitability, downstream know margin partner. In drive second suppliers expect and our in bringing we shaping while suppliers, to will reduced attractive develop, network to or and the reducing us continue lowering value focused upstream invest other our will similar services to future, our improving a customers capital-light customers serve will we to the strategy We partners in parallel, capital expansion. which partner helping bring continue and

will broader and us these levels service enhance which our expect also strengthen responsiveness and and supplier We should enable us the capability, moves process to increase business, help customer experience.

our on In and business. initial region, our Bismarck and Billings DC to the DCs of our and these Springs network volume, to and Fe Commerce, into and Billings the Once with facilities. to Bismarck we've our focused will our all Santa few transitioning distribution work executed Fargo Central most months, customers volume optimizing customers operations we from we're streamline Over last conventional on moving some DCs, remainder transition the Centralia nearby nearby facilities. close our X consolidate

experience own expected technology use by scanning We are actively properties. repay and cloud management the in debt. leveraging improve we'll and are warehouse the proceeds real These our the case system both Bismarck advanced Billings And to region our solutions, and estate marketing moves these including modern customer DC in to technology. the

rigorous our this with management and production better operational conjunction on to customers quality, deliver both practices, and preparation, expect process, to we and emphasizing lean efficiency employing In suppliers. our transition focus service

customers DC will assortment enable with broader suppliers access to Fargo DC. and In a reach more to single product a addition, our of customers provide out

result reduce and help conventional and to supplier lowering costs. capital while Actions network both like customer of benefits intensity this the our in our operating

to chain we streamline our supply Importantly, opportunities see footprint. further

savings, improving generation cash evaluate We in action from years operating cash similar the all asset and be while generate the Billings of and consolidate done working and take will we've what to experience. potentially to improve volumes, to over generate and flow next supplier sustainably sales, customer Bismarck couple

the network intensity reducing on invest focus capital improve our extending are to optimization beyond we way our We capital.

million, XXXX. compared we be around reduced less fiscal tear As XXXX capital a driven being decline on expect investments regular spent intensity by fiscal our to a to release, need. you $XXX $XX spending a in saw in a of and where on asset maintenance focus on and million is get utilization with This calendar cadence shift based wear rather approach than press dollars

we allocation, As we will improve levels. and continue to service prioritize capital safety

Additionally, on focused hand return capabilities and capital to in inventory days on seeking we reducing to pre-pandemic working levels. are improve our investment our to are

the ensuring timelines to hand is enduring We X progress lean XXXX key expect initiatives problem-solving on It against and during delivery and to managing we this have being practices provide through achieved benefits. have basis. To a ensure is on and with expected discipline, days efficiently reports made maintained by also processes to structure process and on Matteo and is fiscal reduce created improvements. progress on an focused office. This days value more structural manage charged and group project introduced around and management defined

Slide revenue impact the result and X-year that perspective, financial financial to optimization. revenue From growth a network strategy organic objectives in are X. expected offsets our as of Turning new is to roughly flat

priority higher-margin natural in we believe products reflecting as partially projected help particularly trends. business by, We UNFI's the first, segment our will expansion driven increasing market growth faster for business, share secular conventional years billion be the market focused value on prioritization to of segment resilient as priority well in margin the and retailers, be will next of our add to our compared X overall $XX over expect

distribution As majority organic our is I represents strongly and mentioned earlier, our specialty profitability. business and natural, the growing of

on while Our UNFI. call, last the expected add million to and driver which our professional benefits higher for to our which fiscal to magnitude $XXX introduced from from in services, carrying XXXX. a are we second And the to similar margin relates realized growth lastly, our approach digital efficiency multiyear initiatives margins value customers

the X As over to in adjusted the high be annual single-digit a result, rate next range. we expect years EBITDA average growth our

as fiscal a $XXX well cash lower of of less leverage expect net generate XXXX, execution to more free We interest X.X% of expected objectives sales. complete will year-end XXXX as be by cash of in stable detail. These $XXX flow initial strong to we In million driven to million couple or to net Matteo adjusted XXXX, to generally in adjusted This flow, generation, by our expect we growth years, X well generate reduction better planned higher which financial the fiscal the to expect X.X plan cash that EBITDA from key turns free repaying fiscal over is assume next of direct EBITDA around as than net benefit we outpace initiatives which in strategic EPS discuss target reduction we operating adjusted free annual debt. Once expense. and we towards over leverage backdrop. about flow

opportunities toward as capabilities evaluate And our updated throughout improved the the This the includes Our remains that our integrated financial metrics reorganization more reduced X-year allowing and strategy supplier and the increased management-led business beyond improve review quarter Board embedded objectives. We XXXX, decision-making experience. digital fourth execute ongoing. value drive digital and the reprioritization we and layers scalability. and in continue digital and this organization in in we for to customer streamlined management of creation faster,

the embed As in lean organization, continuous efficiency. a opportunities we mindset we identify more will improvement improved for

and I organic earlier, controllable growth stated large business and a with variables. through momentum cash potential stable flow free we fiscal As optimizing generation XXXX with enter significant

customers believe We through value XX,XXX insights service. and diverse through Our to programs and and this focus term. services, growth flow sustain value locations adding the long on products, improving in will also bringing organic shareholder recurring remains value on focus free cash the while helping suppliers our creation meaningful driving our generation while that short customer suppliers to customers result compete to over the we

pursue be turn me We let that, process will outlook expect work. of fiscal results, it over our continuous to deleveraging a transformation delivering Matteo? our discuss XXXX improvement QX new strategy. With and and Matteo and as year we to

Giorgio Tarditi

you Thank join our and to you, Sandy, earnings good pleased year-end call. I'm morning, everyone. for

principles Sandy at fiscal process revised results, additional end adjusted structure, XQ fiscal for and sales, lean the quarter that, capital provided and into will management and the guided I the year-end operational As into we our financial we by outlook stated, ranges our for finished provide changes let's position outlook dive XXXX EPS. our adjusted Today, results. in our insights EBITDA XXXX. With we've of implemented June fourth upper

to X. turn Slide Let's

fourth grew million week in which benefit $X.X UNFI. Our came basis, billion, as excludes a approximately year for comparable X.X%. fourth XX-week quarter a from was which sales extra fiscal additional in at the week, $XXX close XXXX included the XX-week sales quarter On the to a quarter

continued driven by positive improvement the side as conventional each This compared our a for fiscal basis to at was XXXX. At consumers continued higher and consecutive declining fourth pace. although inflation to improvement to volumes again into trended performance of in in quarter sales Retail year ended volumes to as our as business our year Wholesale, improved a time, continuing the increase the modestly discussed fiscal X.X%. of sensitive. same this we volume a basis. In expect and natural to year week volume approximately well leveling And but full a contributed turned This quarter saw balance largely our in out remain before gradually viewed third we trends decelerated call. slower inflation, to also Our last of well, levels fiscal on has highly X.X% early the X-week we Week year. Sales continued business, Wholesale of inflation the up pressure as XX-week on XX sequentially continue operating see trailing many X%. price on year later slow volumes markets the improving

but to the than was Excluding week, third lower the same-store from down year. the X% This compared were additional to more Retail still primarily attributable quarter by sales decline slightly prior sales. improved

Our expected to line robust team a bottom XXXX performance drive plan top execute is in to beyond. working fiscal improving and and

to Slide XX. Moving

Let's drivers review quarter. profitability in the

margin gross the in XX.X% quarter. excluding rate, Our LIFO, was fourth

cycled going of would procurement forward. in declines period expect a year-over-year We be have comparable gains large now to and broadly margins

were compared our business to margin our last up Within gross Retail segments, both rates year. Wholesale and

investments year shrink than commercial the improved the initiatives Wholesale lower during procurement and QX on and we margin more Our margin focused our the during and gains. offset benefit of includes

the in generated EBITDA we levels in profitability, delivered And year's which was adjusted drive rates. incentive each streamlined higher year's terms, higher of organization SG&A was efficiency dollar quarter. of fiscal average means This QX driven than upon EPS expenses, shrink of in net to higher sequentially even about there of momentum the expense cost by $XX quarter another and from as we and than some around rate This since EBITDA reflects took to within around that $X.XX fourth last $X.XX, we This XX The evidenced million environment expense, fourth quarter, our expense. Within reduction end by the higher despite our fiscal solid a Sandy in initiatives. the through savings a last material in close as initiatives, markedly which the higher in are to which also touch last with of further adjusted when of our digital quarter, efforts level control. last $XXX operating working improvement was overall fourth broad-based improved led lower his from count interest we We shortly. Last can expense to compared and points occurred quarter consecutive loss in week, quarter our are million remains quarter savings last in we This reduction $XX by comparable to included biggest of was primarily of detail execution in quarter. near-term higher $XX approximate has our additional compensation reduced year's pre-COVID layers, of offset more more with in XXXX the of interest an our spoke no both sales fourth partly we our an the adjusted was expense vision. EBITDA for which XX-week fourth a our basis scalability enter benefit compared on year's to quarter in I'll greater operating challenging, total strategic increase remarks. Adjusted million and strong driver basis the which and head X% prior labor normalized incentive million consistent compares on quarter spend about what which rate year. against was actions quarter compensation, the its benefits to than we expense focusing one platform, This which described fourth streamline higher quarter. during a the XXXX. This shrink

on last and result reflects lower quarter. to and compared capital decrease higher fourth working a of higher lower than related capital Free higher as ongoing last and cash the receivable accounts QX for automation partially of The use. the minimizing Turning level payments interest in programs and to a higher changes working change accountability focused use capital decentralized capital $XX cash offset year by expenditures Slide discipline, strategic our million, to payments of benefits of investments, from more in profitability year's timing monetization XX. was was similar flow as a greater from more working shift

as the employ program monetization organic expect cash less receivable like We generation. to we flow over vehicles free accounts prioritize time

in from enabled of to QX. net X.X cash free The $XX QX to us of under a net turns, reduce billion debt to million decline leverage and turns $X.X flow X.X

earlier, and we leverage reduce to year continue under net our to look As X.X fiscal goal remain track highlighted to accelerate we'll turns by Sandy on with to opportunities longer-term XXXX, for this.

previous forecast Moving more to UNFI, success joined experience my and have driving free and based profitability. process on Slide of XX. I've began at sales largely Since manage to flow we and Previously, been the and a framework leaders in teams UNFI detailed focused doing so. on introducing cash

we better our organization the generation, goals incentivize fiscal objectives as metric have part flow and To in for broader free planning incentive XXXX process. our embedded this cash of

focus management and As our have and Sandy flow the well generation will rigorous remarks, levers organization. to up in that for benefiting Daily identified cash set place to detailed fiscal free close out us financial already review. generating already cash in free XXXX. Obtaining an will enable us in important And lean practices are depend routines us plans, believe which free in this improvement cash are routines controllable have flow improving fiscal flow one is XXXX his starting on significant we of fiscal way return sustained we meaningful daily strong management we put helped action XXXX. and that

our phase across the this We lean have senior training team initial our leadership roll to broadly organization. begun have out for and of completed more

moves and and the for stronger a decisions cash Associates actions out will of organization. how daily sense get influence into how

appropriate actions corrective can aggressively across and measure goals reflected. learning can be operating and frequently taken more company the real-time more against more goals will where so quickly We and be these metrics results set

that future will short-term look wins UNFI accomplishments balance with longer-term success. position to further savings for will breakthrough cost We

our on year benchmarks long-term across dimensions and and fiscal advance high all vision of goals to our ratio say continuous of drive that XXXX, As are this defined improvement for a long-term organization. based short- do the

XX. Looking at Slide

We and fiscal XXXX generating at highly the have financial on previous guidance our performance improvement in upper continuous fiscal XXXX. end are focused closed our of in

of As outlined the expected to $XXX ranges the the in our EBITDA on fiscal million be that week range to of XXrd adjusted range basis. of to release, sales comparable an for increase in a billion, $XX.X midpoint of expected guidance when X.X% at $XXX adjusting XXXX fiscal XX-week press the an $XX.X increase are the an XXXX; compared billion to million, for at in increases midpoint X% include and

overall our from we adjusted grow expect with digits first they actions to quarter We in in revised the expected cadence compared dollars take and rate reflects EBITDA the year QX year. executing first to sequentially strategy expand over results mid-single margin fiscal to prior the to This the our of benefit will to quarter. XXXX adjusted QX EBITDA plan how

we're range share, the mentioned, see in adjusted on could annual of generating our an for fiscal XXXX. XXrd I adjusted margin fluctuations Sandy week when expansion. strategy, over the of an focused Xx increase to As EBITDA $X.XX midpoint $X.XX adjusting per quarter-to-quarter: at revised In EPS

We $XXX million continue to spent expect cloud $XXX XXXX. fiscal capital approximately spending, including from to be the dollars implementation down million, in for

allocate as up our million one in DC, approximately leverage. $XXX flow, almost $XXX as usage-based we construction. We CapEx plan in automation to generate to project, Sarasota maintenance reducing our to net million investments of continued free safety cash and believe year-over-year, debt well will which plan and we under Our improving include already the able be completion spending

guidance Sandy I to are that longer-term X.X% ranges free also Sandy well of is applies the flow provided earlier. call recurring As steady-state based stated, cash longer-term over which what all these will on of metrics to goal sales. Note operations, our generate

which benefits to expect we decision spoke for distribution operating close save made centers, As to. X us, he Sandy a customer will strategic cash generate provide on future and costs mentioned, we owned the

outlook. We XXXX X-year outlook the but incremental described to earlier. plan initiatives these included objectives for fiscal of This first financial the business year will Sandy continue any is lines in evaluate yet opportunities other strategic not our and along have

can better creation we and focused We realize year billion-plus our the financial embedded will and value stable large, realize in $XX that objectives potential executing this significant organic continue to so fully business. our be on growth

Flipping during services advantage action to the to took suppliers to a become from and our foundation the products as the drive fiscal XXXX market. benefit to retailers strive business Slide to fiscal all XX. expect more XXXX efficient continued and full partner we in and strengthen bring we of improvement to decisive to We

more been of confident can prior and value is over opportunity There to X future Having create our about vital improving of shareholders. efficiencies, we and aspect generate so is company for from here much months which experience. for I'm even my the generating our returns the processes now, a

year line deleveraging. progress. With to please expect updating that, of XXXX be look operator, on a to fiscal I for We our delivery open questions. and you forward the

Operator

Your first from of Guggenheim. comes [Operator Instructions] Heinbockel line the John question with

John Heinbockel

the I comes of you the to Sandy, your role said conventional of most business that Because from in the natural, start wanted and on is with profitability growing. view portfolio, right?

revenue, it So of and to billion to somewhere. conventional, know the you're probably giving up $X.X $X flat billion that role get means or I

will that there closures close? more beyond out the I system think well? assume. warehouses of and accounts of Billings do conventional part as you in don't And that this managed Is you Bismarck, So be you

James Alexander Douglas

the of view customers and our the products in What more network that to consumer towards we portfolio need that make returns. Ultimately, see the sense invested and sure is and of that the better-for-you broad-based generating the that is you effort have our clearly product an all our trending seek possible want. supply rationalization think in our I capital as to our natural we as is that chain products. efficient have is best is

this at and for customers there And we're material and products. focus big inside the conventional our be both addressable we the we part will of a about, we believe designed market serve. of But talked ours that's amounts So stage, natural of also heritage.

John Heinbockel

is X% X Matteo. that inflation, that -- sides you think of a can So gains going in to hour, can your wage be sort forward given right? for X% Where is just side productivity then And X% you that the drive flip of in is the think right? then of to maybe to do aspect labor per Do supply-demand? And number offset here, And rate the you wage right? productivity there's to the the rate is productivity Okay. you lean X%, the of one, cases Can inflation two? speak rate right, labor idea -- excess inflation?

Giorgio Tarditi

Yes, Two you question. for John, thank things. the

So first throughput of the productivity more always than inflation. our pressure all, is goal from and offset through to

correct, are pressure already a points without waste, you point, the we renegs goal of while proof pinning between our percentage continue productivity we necessarily to network. of some to to how down through remove number and continue lean, do So is drive center that out and large cases and we some then have the hour will improve distribution see labor. But on good inflation per

So clearly to labor standpoint pressure in is to midterm, productivity. with plan offset long from continue term, any the cost more a

Operator

question Sachs. the Goldman Jordan of next from Leah comes with line Your

Leah Jordan

much vendor to walk stabilization? And opportunities, could takes through puts in your be think inflation and deceleration gross What your we in there? coming a could outlook. you how the should if How outlook are for year? some given you seeing the margin seeing promotions Just 'XX and us about then procurement tailwind

Giorgio Tarditi

you. Thank Yes.

So a here. thoughts couple of

guiding looking EBITDA term. high all, the of in a the with we're single-digit to kind on we're $XXX And on million at midpoint guidance, million of $XXX First long general growth million. $XXX of

that, will into pressure from And benefits and expect XXXX. these customer XXXX -- to shrink great we that have actions two. XXXX mix continue mix is from continue into broadly what like also in gross great of we to expect profit, obviously, between kind balancing to given the Relative results so

That pre-pandemic expect to -- of to we is kind to of don't from us gross mix. Relative back part help profit, pressure probably so balance to optimization sorry, between from to and relative specific of going of see the benefit promotions, going the to 'XX DC network shrink the the XXXX, through mentioned, profit benefits business. gross Sandy But still As be the going the remargin and the question 'XX. on see some promotions levels. we and is

I want of pre-pandemic have we improvement you to to Sandy, kind add back for levels. if but to the So now, improvement level modeled significant not know of some don't that?

James Alexander Douglas

I view covered Yes, the think well. you really wholesale

I a give that higher margin point think and tailwind professional our our they margin customers, be and would value us for for us. digital create the added services because they're

focus, of a which a is margin they're so part go-forward our strategy. And of big big our part

Leah Jordan

And see supporting just if for you seeing wanted the I trends important follow-up, Wholesale you your detail Great. are there could retail that to What to is operate? environment provide as demand the just where more business my you how banners And segment. competitive and on within your business well?

James Alexander Douglas

of in Yes. the performance had brand. mean leader Twin Twin a a last years. our It's it the retail business, Minnesota, think as Cities. It's couple market about I Cities business. Cub It's some challenging over the

strategy, And with performance many, improve be competitive like collaborative. a a in got they're we're initiatives working performance. And plan on standpoint, constructive And the that to against a local mentioned our Cub And players. new there to We there. national the I and we're the team range that's there. From a again, pursuing strategies that's built. differentiation there structure. are for years the is player of to I new up and underway franchisees. strong are a unique closely optimistic Cub building have that competing We've will It's number widest of a come, being think improve the very franchisees increasingly

Operator

with comes line Carden question of UBS. Mark from next the Your

Mark Carden

Great.

you conventionals the grow a between which prioritizing independent lot Would of chains expect the sense. other? plan, how into Digging X-year what makes than balance of faster on the years? conventionals, and your much natural, in organic, So over you're few are next though, doing you're growth you one about to thinking

James Alexander Douglas

well. one it's Mark, from to is, XX,XXX approximate of amongst on the we performance doing other base yes, to retailers see dodging see vary organic and ethnic But really We generalize. based not as and our the retailer quite well-positioned natural And and the positioning. What right question. in faster retail segment we literally specializations specialty growing other well now. are and their also find hard sort the retailers to I'm

others And store are some just and are one who them brilliant operators of merchants, larger. are

the So base customer find all future. who really tomorrow is our to then and you they win winners all than going wherever did But yesterday. across the to see they are of in are from better can to help them you'll those winners over entire try our do And job market.

Mark Carden

makes more signs know that are I for seeing how your your you been business? a front? on is sense. historically, geared step That services, change of on any traction and higher-margin And it's Okay. but then natural towards professional trending organic conventional,

James Alexander Douglas

Yes. as with focus, a it base. general business. conventional outgrow Well, we've Services our continue up customer a business, was significantly the -- across been said, services you but our more ramping it to originated

do seeing the resell. we don't mentioned is aggregate, capability, earlier, business think very we're it either any interest and where about we're generally we what then and services both we latest I on services we about technology or example. is And across customers, place can is products and scale insight add them the natural And typically, media base. the bullish help as And conventional the retail that network they board. or customer to And

Operator

Fargo. of next Kelly comes the Edward Wells Your question from with line

Edward Kelly

like improved in, 'XX. a kind of EBITDA leg back the correct? portion My think this to XXXX I tell of of of the already seems and level high Is growth, that single-digit it first you of think, is what of we in 'XX us as pertains first like that growth question, year about growth the it multiyear an but just locks as half EBITDA

James Alexander Douglas

guide growth what this Ed, We the fiscal year as that and say, is Matteo's it would plan single-digit remarks, the compounded 'XX. for also the starts. was the build rate X-year believe high guide will is in I for is the and

expected he because that early BDO first that's first part quarter being the into year the the the building will and mid-single said to second are implemented the digits. be as productivity in half. half, get be the initiatives number we Matteo of And and of or the

a to So digits year obviously, mid-single year. it's number get but and very the through end as so second digits think a cycled initiatives that come to high whole then for over But to half the upper about of multiyear the early, the sort story. single in the the year. some half have new year, being first of the full they were benefit Last at

Edward Kelly

Got it.

Okay. impact that us seeing on ability on own trends and the there? That it's to your customers' there, drive having Can to And better P&L. I that promo sense. makes about the then maybe having vendor update it's also that wanted you the your you're impact and you ask volume

James Alexander Douglas

varies continue below company, What is Consumer are starting continuing but pre-pandemic to back. -- spending still obviously the levels. seeing is promotions grow. come to companies products to by they're They're we're Yes.

data of dollars the that for for called we suppliers improve get growth last and a spend Matteo suppliers, typically that of our laser we're amount simplify they through the customers our and to to, program, one we've who way suppliers developed and suppliers slightly. to particularly are new because that in to don't our units XX more customer go-to-market base, all into providing service through our by customers. I to over trade and for called our As the investment smaller like mentioned where help to on maximum up when of the the opens customers continuing spend way customers. the for to from used can be very their they lot which to by alluded profitable more And to fees XX our growth are we our customers is trying grow, we so grow. operate driving that benefit. supplier the year company reducing our to benefit program focused And The of impact merchants new obviously them suppliers on starting energy also we see growth-oriented suppliers promote our

Operator

of comes Andrew next Your from question line with Wolf the CL King.

Andrew Paul Wolf

customer and just sort Could provide color you the those more referenced press of increased said concentrated the more maybe segments? new release you a example? between across of for Or think volume currently? the intra-quarter I know I things. is supernatural, step-up lot it drove increased two uniform that the penetration, also with on And kind was and also in what volume customers

James Alexander Douglas

that describe So continued the us a saw differentiating we bigger and then the had natural quarter. in where then we And slower in that saw probably existing deep -- the do for in it's of to is them sort a first I growth Andy. customers, were expanded the but beyond that And expansion smaller. further specialty would we fourth quarter. We the a was clearly, at rate. were I'll growth accelerate number customers, the and of with reported go natural, to work But that of customers couple we specific in improve significantly start conventional into accelerate segments as in organic as general

role: factors, So industry playing of with those customers they our -- broader a of then all our X expansion customers. success the and certain the were

Andrew Paul Wolf

Got it.

less there X.X%. in or helpful. all tell Okay. of sales mean a Just the now, you you're volumes Or Matteo. it probably sounds down just least difference running differential. just maybe but come that me up down? That's kind more there is square I better in other Can understand how trying guiding midpoint optimization? or at X% like the you're and is if expectations maybe for quarter, to little And network to to settle inflation to for

Giorgio Tarditi

a Thanks asking. very that's Yes, for question. good

So a couple thoughts of here.

as So Sandy the and primarily starting are tracking favorably, week they trending natural fiscal strength in mentioned, started as specialty our said favorably. script, through business. in And of XX, the volumes we the

trend And this continued has into the so year. far,

on would or early. continues, be a But going I to a possible guiding we're to able standpoint, which case X% billion our It's it's X% so why that trend outlook, $XX.X month of $XX.X $XX.X if the kind on growth X%, to case is standpoint. volume think of of we're this imply is very midpoint only outperform year-over-year, XX. it billion of second billion.

have we the to approach dynamic trying that we and comfortable believe outlook. continue setting And feel outlook. a forecast. at backdrop. the if conservative will midpoint the we we're a market billion this reflects see And relook billion So current I to volume $XX.X to with pragmatic this sustaining, to $XX.X

mind network DC bear got the we that the at going again continue that Now thing playbook is we we in to are while optimization. and to to the see look improving, the volume

of coming from so that in closures. specialty will fact DC in balance the may with continue see what we and contraction organic the revenues And we growth on we to see terms

Andrew Paul Wolf

to Okay. already guidance? be the in And contemplated of is determined is there? what did still in you more is just any closures kind Or that

Giorgio Tarditi

Yes, be determined. still to

are So ongoing. announced then improving at And and Billings to the cost operating and Bismarck we continue serve look and customers efficiency our while position. opportunities to

Operator

with next Capital comes Markets. the Kelly Bania Your line of question from BMO

Kelly Bania

of what just primarily in little the chains we should vision or that of should Can walk a the you coming that, the strategy impact optimization channel? us year impacts or help us magnitude sales we network through deeper presume there? not you but independents supernatural the both strategy this Can in is And terms understand and expect years? just the that

James Alexander Douglas

of is capability strategy Sandy. the network an And perspective. The it's Kelly, as optimization and the it X-year a plan. our about as is core an we way technology a efficiency from the can to optimize footprint, part how think assortment automation, well

for network fit purpose customers into a rationalizing And network today. that's for we're a modern that's built decades over really been

side of the have So the and it's business focused on of legacy a principally DCs the where are. lot DCs conventional

and network service, being investments anyway. metrics technology natural built customer way around on customer-backed we're by the returns in flow. DC it's And Most of our all and the enabled technology. built technology But cash been capital has making excellent and regional of it's free

is X closures. I'd make The we announce point did other

a DC will employing close. sometime opening York, our which technology is a all be That of on We an and adjacent significant in also will be expansion which going to newest spring. DC is we automated have next announced Manchester, in also Pennsylvania,

net on but the in involved with There metrics, DCs lot will a closure customer foremost. be always to of improve there's strategy. a So returns capital first and

Kelly Bania

a new just your this volatility varies fee any or customer And competitors volatility how terms and structure little structure should of of margins structure new fee of or feedback -- be you in this can lack from in marketplace? on the about more structure? fee bit And talk of we margins impacts Okay. consolidated the from considering seasonality

James Alexander Douglas

suppliers. A our faster that that action I'll by I you not Sure. What suppliers be say collecting should we're of do are to facets fees. the that program fees for would consistent example. Suppliers is pay question. an in see slotting you enrolled more who give allow number and from

once is the an shelf. get So much together goal fastest we a DC, faster decide being or item right for to we faster with of that

structure for and you standpoint, a competitive to earning competitors. more and and need consistent All by of alignment for simpler and strategy supplier to is this for us. From faster designed ask retailer action fee to create value the suppliers then really our make

and invest partner them the and be by cycle. And help it's to it creates how customer early. see Our the goal doing on distributor is valuable return virtuous a and have our they goes. so, with make most so that they're then in seeking it suppliers base that We'll it that opportunity see

We more and through trying of do enrolled promotional subscription and more listening today. that dollars spend as we the and to suppliers' be plenty the that getting to have a kind allow we on implementation about spend time, to better, earn up like growth retailer midstream retailers. go. But show to and of are number directly come. more feedback their should and in suppliers over with it a we're flow we're it and can And we're ways of make the I'd say

Kelly Bania

then one helpful. for other That's And Okay. one me. just

the are these that your with planning 'XX over In next of X these on terms of and what of today media professional the of means side, customer kind the you digital components? from fiscal just and retail in base what services understand growth guess can X years us really services, some I are you help and engaged services percent

James Alexander Douglas

about Yes. I'll give ways a thinking of you that. of couple

are our highly older, more analog services Some penetrated. of

expect new, a and highly. We're have seeing process are need, services services. an We saw use accelerate effectively New strong we customers it for curation forward. whatever digital growth only to and as therefore, I'll they're it media last and and where not we retail years, services And X penetrated the example. our in going

is media billion advertising $XXX going to Retail a be business.

they have the have that and returns access We to of could experience investment on and some didn't with worked companies consumer a the kind to into where Our customers create a it. bigger it facility players. get their products with same of partner invest

to penetration team to participate and have next years figure successful. in existing that professional need that then that are for of but have they opportunities our wait be out services would to We like in drive to for looking don't that a digital services so customers things to what's

Operator

the question comes with of Chuck Research. line final from Cerankosky Your Northcoast

Charles Cerankosky

think got series and delivering the where quarters recovery How team sensitive management price repeated plan Natural your inflation-weary, environment to confident deleveraging. United the do about economic here sensitive, you We've the of refreshingly very a yet sounds consumer is is?

James Alexander Douglas

Chuck, super question. good

in helping business think to that be sure the make on recovery and actions self-help I customers focused taking alongside. healthy we're successful own our our controllable our plan is

then Needs for in the using, a make taking them actions sure other cost for Matteo management disciplines market lean tightly challenge as that us, are sure outlined, to is and for make purpose is meeting not principles we're fit the the managed to our structure environment. and

the our customer that our So customers the the But they sensitive. tools We're very price to balanced give outlook hard to consumer is, is said, as are. in. appeal in you very to it's working environment the where

still but a still growth are important. lowered Obviously, Value standpoint, prices high. inflation down is percentage has from

on there. in terms based things our of 'XX. growth, is we initiative on fiscal to our built do control the program important profitability we we are an to need that own controllables. confidence Brands+ performance the focused But Our some in And

Charles Cerankosky

centers of Sandy amount talk selling of cash you from timing those X might Matteo, about the get and you could Good. them? or what distribution

Giorgio Tarditi

Thanks, Chuck. question. Good Yes.

So of a couple thoughts here.

process We team value. these we're and the We're the starting marketing with time the operations, are for that being phasing trade X not going to down are facilities. we for clear

We do cut economics. are going up not that rush a market the We're there. opportunities to into in there transaction to believe good

as so response through disciplined acquisitions we'll we'll the update a implemented an months. through on provide and dispositions But that. next So few we go both far, capital and that and go process we've marketing the process, again, we positive through started go

Operator

closing I'll This concludes to turn Sandy the Douglas for question-and-answer the session. call remarks.

James Alexander Douglas

you, operator. Thank

And simultaneously His focused are We and flow great that actions taken demonstrate to I'm broadly. We've suppliers accomplish. leadership first to as shareholders. With on confident UNFI customers valuable suppliers is turn, has the process customers, in I and we our for create grow on flow strategy, team in of UNFI of complete, seeking plan, value management the our aligned embark improving it will plan is well complementary. gives our we're senior leadership The Matteo's team and execute free sets believe on strengthening and significant And to delivering value well. earlier, focused skill on suppliers, been that improvement. I X-year and are while a associates already will emphasizes emphasis for and as new operational help highly cash me driving onboarding, outlined and sustainable our our confidence customers, addition which, which cash executing free many efficiency, year and that our ability team. we succeed. Matteo our

the you do and in suppliers, for together. thank For our we customers partnership your continued we business

of you UNFI each each our today, thanks other. to our for communities the business, customers, everything and associates our that you our for For listening do

forward thank in our for us. in for updating look you I place that this trust morning. we again you shareholders, for Thanks December. on the continue our progress you joining And to to us

Operator

joining. for This you concludes thank call. today's conference We

disconnect your lines. now You may

United Natural Foods (UNFI) 1 Oct 242024 Q4 Earnings call transcript