United Natural Foods Warns Higher Energy Prices, SNAP Cuts Are Impacting Consumers

United Natural Foods, Inc. (NYSE:UNFI) stock fell Tuesday after the grocery wholesaler reported third-quarter fiscal 2026 results that missed Wall Street expectations and narrowed its full-year outlook. Earnings Miss Expectations Adjusted earnings came in at 77 cents per share, missing analysts’ estimates of 78 cents per share. Revenue totaled $7.72 billion, below the consensus estimate of $7.80 billion. Sales declined 4.2% from a year earlier. The company said optimization initiatives reduced sales by about 450 basis points during the quarter. The decline primarily reflected lower conventional product sales following the closure of the Allentown, Pennsylvania, distribution center and reduced project-based work in the natural products business. Despite the sales decline, adjusted EBITDA increased 16.6% year over year to $183 million. As of May 2, 2026, United Natural Foods had total liquidity of approximately $1.25 billion. Natural Products Business Shows Strength Natural product sales increased more than 4% from the prior year, driven by continued demand for natural, organic, fresh and specialty products. Conventional product sales fell nearly 14%, reflecting portfolio optimization efforts and changes to the company’s distribution network. Retail segment sales declined about 10% as planned store closures and footprint optimization weighed on results. Same-store sales decreased roughly 4% from a year earlier. Cash Flow And Share Repurchases United Natural Foods generated $98 million in operating cash flow and $54 million in free cash flow during the quarter. The company reduced net debt to $1.63 billion and improved its net leverage ratio to 2.5 times, the lowest level since fiscal 2018. During the quarter, the company repurchased 82,233 shares for about $4 million at an average price of $48.64 per share. Through the first nine months of fiscal 2026, it repurchased approximately 990,000 shares for roughly $38 million. Outlook Narrowed For fiscal 2026, United Natural Foods narrowed its adjusted earnings outlook to a range of $2.40 to $2.60 per share, compared with its previous forecast of $2.30 to $2.70 per share. Analysts expect earnings of $2.58 per share. The company also tightened its revenue outlook to between $31.1 billion and $31.3 billion, compared with its prior range of $31.0 billion to $31.4 billion. Analysts currently expect revenue of $31.31 billion. Management said it continues to expect a return to overall sales growth in fiscal 2027, supported by capability expansion and productivity improvements. During the earnings call, CEO Sandy Douglas said the company is seeing “incremental pressure across the consumer base,” particularly among lower-income shoppers. He pointed to higher energy prices and reduced Supplemental Nutrition Assistance Program (SNAP) benefits as key headwinds, adding that consumers continue to seek value as household budgets come under strain. Management said the changing consumer backdrop is contributing to a more challenging operating environment for grocers and food retailers. UNFI Price Action: United Natural Foods shares were down 12.35% at $42.25 at the time of publication on Tuesday, according to Benzinga Pro data. Photo via Shutterstock