Re: United Nat Foods (UNFI) 37.90 +6.14 (+19.33%) - Beat on Earnings & Guides Higher
Peeled off 20% of my position selling a few yesterday and more today. Will hold the rest at prices at/above $40 then close out the remaining shares at/above $45.
I have position in taxable accout w/ avg cost $6.56/share; IRA/ROTH at 7.37/share
The Compound Annual Growth Rate (CAGR) for UNFI stock bought on January 20, 2020, and sold on September 30, 2025, is approximately 36.03%.
Here is the breakdown of the calculation:
| Metric | Value | | Purchase Price (Beginning Value) | $6.56 | | Sale Price (Ending Value) | $37.84 | | Time Period (Number of Years) | 5.6947 years |
The big move in United Natural Foods (UNFI) stock is likely due to the company's Fourth Quarter and Full Year Fiscal 2025 earnings report, specifically beating analyst expectations and raising long-term growth targets, which often outweighs near-term challenges.
Here's a breakdown of the key factors driving the stock's significant jump:
- Earnings Beat (Adjusted EPS):
- UNFI reported an Adjusted Loss Per Share of ($0.11) for Q4 2025.
- This loss was significantly better than the Zacks Consensus Estimate of a loss of ($0.27) per share.
- Beating the consensus EPS estimate by such a wide margin, especially in a quarter known to have significant headwinds (like the cyber incident mentioned below), provides a major positive surprise to the market.
- Revenue Beat:
- The company's Q4 net sales of $7.7 billion also topped the Zacks Consensus Estimate of approximately $7.63 billion.
- Raised Long-Term Financial Targets:
- The most significant factor for the long-term outlook appears to be the acceleration of multi-year objectives. Management announced:
- They now expect average annual Adjusted EBITDA growth from fiscal 2024 to 2027 to be in the low double-digit range, which is well above their prior expectations.
- They anticipate reducing Net Leverage to approximately 2.5x by year-end fiscal 2026, which is one year ahead of their previous plan.
- They set a $300 million free cash flow target for fiscal 2026.
- Resilience Despite Headwinds:
- The Q4 results were achieved despite the significant negative impact from a cyber incident in June 2025, which the company estimated reduced Q4 net sales by about $400 million and Adjusted EBITDA by about $50 million. The fact that the company still outperformed analyst expectations for the quarter and raised its future outlook suggests their strategic initiatives and core business performance are stronger than previously modeled by the market.
In summary, the market is primarily reacting to the better-than-expected Adjusted EPS and the more optimistic long-term outlook provided by the company, which suggests an accelerating turnaround and better debt management than analysts had feared. This shift in the future profitability and debt trajectory is what is driving the stock's dramatic re-rating, even if the sector's traditional P/E ratio seems low. The stock is being priced for future growth and profitability improvement rather than its current trailing earnings (which are impacted by the recent cyber incident and prior challenges). |
