Aug. 22 at 7:01 PM
$UNFI is making progress, but I’m still at HOLD. Q3 FY25 showed solid execution: sales
$8.06B (+7.5% y/y), adj. EBITDA
$157M (+20.8%), EPS
$0.44, and
$119M in free cash flow. Leverage improved to 3.3x from 4.6x last year, with a path toward ~2.5x by FY26 if they keep it up.
The network is getting leaner: DC closures, automation in PA, and a big Florida site coming in FY26. But customer concentration and razor-thin margins mean execution must be flawless. The June cyber incident was a hit (
$350–400M in sales,
$40–50M EBITDA), yet FY25 FCF guide still sits at ~
$200M, showing resilience.
Cheap valuation (low P/S, EV/EBITDA) makes the stock look attractive, but the structural low-margin model caps upside until margins expand.
Bottom line: progress is real—better EBITDA, cash, and leverage—but I need 2–3 more quarters of sustained margin gains before upgrading to BUY.
