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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 29, 2022
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number: 001-15723
unfi-20220129_g1.jpg
UNITED NATURAL FOODS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
 
05-0376157
(I.R.S. Employer Identification No.)
313 Iron Horse Way, Providence, RI 02908
(Address of principal executive offices) (Zip Code)

 Registrant’s telephone number, including area code: (401) 528-8634
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, par value $0.01UNFINew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.     
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
As of March 4, 2022 there were 58,265,075 shares of the registrant’s common stock, $0.01 par value per share, outstanding.



TABLE OF CONTENTS
 
Part I.
Financial Information
 
 
 
 
 
 
 
 

2

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions, except for par amounts)
January 29,
2022
July 31,
2021
ASSETS  
Cash and cash equivalents$45 $41 
Accounts receivable, net1,241 1,103 
Inventories, net2,426 2,247 
Prepaid expenses and other current assets152 157 
Current assets of discontinued operations 2 
Total current assets3,864 3,550 
Property and equipment, net1,764 1,784 
Operating lease assets1,097 1,064 
Goodwill20 20 
Intangible assets, net855 891 
Deferred income taxes42 57 
Other long-term assets159 157 
Long-term assets of discontinued operations 2 
Total assets$7,801 $7,525 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Accounts payable$1,737 $1,644 
Accrued expenses and other current liabilities328 341 
Accrued compensation and benefits223 243 
Current portion of operating lease liabilities145 135 
Current portion of long-term debt and finance lease liabilities122 120 
Current liabilities of discontinued operations 4 
Total current liabilities2,555 2,487 
Long-term debt2,309 2,175 
Long-term operating lease liabilities988 962 
Long-term finance lease liabilities30 35 
Pension and other postretirement benefit obligations21 53 
Other long-term liabilities215 299 
Total liabilities6,118 6,011 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 5.0 shares; none issued or outstanding
  
Common stock, $0.01 par value, authorized 100.0 shares; 58.8 shares issued and 58.2 shares outstanding at January 29, 2022; 57.0 shares issued and 56.4 shares outstanding at July 31, 2021
1 1 
Additional paid-in capital596 599 
Treasury stock at cost(24)(24)
Accumulated other comprehensive loss(9)(39)
Retained earnings1,120 978 
Total United Natural Foods, Inc. stockholders’ equity1,684 1,515 
Noncontrolling interests(1)(1)
Total stockholders’ equity1,683 1,514 
Total liabilities and stockholders’ equity$7,801 $7,525 

See accompanying Notes to Condensed Consolidated Financial Statements.
3

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in millions, except for per share data) 
 13-Week Period Ended26-Week Period Ended
 
January 29,
2022
January 30,
2021
January 29,
2022
January 30,
2021
Net sales$7,416 $6,900 $14,413 $13,584 
Cost of sales6,341 5,905 12,296 11,619 
Gross profit1,075 995 2,117 1,965 
Operating expenses944 870 1,876 1,774 
Restructuring, acquisition and integration related expenses5 18 8 34 
Loss on sale of assets1  1  
Operating income125 107 232 157 
Net periodic benefit income, excluding service cost(10)(17)(20)(34)
Interest expense, net44 51 84 120 
Other, net(2)(2)(1)(3)
Income from continuing operations before income taxes93 75 169 74 
Provision for income taxes25 17 24 16 
Net income from continuing operations68 58 145 58 
Income from discontinued operations, net of tax 3  3 
Net income including noncontrolling interests68 61 145 61 
Less net income attributable to noncontrolling interests(2)(2)(3)(3)
Net income attributable to United Natural Foods, Inc.$66 $59 $142 $58 
  
Basic earnings per share:
Continuing operations$1.13 $1.01 $2.47 $0.99 
Discontinued operations$ $0.04 $ $0.05 
Basic earnings per share$1.13 $1.05 $2.47 $1.04 
Diluted earnings per share:
Continuing operations$1.08 $0.96 $2.33 $0.93 
Discontinued operations$ $0.04 $ $0.05 
Diluted earnings per share$1.08 $1.00 $2.33 $0.98 
Weighted average shares outstanding:
Basic58.3 56.1 57.6 55.7 
Diluted61.0 59.2 61.0 59.1 

See accompanying Notes to Condensed Consolidated Financial Statements.
4

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
(in millions)
13-Week Period Ended26-Week Period Ended
January 29,
2022
January 30,
2021
January 29,
2022
January 30,
2021
Net income including noncontrolling interests$68 $61 $145 $61 
Other comprehensive income (loss):   
Recognition of pension and other postretirement benefit obligations, net of tax1 (1)2 (1)
Recognition of interest rate swap cash flow hedges, net of tax(1)
15 10 28 22 
Foreign currency translation adjustments(2)3 (2)3 
Recognition of other cash flow derivatives, net of tax(2)
1  2  
Total other comprehensive income15 12 30 24 
Less comprehensive income attributable to noncontrolling interests(2)(2)(3)(3)
Total comprehensive income attributable to United Natural Foods, Inc.$81 $71 $172 $82 

(1)Amounts are net of tax expense of $6 million, $3 million, $10 million and $7 million, respectively.
(2)Amounts are net of tax expense of $1 million, $0 million, $1 million and $0 million, respectively.


See accompanying Notes to Condensed Consolidated Financial Statements.

5


UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)
For the 13-week periods ended January 29, 2022 and January 30, 2021
(in millions)
 Common StockTreasury StockAdditional
Paid-in Capital
Accumulated
Other
Comprehensive Loss
Retained EarningsTotal United Natural Foods, Inc.
Stockholders’ Equity
Noncontrolling InterestsTotal Stockholders’ Equity
SharesAmountSharesAmount
Balances at October 30, 202158.7 $1 0.6 $(24)$582 $(24)$1,054 $1,589 $(2)$1,587 
Restricted stock vestings 0.1 — — — (2)— — (2)— (2)
Share-based compensation— — — — 12 — — 12 — 12 
Other comprehensive income— — — — — 15 — 15 — 15 
Distributions to noncontrolling interests— — — — — — — — (1)(1)
Proceeds from issuance of common stock, net— — — — 4 — — 4 — 4 
Net income— — — — — — 66 66 2 68 
Balances at January 29, 202258.8 $1 0.6 $(24)$596 $(9)$1,120 $1,684 $(1)$1,683 
Balances at October 31, 202056.7 $1 0.6 $(24)$572 $(227)$828 $1,150 $(2)$1,148 
Restricted stock vestings 0.1 — — — (2)— — (2)— (2)
Share-based compensation— — — — 11 — — 11 — 11 
Other comprehensive income— — — — — 12 — 12 — 12 
Distributions to noncontrolling interests— — — — — — — — (1)(1)
Net income— — — — — — 59 59 2 61 
Balances at January 30, 202156.8 $1 0.6 $(24)$581 $(215)$887 $1,230 $(1)$1,229 

See accompanying Notes to Condensed Consolidated Financial Statements.

6

UNITED NATURAL FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)
For the 26-week periods ended January 29, 2022 and January 30, 2021
(in millions)
 Common StockTreasury StockAdditional
Paid-in Capital
Accumulated
Other
Comprehensive Loss
Retained EarningsTotal United Natural Foods, Inc.
Stockholders’ Equity
Noncontrolling InterestsTotal Stockholders’ Equity
SharesAmountSharesAmount
Balances at July 31, 202157.0 $1 0.6 $(24)$599 $(39)$978 $1,515 $(1)$1,514 
Restricted stock vestings 1.8 — — — (35)— — (35)— (35)
Share-based compensation— — — — 23 — — 23 — 23 
Other comprehensive income— — — — — 30 — 30 — 30 
Distributions to noncontrolling interests— — — — — — — — (3)(3)
Proceeds from issuance of common stock, net— — — — 9 — — 9 — 9 
Net income— — — — — — 142 142 3 145 
Balances at January 29, 202258.8 $1 0.6 $(24)$596 $(9)$1,120 $1,684 $(1)$1,683 
Balances at August 1, 202055.3 $1 0.6 $(24)$569 $(239)$838 $1,145 $(3)$1,142 
Cumulative effect of change in accounting principle— — — — — — (9)(9)— (9)
Restricted stock vestings 1.5 — — — (11)— — (11)— (11)
Share-based compensation— — — — 23 — — 23 — 23 
Other comprehensive income— — — — — 24 — 24 — 24 
Distributions to noncontrolling interests— — — — — — — — (1)(1)
Net income— — — — — — 58 58 3 61 
Balances at January 30, 202156.8 $1 0.6 $(24)$581 $(215)$887 $1,230 $(1)$1,229 
 
See accompanying Notes to Condensed Consolidated Financial Statements.
7

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
 26-Week Period Ended
(in millions)January 29,
2022
January 30,
2021
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income including noncontrolling interests$145 $61 
Income from discontinued operations, net of tax 3 
Net income from continuing operations145 58 
Adjustments to reconcile net income to net cash provided by operating activities:
  
Depreciation and amortization138 144 
Share-based compensation23 23 
Loss on sale of assets1  
Closed property and other restructuring charges1 3 
Net pension and other postretirement benefit income(20)(34)
Deferred income tax benefit (1)
LIFO charge30 13 
Provision (recoveries) for losses on receivables1 (4)
Non-cash interest expense and other adjustments15 39 
Changes in operating assets and liabilities(291)(34)
Net cash provided by operating activities
43 207 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Payments for capital expenditures(106)(92)
Proceeds from dispositions of assets3 41 
Payments for investments(26) 
Net cash used in investing activities of continuing operations
(129)(51)
Net cash provided by investing activities of discontinued operations
 1 
Net cash used in investing activities
(129)(50)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Proceeds from borrowings of long-term debt 500 
Proceeds from borrowings under revolving credit line2,521 2,666 
Repayments of borrowings under revolving credit line(2,232)(2,538)
Repayments of long-term debt and finance leases(168)(769)
Proceeds from the issuance of common stock and exercise of stock options9  
Payment of employee restricted stock tax withholdings(35)(10)
Payments for debt issuance costs(1)(10)
Distributions to noncontrolling interests(3)(1)
Other (1)
Net cash provided by (used in) financing activities
91 (163)
EFFECT OF EXCHANGE RATE ON CASH  
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS5 (6)
Cash and cash equivalents, at beginning of period40 47 
Cash and cash equivalents, at end of period$45 $41 
Supplemental disclosures of cash flow information:
Cash paid for interest$67 $75 
Cash payments for federal, state, and foreign income taxes, net$ $43 
Leased assets obtained in exchange for new operating lease liabilities$123 $117 
Leased assets obtained in exchange for new finance lease liabilities$1 $ 
Additions of property and equipment included in Accounts payable$16 $31 
 See accompanying Notes to Condensed Consolidated Financial Statements.
8

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


NOTE 1—SIGNIFICANT ACCOUNTING POLICIES
 
Nature of Business

United Natural Foods, Inc. and its subsidiaries (the “Company”, “we”, “us”, “UNFI”, or “our”) is a leading distributor of natural, organic, specialty, produce and conventional grocery and non-food products, and provider of support services to retailers. The Company sells its products primarily throughout the United States and Canada.

Fiscal Year

The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to the second quarter of fiscal 2022 and 2021 relate to the 13-week fiscal quarters ended January 29, 2022 and January 30, 2021, respectively. References to fiscal 2022 and 2021 year-to-date relate to the 26-week fiscal periods ended January 29, 2022 and January 30, 2021, respectively.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Unless otherwise indicated in these Condensed Consolidated Financial Statements, references to the Condensed Consolidated Statements of Operations, the Condensed Consolidated Balance Sheets and the Notes to the Condensed Consolidated Financial Statements exclude all amounts related to discontinued operations.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. In the Company’s opinion, these Condensed Consolidated Financial Statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. However, the results of operations for interim periods may not be indicative of the results that may be expected for a full year. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2021 (the “Annual Report”). There were no material changes in significant accounting policies from those described in the Annual Report.

Discontinued Operations

In the fourth quarter of fiscal 2021, the Company determined it no longer met the held for sale criterion for a probable sale to be completed within 12 months for two of the four stores that were previously included within discontinued operations. As a result, the Company revised its Condensed Consolidated Financial Statements to reclassify two Shoppers stores from discontinued operations to continuing operations. The prior period presented in the Condensed Consolidated Financial Statements have been conformed to the current period presentation. The remaining two stores included in discontinued operations were sold in the second quarter of fiscal 2022.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

9

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows. As of January 29, 2022 and July 31, 2021, the Company had net book overdrafts of $292 million and $268 million, respectively.

Reclassifications

Within the Condensed Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current year presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.

Inventories, Net

Substantially all of the Company’s inventories consist of finished goods. To value discrete inventory items at lower of cost or net realizable value before application of any last-in, first-out (“LIFO”) reserve, the Company utilizes the weighted average cost method, perpetual cost method, the retail inventory method and the replacement cost method. Allowances for vendor funds received from suppliers are recorded as a reduction to Inventories, net and subsequently within Cost of sales upon the sale of the related products. Inventory quantities are evaluated throughout each fiscal year based on actual physical counts in our distribution facilities and stores. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated shortages as of the end of each fiscal year. If the first-in, first-out method had been used, Inventories, net would have been higher by approximately $97 million and $67 million at January 29, 2022 and July 31, 2021, respectively.

NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 eliminates certain exceptions to Topic 740’s general principles. The amendments also improve consistency in and simplify its application. The Company adopted this standard in the first quarter of fiscal 2022. The adoption of this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The temporary guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. ASU 2020-04 is effective from March 12, 2020 and may be applied prospectively through December 31, 2022. In fiscal 2020, the Company elected the initial expedient to assert probability of its hedged interest rate transactions and is currently evaluating the impact the remaining elements of the standard will have on the future cessation of LIBOR rates applicable to the Company.
10

NOTE 3—REVENUE RECOGNITION

Disaggregation of Revenues

The Company records revenue to five customer channels within Net sales, which are described below:

Chains, which consists of customer accounts that typically have more than 10 operating stores and excludes stores included within the Supernatural and Other channels defined below;
Independent retailers, which includes smaller size accounts, including single store and multiple store locations, and group purchasing entities that are not classified within Chains above or Other discussed below;
Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of Whole Foods Market;
Retail, which reflects our Retail segment, including Cub Foods and Shoppers stores, excluding Shoppers stores that were held for sale within discontinued operations; and
Other, which includes international customers outside of Canada, foodservice, eCommerce, conventional military business and other sales.

The following tables detail the Company’s net sales for the periods presented by customer channel for each of its segments. The Company does not record its revenues within its Wholesale reportable segment for financial reporting purposes by product group, and it is therefore impracticable for it to report them accordingly.
11

 Net Sales for the 13-Week Period Ended
(in millions)January 29, 2022
Customer ChannelWholesaleRetailOther
Eliminations(1)
Consolidated
Chains$3,243 $ $ $— $3,243 
Independent retailers1,905   — 1,905 
Supernatural1,453   — 1,453 
Retail 643  — 643 
Other531  50 — 581 
Eliminations— — — (409)(409)
Total$7,132 $643 $50 $(409)$7,416 
Net Sales for the 13-Week Period Ended
(in millions)
January 30, 2021
Customer ChannelWholesaleRetailOther
Eliminations(1)
Consolidated
Chains$3,106 $ $ $— $3,106 
Independent retailers1,701   — 1,701 
Supernatural1,298   — 1,298 
Retail