Tear Sheet: United Natural Foods Inc. Looks to Wrap Up Slow 2024 With Strong Fourth Quarter

In the third quarter of fiscal 2024, S&P Global Ratings-adjusted leverage deteriorated to 6.9x as adjusted EBITDA fell 29% on a trailing 12 months (TTM) basis compared with its last fiscal year ended July 29, 2023. Through the first three quarters of fiscal 2024 (ended April 27, 2024), the company generated a free cash flow deficit of $163 million and has seen sequential declines in TTM EBITDA over the same period. We expect the company?s various strategic turn-around initiatives aimed at restoring profitability (i.e., streamlining the supply chain footprint, cost rationalization, increased working capital efficiency, and reduced capital intensity) to yield results over the next several years. We expect United Natural Foods Inc.'s (UNFI) efforts to improve working capital management

...Rating Component Scores Foreign currency issuer credit rating B/Negative/-- Local currency issuer credit rating B/Negative/-- Business risk Weak Country risk Very Low Industry risk Intermediate Competitive position Weak Financial risk Aggressive Cash flow/leverage Aggressive Anchor b+ Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy Neutral (no impact) Liquidity Adequate (no impact) Management and governance Moderately Negative (no impact) Comparable rating analysis Negative (-1 notch) Stand-alone credit profile b...

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