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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 27, 2024
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
unficoa03.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 1, 2024 there were 59,436,775 shares of the registrant’s common stock, $0.01 par value per share, outstanding.



TABLE OF CONTENTS
 
Part I.
Financial Information
 
 
 
 
 
 
 
Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
 

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 values)
January 27,
2024
July 29,
2023
ASSETS  
Cash and cash equivalents$34 $37 
Accounts receivable, net990 889 
Inventories, net2,311 2,292 
Prepaid expenses and other current assets246 245 
Total current assets3,581 3,463 
Property and equipment, net1,766 1,767 
Operating lease assets1,430 1,228 
Goodwill20 20 
Intangible assets, net685 722 
Deferred income taxes34 32 
Other long-term assets155 162 
Total assets$7,671 $7,394 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Accounts payable$1,722 $1,781 
Accrued expenses and other current liabilities247 283 
Accrued compensation and benefits168 143 
Current portion of operating lease liabilities187 180 
Current portion of long-term debt and finance lease liabilities12 18 
Total current liabilities2,336 2,405 
Long-term debt2,176 1,956 
Long-term operating lease liabilities1,298 1,099 
Long-term finance lease liabilities7 12 
Pension and other postretirement benefit obligations15 16 
Other long-term liabilities147 162 
Total liabilities5,979 5,650 
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; 61.9 shares issued and 59.4 shares outstanding at January 27, 2024; 61.0 shares issued and 58.5 shares outstanding at July 29, 2023
1 1 
Additional paid-in capital616 606 
Treasury stock at cost(86)(86)
Accumulated other comprehensive loss(35)(28)
Retained earnings1,196 1,250 
Total United Natural Foods, Inc. stockholders’ equity1,692 1,743 
Noncontrolling interests 1 
Total stockholders’ equity1,692 1,744 
Total liabilities and stockholders’ equity$7,671 $7,394 

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 27,
2024
January 28,
2023
January 27,
2024
January 28,
2023
Net sales$7,775 $7,816 $15,327 $15,348 
Cost of sales6,740 6,747 13,262 13,183 
Gross profit1,035 1,069 2,065 2,165 
Operating expenses1,010 1,002 2,033 2,002 
Restructuring, acquisition and integration related expenses4 3 8 5 
Loss (gain) on sale of assets and other asset charges5 1 24 (4)
Operating income16 63  162 
Net periodic benefit income, excluding service cost(4)(7)(7)(14)
Interest expense, net40 39 75 74 
Other income, net(1) (1)(1)
(Loss) income before income taxes(19)31 (67)103 
(Benefit) provision for income taxes(5)9 (14)14 
Net (loss) income including noncontrolling interests(14)22 (53)89 
Less net income attributable to noncontrolling interests(1)(3)(1)(4)
Net (loss) income attributable to United Natural Foods, Inc.$(15)$19 $(54)$85 
Basic (loss) earnings per share
$(0.25)$0.32 $(0.92)$1.43 
Diluted (loss) earnings per share
$(0.25)$0.31 $(0.92)$1.38 
Weighted average shares outstanding:
Basic59.4 59.8 59.0 59.3 
Diluted59.4 61.0 59.0 61.3 

See accompanying Notes to Condensed Consolidated Financial Statements.
4

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited)
(in millions)
13-Week Period Ended26-Week Period Ended
January 27,
2024
January 28,
2023
January 27,
2024
January 28,
2023
Net (loss) income including noncontrolling interests$(14)$22 $(53)$89 
Other comprehensive (loss) income: 
Recognition of pension and other postretirement benefit obligations, net of tax1 1 1 1 
Recognition of interest rate swap cash flow hedges, net of tax(1)
(4)(4)(7)14 
Foreign currency translation adjustments2 1 (1)(2)
Recognition of other cash flow derivatives, net of tax(2)
(1)(2) (2)
Total other comprehensive (loss) income(2)(4)(7)11 
Less comprehensive income attributable to noncontrolling interests(1)(3)(1)(4)
Total comprehensive (loss) income attributable to United Natural Foods, Inc.$(17)$15 $(61)$96 

(1)Amounts are net of tax (benefit) expense of $(1) million and $(1) million for the second quarters of fiscal 2024 and 2023, respectively, and $(2) million and $5 million for fiscal 2024 and 2023 year-to-date, respectively.
(2)Amounts are net of tax (benefit) expense of $0 million and $(1) million for the second quarters of fiscal 2024 and 2023, respectively, and $0 million and $(1) million for fiscal 2024 and 2023 year-to-date, 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 27, 2024 and January 28, 2023
(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 28, 202361.9 $1 2.5 $(86)$606 $(33)$1,211 $1,699 $ $1,699 
Share-based compensation— — — — 10 — — 10 — 10 
Other comprehensive loss— — — — — (2)— (2)— (2)
Distributions to noncontrolling interests— — — — — — — — (1)(1)
Net (loss) income— — — — — — (15)(15)1 (14)
Balances at January 27, 202461.9 $1 2.5 $(86)$616 $(35)$1,196 $1,692 $ $1,692 
Balances at October 29, 202260.9 $1 1.0 $(36)$583 $(5)$1,292 $1,835 $ $1,835 
Restricted stock vestings — — — — (2)— — (2)— (2)
Share-based compensation— — — — 11 — — 11 — 11 
Repurchases of common stock— — 0.3 (17)— — — (17)— (17)
Other comprehensive loss— — — — — (4)— (4)— (4)
Net income— — — — — — 19 19 3 22 
Balances at January 28, 202360.9 $1 1.3 $(53)$592 $(9)$1,311 $1,842 $3 $1,845 

See accompanying Notes to Condensed Consolidated Financial Statements.














6

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)
For the 26-week periods ended January 27, 2024 and January 28, 2023
(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 29, 202361.0 $1 2.5 $(86)$606 $(28)$1,250 $1,743 $1 $1,744 
Restricted stock vestings 0.9 — — — (6)— — (6)— (6)
Share-based compensation— — — — 16 — — 16 — 16 
Other comprehensive loss— — — — — (7)— (7)— (7)
Distributions to noncontrolling interests— — — — — — — — (2)(2)
Net (loss) income— — — — — — (54)(54)1 (53)
Balances at January 27, 202461.9 $1 2.5 $(86)$616 $(35)$1,196 $1,692 $ $1,692 
Balances at July 30, 202258.9 $1 0.6 $(24)$608 $(20)$1,226 $1,791 $1 $1,792 
Restricted stock vestings 2.0 — — — (39)— — (39)— (39)
Share-based compensation— — — — 23 — — 23 — 23 
Repurchases of common stock— — 0.7 (29)— — — (29)— (29)
Other comprehensive income— — — — — 11 — 11 — 11 
Distributions to noncontrolling interests— — — — — — — — (2)(2)
Net income— — — — — — 85 85 4 89 
Balances at January 28, 202360.9 $1 1.3 $(53)$592 $(9)$1,311 $1,842 $3 $1,845 

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 27,
2024
January 28,
2023
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net (loss) income including noncontrolling interests$(53)$89 
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
  
Depreciation and amortization152 147 
Share-based compensation16 23 
Gain on sale of assets(7)(9)
Long-lived asset impairment charges21  
Net pension and other postretirement benefit income(7)(14)
Deferred income tax expense 1 
LIFO charge13 50 
Provision (recoveries) for losses on receivables2 (3)
Non-cash interest expense and other adjustments5 8 
Changes in operating assets and liabilities(213)(22)
Net cash (used in) provided by operating activities
(71)270 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Payments for capital expenditures(141)(151)
Proceeds from dispositions of assets11 12 
Payments for investments(12)(4)
Net cash used in investing activities
(142)(143)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Proceeds from borrowings under revolving credit line1,422 1,944 
Proceeds from issuance of other loans14  
Repayments of borrowings under revolving credit line(1,180)(1,861)
Repayments of long-term debt and finance leases(37)(143)
Repurchases of common stock (29)
Payments of employee restricted stock tax withholdings(6)(39)
Distributions to noncontrolling interests(2)(2)
Repayments of other loans (1)
Other(1) 
Net cash provided by (used in) financing activities
210 (131)
EFFECT OF EXCHANGE RATE ON CASH  
NET DECREASE IN CASH AND CASH EQUIVALENTS(3)(4)
Cash and cash equivalents, at beginning of period37 44 
Cash and cash equivalents, at end of period$34 $40 
Supplemental disclosures of cash flow information:
Cash paid for interest$74 $65 
Cash (refunds) payments for federal, state, and foreign income taxes, net$(13)$3 
Leased assets obtained in exchange for new operating lease liabilities$298 $133 
Additions of property and equipment included in Accounts payable$31 $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” or “UNFI”) 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. Fiscal 2024 will contain 53 weeks with the fourth quarter of fiscal 2024 containing 14 weeks. References to the second quarter of fiscal 2024 and 2023 relate to the 13-week fiscal quarters ended January 27, 2024 and January 28, 2023, respectively. References to fiscal 2024 and 2023 year-to-date relate to the 26-week fiscal periods ended January 27, 2024 and January 28, 2023, 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.

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 29, 2023 (the “Annual Report”). There were no material changes in significant accounting policies from those described in the Annual Report.

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.

Reclassifications

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

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 27, 2024 and July 29, 2023, the Company had net book overdrafts of $283 million and $308 million, respectively.

9

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 and cash discounts 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 physical counts in the Company’s distribution facilities and stores. Allowances for inventory shortages are recorded based on the results of these counts. The LIFO reserve was approximately $357 million and $344 million as of January 27, 2024 and July 29, 2023, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements

In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update also require additional disclosures for equity securities subject to contractual sale restrictions. The Company is required to adopt the amendments in this update in the first quarter of fiscal 2025. The Company is in the process of reviewing the provisions of the amendments in this update but does not expect the adoption to have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM. The amendments in this update also expand the interim segment disclosure requirements. The Company is required to adopt the amendments in this update in fiscal 2025, and the interim disclosure requirements will be effective for the Company in the first quarter of fiscal 2026. Early adoption is permitted. The amendments in this update are required to be applied on a retrospective basis. The Company is currently reviewing the provisions of the amendments in this update and evaluating their impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The amendments also require disclosure on an annual basis of income taxes paid disaggregated by federal, state and foreign taxes as well as the amount of income taxes paid by individual jurisdiction. In addition, the amendments require disclosures of disaggregated pretax income and income tax expense and remove the requirement to disclose certain items that are no longer considered cost beneficial or relevant. The Company is required to adopt the amendments in this update in fiscal 2026. Early adoption is permitted. The amendments in this update should be applied on a prospective basis, but can also be applied retrospectively. The Company is currently reviewing the provisions of the amendments in this update and evaluating their impact on the Company’s consolidated financial statements.

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 defined below;
Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of one customer;
Retail, which reflects the Company’s Retail segment, including Cub® Foods and Shoppers® stores; and
Other, which includes international customers outside of Canada, foodservice, eCommerce, conventional military business and other sales.

10

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.
 Net Sales for the 13-Week Period Ended
(in millions)January 27, 2024
Customer ChannelWholesaleRetailOther
Eliminations(1)
Consolidated
Chains$3,266 $ $ $— $3,266 
Independent retailers1,907   — 1,907 
Supernatural1,751   — 1,751 
Retail 631  — 631 
Other563  52 — 615 
Eliminations— — — (395)(395)
Total$7,487 $631 $52 $(395)$7,775 
Net Sales for the 13-Week Period Ended
(in millions)
January 28, 2023
Customer ChannelWholesaleRetailOther
Eliminations(1)
Consolidated
Chains$3,322 $ $ $— $3,322 
Independent retailers1,980   — 1,980 
Supernatural1,659   — 1,659 
Retail 660  — 660 
Other553  56 — 609 
Eliminations— — — (414)(414)
Total$7,514 $660 $56 $(414)$7,816 
 Net Sales for the 26-Week Period Ended
(in millions)January 27, 2024
Customer ChannelWholesaleRetailOther
Eliminations(1)
Consolidated
Chains$6,450 $ $ $— $6,450 
Independent retailers3,806   — 3,806 
Supernatural3,363   — 3,363 
Retail 1,237  — 1,237 
Other1,149  112 — 1,261 
Eliminations— — — (790)(790)
Total$14,768 $1,237 $112 $(790)$15,327 
Net Sales for the 26-Week Period Ended
(in millions)
January 28, 2023
Customer ChannelWholesaleRetailOther
Eliminations(1)
Consolidated
Chains$6,546 $ $ $— $6,546 
Independent retailers3,927   — 3,927 
Supernatural3,172   — 3,172 
Retail 1,273  — 1,273 
Other1,128  116 — 1,244 
Eliminations— — — (814)(814)
Total$14,773 $1,273 $116 $(814)$15,348 
(1)Eliminations primarily includes the net sales elimination of Wholesale to Retail sales and the elimination of sales from segments included within Other to Wholesale.
11


The Company serves customers in the United States and Canada, as well as customers located in other countries. However, all of the Company’s revenue is earned in the United States and Canada, and international distribution occurs through freight-forwarders. The Company does not have any performance obligations on international shipments subsequent to delivery to the domestic port.

Accounts and Notes Receivable Balances

Accounts and notes receivable are as follows:
(in millions)January 27, 2024July 29, 2023
Customer accounts receivable$977 $887 
Allowance for uncollectible receivables (17)(17)
Other receivables, net30 19 
Accounts receivable, net$990 $889 
Notes receivable, net, included within Prepaid expenses and other current assets
$3 $3 
Long-term notes receivable, net, included within Other long-term assets
$7 $7 

In fiscal 2023, the Company entered into an agreement to sell, on a revolving basis, certain customer accounts receivable to a third-party financial institution. Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of January 27, 2024 and July 29, 2023, was approximately $333 million and $310 million, respectively. Net proceeds received are included within cash from operating activities in the Condensed Consolidated Statements of Cash Flows in the period of sale. The loss on sale of receivables was $5 million for the second quarters of fiscal 2024 and 2023, and $10 million and $5 million for fiscal 2024 and 2023 year-to-date, respectively, and is recorded within Loss (gain) on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations.

NOTE 4—PROPERTY AND EQUIPMENT, NET

In fiscal 2024, the Company determined that it was more likely than not that it would dispose of one of its corporate-owned office locations before the end of its previously estimated useful life. As a result, the Company conducted an impairment review and recorded a $21 million non-cash asset impairment charge in fiscal 2024 year-to-date. The fair value utilized in the Company’s impairment review was determined based on the market approach. The impairment charge is recorded within Loss (gain) on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations. There were no asset impairment charges recorded in the second quarter of fiscal 2024 and for fiscal 2023 year-to-date.

NOTE 5—GOODWILL AND INTANGIBLE ASSETS, NET

Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following:
(in millions)WholesaleOther Total
Goodwill as of July 29, 2023
$10 
(1)
$10 
(2)
$20 
Change in foreign exchange rates   
Goodwill as of January 27, 2024
$10 
(1)
$10 
(2)
$20 
(1)Wholesale amounts are net of accumulated goodwill impairment charges of $717 million as of July 29, 2023 and January 27, 2024.
(2)Other amounts are net of accumulated goodwill impairment charges of $10 million as of July 29, 2023 and January 27, 2024.

12

Identifiable intangible assets, net consisted of the following:
January 27, 2024July 29, 2023
(in millions)Gross Carrying
Amount
Accumulated
Amortization
NetGross Carrying
Amount
Accumulated
Amortization
Net
Amortizing intangible assets:
Customer relationships$1,007 $383 $624 $1,007 $354 $653 
Pharmacy prescription files33 25 8 33 22 11 
Operating lease intangibles6 5 1 6 5 1 
Trademarks and tradenames88 61 27 89 57 32 
Total amortizing intangible assets1,134 474 660 1,135 438 697 
Indefinite lived intangible assets:      
Trademarks and tradenames25 — 25 25 — 25 
Intangibles assets, net$1,159 $474 $685 $1,160 $438 $722 
Amortization expense was $18 million for the second quarters of fiscal 2024 and 2023, respectively, and $36 million for fiscal 2024 and 2023 year-to-date, respectively. The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of January 27, 2024 is as shown below:
Fiscal Year:(in millions)
Remaining fiscal 2024$37 
202571 
202667 
202764 
202861 
Thereafter360 
$660 

NOTE 6—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Recurring Fair Value Measurements

The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:
Condensed Consolidated Balance Sheets LocationFair Value at January 27, 2024
(in millions)Level 1Level 2Level 3
Assets:
Interest rate swaps designated as hedging instrumentsPrepaid expenses and other current assets$ $13 $ 
Interest rate swaps designated as hedging instrumentsOther long-term assets$ $1 $ 
Liabilities:
Fuel derivatives designated as hedging instrumentsAccrued expenses and other current liabilities$ $1 $ 
Interest rate swaps designated as hedging instrumentsOther long-term liabilities$ $1 $ 

13

Condensed Consolidated Balance Sheets LocationFair Value at July 29, 2023
(in millions)Level 1Level 2Level 3
Assets:
Interest rate swaps designated as hedging instrumentsPrepaid expenses and other current assets$ $17 $ 
Interest rate swaps designated as hedging instrumentsOther long-term assets$ $5 $ 
Liabilities:
Fuel derivatives designated as hedging instrumentsAccrued expenses and other current liabilities$ $1 $ 

Interest Rate Swap Contracts

The fair values of interest rate swap contracts are measured using Level 2 inputs. The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, SOFR swap rates and credit default swap rates. As of January 27, 2024, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $11 million; a 100-basis point decrease in forward SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $12 million. Refer to Note 7—Derivatives for further information on interest rate swap contracts.

Fair Value Estimates

For certain of the Company’s financial instruments including cash and cash equivalents, receivables, accounts payable, accrued vacation, compensation and benefits, and other current assets and liabilities the fair values approximate carrying amounts due to their short maturities. The fair value of notes receivable is estimated by using a discounted cash flow approach prior to consideration for uncollectible amounts and is calculated by applying a market rate for similar instruments using Level 3 inputs. The fair value of debt is estimated based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs. In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs.
 January 27, 2024July 29, 2023
(in millions)Carrying ValueFair ValueCarrying ValueFair Value
Notes receivable, including current portion$15 $9 $15 $8 
Long-term debt, including current portion$2,180 $2,123 $1,963 $1,903 

NOTE 7—DERIVATIVES

Management of Interest Rate Risk

The Company enters into interest rate swap contracts from time to time to mitigate its exposure to changes in market interest rates as part of its overall strategy to manage its debt portfolio to achieve an overall desired position of notional debt amounts subject to fixed and floating interest rates. Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company’s interest rate swap contracts are designated as cash flow hedges as of January 27, 2024. Interest rate swap contracts are reflected at their fair values in the Condensed Consolidated Balance Sheets. Refer to Note 6—Fair Value Measurements of Financial Instruments for further information on the fair value of interest rate swap contracts.

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Details of active swap contracts as of January 27, 2024, which are all pay fixed and receive floating, are as follows:
Effective DateSwap MaturityNotional Value (in millions)Pay Fixed RateReceive Floating RateFloating Rate Reset Terms
January 11, 2019March 28, 2024100 2.3600 %One-Month Term SOFRMonthly
January 23, 2019March 28, 2024100 2.4250 %One-Month Term SOFRMonthly
November 30, 2018October 31, 2024100 2.7385 %One-Month Term SOFRMonthly
January 11, 2019October 31, 2024100 2.4025 %One-Month Term SOFRMonthly
January 24, 2019October 31, 202450 2.4090 %One-Month Term SOFRMonthly
October 26, 2018October 22, 202550 2.8725 %One-Month Term SOFRMonthly
November 16, 2018October 22, 202550 2.8750 %One-Month Term SOFRMonthly
November 16, 2018October 22, 202550 2.8380 %One-Month Term SOFRMonthly
January 24, 2019October 22, 202550 2.4750 %One-Month Term SOFRMonthly
December 29, 2023June 3, 2027100 3.7525 %One-Month Term SOFRMonthly
December 29, 2023June 3, 2027100 3.7770 %One-Month Term SOFRMonthly
$850 

The Company performs an initial quantitative assessment of hedge effectiveness using the “Hypothetical Derivative Method” in the period in which the hedging transaction is entered. Under this method, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. In future reporting periods, the Company performs a qualitative analysis for quarterly prospective and retrospective assessments of hedge effectiveness. The Company also monitors the risk of counterparty default on an ongoing basis and noted that the counterparties are reputable financial institutions. The entire change in the fair value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Condensed Consolidated Statements of Comprehensive (Loss) Income and subsequently reclassified to earnings in Interest expense, net in the Condensed Consolidated Statements of Operations when the hedged transactions affect earnings.

The location and amount of gains or losses recognized in the Condensed Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pre-tax basis, are as follows:
13-Week Period Ended26-Week Period Ended
January 27, 2024January 28, 2023January 27, 2024January 28, 2023
(in millions)Interest expense, netInterest expense, net
Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
$40 $39 $75 $74 
Gain on cash flow hedging relationships:
Gain reclassified from comprehensive income into earnings$5 $4 $10 $4 

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NOTE 8—LONG-TERM DEBT

The Company’s long-term debt consisted of the following:
(in millions)
Average Interest Rate at
January 27, 2024
Fiscal Maturity YearJanuary 27,
2024
July 29,
2023
Term Loan Facility8.72%2026$645 $670 
ABL Credit Facility6.56%20271,054 812 
Senior Notes6.75%2029500 500 
Other secured loans4.43%20254 9 
Debt issuance costs, net(18)(22)
Original issue discount on debt(5)(6)
Long-term debt, including current portion2,180 1,963 
Less: current portion of long-term debt(4)(7)
Long-term debt$2,176 $1,956 

Senior Notes

On October 22, 2020, the Company issued $500 million of unsecured 6.750% senior notes due October 15, 2028 (the “Senior Notes”). The Senior Notes, which are presented net of debt issuance costs of $6 million as of January 27, 2024 in the Condensed Consolidated Balance Sheets, are guaranteed by each of the Company’s subsidiaries that are borrowers under or that guarantee the ABL Credit Facility or the Term Loan Facility (defined below).

ABL Credit Facility

The revolving credit agreement dated as of June 3, 2022 (the “ABL Loan Agreement”), by and among the Company (the “U.S. Borrower”) and UNFI Canada (the “Canadian Borrower” and, together with the U.S. Borrower, the “Borrowers”), and the financial institutions that are parties thereto as lenders (collectively, the “ABL Lenders”), Wells Fargo Bank, N.A. as administrative agent for the ABL Lenders, and the other parties thereto, provides for a secured asset-based revolving credit facility (the “ABL Credit Facility”), of which up to $2,600 million is available to the Borrowers, including a U.S. Dollar equivalent of $100 million sublimit for borrowings in Canadian dollars. Under the ABL Loan Agreement, the Borrowers may, at their option, increase the aggregate amount of the ABL Credit Facility in an amount of up to $750 million without the consent of any ABL Lenders not participating in such increase, subject to certain customary conditions and applicable lenders committing to provide the increase in funding. There is no assurance that additional funding would be available.

The Borrowers’ obligations under the ABL Credit Facility are guaranteed by most of the Company’s wholly-owned subsidiaries (collectively, the “Guarantors”), subject to customary exceptions and limitations. The Borrowers’ obligations under the ABL Credit Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on certain accounts receivable, inventory and certain other assets arising therefrom or related thereto of the Borrowers and Guarantors (including substantially all of their deposit accounts, collectively, the “ABL Assets”) and (ii) a second-priority lien on all of the Borrowers’ and Guarantors’ assets that do not constitute ABL Assets, in each case, subject to customary exceptions and limitations.

Availability under the ABL Credit Facility is subject to a borrowing base (the “Borrowing Base”), which is based on 90% of eligible accounts receivable, plus 90% of eligible credit card receivables, plus 90% to 92.5% of the net orderly liquidation value of eligible inventory, plus 90% of eligible pharmacy receivables, plus certain availability related to pharmacy prescription files, after adjusting for customary reserves, but at no time shall exceed the lesser of the aggregate commitments under the ABL Credit Facility (currently $2,600 million) or the Borrowing Base.

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The assets included in the Condensed Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis were as follows:
(in millions)January 27,
2024
July 29,
2023
Certain inventory assets included in Inventories, net$1,850 $1,861 
Certain receivables included in Accounts receivable, net584 571 
Pharmacy prescription files included in Intangible assets, net8 11 
Total$2,442 $2,443 

As of January 27, 2024, the Borrowers’ Borrowing Base was $2,606 million, reflecting the advance rates described above and $105 million of reserves, which is above the $2,600 million limit of availability. This resulted in total availability of $2,600 million for loans and letters of credit under the ABL Credit Facility. The Company’s unused credit under the ABL Credit Facility was as follows:
(in millions)January 27, 2024
Total availability for ABL loans and letters of credit$2,600 
ABL loans outstanding(1,054)
Letters of credit outstanding(150)
Unused credit$1,396 

The applicable interest rates, unutilized commitment fees and letter of credit fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Loan Agreement), and were as follows:
Range of Facility Rates and Fees (per annum)January 27, 2024
Borrowers’ applicable margin for base rate loans
0.00% - 0.25%
0.00 %
Borrowers’ applicable margin for SOFR and BA loans(1)
1.00% - 1.25%
1.00 %
Unutilized commitment fees
0.20%
0.20 %
Letter of credit fees
1.125% - 1.375%
1.125 %
(1) The U.S. Borrower utilizes SOFR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.

Term Loan Facility

The term loan agreement dated as of October 22, 2018 (as amended, the “Term Loan Agreement”), by and among the Company and SUPERVALU INC. (“Supervalu” and, collectively with the Company, the “Term Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “Term Lenders”), Credit Suisse, as administrative agent for the Term Lenders, and the other parties thereto, provides for a $1,800 million senior secured first lien term loan (the “Term Loan Facility”). The net proceeds from the Term Loan Facility were used to finance the Supervalu acquisition and related transaction costs. Any amounts then outstanding will be payable in full on October 22, 2025.

The obligations under the Term Loan Facility are guaranteed by the Guarantors, subject to customary exceptions and limitations. The Term Borrowers’ obligations under the Term Loan Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ ABL Assets, in each case, subject to customary exceptions and limitations, including an exception for owned real property with net book values of less than $10 million. As of January 27, 2024 and July 29, 2023, there was $608 million and $617 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets.

The Company must prepay loans outstanding under the Term Loan Facility no later than 130 days after the fiscal year end in an aggregate principal amount equal to a specified percentage (which percentage ranges from 0 to 75 percent depending on the Consolidated First Lien Net Leverage Ratio as of the last day of such fiscal year) of Excess Cash Flow (as defined in the Term Loan Agreement), minus certain types of voluntary prepayments of indebtedness made during such fiscal year. The potential amount of prepayment from Excess Cash Flow in fiscal 2024 that may be required in fiscal 2025 is not reasonably estimable as of January 27, 2024.
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As of January 27, 2024, the Company had borrowings of $645 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $5 million and an original issue discount on debt of $5 million. As of January 27, 2024, no amount of the Term Loan Facility was classified as current.

As of January 27, 2024, the borrowings under the Term Loan Facility bear interest at rates that, at the Term Borrowers’ option, can be either: (i) a base rate plus a margin of