United Natural Foods, Inc.

presentation, there will be an opportunity to ask questions. To ask a question, you may press star followed by the number one on your telephone keypad. To withdraw your question, you may press star followed by the number one again. I will now turn the call over to Steve Blomquist, VP of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us on UNFI's second quarter fiscal 2025 earnings conference call. By now, you should have received a copy of the earnings release issued this morning. The press release and earnings presentation, which management will speak to, are available under the investor section of the company's website on the events tab. We've also included a supplemental disclosure file in Microsoft Excel with key financial information. Joining me for today's call are Sandy Douglas, our Chief Executive Officer, and Matteo Tarditi, our President and Chief Financial Officer. Sandy and Matteo will provide a business update, after which we'll take your questions. Before we begin, I'd like to remind everyone that today's comments made by management may contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that might involve significant risk and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Actual results may differ materially from the results discussed in these forward-looking statements. I'd like to point out during today's call, management will refer to certain non-GAAP financial measures. Definitions and reconciliations to the most comparable GAAP financial measures are included in our press release and the end of our presentation. And finally, as we stated on our last call, we've changed the sales reporting on the face of our press release, which now breaks down our revenues in a manner consistent with the previously announced realignment of our wholesale business. To provide historical context, last week we posted prior quarter sales under this updated approach to our website. We believe these changes will give you additional insight and transparency into our multi-year strategy and sales performance. I now ask you to turn to slide six of our presentation as I turn the call over to Sandy.

Thanks, Steve, and thank you, everyone, for joining us this morning. As we shared in our release, we delivered another quarter of improving financial results and operational execution while achieving key milestones of our multi-year plan. Our results also reflect solid sales growth and adjusted EBITDA growth of over 13%. and significant improvement in year-over-year free cash flow. As a result, we've again raised our full-year outlook for all financial objectives other than capital spending and remain firmly on track to deliver our longer-term fiscal 2027 targets and to continue creating sustainable shareholder value. Today, I'm going to focus on three key areas. First, I'll describe how we are working to increase the value we offer to both customers and suppliers. Then I'll discuss some accomplishments within our multi-year plan and highlights from our results in the quarter. We've outlined our strategy of adding value for our customers and suppliers while also improving UNFI's free cash flow and strengthening our balance sheet. And we believe our recent results validate our strategy and demonstrate that we're delivering improving operational execution as we work to embed lean management practices throughout the organization. We've strived to learn and adapt as we've implemented our plans, soliciting feedback from both customers and suppliers on what we're doing well and, importantly, areas in which we can improve. We routinely evaluate our potential to improve and create more value for all of our key stakeholders. And by so doing, we believe our value creation opportunity continues to grow. We expect our focus on continuous improvement to increasingly benefit the customers and suppliers we partner with, driving greater sales and profit opportunity for our mutual businesses. In turn, we anticipate we will continue to create sustainable shareholder value. We have identified new areas to add value and increase effectiveness and efficiency. This includes opportunities to improve the customer and supplier experience in our wholesale distribution business, expand services catering to key customer groups that have historically been underserved by the digital and professional services available in our industry, elevate our merchandising capabilities, and make targeted investments in our private brands program to ensure that we have the unique, innovative items retailers need to drive relevance and value with consumers. These are all opportunities that would be incremental to our multi-year strategy. While we've been identifying new areas of value creation, we've also had another strong quarter achieving key milestones within our multi-year plan. Matteo's leadership has helped us become more effective and efficient Across our operations, and our teams are embracing the principles and power behind lean. We've extended lean daily management into additional distribution centers and continue to see indications of success, including reducing shrink down to the 2nd, lowest level as a percentage of sales in the past 10 quarters. Lean daily management is now practiced at 9 and we plan to continue to methodically expand. this discipline across our network. Importantly, these practices not only strengthen our operating efficiency, but also deliver improvements in effectiveness and accuracy that benefit our customers and suppliers. We also continue improving our effectiveness and efficiency through targeted optimization within our distribution network. We successfully consolidated our Fort Wayne, Indiana distribution center in mid-February, and transferred its volume to other more modern and efficient facilities nearby. Our previously closed DC and Billings is also now under contract, and the sale is expected to be completed in the fourth quarter of this year, with proceeds to be utilized to further reduce net debt. Our Fort Wayne and Bismarck DCs are actively being marketed, and as we've mentioned, we will not trade time for value as we seek to maximize our proceeds from these sales. As part of our network optimization, we're also working to evolve select customer relationships to drive win-win solutions that are mutually beneficial to both parties. We've already completed extensive work across our customer base to improve key agreements, and in most cases, we've successfully achieved mutually beneficial outcomes for UNFI and our customers. We're now focused on doing the same for a few remaining agreements. While our goal is always to reach a win-win agreement, when a win-win agreement is not possible, we'll explore a mutually agreeable exit plan. In all cases, we are continuing to take actions that support our customers and suppliers and accelerate our multi-year financial targets to create shareholder value. Lastly, as we announced in January, we have taken steps to realign our wholesale business into two product-centered divisions that we expect will enable us to offer more differentiated and tailored solutions to customers and suppliers. One division will be focused on conventional grocery products, and the other will be focused on natural organic specialty and fresh products. The basis of our multi-year strategy was a deep understanding of the unique ways that we can add value for customers that are included in the growing 90 billion plus target market we previously described. We believe these new more focused divisions supported by centers of excellence that will scale enterprise-wide capabilities will enable our commercial teams to provide a more customized product and service centered experience. This increasingly effective and responsive operating model is intended to help our customers and suppliers differentiate, compete, and grow profitably. We expect most of the organizational changes required to support this realignment will be completed by the end of this fiscal year. The strategic actions we took during fiscal 2024 and thus far in fiscal 2025 to strengthen our foundation and execute our multi-year plan are delivering results. During the first half, adjusted EBITDA grew nearly 14%. Free cash flow generation climbed nearly $250 million, and net leverage has been reduced to 3.7 turns. This is the lowest net leverage level since fiscal 2023. As Matteo will describe in more detail, we expect to build on this performance during the second half of the year. In closing, as we execute our strategy, we become even more confident in our multi-year objectives, long-term trajectory, and in our ability to add value for retailers and suppliers across the food retail industry. As I described, we're also continuing to identify further opportunities for value creation. We are focused on becoming the most efficient value creating partner for our stakeholders, which in turn creates more opportunities for the approximately 27,000 UNFI associates who serve our customers and suppliers with dedication every day. Together, we remain confident our plan will continue to drive sustainable shareholder returns. And with that, let me turn it over to Matteo to discuss our Q2 results, lean progress, and revised outlook. Matteo?