United Natural Foods, Inc.

If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. And I would now like to turn the conference over to Steve Blomquist, Vice President of Investor Relations. Steve, you may begin.

Good morning, everyone, and thank you for joining us on UNFI's third 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 investors section of the company's website at www.unfi.com. 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 the comments made by management during today's call may contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that might involve significant risks 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 that 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 earnings presentation. 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. Before discussing our Q3 performance, I'd like to comment on the IT system security update we provided yesterday morning. As we disclosed yesterday, the company became aware of unauthorized activity on certain of our IT systems on June 5th. We promptly activated our incident response plan, implemented containment measures, and are working to assess, mitigate, and remediate the incident with the assistance of third party cybersecurity professionals. Pursuant to our business continuity plans, we have implemented workarounds for certain operations in order to continue servicing our customers where possible, and we're continuing to safely bring our systems back online and restore broad-based customer service as soon as possible. Our entire company is focused on serving our customers. Our core values of transparency and doing the right thing serve us well as we manage through this incident and our core principles of our daily operations. We believe we are managing the incident capably with a very strong team of inside and outside professionals, including specialized experts. We will continue to keep our customers, suppliers, and associates regularly updated on our progress and next steps. Now, let me turn to Q3's results. As you saw in this morning's earnings release, we achieved another solid quarter driven by the strength of our customer base and disciplined execution of our multi-year strategic plan. Our results reflect sales growth above the industry benchmark and adjusted EBITDA growth that was meaningfully higher than our sales growth, leading to our highest adjusted EBITDA margin rate in two years. As part of our strategic plan, we expect to continue driving consistent annual margin expansion. This trajectory reflects our continued focus on creating value for customers and suppliers, while also systematically improving processes implementing technology to enhance customer service and strengthening operational efficiency. The third quarter was another quarter of year-over-year improvement in free cash flow, which is now well ahead of our original expectations year-to-date. This has enabled us to reduce net leverage by 1.3 turns compared to last year's third quarter. Based on our third quarter and year-to-date outperformance, We are tracking ahead of the three-year fiscal 2027 financial objectives that we set last year. This gives us even more confidence that we will create long-term, sustainable value for our customers, suppliers, associates, and shareholders. This performance demonstrates that our new, more focused and efficient product-centered wholesale structure is helping us better understand and meet both our customers and suppliers' unique needs in a highly dynamic market. In some cases, we've supported customers with existing and new market expansions through our well-scaled distribution capabilities. In other instances, we are serving new business in incremental categories for a period as retailers reconfigure their supply network. Our strong top line performance this quarter reflects the continued success of our winning customers and UNFI's ability to support their strategies across a variety of unique circumstances. We also recognize that both our customers and suppliers are navigating a dynamic macroeconomic environment, and we're focused on helping them plan for different scenarios, find product alternatives where needed, and remain as competitive as possible. At the start of fiscal year 2025, I also shared that we would sharpen our focus on building win-win relationships with suppliers and customers, which has largely driven profitable growth. Importantly, this process includes taking the right steps to adjust or exit relationships that are not mutually beneficial. Recently, we came to a mutual agreement with Key Food to end our Northeastern distribution agreement and help them transition to another wholesaler that we believe will better fit their needs. This enables UNFI to exit an unprofitable relationship and further optimize our Northeast DC network by ceasing operations at our Allentown facility. Importantly, This will allow us to continue to more efficiently and effectively service our customers and accelerate progress towards achieving our three-year financial objectives. Next, I want to focus on our second strategic objective, which is to become a more efficient and effective company for our customers and suppliers, which in turn is helping us accelerate free cash flow and strengthen our balance sheet. One year ago, during our Q3 fiscal 2024 call, I outlined four foundational initiatives under this objective. One, intensify our network optimization. Second, to focus and reduce annual capital spending. Third, to optimize our cost structure. And fourth, to increase working capital efficiency. We've made significant progress on all four initiatives and we see continuing opportunity to enhance our performance going forward. A good example of the progress we're making in improving execution and reducing waste is through the further implementation of lean daily management. With lean processes now being used in 20 of our 52 distribution centers, we are steadily improving safety, quality, delivering, and cost. and we continue to see significant opportunity for further improvement. Additionally, we've made progress to increase working capital efficiency by reducing our inventory days on hand back to pre-COVID levels, while also continuing to improve controllable fill rates. Fiscal year to date, we've reduced days on hand by over three days compared to the prior year, and we've steadily improved fill rates over the last few quarters. While we're making real progress, we remain focused on continuing to drive fill rate improvements across our network. We said a year ago that we expected to generate up to $100 million in free cash flow during fiscal 2025, and that we would use these funds to reduce debt. One year later, we've surpassed our original target and further improved our balance sheet. And as reflected in our guidance, we expect to generate free cash flow over 50% higher than our initial outlook for the full year. By consistently executing these elements of our multi-year strategic plan and continuing to identify more areas for improvement, we see significant opportunity to accelerate achievement of the three-year fiscal 2025 to fiscal 2027 financial objectives that we set at the end of last year. We believe that our improving execution, adjusted EBITDA, and free cash flow outperformance to date, along with our network optimization proceeds, will lower net leverage to nearly two and a half turns by the end of fiscal 2026, which would be about a year earlier than our previous expectations. After we finalize our fiscal 2026 budgeting process this summer, we plan to update our long-term financial objectives and provide a more in-depth review this fall. In summary, we have work to do to manage the current disruption in our environment, and we are very focused on doing so in a transparent, principled, and customer-focused manner. Above all else, we remain committed to becoming the most efficient, effective, and value-creating partner for our stakeholders, which we expect will help to create sustainable long-term shareholder value. With that, let me turn over the call to Mateo to discuss our Q3 results and our revised outlook. Mateo?