Shares of United Natural Foods (UNFI) took a hit Tuesday after the grocery wholesaler served up third-quarter results that left Wall Street wanting more. The company missed both earnings and revenue estimates, and it tightened its full-year outlook, citing a tougher consumer environment.

Adjusted earnings came in at 77 cents per share, just a penny shy of the 78 cents analysts were looking for. Revenue landed at $7.72 billion, below the $7.80 billion consensus. Sales dropped 4.2% from a year earlier, partly because the company closed a distribution center in Allentown, Pennsylvania, and scaled back project-based work in its natural products business. Those optimization efforts shaved off about 450 basis points from sales growth.

But it wasn't all bad news. Adjusted EBITDA jumped 16.6% year over year to $183 million, and the company ended the quarter with about $1.25 billion in total liquidity as of May 2.

Natural Products Shine, Conventional Drags

The natural products business continues to be a bright spot. Sales there rose more than 4% from last year, driven by demand for natural, organic, fresh, and specialty items. Conventional product sales, however, fell nearly 14% as the company focused on optimizing its portfolio and distribution network.

Retail segment sales declined about 10%, thanks to planned store closures and footprint optimization. Same-store sales dropped roughly 4% from a year earlier.

Cash Flow and Share Buybacks

United Natural Foods generated $98 million in operating cash flow and $54 million in free cash flow during the quarter. It also trimmed net debt to $1.63 billion, pushing its net leverage ratio down to 2.5 times — the lowest level since fiscal 2018.

The company bought back 82,233 shares for about $4 million at an average price of $48.64 per share. Over the first nine months of fiscal 2026, it repurchased roughly 990,000 shares for about $38 million.

A Narrower Path Forward

For the full fiscal year, United Natural Foods narrowed its adjusted earnings guidance to a range of $2.40 to $2.60 per share, compared with its previous forecast of $2.30 to $2.70. Analysts are expecting $2.58 per share. The company also tightened its revenue outlook to between $31.1 billion and $31.3 billion, versus the prior range of $31.0 billion to $31.4 billion. Analysts currently see revenue of $31.31 billion.

Management said it still expects a return to overall sales growth in fiscal 2027, backed by capability expansion and productivity improvements.

Consumer Pressure Mounts

During the earnings call, CEO Sandy Douglas painted a picture of a strained consumer. He said the company is seeing “incremental pressure across the consumer base,” especially among lower-income shoppers. Higher energy prices and reduced Supplemental Nutrition Assistance Program (SNAP) benefits are key headwinds, he noted, adding that consumers are increasingly seeking value as household budgets tighten.

That changing consumer backdrop is making life tougher for grocers and food retailers, according to management.

UNFI Price Action: Shares of United Natural Foods were down 12.35% at $42.25 at the time of publication Tuesday.