Yet Another Value Podcast Kingdom Capital's David Bastian on United Natural Foods $UNFI
Jul 25, 2025
In this conversation, David Bastion from Kingdom Capital, an expert in value investing and stock analysis, dives deep into United Natural Foods Inc. (UNFI). He examines the hurdles UNFI faces post-merger and the implications of a recent cyberattack on its operations. David highlights management's strategic pivot, the importance of partnerships with Whole Foods and Amazon, and the need for recovery amidst inflation challenges. With a focus on the company's path to sustainable earnings growth, he offers invaluable insights for potential investors navigating this turnaround.
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UNFI's Troubled Turnaround Journey
- United Natural Foods Inc. (UNFI) faced major issues after its SuperValu merger and COVID over-earning.
- The recent cyberattack shutdown lasted about 10 days, leading to initial operational paralysis.
Management Confidence vs Sell-Side Skepticism
- UNFI's management is confident in reaching $650 million EBITDA by 2026-2027 through multiple strategies.
- Sell-side analysts remain cautious due to past failed executions and lack of convincing upgrades.
Margin Challenges and Competitive Benchmarks
- UNFI lags peers in EBITDA margin at below 2%, while competitors run 2.5% to 4%.
- Management aims to restore margins by improving efficiency and leveraging the natural and organic specialty niche.