REVENUE RECOGNITION

3 Months Ended

Nov. 02, 2019

Revenue from Contract with Customer [Abstract]

NOTE 3—REVENUE RECOGNITION

Disaggregation of Revenues

The Company records revenue to four customer channels, which are described below:


•	Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of Whole Foods Market.


•	Supermarkets, which include accounts that also carry conventional products, and include chain accounts, supermarket independents, and gourmet and ethnic specialty stores.


•	Independents, which include single store and chain accounts (excluding supernatural, as defined above), which carry primarily natural products and buying clubs of consumer groups joined to buy products, and the conventional military business.


•	Other, which includes foodservice, e-commerce and international customers outside of Canada, as well as sales to Amazon.com, Inc.

The following tables detail the Company’s revenue recognition 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)	November 2, 2019
Customer Channel	Wholesale		Other		Eliminations			Consolidated
Supermarkets	$	3,769	$	—	$	—		$	3,769
Supernatural	1,111		—		—			1,111
Independents	758		—		—			758
Other	368		64		(51		)	381
Total	$	6,006	$	64	$	(51	)	$	6,019

	Net Sales for the 13-Week Period Ended
(in millions)	October 27, 2018⁽¹⁾
Customer Channel	Wholesale		Other		Eliminations			Consolidated
Supernatural	$	1,027	$	—	$	—		$	1,027
Supermarkets	930		—		—			930
Independents	667		—		—			667
Other	233		49		(38		)	244
Total	$	2,857	$	49	$	(38	)	$	2,868

(1)

During the first quarter of fiscal 2020, the presentation of net sales by customer channel was adjusted to reflect reclassification of customer types resulting from management’s determination that a customer serviced by both Supervalu and legacy UNFI should be classified as a Supermarket customer given that customer’s operations. In addition, during the second quarter of fiscal 2019, net sales attributable to Supervalu was incorporated into the Company’s definition of sales by customer channel. There was no impact to the Condensed Consolidated Statements of Operations as a result of the reclassification of customer types. As a result of these adjustments, net sales to the Company’s Supermarkets channel for the first quarter of fiscal 2019 increased approximately $223 million compared to the previously reported amounts, while net sales to the Other channel increased approximately $1 million, with an offsetting elimination of the Supervalu customer channel.

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 U.S. and Canada, as international distribution occurs through freight-forwarders. The Company does not have any performance obligations related to international shipments subsequent to delivery to the domestic port.

Sales from the Company’s Wholesale segment to its retail discontinued operations are presented within Net Sales when the Company holds the business for sale with a supply agreement that it anticipates the sale of the retail banner to include upon its disposal. The Company recorded $244.6 million within Net sales from continuing operations attributable to discontinued operations inter-company product purchases in the first quarter of fiscal 2020, which the Company expects will continue subsequent to the sale of certain retail banners. These amounts were recorded at gross margin rates consistent with sales to other similar wholesale customers of the acquired Supervalu business. No sales were recorded within continuing operations for purchases by retail banners that the Company expects to dispose of without a supply agreement, which were eliminated upon consolidation within continuing operations and amounted to $113.0 million in the first quarter of fiscal 2020.

Contract Balances

Accounts and notes receivable are as follows:



(in thousands)	November 2, 2019			August 3, 2019
Customer accounts receivable	$	1,143,836		$	1,063,167
Allowance for uncollectible receivables	(27,812		)	(20,725		)
Other receivables, net	20,900			23,257
Accounts receivable, net	$	1,136,924		$	1,065,699

Customer notes receivable, net, included within Prepaid expenses and other current assets	$	11,235		$	11,912
Long-term notes receivable, net, included within Other assets	$	25,683		$	34,408