10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 28, 2023

or 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-15723

UNITED NATURAL FOODS, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	05-0376157 (I.R.S. Employer Identification No.)
313 Iron Horse Way, Providence, RI 02908
(Address of principal executive offices) (Zip Code)

 Registrant’s telephone number, including area code: (401) 528-8634

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.01	UNFI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.     

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of March 3, 2023 there were 59,397,933 shares of the registrant’s common stock, $0.01 par value per share, outstanding.

TABLE OF CONTENTS

Part I.	Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets (unaudited)	3
	Condensed Consolidated Statements of Operations (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited)	6
	Condensed Consolidated Statements of Cash Flows (unaudited)	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
Part II.	Other Information
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
	Signatures	43

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in millions, except for par values)

	January 28, 2023		July 30, 2022
ASSETS
Cash and cash equivalents	$	40	$	44
Accounts receivable, net	992		1,214
Inventories, net	2,512		2,355
Prepaid expenses and other current assets	197		184
Total current assets	3,741		3,797
Property and equipment, net	1,719		1,690
Operating lease assets	1,218		1,176
Goodwill	20		20
Intangible assets, net	783		819
Other long-term assets	154		126
Total assets	$	7,635	$	7,628
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	1,797	$	1,742
Accrued expenses and other current liabilities	249		260
Accrued compensation and benefits	166		232
Current portion of operating lease liabilities	161		156
Current portion of long-term debt and finance lease liabilities	23		27
Total current liabilities	2,396		2,417
Long-term debt	2,065		2,109
Long-term operating lease liabilities	1,107		1,067
Long-term finance lease liabilities	18		23
Pension and other postretirement benefit obligations	18		18
Deferred income taxes	14		8
Other long-term liabilities	172		194
Total liabilities	5,790		5,836
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 5.0 shares; none issued or outstanding	—		—
Common stock, $0.01 par value, authorized 100.0 shares; 60.9 shares issued and 59.6 shares outstanding at January 28, 2023; 58.9 shares issued and 58.3 shares outstanding at July 30, 2022	1		1
Additional paid-in capital	592		608
Treasury stock at cost	(53)		(24)
Accumulated other comprehensive loss	(9)		(20)
Retained earnings	1,311		1,226
Total United Natural Foods, Inc. stockholders’ equity	1,842		1,791
Noncontrolling interests	3		1
Total stockholders’ equity	1,845		1,792
Total liabilities and stockholders’ equity	$	7,635	$	7,628

See accompanying Notes to Condensed Consolidated Financial Statements.

3

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in millions, except for per share data) 

	13-Week Period Ended				26-Week Period Ended
	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net sales	$	7,816	$	7,416	$	15,348	$	14,413
Cost of sales	6,747		6,341		13,183		12,296
Gross profit	1,069		1,075		2,165		2,117
Operating expenses	1,002		944		2,002		1,876
Restructuring, acquisition and integration related expenses	3		5		5		8
Loss (gain) on sale of assets	1		1		(4)		1
Operating income	63		125		162		232
Net periodic benefit income, excluding service cost	(7)		(10)		(14)		(20)
Interest expense, net	39		44		74		84
Other income, net	—		(2)		(1)		(1)
Income before income taxes	31		93		103		169
Provision for income taxes	9		25		14		24
Net income including noncontrolling interests	22		68		89		145
Less net income attributable to noncontrolling interests	(3)		(2)		(4)		(3)
Net income attributable to United Natural Foods, Inc.	$	19	$	66	$	85	$	142
Basic earnings per share	$	0.32	$	1.13	$	1.43	$	2.47
Diluted earnings per share	$	0.31	$	1.08	$	1.38	$	2.33
Weighted average shares outstanding:
Basic	59.8		58.3		59.3		57.6
Diluted	61.0		61.0		61.3		61.0

See accompanying Notes to Condensed Consolidated Financial Statements.

4

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(in millions)

	13-Week Period Ended				26-Week Period Ended
	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net income including noncontrolling interests	$	22	$	68	$	89	$	145
Other comprehensive (loss) income:
Recognition of pension and other postretirement benefit obligations, net of tax	1		1		1		2
Recognition of interest rate swap cash flow hedges, net of tax(1)	(4)		15		14		28
Foreign currency translation adjustments	1		(2)		(2)		(2)
Recognition of other cash flow derivatives, net of tax(2)	(2)		1		(2)		2
Total other comprehensive (loss) income	(4)		15		11		30
Less comprehensive income attributable to noncontrolling interests	(3)		(2)		(4)		(3)
Total comprehensive income attributable to United Natural Foods, Inc.	$	15	$	81	$	96	$	172

(1)Amounts are net of tax (benefit) expense of $(1) million and $6 million for the second quarters of fiscal 2023 and 2022, respectively, and $5 million and $10 million for fiscal 2023 and 2022 year-to-date, respectively.

(2)Amounts are net of tax (benefit) expense of $(1) million and $1 million for the second quarters of fiscal 2023 and 2022, respectively, and $(1) million and $1 million for fiscal 2023 and 2022 year-to-date, respectively.

See accompanying Notes to Condensed Consolidated Financial Statements.

5

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the 13-week periods ended January 28, 2023 and January 29, 2022

(in millions)

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total United Natural Foods, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balances at October 29, 2022	60.9	$	1	1.0	$	(36)	$	583	$	(5)	$	1,292	$	1,835	$	—	$	1,835
Restricted stock vestings	—	—		—	—		(2)		—		—		(2)		—		(2)
Share-based compensation	—	—		—	—		11		—		—		11		—		11
Repurchases of common stock	—	—		0.3	(17)		—		—		—		(17)		—		(17)
Other comprehensive loss	—	—		—	—		—		(4)		—		(4)		—		(4)
Net income	—	—		—	—		—		—		19		19		3		22
Balances at January 28, 2023	60.9	$	1	1.3	$	(53)	$	592	$	(9)	$	1,311	$	1,842	$	3	$	1,845
Balances at October 30, 2021	58.7	$	1	0.6	$	(24)	$	582	$	(24)	$	1,054	$	1,589	$	(2)	$	1,587
Restricted stock vestings	0.1	—		—	—		(2)		—		—		(2)		—		(2)
Share-based compensation	—	—		—	—		12		—		—		12		—		12
Other comprehensive income	—	—		—	—		—		15		—		15		—		15
Distributions to noncontrolling interests	—	—		—	—		—		—		—		—		(1)		(1)
Proceeds from issuance of common stock, net	—	—		—	—		4		—		—		4		—		4
Net income	—	—		—	—		—		—		66		66		2		68
Balances at January 29, 2022	58.8	$	1	0.6	$	(24)	$	596	$	(9)	$	1,120	$	1,684	$	(1)	$	1,683

See accompanying Notes to Condensed Consolidated Financial Statements.

6

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the 26-week periods ended January 28, 2023 and January 29, 2022

(in millions)

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total United Natural Foods, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balances at July 30, 2022	58.9	$	1	0.6	$	(24)	$	608	$	(20)	$	1,226	$	1,791	$	1	$	1,792
Restricted stock vestings	2.0	—		—	—		(39)		—		—		(39)		—		(39)
Share-based compensation	—	—		—	—		23		—		—		23		—		23
Repurchases of common stock	—	—		0.7	(29)		—		—		—		(29)		—		(29)
Other comprehensive income	—	—		—	—		—		11		—		11		—		11
Distributions to noncontrolling interests	—	—		—	—		—		—		—		—		(2)		(2)
Net income	—	—		—	—		—		—		85		85		4		89
Balances at January 28, 2023	60.9	$	1	1.3	$	(53)	$	592	$	(9)	$	1,311	$	1,842	$	3	$	1,845
Balances at July 31, 2021	57.0	$	1	0.6	$	(24)	$	599	$	(39)	$	978	$	1,515	$	(1)	$	1,514
Restricted stock vestings	1.8	—		—	—		(35)		—		—		(35)		—		(35)
Share-based compensation	—	—		—	—		23		—		—		23		—		23
Other comprehensive income	—	—		—	—		—		30		—		30		—		30
Distributions to noncontrolling interests	—	—		—	—		—		—		—		—		(3)		(3)
Proceeds from issuance of common stock, net	—	—		—	—		9		—		—		9		—		9
Net income	—	—		—	—		—		—		142		142		3		145
Balances at January 29, 2022	58.8	$	1	0.6	$	(24)	$	596	$	(9)	$	1,120	$	1,684	$	(1)	$	1,683

See accompanying Notes to Condensed Consolidated Financial Statements.

7

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests	$	89	$	145
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	147		138
Share-based compensation	23		23
(Gain) loss on sale of property and equipment	(9)		1
Closed property and other restructuring charges	—		1
Net pension and other postretirement benefit income	(14)		(20)
Deferred income tax expense	1		—
LIFO charge	50		30
Provision for losses on receivables	(3)		1
Non-cash interest expense and other adjustments	8		15
Changes in operating assets and liabilities	(22)		(291)
Net cash provided by operating activities	270		43
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for capital expenditures	(151)		(106)
Proceeds from dispositions of assets	12		3
Payments for investments	(4)		(26)
Net cash used in investing activities	(143)		(129)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under revolving credit line	1,944		2,521
Repayments of borrowings under revolving credit line	(1,861)		(2,232)
Repayments of long-term debt and finance leases	(143)		(168)
Repurchases of common stock	(29)		—
Proceeds from the issuance of common stock and exercise of stock options	—		9
Payments of employee restricted stock tax withholdings	(39)		(35)
Payments for debt issuance costs	—		(1)
Distributions to noncontrolling interests	(2)		(3)
Repayments of other loans	(1)		—
Net cash (used in) provided by financing activities	(131)		91
EFFECT OF EXCHANGE RATE ON CASH	—		—
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(4)		5
Cash and cash equivalents, at beginning of period	44		40
Cash and cash equivalents, at end of period	$	40	$	45
Supplemental disclosures of cash flow information:
Cash paid for interest	$	65	$	67
Cash payments for federal, state, and foreign income taxes, net	$	3	$	—
Leased assets obtained in exchange for new operating lease liabilities	$	133	$	123
Leased assets obtained in exchange for new finance lease liabilities	$	—	$	1
Additions of property and equipment included in Accounts payable	$	31	$	16

 See accompanying Notes to Condensed Consolidated Financial Statements.

8

UNITED NATURAL FOODS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

United Natural Foods, Inc. and its subsidiaries (the “Company” or “UNFI”) is a leading distributor of natural, organic, specialty, produce and conventional grocery and non-food products, and provider of support services to retailers. The Company sells its products primarily throughout the United States and Canada.

Fiscal Year

The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to the second quarter of fiscal 2023 and 2022 relate to the 13-week fiscal quarters ended January 28, 2023 and January 29, 2022, respectively. References to fiscal 2023 and 2022 year-to-date relate to the 26-week fiscal periods ended January 28, 2023 and January 29, 2022, respectively.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. In the Company’s opinion, these Condensed Consolidated Financial Statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. However, the results of operations for interim periods may not be indicative of the results that may be expected for a full year. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 30, 2022 (the “Annual Report”). There were no material changes in significant accounting policies from those described in the Annual Report.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows. As of January 28, 2023 and July 30, 2022, the Company had net book overdrafts of $263 million and $266 million, respectively.

Reclassifications

Within the Condensed Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current period presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.

9

Inventories, Net

Substantially all of the Company’s inventories consist of finished goods. To value discrete inventory items at lower of cost or net realizable value before application of any last-in, first-out (“LIFO”) reserve, the Company utilizes the weighted average cost method, perpetual cost method, the retail inventory method and the replacement cost method. Allowances for vendor funds and cash discounts received from suppliers are recorded as a reduction to Inventories, net and subsequently within Cost of sales upon the sale of the related products. Inventory quantities are evaluated throughout each fiscal year based on actual physical counts in the Company’s distribution facilities and stores. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated variances as of the end of each fiscal year. The LIFO reserve was approximately $275 million and $225 million as of January 28, 2023 and July 30, 2022, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update also require additional disclosures for equity securities subject to contractual sale restrictions. The Company is required to adopt this guidance in the first quarter of fiscal 2025. The Company is in the process of reviewing the provisions of the new standard but does not expect the adoption to have a material impact on the Company’s consolidated financial statements.

NOTE 3—REVENUE RECOGNITION

Disaggregation of Revenues

The Company records revenue to five customer channels within Net sales, which are described below:

•Chains, which consists of customer accounts that typically have more than 10 operating stores and excludes stores included within the Supernatural and Other channels defined below;

•Independent retailers, which includes smaller size accounts, including single store and multiple store locations, and group purchasing entities that are not classified within Chains above or Other discussed below;

•Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of one customer;

•Retail, which reflects the Company’s Retail segment, including Cub Foods and Shoppers stores, and

•Other, which includes international customers outside of Canada, foodservice, eCommerce, conventional military business and other sales.

10

The following tables detail the Company’s Net sales 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)	January 28, 2023
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	3,322	$	—	$	—	$	—	$	3,322
Independent retailers	1,980		—		—		—		1,980
Supernatural	1,659		—		—		—		1,659
Retail	—		660		—		—		660
Other	553		—		56		—		609
Eliminations	—		—		—		(414)		(414)
Total	$	7,514	$	660	$	56	$	(414)	$	7,816
	Net Sales for the 13-Week Period Ended
(in millions)	January 29, 2022
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	3,243	$	—	$	—	$	—	$	3,243
Independent retailers	1,905		—		—		—		1,905
Supernatural	1,453		—		—		—		1,453
Retail	—		643		—		—		643
Other	531		—		50		—		581
Eliminations	—		—		—		(409)		(409)
Total	$	7,132	$	643	$	50	$	(409)	$	7,416
	Net Sales for the 26-Week Period Ended
(in millions)	January 28, 2023
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	6,546	$	—	$	—	$	—	$	6,546
Independent retailers	3,927		—		—		—		3,927
Supernatural	3,172		—		—		—		3,172
Retail	—		1,273		—		—		1,273
Other	1,128		—		116		—		1,244
Eliminations	—		—		—		(814)		(814)
Total	$	14,773	$	1,273	$	116	$	(814)	$	15,348
	Net Sales for the 26-Week Period Ended
(in millions)	January 29, 2022
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	6,325	$	—	$	—	$	—	$	6,325
Independent retailers	3,655		—		—		—		3,655
Supernatural	2,831		—		—		—		2,831
Retail	—		1,245		—		—		1,245
Other	1,055		—		106		—		1,161
Eliminations	—		—		—		(804)		(804)
Total	$	13,866	$	1,245	$	106	$	(804)	$	14,413

(1)Eliminations primarily includes the net sales elimination of Wholesale to Retail sales and the elimination of sales from segments included within Other to Wholesale.

11

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 United States and Canada, and international distribution occurs through freight-forwarders. The Company does not have any performance obligations on international shipments subsequent to delivery to the domestic port.

Accounts and Notes Receivable Balances

Accounts and notes receivable are as follows:

(in millions)	January 28, 2023		July 30, 2022
Customer accounts receivable	$	989	$	1,213
Allowance for uncollectible receivables	(17)		(18)
Other receivables, net	20		19
Accounts receivable, net	$	992	$	1,214
Notes receivable, net, included within Prepaid expenses and other current assets	$	5	$	6
Long-term notes receivable, net, included within Other long-term assets	$	10	$	12

During the second quarter of fiscal 2023, the Company entered into a purchase agreement with a third-party financial institution for the sale of certain customer accounts receivable up to a maximum outstanding amount of $300 million, without recourse, subject to eligibility criteria established by the financial institution. Pursuant to the terms of the agreement, certain customer receivables are sold to the third-party financial institution on a revolving basis, subject to certain limitations. After these sales, the Company does not retain any interest in the receivables. The Company’s continuing involvement in transferred receivables is limited to servicing the receivables.

Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of January 28, 2023, was approximately $292 million. Net proceeds received are included within net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows in the period of sale. The loss on sale of receivables was $5 million during the second quarter of fiscal 2023 and is recorded within Loss (gain) on sale of assets in the Condensed Consolidated Statements of Operations.

NOTE 4—GOODWILL AND INTANGIBLE ASSETS, NET

Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following:

(in millions)	Wholesale			Other			Total
Goodwill as of July 30, 2022	$	10	(1)	$	10	(2)	$	20
Change in foreign exchange rates	—			—			—
Goodwill as of January 28, 2023	$	10	(1)	$	10	(2)	$	20

(1)Wholesale amounts are net of accumulated goodwill impairment charges of $717 million as of July 30, 2022 and January 28, 2023.

(2)Other amounts are net of accumulated goodwill impairment charges of $10 million as of July 30, 2022 and January 28, 2023.

12

Identifiable intangible assets, net consisted of the following:

	January 28, 2023						July 30, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Amortizing intangible assets:
Customer relationships	$	1,007	$	324	$	683	$	1,007	$	294	$	713
Pharmacy prescription files	33		20		13		33		18		15
Operating lease intangibles	6		4		2		6		4		2
Trademarks and tradenames	84		55		29		84		51		33
Total amortizing intangible assets	1,130		403		727		1,130		367		763
Indefinite lived intangible assets:
Trademarks and tradenames	56		—		56		56		—		56
Intangibles assets, net	$	1,186	$	403	$	783	$	1,186	$	367	$	819

Amortization expense was $18 million and $18 million for the second quarters of fiscal 2023 and 2022, respectively, and $36 million and $36 million for fiscal 2023 and 2022 year-to-date, respectively. The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of January 28, 2023 is as shown below:

Fiscal Year:	(in millions)
Remaining fiscal 2023	$	36
2024	72
2025	70
2026	66
2027	63
Thereafter	420
	$	727

NOTE 5—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Recurring Fair Value Measurements

The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:

	Condensed Consolidated Balance Sheets Location	Fair Value at January 28, 2023
(in millions)		Level 1		Level 2		Level 3
Assets:
Interest rate swaps designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	17	$	—
Interest rate swaps designated as hedging instruments	Other long-term assets	$	—	$	5	$	—
Liabilities:
Fuel derivatives designated as hedging instruments	Accrued expenses and other current liabilities	$	—	$	1	$	—

13

	Condensed Consolidated Balance Sheets Location	Fair Value at July 30, 2022
(in millions)		Level 1		Level 2		Level 3
Assets:
Fuel derivatives designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	3	$	—
Interest rate swaps designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	3	$	—
Interest rate swaps designated as hedging instruments	Other long-term assets	$	—	$	1	$	—
Liabilities:
Interest rate swaps designated as hedging instruments	Other long-term liabilities	$	—	$	2	$	—

Interest Rate Swap Contracts

The fair values of interest rate swap contracts are measured using Level 2 inputs. The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, SOFR swap rates and credit default swap rates. As of January 28, 2023, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $12 million; a 100-basis point decrease in forward SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $12 million. Refer to Note 6—Derivatives for further information on interest rate swap contracts.

Fair Value Estimates

For certain of the Company’s financial instruments including cash and cash equivalents, receivables, accounts payable, accrued vacation, compensation and benefits, and other current assets and liabilities the fair values approximate carrying amounts due to their short maturities. The fair value of notes receivable is estimated by using a discounted cash flow approach prior to consideration for uncollectible amounts and is calculated by applying a market rate for similar instruments using Level 3 inputs. The fair value of debt is estimated based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs. In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs.

	January 28, 2023				July 30, 2022
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable, including current portion	$	20	$	14	$	23	$	17
Long-term debt, including current portion	$	2,077	$	2,091	$	2,123	$	2,153

NOTE 6—DERIVATIVES

Management of Interest Rate Risk

The Company enters into interest rate swap contracts from time to time to mitigate its exposure to changes in market interest rates as part of its overall strategy to manage its debt portfolio to achieve an overall desired position of notional debt amounts subject to fixed and floating interest rates. Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company’s interest rate swap contracts are designated as cash flow hedges as of January 28, 2023. Interest rate swap contracts are reflected at their fair values in the Condensed Consolidated Balance Sheets. Refer to Note 5—Fair Value Measurements of Financial Instruments for further information on the fair value of interest rate swap contracts.

14

Details of active swap contracts as of January 28, 2023, which are all pay fixed and receive floating, are as follows:

Effective Date	Swap Maturity	Notional Value (in millions)		Pay Fixed Rate		Receive Floating Rate	Floating Rate Reset Terms
November 16, 2018	March 31, 2023	150		2.7770	%	One-Month Term SOFR	Monthly
January 23, 2019	March 31, 2023	50		2.4245	%	One-Month Term SOFR	Monthly
November 30, 2018	September 30, 2023	50		2.6980	%	One-Month Term SOFR	Monthly
October 26, 2018	October 31, 2023	100		2.7880	%	One-Month Term SOFR	Monthly
January 11, 2019	March 28, 2024	100		2.3600	%	One-Month Term SOFR	Monthly
January 23, 2019	March 28, 2024	100		2.4250	%	One-Month Term SOFR	Monthly
November 30, 2018	October 31, 2024	100		2.7385	%	One-Month Term SOFR	Monthly
January 11, 2019	October 31, 2024	100		2.4025	%	One-Month Term SOFR	Monthly
January 24, 2019	October 31, 2024	50		2.4090	%	One-Month Term SOFR	Monthly
October 26, 2018	October 22, 2025	50		2.8725	%	One-Month Term SOFR	Monthly
November 16, 2018	October 22, 2025	50		2.8750	%	One-Month Term SOFR	Monthly
November 16, 2018	October 22, 2025	50		2.8380	%	One-Month Term SOFR	Monthly
January 24, 2019	October 22, 2025	50		2.4750	%	One-Month Term SOFR	Monthly
		$	1,000

The Company performs an initial quantitative assessment of hedge effectiveness using the “Hypothetical Derivative Method” in the period in which the hedging transaction is entered. Under this method, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. In future reporting periods, the Company performs a qualitative analysis for quarterly prospective and retrospective assessments of hedge effectiveness. The Company also monitors the risk of counterparty default on an ongoing basis and noted that the counterparties are reputable financial institutions. The entire change in the fair value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Condensed Consolidated Statements of Comprehensive Income and subsequently reclassified to earnings in Interest expense, net in the Condensed Consolidated Statements of Operations when the hedged transactions affect earnings.

The location and amount of gains or losses recognized in the Condensed Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pre-tax basis, are as follows:

	13-Week Period Ended				26-Week Period Ended
	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
(in millions)	Interest expense, net				Interest expense, net
Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	39	$	44	$	74	$	84
Loss on cash flow hedging relationships:
Loss reclassified from comprehensive income into earnings	$	4	$	(10)	$	4	$	(21)

15

NOTE 7—LONG-TERM DEBT

The Company’s long-term debt consisted of the following:

(in millions)	Average Interest Rate at January 28, 2023	Fiscal Maturity Year	January 28, 2023		July 30, 2022
Term Loan Facility	7.69%	2026	$	670	$	800
ABL Credit Facility	5.46%	2027	923		840
Senior Notes	6.75%	2029	500		500
Other secured loans	5.01%	2024-2025	16		23
Debt issuance costs, net			(25)		(29)
Original issue discount on debt			(7)		(11)
Long-term debt, including current portion			2,077		2,123
Less: current portion of long-term debt			(12)		(14)
Long-term debt			$	2,065	$	2,109

Senior Notes

On October 22, 2020, the Company issued $500 million of unsecured 6.750% senior notes due October 15, 2028 (the “Senior Notes”). The Senior Notes, which are presented net of debt issuance costs of $7 million as of January 28, 2023 and July 30, 2022 in the Condensed Consolidated Balance Sheets, are guaranteed by each of the Company’s subsidiaries that are borrowers under or that guarantee the ABL Credit Facility or the Term Loan Facility (defined below).

ABL Credit Facility

The revolving credit agreement dated as of June 3, 2022 (the “ABL Loan Agreement”), by and among the Company (the “U.S. Borrower”), UNFI Canada (the “Canadian Borrower” and, together with the U.S. Borrower, the “Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ABL Lenders”), Wells Fargo Bank, N.A. as administrative agent for the ABL Lenders, and the other parties thereto, provides for a secured asset-based revolving credit facility (the “ABL Credit Facility”), of which up to $2,600 million is available to the Borrowers, including a U.S. Dollar equivalent of $100 million sublimit for borrowings in Canadian dollars. Under the ABL Loan Agreement, the Borrowers may, at their option, increase the aggregate amount of the ABL Credit Facility in an amount of up to $750 million without the consent of any ABL Lenders not participating in such increase, subject to certain customary conditions and applicable lenders committing to provide the increase in funding. There is no assurance that additional funding would be available.

The Borrowers’ obligations under the ABL Credit Facility are guaranteed by most of the Company’s wholly owned subsidiaries (collectively, the “Guarantors”), subject to customary exceptions and limitations. The Borrowers’ obligations under the ABL Credit Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on certain accounts receivable, certain inventory and certain other assets arising therefrom or related thereto of the Borrowers and Guarantors (including substantially all of their deposit accounts, collectively, the “ABL Assets”) and (ii) a second-priority lien on all of the Borrowers’ and Guarantors’ assets that do not constitute ABL Assets, in each case, subject to customary exceptions and limitations.

Availability under the ABL Credit Facility is subject to a borrowing base (the “Borrowing Base”), which is based on 90% of eligible accounts receivable, plus 90% of eligible credit card receivables, plus 90% to 92.5% of the net orderly liquidation value of eligible inventory, plus 90% of eligible pharmacy receivables, plus certain pharmacy prescription files availability to the Borrowers, after adjusting for customary reserves, but at no time shall exceed the lesser of the aggregate commitments under the ABL Credit Facility (currently $2,600 million) or the Borrowing Base.

16

The assets included in the Condensed Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis, and the unused credit and fees under the ABL Credit Facility, were as follows:

Assets securing the ABL Credit Facility (in millions):	January 28, 2023		July 30, 2022
Certain inventory assets included in Inventories, net	$	1,950	$	1,789
Certain receivables included in Accounts receivable, net	667		878
Pharmacy prescription files included in Intangible assets, net	13		15
Total	$	2,630	$	2,682

As of January 28, 2023, the Borrowers’ Borrowing Base, net of $95 million of reserves, was $2,740 million, which is above the $2,600 million limit of availability, resulting in total availability of $2,600 million for loans and letters of credit under the ABL Credit Facility. As of January 28, 2023, the Borrowers had $923 million of loans outstanding under the ABL Credit Facility, which are presented net of debt issuance costs of $9 million and are included in Long-term debt in the Condensed Consolidated Balance Sheets. As of January 28, 2023, the U.S. Borrowers had $144 million in letters of credit outstanding under the ABL Credit Facility. The Company’s resulting remaining availability under the ABL Credit Facility was $1,533 million as of January 28, 2023.

Availability under the ABL Credit Facility (in millions):	January 28, 2023
Total availability for ABL loans and letters of credit	$	2,600
ABL loans	$	923
Letters of credit	$	144
Unused credit	$	1,533

The applicable interest rates, unutilized commitment fees and letter of credit fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Loan Agreement), and were as follows:

Interest rates and fees under the ABL Credit Facility:	Range of Facility Rates and Fees (per annum)	January 28, 2023
Borrowers’ applicable margin for base rate loans	0.00% - 0.25%	0.00	%
Borrowers’ applicable margin for SOFR and BA loans(1)	1.00% - 1.25%	1.00	%
Unutilized commitment fees	0.20%	0.20	%
Letter of credit fees	1.125% - 1.375%	1.125	%

(1) The U.S. Borrower utilizes SOFR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.

Term Loan Facility

The term loan agreement dated as of October 22, 2018 (as amended, the “Term Loan Agreement”), by and among the Company and SUPERVALU INC. (“Supervalu” and, collectively with the Company, the “Term Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “Term Lenders”), Credit Suisse, as administrative agent for the Term Lenders, and the other parties thereto, provides for senior secured first lien term loans in an initial aggregate principal amount of $1,950 million, consisting of a $1,800 million seven-year tranche and a $150 million 364-day tranche that was repaid in fiscal 2020 (the “Term Loan Facility”). The net proceeds from the Term Loan Facility were used to finance the Supervalu acquisition and related transaction costs. Any amounts then outstanding will be payable in full on October 22, 2025.

The obligations under the Term Loan Facility are guaranteed by the Guarantors, subject to customary exceptions and limitations. The Term Borrowers’ obligations under the Term Loan Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ ABL Assets, in each case, subject to customary exceptions and limitations, including an exception for owned real property with net book values of less than $10 million. As of January 28, 2023 and July 30, 2022, there was $618 million and $629 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets.

17

The Company must prepay loans outstanding under the Term Loan Facility no later than 130 days after the fiscal year end in an aggregate principal amount equal to a specified percentage (which percentage ranges from 0 to 75 percent depending on the Consolidated First Lien Net Leverage Ratio as of the last day of such fiscal year) of Excess Cash Flow (as defined in the Term Loan Agreement), minus certain types of voluntary prepayments of indebtedness made during such fiscal year. As of January 28, 2023, there is no Excess Cash Flow payment expected to be required in fiscal 2024.

As of January 28, 2023, the Company had borrowings of $670 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $9 million and an original issue discount on debt of $7 million. As of January 28, 2023, no amount of the Term Loan Facility was classified as current.

In the second quarter of fiscal 2023, the Company made a $125 million voluntary prepayment on the Term Loan Facility with a portion of the proceeds received from monetizing certain receivables within Accounts receivable, net associated with the Company’s purchase agreement with a third-party financial institution as previously discussed within Note 3—Revenue Recognition. This voluntary prepayment will count towards any requirement to prepay the Term Loan Facility from Excess Cash Flow (as defined in the Term Loan Agreement) generated during fiscal 2023, which would be due in fiscal 2024.

NOTE 8—COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2023 year-to-date were as follows:

(in millions)	Other Cash Flow Derivatives		Benefit Plans		Foreign Currency Translation		Swap Agreements		Total
Accumulated other comprehensive income (loss) at July 30, 2022	$	2	$	(3)	$	(19)	$	—	$	(20)
Other comprehensive (loss) income before reclassifications	(3)		—		(2)		17		12
Amortization of amounts included in net periodic benefit income	—		1		—		—		1
Amortization of cash flow hedges	1		—		—		(3)		(2)
Net current period Other comprehensive (loss) income	(2)		1		(2)		14		11
Accumulated other comprehensive income (loss) at January 28, 2023	$	—	$	(2)	$	(21)	$	14	$	(9)

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2022 year-to-date were as follows:

(in millions)	Other Cash Flow Derivatives		Benefit Plans		Foreign Currency Translation		Swap Agreements		Total
Accumulated other comprehensive income (loss) at July 31, 2021	$	—	$	37	$	(16)	$	(60)	$	(39)
Other comprehensive income (loss) before reclassifications	1		—		(2)		13		12
Amortization of amounts included in net periodic benefit income	—		2		—		—		2
Amortization of cash flow hedges	1		—		—		15		16
Net current period Other comprehensive income (loss)	2		2		(2)		28		30
Accumulated other comprehensive income (loss) at January 29, 2022	$	2	$	39	$	(18)	$	(32)	$	(9)

18

Items reclassified out of Accumulated other comprehensive loss had the following impact on the Condensed Consolidated Statements of Operations:

	13-Week Period Ended				26-Week Period Ended				Affected Line Item on the Condensed Consolidated Statements of Operations
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Pension and postretirement benefit plan net assets:
Amortization of amounts included in net periodic benefit income(1)	$	1	$	1	$	1	$	2	Net periodic benefit income, excluding service cost
Income tax benefit	—		—		—		—		Provision for income taxes
Total reclassifications, net of tax	$	1	$	1	$	1	$	2
Swap agreements:
Reclassification of cash flow hedges	$	(4)	$	10	$	(4)	$	21	Interest expense, net
Income tax expense (benefit)	1		(3)		1		(6)		Provision for income taxes
Total reclassifications, net of tax	$	(3)	$	7	$	(3)	$	15
Other cash flow hedges:
Reclassification of cash flow hedge	$	1	$	2	$	2	$	2	Cost of sales
Income tax benefit	(1)		(1)		(1)		(1)		Provision for income taxes
Total reclassifications, net of tax	$	—	$	1	$	1	$	1

(1)Reclassification of amounts included in net periodic benefit income include reclassification of prior service cost and reclassification of net actuarial loss as reflected in Note 10—Benefit Plans.

As of January 28, 2023, the Company expects to reclassify $16 million related to unrealized derivative gains on interest rate swap hedges out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

NOTE 9—SHARE-BASED AWARDS

In fiscal 2023 year-to-date, the Company granted restricted stock units and performance share units to its directors, executive officers and certain employees representing a right to receive an aggregate of 1.6 million shares. As of January 28, 2023, there were 1.6 million shares available for issuance under the Amended and Restated 2020 Equity Incentive Plan.

NOTE 10—BENEFIT PLANS

Net periodic benefit income and contributions to defined benefit pension and other postretirement benefit plans consisted of the following:

	13-Week Period Ended
	Pension Benefits				Other Postretirement Benefits
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net Periodic Benefit (Income) Cost
Interest cost	$	15	$	9	$	—	$	—
Expected return on plan assets	(23)		(20)		—		—
Amortization of prior service cost	—		—		1		1
Net periodic benefit (income) cost	$	(8)	$	(11)	$	1	$	1
Contributions to benefit plans	$	—	$	—	$	—	$	(1)

19

	26-Week Period Ended
	Pension Benefits				Other Postretirement Benefits
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net Periodic Benefit (Income) Cost
Interest cost	$	32	$	19	$	—	$	—
Expected return on plan assets	(47)		(41)		—		—
Amortization of prior service cost	—		—		1		2
Net periodic benefit (income) cost	$	(15)	$	(22)	$	1	$	2
Contributions to benefit plans	$	—	$	—	$	—	$	(2)

Contributions

No minimum pension contributions are required to be made under the SUPERVALU INC. Retirement Plan under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) in fiscal 2023. The Company expects to contribute approximately $1 million to its other defined benefit pension plans and $1 million to its postretirement benefit plans in fiscal 2023.

Multiemployer Pension Plans

The Company contributed $12 million and $11 million in the second quarters of fiscal 2023 and 2022, respectively, and $23 million and $22 million in fiscal 2023 and 2022 year-to-date, respectively, to multiemployer pension plans, which are included within Operating expenses.

NOTE 11—INCOME TAXES

The effective tax rate for the second quarter of fiscal 2023 was 29.0% compared to 26.9% for the second quarter of fiscal 2022. The change was driven primarily by the reduction in pre-tax income during the second quarter of fiscal 2023.

The effective tax rate for fiscal 2023 year-to-date was 13.6% compared to 14.2% for fiscal 2022 year-to-date. The effective tax rate for both fiscal 2023 and fiscal 2022 year-to-date was reduced by the impact of discrete tax benefits related to the vesting of employee stock awards.

NOTE 12—EARNINGS PER SHARE

The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share:

	13-Week Period Ended				26-Week Period Ended
(in millions, except per share data)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Basic weighted average shares outstanding	59.8		58.3		59.3		57.6
Net effect of dilutive stock awards based upon the treasury stock method	1.2		2.7		2.0		3.4
Diluted weighted average shares outstanding	61.0		61.0		61.3		61.0
Basic earnings per share(1)	$	0.32	$	1.13	$	1.43	$	2.47
Diluted earnings per share(1)	$	0.31	$	1.08	$	1.38	$	2.33
Anti-dilutive share-based awards excluded from the calculation of diluted earnings per share	0.8		0.4		0.8		0.9

(1)Earnings per share amounts are calculated using actual unrounded figures.

20

NOTE 13—BUSINESS SEGMENTS

The Company has two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each with a different customer base, marketing strategy and management structure. The Company organizes and operates the Wholesale reportable segment through four U.S geographic regions: Atlantic; South; Central; and Pacific; and Canada Wholesale, which is operated separately from the U.S. Wholesale business. The U.S. Wholesale and Canada Wholesale operating segments have similar products and services, customer channels, distribution methods and economic characteristics, and therefore have been aggregated into a single reportable segment. Reportable segments are reviewed on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

In fiscal 2022, the Company changed its measure of segment profit to exclude the impact of the non-cash LIFO charge or benefit from Adjusted EBITDA. Prior period Adjusted EBITDA amounts and the reconciliation to Income before income taxes have been recast to reflect this change in the measure of segment profit.

21

The following table provides Net sales and Adjusted EBITDA by reportable segment and reconciles that information to consolidated Net sales and Income before income taxes, respectively:

	13-Week Period Ended				26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net sales:
Wholesale(1)	$	7,514	$	7,132	$	14,773	$	13,866
Retail	660		643		1,273		1,245
Other	56		50		116		106
Eliminations	(414)		(409)		(814)		(804)
Total Net sales	$	7,816	$	7,416	$	15,348	$	14,413
Adjusted EBITDA:
Wholesale(2)	$	137	$	176	$	308	$	351
Retail(2)	28		32		48		54
Other	15		12		34		16
Eliminations	1		—		(2)		(1)
Adjustments:
Net income attributable to noncontrolling interests	3		2		4		3
Net periodic benefit income, excluding service cost	7		10		14		20
Interest expense, net	(39)		(44)		(74)		(84)
Other income, net	—		2		1		1
Depreciation and amortization	(73)		(69)		(147)		(138)
Share-based compensation	(11)		(12)		(23)		(23)
LIFO charge(2)	(29)		(19)		(50)		(30)
Restructuring, acquisition and integration related expenses	(3)		(5)		(5)		(8)
(Loss) gain on sale of assets	(1)		(1)		4		(1)
Multiemployer pension plan withdrawal benefit	—		8		—		8
Other retail benefit	—		1		—		1
Business transformation costs	(4)		—		(9)		—
Income before income taxes	$	31	$	93	$	103	$	169
Depreciation and amortization:
Wholesale	$	62	$	61	$	126	$	122
Retail	10		8		18		15
Other	1		—		3		1
Total depreciation and amortization	$	73	$	69	$	147	$	138
Payments for capital expenditures:
Wholesale	$	74	$	46	$	131	$	98
Retail	10		4		20		8
Total capital expenditures	$	84	$	50	$	151	$	106

(1)As presented in Note 3—Revenue Recognition, the Company recorded $353 million and $356 million for the second quarters of fiscal 2023 and 2022, respectively, and $687 million and $695 million in fiscal 2023 and 2022 year-to-date, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

(2)As a result of the segment profit measurement revision discussed above, previously reported Adjusted EBITDA disclosures by segment and the reconciliation to Income before income taxes has been recast to exclude the impact of the non-cash LIFO charge.

22

Total assets by reportable segment were as follows:

(in millions)	January 28, 2023		July 30, 2022
Assets:
Wholesale	$	6,684	$	6,733
Retail	637		599
Other	352		335
Eliminations	(38)		(39)
Total assets	$	7,635	$	7,628

NOTE 14—COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

Guarantees and Contingent Liabilities

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of January 28, 2023. These guarantees were generally made to support the business growth of wholesale customers. The guarantees are generally for the entire terms of the leases, fixture financing loans or other debt obligations with remaining terms that range from less than one year to seven years, with a weighted average remaining term of approximately four years. For each guarantee issued, if the wholesale customer or other third-party defaults on a payment, the Company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees. The Company reviews performance risk related to its guarantee obligations based on internal measures of credit performance. As of January 28, 2023, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $16 million ($14 million on a discounted basis). Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of January 28, 2023, a total estimated loss of $1 million is recorded in the Condensed Consolidated Balance Sheets.

The Company is a party to a variety of contractual agreements under which it may be obligated to indemnify the other party for certain matters in the ordinary course of business, which indemnities may be secured by operation of law or otherwise. These agreements primarily relate to the Company’s commercial contracts, service agreements, contracts entered into for the purchase and sale of stock or assets, operating leases and other real estate contracts, financial agreements, agreements to provide services to the Company and agreements to indemnify officers, directors and employees in the performance of their work. While the Company’s aggregate indemnification obligations could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability. No amount has been recorded in the Condensed Consolidated Balance Sheets for these contingent obligations as the fair value has been determined to be de minimis.

In connection with Supervalu’s sale of New Albertson’s, Inc. (“NAI”) on March 21, 2013, the Company remains contingently liable with respect to certain self-insurance commitments and other guarantees as a result of parental guarantees issued by Supervalu with respect to the obligations of NAI that were incurred while NAI was Supervalu’s subsidiary. Based on the expected settlement of the self-insurance claims that underlie the Company’s commitments, the Company believes that such contingent liabilities will continue to decline. Subsequent to the sale of NAI, NAI collateralized most of these obligations with letters of credit and surety bonds to numerous state governmental authorities. Because NAI remains a primary obligor on these self-insurance and other obligations and has collateralized most of the self-insurance obligations for which the Company remains contingently liable, the Company believes that the likelihood that it will be required to assume a material amount of these obligations is remote. Accordingly, no amount has been recorded in the Condensed Consolidated Balance Sheets for these guarantees, as the fair value has been determined to be de minimis.

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Agreements with Save-A-Lot and Onex

The Agreement and Plan of Merger pursuant to which Supervalu sold the Save-A-Lot business in 2016 (the “SAL Merger Agreement”) contains customary indemnification obligations of each party with respect to breaches of their respective representations, warranties and covenants, and certain other specified matters, on the terms and subject to the limitations set forth in the SAL Merger Agreement. Similarly, Supervalu entered into a Separation Agreement (the “Separation Agreement”) with Moran Foods, LLC d/b/a Save-A-Lot (“Moran Foods”), which contains indemnification obligations and covenants related to the separation of the assets and liabilities of the Save-A-Lot business from the Company. The Company also entered into a Services Agreement with Moran Foods (the “Services Agreement”), pursuant to which the Company provided Save-A-Lot with various technical, human resources, finance and other operational services. The Company primarily ceased providing services under the Services Agreement in fiscal 2022. The Services Agreement generally requires each party to indemnify the other party against third-party claims arising out of the performance of or the provision or receipt of services under the Services Agreement. While the Company’s aggregate indemnification obligations to Save-A-Lot and Onex, the purchaser of Save-A-Lot, could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability. The Company has recorded the de minimis fair value of the guarantee in the Condensed Consolidated Balance Sheets within Other long-term liabilities.

Other Contractual Commitments

In the ordinary course of business, the Company enters into supply contracts to purchase products for resale and service contracts for fixed asset and information technology systems. These contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. As of January 28, 2023, the Company had approximately $562 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the ordinary course within one year.

As of January 28, 2023, the Company had commitments of $755 million for future undiscounted minimum lease payments on leases signed but not yet commenced with terms of up to 21 years from commencement date.

Legal Proceedings

The Company is one of dozens of companies that have been named in various lawsuits alleging that drug manufacturers, retailers and distributors contributed to the national opioid epidemic. Currently, UNFI, primarily through its subsidiary, Advantage Logistics, is named in approximately 43 suits pending in the United States District Court for the Northern District of Ohio where thousands of cases have been consolidated as Multi-District Litigation (“MDL”). In accordance with the Stock Purchase Agreement dated January 10, 2013, between New Albertson’s Inc. (“New Albertson’s”) and the Company (the “Stock Purchase Agreement”), New Albertson’s is defending and indemnifying UNFI in a majority of the cases under a reservation of rights as those cases relate to New Albertson’s pharmacies. In one of the MDL cases, MDL No. 2804 filed by The Blackfeet Tribe of the Blackfeet Indian Reservation, all defendants were ordered to Answer the Complaint, which UNFI did on July 26, 2019. To date, no discovery has been conducted against UNFI in any of the actions. On October 7, 2022, the MDL Court issued an order directing the Company and numerous other “non-litigating” defendants to submit by November 1, 2022, a list of opioid cases where the Company is named and opioid dispensing and distribution data. The Company produced the data in compliance with the order. The Company believes these claims are without merit and is vigorously defending this matter.

On January 21, 2021, various health plans filed a complaint in Minnesota state court against the Company, Albertson’s Companies, LLC (“Albertson’s”) and Safeway, Inc. alleging the defendants committed fraud by improperly reporting inflated prices for prescription drugs for members of health plans. The Plaintiffs assert six causes of action against the defendants: common law fraud, fraudulent nondisclosure, negligent misrepresentation, unjust enrichment, violation of the Minnesota Uniform Deceptive Trade Practices Act and violation of the Minnesota Prevention of Consumer Fraud Act. The plaintiffs allege that between 2006 and 2016, Supervalu overcharged the health plans by not providing the health plans, as part of usual and customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that Supervalu match competitor prices. Plaintiffs seek an unspecified amount of damages. Similar to the above case, for the majority of the relevant period Supervalu and Albertson’s operated as a combined company. In March 2013, Supervalu divested Albertson’s and pursuant to the Stock Purchase Agreement, Albertson’s is responsible for any claims regarding its pharmacies. On February 19, 2021, Albertson’s and Safeway removed the case to Minnesota Federal District Court and on March 22, 2021 plaintiffs’ filed a motion to remand to state court. On February 26, 2021, defendants filed a motion to dismiss. The hearing on the remand motion and motions to dismiss occurred on May 20, 2021. On September 21, 2021, the Federal District Court remanded the case to Minnesota state court and did not rule on the motion to dismiss, which was refiled in state court. On February 1, 2022, the state court denied the motion to dismiss. The Company believes these claims are without merit and is vigorously defending this matter.

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UNFI is currently subject to a qui tam action alleging violations of the False Claims Act (“FCA”). In United States ex rel. Schutte and Yarberry v. Supervalu, New Albertson’s, Inc., et al, which is pending in the U.S. District Court for the Central District of Illinois, the relators allege that defendants overcharged government healthcare programs by not providing the government, as a part of usual and customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that defendants match competitor prices. The complaint was originally filed under seal and amended on November 30, 2015. The government previously investigated the relators’ allegations and declined to intervene. Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim. Relators elected to pursue the case on their own and have alleged FCA damages against Supervalu and New Albertson’s in excess of $100 million, not including trebling and statutory penalties. For the majority of the relevant period Supervalu and New Albertson’s operated as a combined company. In March 2013, Supervalu divested New Albertson’s (and related assets) pursuant to the Stock Purchase Agreement. Based on the claims that are currently pending and the Stock Purchase Agreement, Supervalu’s share of a potential award (at the currently claimed value by relators) would be approximately $24 million, not including trebling and statutory penalties. Both sides moved for summary judgment. On August 5, 2019, the Court granted one of the relators’ summary judgment motions finding that the defendants’ lower matched prices are the usual and customary prices and that Medicare Part D and Medicaid were entitled to those prices. On July 2, 2020, the Court granted the defendants’ summary judgment motion and denied the relators’ motion, dismissing the case. On July 9, 2020, the relators filed a notice of appeal with the 7th Circuit Court of Appeals, and on September 30, 2020 filed an appellate brief. On November 30, 2020, the Company filed its response. The hearing before the 7th Circuit Court of Appeals occurred on January 19, 2021. On August 12, 2021, the 7th Circuit affirmed the District Court’s decision granting summary judgment in defendants’ favor. On September 23, 2021, the relators filed a petition for rehearing and defendants filed a response on November 9, 2021. On December 3, 2021, the 7th Circuit denied the petition for rehearing. On April 1, 2022, the relators filed a petition for a writ of certiorari with the United States Supreme Court. The Company filed its response on June 20, 2022. On August 22, 2022, the Supreme Court issued an order inviting the Solicitor General to file a brief setting forth the views of the government on the petition for a writ of certiorari. On December 6, 2022, the Solicitor General submitted its brief recommending that the Supreme Court grant the petition for certiorari. On January 13, 2023, the Supreme Court granted the petition for certiorari and oral argument is set for April 18, 2023.

From time to time, the Company receives notice of claims or potential claims or becomes involved in litigation, alternative dispute resolution, such as arbitration, or other legal and regulatory proceedings that arise in the ordinary course of its business, including investigations and claims regarding employment law, including wage and hour (including class actions); pension plans; labor union disputes, including unfair labor practices, such as claims for back-pay in the context of labor contract negotiations and other matters; supplier, customer and service provider contract terms and claims, including matters related to supplier or customer insolvency or general inability to pay obligations as they become due; product liability claims, including those where the supplier may be insolvent and customers or consumers are seeking recovery against the Company; real estate and environmental matters, including claims in connection with its ownership and lease of a substantial amount of real property, both retail and warehouse properties; and antitrust. Other than as described above, there are no pending material legal proceedings to which the Company is a party or to which its property is subject.

Predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial uncertainties that could cause actual outcomes, costs and exposures to vary materially from current expectations. Management regularly monitors the Company’s exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and estimates with respect to related costs and exposures. As of January 28, 2023, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

Although management believes it has made appropriate assessments of potential and contingent loss in each of these cases based on current facts and circumstances, and application of prevailing legal principles, there can be no assurance that material differences in actual outcomes from management’s current assessments, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates will not occur. The occurrence of any of the foregoing, could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act, that involve substantial risks and uncertainties. In some cases you can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “seek,” “should,” “will” and “would,” or similar words. Statements that contain these words and other statements that are forward-looking in nature should be read carefully because they discuss future expectations, contain projections of future results of operations or of financial positions or state other “forward-looking” information.

Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect. These statements are based on our management’s beliefs and assumptions, which are based on currently available information. These assumptions could prove inaccurate. You are cautioned not to place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to:

•our dependence on principal customers;

•the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures;

•our ability to operate, and rely on third parties to operate, reliable and secure technology systems;

•our ability to realize anticipated benefits of our strategic initiatives, including any acquisitions;

•labor and other workforce shortages and challenges;

•the addition or loss of significant customers or material changes to our relationships with these customers;

•our sensitivity to general economic conditions including inflation, changes in disposable income levels and consumer spending trends;

•the impact and duration of any pandemics or disease outbreaks;

•our ability to continue to grow sales, including of our higher margin natural and organic foods and non-food products, and to manage that growth;

•increased competition in our industry, including as a result of continuing consolidation of retailers and the growth of chains, direct distribution by large retailers and the growth of online distributors;

•our ability to timely and successfully deploy our warehouse management system throughout our distribution centers and our transportation management system across the Company and to achieve efficiencies and cost savings from these efforts;

•the potential for disruptions in our supply chain or our distribution capabilities from circumstances beyond our control, including due to lack of long-term contracts, severe weather, labor shortage or work stoppages or otherwise;

•moderated supplier promotional activity, including decreased forward buying opportunities;

•union-organizing activities that could cause labor relations difficulties and increased costs;

•the potential for additional asset impairment charges;

•our ability to maintain food quality and safety;

•volatility in fuel costs;

•volatility in foreign exchange rates; and

•our ability to identify and successfully complete asset or business acquisitions.

You should carefully review the risks described under “Part I. Item 1A Risk Factors” of our Annual Report on Form 10-K for the year ended July 30, 2022 (the “Annual Report”) as well as any other cautionary language in this Quarterly Report, as the occurrence of any of these events could have an adverse effect, which may be material, on our business, results of operations, financial condition or cash flows.

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EXECUTIVE OVERVIEW

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto contained in this Quarterly Report on Form 10-Q, the information contained under the caption “Forward-Looking Statements,” and the information in the Annual Report.

Business Overview

UNFI is a leading distributor of grocery and non-food products, and support services provider to retailers in the United States and Canada. We believe we are uniquely positioned to provide the broadest array of products and services to customers throughout North America. Our diversified customer base includes over 30,000 customer locations ranging from some of the largest grocers in the country to smaller independents. We offer approximately 260,000 products consisting of national, regional and private label brands grouped into six product categories: grocery and general merchandise; produce; perishables and frozen foods; nutritional supplements and sports nutrition; bulk and foodservice products; and personal care items. We believe we are North America’s premier wholesaler with 56 distribution centers and warehouses representing approximately 30 million square feet of warehouse space. We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in Canada, making us a desirable partner for retailers and consumer product manufacturers. We believe our total product assortment and service offerings are unmatched by our wholesale competitors. We plan to continue to pursue new business opportunities with independent retailers that operate diverse formats, regional and national chains, as well as international customers with wide-ranging needs. Our business is classified into two reportable segments: Wholesale and Retail; and also includes a manufacturing division and a branded product line division.

We are focused on executing our transformation strategy, which we believe will position us for long-term profitable growth. Our enterprise-wide business transformation program consists of four areas: network automation and optimization; commercial value creation; digital offering enhancement and infrastructure unification and modernization. These four areas represent the next evolution of our business strategy. To enable this business transformation, we have engaged consultants and brought in new leadership with transformation experience to upgrade and modernize our technology and platforms to better serve our customers.

We expect to continue to use available capital to re-invest in our business and to reduce outstanding debt, and we remain committed to improving our financial leverage over time. The decline in our financial leverage in recent years offers us increased flexibility to invest in growing our business and selectively return cash to shareholders as appropriate.

We believe we can accelerate our growth through our transformation efforts, which we expect will increase sales of products and services, and provide tailored, data-driven solutions to help our customers run their businesses more efficiently and contribute to customer acquisitions. We believe the key drivers for new customer growth will be the benefits of our significant scale, product and service offerings and nationwide footprint.

Trends and Other Factors Affecting our Business

Our results are impacted by macroeconomic and demographic trends, changes in the food distribution market structure and changes in consumer behavior. We believe food-at-home expenditures as a percentage of total food expenditures are subject to these trends, including changes in consumer behaviors in response to social and economic trends, such as levels of disposable income and the health of the economy in which our customers and our stores operate.

The U.S. economy has experienced economic volatility in recent years due to uncertain economic conditions, which have had, and we expect may continue to have, an impact on consumer confidence. Consumer spending may be impacted by levels of discretionary income and consumers trading down to a less expensive mix of products for grocery items. In addition, inflation remains at elevated levels and continues to be unpredictable. For example, we experienced volatility in our energy operating costs, and commodity and labor input costs continue to impact the prices of products we procure from manufacturers. We believe our product mix, which ranges from high-quality natural and organic products to national and local conventional brands, including cost conscious private label brands, positions us to serve a broad cross section of North American retailers and end customers, and may lessen the impact of any shifts in consumer and industry trends in grocery product mix.

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Uncertainty remains regarding the longer-term impact of the COVID-19 pandemic on our business as global economies, markets and supply chains respond to the ongoing effects. We continue to monitor guidelines released by the Centers for Disease Control and Prevention and the World Health Organization and, when appropriate, implement mitigation measures to protect our associates, including safety protocols and strongly encouraging vaccinations/boosters. Our results could be impacted by, among other factors, any resurgence of infection rates and new variants of COVID-19 with higher transmissibility, the availability and efficacy of vaccines and treatments, actions taken by governmental authorities and other third parties in response to the pandemic such as health and safety orders and mandates, companies’ remote work policies, any economic downturn, the impact on capital and financial markets, food-at-home purchasing levels and other consumer trends, each of which is uncertain. Any of these disruptions could adversely impact our business and results of operations.

We are also impacted by changes in food distribution trends affecting our Wholesale customers, such as direct store deliveries and other methods of distribution. Our Wholesale customers manage their businesses independently and operate in a competitive environment.

Wholesale Distribution Center Network

We evaluate our distribution center network to optimize performance and expect to incur incremental expenses related to any future network realignment, expansion or improvements, including initiatives under the network automation and optimization pillar of our transformation agenda. We are working to both minimize these potential future costs and obtain new business to further improve the efficiency of our transforming distribution network.

In fiscal 2022, our Allentown, Pennsylvania distribution center began operations, with a capacity of 1.3 million square feet to service customers in the surrounding geographic area. We incurred start-up costs and operating losses, as the volume in this facility continues to ramp up to its operating capacity.

Retail Operations

We currently operate 76 Retail grocery stores, including 54 Cub Foods corporate stores and 22 Shoppers Food Warehouse stores. In addition, we supply another 26 Cub Foods stores operated by our Wholesale customers through franchise and equity ownership arrangements. We operate 81 pharmacies primarily within the stores we operate and the stores of our franchisees. In addition, we operate 23 “Cub Wine and Spirit” and “Cub Liquor” stores.

We plan to continue to invest in our Retail segment in areas such as customer-facing merchandising initiatives, physical facilities, technology and operational tools. Cub Foods and Shoppers Food Warehouse anticipate continued investment in improving the customer and associate experience through express remodels focused on customer facing elements.

Impact of Product Cost Inflation

We experienced a mix of inflation across product categories during the second quarter of fiscal 2023. In the aggregate across our businesses, including the mix of products, management estimates our businesses experienced product cost inflation of approximately ten percent in the second quarter of fiscal 2023, as compared to the second quarter of fiscal 2022. Cost inflation estimates are based on individual like items sold during the periods being compared. Changes in merchandising, customer buying habits and competitive pressures create inherent difficulties in measuring the impact of inflation on Net sales and Gross profit. Absent any changes in units sold or the mix of units sold, inflation generally has the effect of increasing sales. Under the last-in, first out (“LIFO”) method of inventory accounting, product cost increases are recognized within Cost of sales based on expected year-end inventory quantities and costs, which has the effect of decreasing Gross profit and the carrying value of inventory during periods of inflation.

Our pricing to our customers is determined at the time of sale primarily based on the then prevailing vendor listed base cost, and includes discounts we offer to our customers. Generally, in an inflationary environment as a wholesaler, rising vendor costs result in higher Net sales driven by higher vendor prices when other variables such as quantities sold and vendor promotions are constant. In the second quarter of fiscal 2023, we experienced a sequential deceleration in the number and magnitude of vendor product cost increases as compared to the first quarter of fiscal 2023, which negatively impacted our gross profit rate.

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Composition of Condensed Consolidated Statements of Operations and Business Performance Assessment

Net sales

Our Net sales consist primarily of product sales of natural, organic, specialty, produce and conventional grocery and non-food products, and support services revenue from retailers, adjusted for customer volume discounts, vendor incentives when applicable, returns and allowances, and professional services revenue. Net sales also include amounts charged by us to customers for shipping and handling and fuel surcharges.

Cost of sales and Gross profit

The principal components of our Cost of sales include the amounts paid to suppliers for product sold, plus transportation costs necessary to bring the product to, or move product between, our distribution centers and retail stores, partially offset by consideration received from suppliers in connection with the purchase or promotion of the suppliers’ products.

Operating expenses

Operating expenses include distribution expenses of warehousing, delivery, purchasing, receiving, selecting, and outbound transportation expenses, and selling and administrative expenses. These expenses include salaries and wages, employee benefits, occupancy, insurance, depreciation and amortization expense and share-based compensation expense.

Restructuring, acquisition and integration related expenses

Restructuring, acquisition and integration related expenses reflect expenses resulting from restructuring activities, including severance costs, facility closure asset impairment charges and costs, share-based compensation acceleration charges and acquisition and integration related expenses. Integration related expenses include certain professional consulting expenses and incremental expenses related to combining facilities required to optimize our distribution network as a result of acquisitions.

Net periodic benefit income, excluding service cost

Net periodic benefit income, excluding service cost reflects the recognition of expected returns on benefit plan assets and interest costs on plan liabilities.

Interest expense, net

Interest expense, net includes primarily interest expense on long-term debt, net of capitalized interest, loss on debt extinguishment, interest expense on finance lease obligations, amortization of financing costs and discounts and interest income.

Adjusted EBITDA

Our Condensed Consolidated Financial Statements are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”). In addition to the GAAP results, we consider certain non-GAAP financial measures to assess the performance of our business and understand underlying operating performance and core business trends, which we use to facilitate operating performance comparisons of our business on a consistent basis over time. Adjusted EBITDA is provided as a supplement to our results of operations and related analysis, and should not be considered superior to, a substitute for or an alternative to, any financial measure of performance prepared and presented in accordance with GAAP. Adjusted EBITDA excludes certain items because they are non-cash items or items that do not reflect management’s assessment of ongoing business performance.

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We believe Adjusted EBITDA is useful to investors and financial institutions because it provides additional information regarding factors and trends affecting our business, which are used in the business planning process to understand expected operating performance, to evaluate results against those expectations, and because of its importance as a measure of underlying operating performance, as the primary compensation performance measure under certain compensation programs and plans. We believe Adjusted EBITDA is reflective of factors that affect our underlying operating performance and facilitate operating performance comparisons of our business on a consistent basis over time. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Certain adjustments to our GAAP financial measures reflected below exclude items that may be considered recurring in nature and may be reflected in our financial results for the foreseeable future. These measurements and items may be different from non-GAAP financial measures used by other companies. Adjusted EBITDA should be reviewed in conjunction with our results reported in accordance with GAAP in this Quarterly Report on Form 10-Q.

There are significant limitations to using Adjusted EBITDA as a financial measure including, but not limited to, it not reflecting the cost of cash expenditures for capital assets or certain other contractual commitments, finance lease obligation and debt service expenses, income taxes and any impacts from changes in working capital.

We define Adjusted EBITDA as a consolidated measure which we reconcile by adding Net income (loss) including noncontrolling interests, less Net income attributable to noncontrolling interests, plus non-operating income and expenses, including Net periodic benefit income, excluding service cost, Interest expense, net and Other (income) expense, net, plus Provision (benefit) for income taxes and Depreciation and amortization all calculated in accordance with GAAP, plus adjustments for Share-based compensation, non-cash LIFO charge or benefit, Restructuring, acquisition and integration related expenses, Goodwill impairment charges, (Gain) loss on sale of assets, certain legal charges and gains, and certain other non-cash charges or other items, as determined by management.

During fiscal 2022, we revised our definition of Adjusted EBITDA to exclude the impact of the non-cash LIFO charge or benefit. We believe that this change provides a better indicator of our underlying operating performance and permits better comparability between periods. Refer to footnote one in the table below and Note 13—Business Segments in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding the impact of the change in definition of Adjusted EBITDA.

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Assessment of Our Business Results

The following table sets forth a summary of our results of operations and Adjusted EBITDA for the periods indicated. We have revised the following tables for the change in segment profit measurement for Adjusted EBITDA as discussed in Note 13—Business Segments within Part I, Item 1 of this Quarterly Report on Form 10-Q.

	13-Week Period Ended						26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022		Change		January 28, 2023		January 29, 2022		Change
Net sales	$	7,816	$	7,416	$	400	$	15,348	$	14,413	$	935
Cost of sales	6,747		6,341		406		13,183		12,296		887
Gross profit	1,069		1,075		(6)		2,165		2,117		48
Operating expenses	1,002		944		58		2,002		1,876		126
Restructuring, acquisition and integration related expenses	3		5		(2)		5		8		(3)
Loss (gain) on sale of assets	1		1		—		(4)		1		(5)
Operating income	63		125		(62)		162		232		(70)
Net periodic benefit income, excluding service cost	(7)		(10)		3		(14)		(20)		6
Interest expense, net	39		44		(5)		74		84		(10)
Other income, net	—		(2)		2		(1)		(1)		—
Income before income taxes	31		93		(62)		103		169		(66)
Provision for income taxes	9		25		(16)		14		24		(10)
Net income including noncontrolling interests	22		68		(46)		89		145		(56)
Less net income attributable to noncontrolling interests	(3)		(2)		(1)		(4)		(3)		(1)
Net income attributable to United Natural Foods, Inc.	$	19	$	66	$	(47)	$	85	$	142	$	(57)
Adjusted EBITDA	$	181	$	220	$	(39)	$	388	$	420	$	(32)

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The following table reconciles Net income including noncontrolling interests to Adjusted EBITDA:

	13-Week Period Ended				26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net income including noncontrolling interests	$	22	$	68	$	89	$	145
Adjustments to net income including noncontrolling interests:
Less net income attributable to noncontrolling interests	(3)		(2)		(4)		(3)
Net periodic benefit income, excluding service cost	(7)		(10)		(14)		(20)
Interest expense, net	39		44		74		84
Other income, net	—		(2)		(1)		(1)
Provision for income taxes	9		25		14		24
Depreciation and amortization	73		69		147		138
Share-based compensation	11		12		23		23
LIFO charge(1)	29		19		50		30
Restructuring, acquisition and integration related expenses	3		5		5		8
Loss (gain) on sale of assets	1		1		(4)		1
Multiemployer pension plan withdrawal benefit(2)	—		(8)		—		(8)
Other retail benefit(3)	—		(1)		—		(1)
Business transformation costs(4)	4		—		9		—
Adjusted EBITDA	$	181	$	220	$	388	$	420

(1)During fiscal 2022, the Company revised its definition of Adjusted EBITDA to exclude the impact of the non-cash LIFO charge or benefit. The following illustrates the impact of the revised definition on previously reported periods to show the effect of this change:

	13-Week Period Ended		26-Week Period Ended
(in millions)	January 29, 2022		January 29, 2022
Adjusted EBITDA (previously reported definition)	$	201	$	390
LIFO charge	19		30
Adjusted EBITDA (current definition)	$	220	$	420

(2)Reflects an adjustment to multiemployer pension plan withdrawal charge estimates.

(3)Reflects an insurance recovery associated with event-specific damages to certain retail stores and store closure costs.

(4)Reflects third-party professional consulting costs for business transformation initiatives, including network automation and optimization, commercial value creation, digital offering enhancement and infrastructure unification and modernization.

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RESULTS OF OPERATIONS

Net Sales

Our Net sales by customer channel was as follows (in millions except percentages):

	13-Week Period Ended				Increase (Decrease)				26-Week Period Ended				Increase (Decrease)
Customer Channel(1)	January 28, 2023		January 29, 2022		$		%		January 28, 2023		January 29, 2022		$		%
Chains	$	3,322	$	3,243	$	79	2.4	%	$	6,546	$	6,325	$	221	3.5	%
Independent retailers	1,980		1,905		75		3.9	%	3,927		3,655		272		7.4	%
Supernatural	1,659		1,453		206		14.2	%	3,172		2,831		341		12.0	%
Retail	660		643		17		2.6	%	1,273		1,245		28		2.2	%
Other	609		581		28		4.8	%	1,244		1,161		83		7.1	%
Eliminations	(414)		(409)		(5)		1.2	%	(814)		(804)		(10)		1.2	%
Total net sales	$	7,816	$	7,416	$	400	5.4	%	$	15,348	$	14,413	$	935	6.5	%

(1)Refer to Note 3—Revenue Recognition in Part 1, Item 1 of this Quarterly Report on Form 10-Q for our channel definitions and additional information.

Second Quarter

Our Net sales for the second quarter of fiscal 2023 increased approximately 5.4% from the second quarter of fiscal 2022. The increase in Net sales was primarily driven by inflation and new business. This new business resulted from selling new or expanded categories to existing customers and adding new customers. These increases were partially offset by a decrease in units sold.

Chains and Independent retailers Net sales increased primarily due to growth in sales to existing and new customers, including an increase from higher product costs, which drove higher wholesale selling prices to our customers, partially offset by a decrease in units sold.

Supernatural Net sales increased primarily due to growth in existing store sales, including the supply of new fresh categories, inflation, and increased sales to new stores, partially offset by a decrease in units sold.

Retail Net sales increased primarily due to a 0.9% increase in identical store sales from higher average basket sizes driven by inflation, offset by lower volume.

Other Net sales increased primarily due to higher eCommerce sales.

Year-to-Date

Our Net sales for fiscal 2023 year-to-date increased approximately 6.5% from fiscal 2022 year-to-date. The increase in Net sales was primarily driven by inflation and new business. This new business resulted from selling new or expanded categories to existing customers and adding new customers. These increases were partially offset by a decrease in units sold.

Chains Net sales increased primarily due to growth in sales to existing and new customers, including an increase from higher product costs, which drove higher wholesale selling prices to our customers, partially offset by a decrease in units sold.

Independent retailers Net sales increased primarily due to increased sales under a supply agreement with a new customer within the Atlantic region commencing in the first quarter of fiscal 2022 and growth in sales to existing customers, including an increase from higher product costs, which drove higher wholesale selling prices to our customers, partially offset by a decrease in units sold.

Supernatural Net sales increased primarily due to growth in existing store sales, including the supply of new fresh categories, inflation, and increased sales to new stores, partially offset by a decrease in units sold.

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Retail Net sales increased primarily due to a 1.4% increase in identical store sales from higher average basket sizes driven by inflation, offset by lower volume.

Other Net sales increased primarily due to higher eCommerce sales.

Cost of Sales and Gross Profit

Our gross profit decreased $6 million, or 0.6%, to $1,069 million for the second quarter of fiscal 2023, from $1,075 million for the second quarter of fiscal 2022. Our gross profit as a percentage of Net sales decreased to 13.7% for the second quarter of fiscal 2023 compared to 14.5% for the second quarter of fiscal 2022. The LIFO charge was $29 million and $19 million in the second quarter of fiscal 2023 and 2022, respectively. Excluding the non-cash LIFO charge, gross profit rate was 14.0% of Net sales and 14.8% of Net sales for the second quarter of fiscal 2023 and 2022, respectively. The decrease in gross profit rate, excluding the LIFO charge, was primarily driven by lower current period procurement gains due to the decelerating rate of inflation and lower inventory gains.

Our gross profit increased $48 million, or 2.3% to $2,165 million for fiscal 2023 year-to-date, from $2,117 million for fiscal 2022 year-to-date. Our gross profit as a percentage of Net sales decreased to 14.1% for fiscal 2023 year-to-date compared to 14.7% for fiscal 2022 year-to-date. The LIFO charge was $50 million and $30 million for fiscal 2023 and fiscal 2022 year-to-date, respectively. Excluding the non-cash LIFO charge, gross profit rate was 14.4% of Net sales and 14.9% of Net sales for fiscal 2023 and fiscal 2022 year-to-date, respectively. The decrease in gross profit rate, excluding LIFO charge, was primarily driven by lower current period procurement gains due to the decelerating rate of inflation, lower inventory gains and customer mix.

Operating Expenses

Operating expenses increased $58 million, or 6.1%, to $1,002 million, or 12.8% of Net sales, for the second quarter of fiscal 2023 compared to $944 million, or 12.7% of Net sales, for the second quarter of fiscal 2022. Operating expenses as a percent of Net sales was approximately flat compared to the second quarter of fiscal 2022, after excluding an $8 million benefit related to an adjustment to a previous multiemployer pension plan withdrawal charge estimate in the second quarter of fiscal 2022.

Operating expenses increased $126 million, or 6.7%, to $2,002 million, or 13.0% of Net sales, for fiscal 2023 year-to-date compared to $1,876 million, or 13.0% of Net sales, for fiscal 2022 year-to-date. Operating expenses as a percent of Net sales was approximately flat to the second quarter fiscal 2022 year-to-date; however, Operating expenses included higher occupancy costs in fiscal 2023 year-to-date, which were offset by leveraging fixed expenses across higher sales.

Operating Income

Reflecting the factors described above, Operating income decreased $62 million to $63 million for the second quarter of fiscal 2023, compared to $125 million for the second quarter of fiscal 2022. The decrease in operating income was primarily driven by a decrease in gross profit and an increase in operating expenses as described above.

Reflecting the factors described above, Operating income decreased $70 million, to $162 million for fiscal 2023 year-to-date, compared to $232 million for fiscal 2022 year-to-date. The decrease in operating income was primarily driven by an increase in operating expenses in excess of an increase in gross profit as described above.

Interest Expense, Net

	13-Week Period Ended				26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Interest expense on long-term debt, net of capitalized interest	$	33	$	30	$	65	$	63
Interest expense on finance lease obligations	—		5		1		9
Amortization of financing costs and discounts	3		3		5		6
Loss on debt extinguishment	3		6		3		6
Interest expense, net	$	39	$	44	$	74	$	84

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The decrease in interest expense, net, in the second quarter of fiscal 2023 compared to the second quarter of fiscal 2022 and in fiscal 2023 year-to-date compared to 2022 year-to-date was primarily driven by lower outstanding debt balances and finance leases, partially offset by higher average interest rates.

Provision for Income Taxes

The effective tax rate for the second quarter of fiscal 2023 was 29.0% compared to 26.9% for the second quarter of fiscal 2022. The change was driven primarily by the reduction in pre-tax income during the second quarter of fiscal 2023.

The effective tax rate for fiscal 2023 year-to-date was 13.6% compared to 14.2% for fiscal 2022 year-to-date. The effective tax rate for both fiscal 2023 and fiscal 2022 year-to-date was reduced by the impact of discrete tax benefits related to the vesting of employee stock awards.

Net Income Attributable to United Natural Foods, Inc.

Reflecting the factors described in more detail above, Net income attributable to United Natural Foods, Inc. was $19 million, or $0.31 per diluted common share, for the second quarter of fiscal 2023, compared to $66 million, or $1.08 per diluted common share, for the second quarter of fiscal 2022.

Reflecting the factors described in more detail above, Net income attributable to United Natural Foods, Inc. was $85 million, or $1.38 per diluted common share, for fiscal 2023 year-to-date, compared to $142 million, or $2.33 per diluted common share, for fiscal 2022 year-to-date.

Segment Results of Operations

In evaluating financial performance in each business segment, management primarily uses Net sales and Adjusted EBITDA of its business segments as discussed and reconciled within Note 13—Business Segments within Part I, Item 1 of this Quarterly Report on Form 10-Q and the above table within the Executive Overview section. The following tables set forth Net sales and Adjusted EBITDA by segment for the periods indicated.

	13-Week Period Ended						26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022		Change		January 28, 2023		January 29, 2022		Change
Net sales:
Wholesale	$	7,514	$	7,132	$	382	$	14,773	$	13,866	$	907
Retail	660		643		17		1,273		1,245		28
Other	56		50		6		116		106		10
Eliminations	(414)		(409)		(5)		(814)		(804)		(10)
Total Net sales	$	7,816	$	7,416	$	400	$	15,348	$	14,413	$	935
Adjusted EBITDA:
Wholesale(1)	$	137	$	176	$	(39)	$	308	$	351	$	(43)
Retail(1)	28		32		(4)		48		54		(6)
Other	15		12		3		34		16		18
Eliminations	1		—		1		(2)		(1)		(1)
Total Adjusted EBITDA	$	181	$	220	$	(39)	$	388	$	420	$	(32)

(1)Adjusted EBITDA amounts as previously reported by segment have been recast to conform with the revised segment profit measure of Adjusted EBITDA, which excludes the non-cash LIFO charge recorded by segment. The effect of the revision increased Adjusted EBITDA for Wholesale by $17 million and Retail by $2 million for the second quarter of fiscal 2022, and increased Adjusted EBITDA for Wholesale by $28 million and Retail by $2 million for fiscal 2022 year-to-date.

Net Sales

Second Quarter

Wholesale’s Net sales increased primarily due to growth in sales to new and existing customers, including an increase from higher product costs, in Supernatural, Chains and Independent retailers channels, as discussed in Results of Operations - Net Sales section above.

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Retail’s Net sales increased primarily due to a 0.9% increase in identical store sales from higher average basket sizes driven by inflation, offset by lower volume.

The increase in eliminations Net sales was driven by higher sales from Other to Wholesale.

Year-to-Date

Wholesale’s Net sales increased primarily due to growth in sales to new and existing customers, including an increase from higher product costs, in Supernatural, Independent retailers and Chains channels, as discussed in Results of Operations - Net Sales section above.

Retail’s Net sales increased primarily due to a 1.4% increase in identical store sales from higher average basket sizes driven by inflation, offset by lower volume.

The increase in eliminations Net sales was driven by higher sales from Other to Wholesale.

Adjusted EBITDA

Second Quarter

Wholesale’s Adjusted EBITDA decreased 22.2% for the second quarter of fiscal 2023 as compared to the second quarter of fiscal 2022. The decrease was driven by an increase in operating expenses combined with a slight gross profit decline excluding the LIFO charge. Wholesale’s Gross profit decrease excluding the LIFO charge for the second quarter of fiscal 2023 was $3 million with a gross profit rate decrease of approximately 69 basis points primarily driven by lower current period procurement gains due to the decelerating rate of inflation and lower inventory gains. Wholesale’s Operating expense increased $36 million, which excludes depreciation and amortization, share-based compensation and other adjustments as outlined in Note 13—Business Segments. Wholesale’s operating expense rate was approximately flat compared to the second quarter of fiscal 2022. Wholesale’s depreciation and amortization expense increased $1 million compared to the second quarter of fiscal 2022.

Retail’s Adjusted EBITDA decreased 12.5% for the second quarter of fiscal 2023 as compared to the second quarter of fiscal 2022. The decrease was driven by higher operating expenses primarily due to new store start-up costs and a slightly lower gross profit rate compared to the second quarter of fiscal 2022. Retail’s Adjusted EBITDA excludes depreciation and amortization, share-based compensation, LIFO charge and other adjustments as outlined in Note 13—Business Segments. Retail’s depreciation and amortization expense increased $2 million compared to the second quarter of fiscal 2022.

Year-to-Date

Wholesale’s Adjusted EBITDA decreased 12.3% for fiscal 2023 year-to-date from fiscal 2022 year-to-date. The decrease was driven by an increase in operating expenses in excess of gross profit growth excluding the LIFO charge. Wholesale’s Gross profit increase excluding the LIFO charge for fiscal 2023 year-to-date was $62 million with a gross profit rate decrease of approximately 37 basis points primarily driven by lower current period procurement gains due to the decelerating rate of inflation and inventory gains as compared to fiscal 2022 year-to-date, and a decrease from changes in customer mix. Wholesale’s Operating expense increased $105 million, which excludes depreciation and amortization, share-based compensation and other adjustments as outlined in Note 13—Business Segments. Wholesale’s operating expense rate increased 7 basis points primarily driven by higher occupancy costs in fiscal 2023 year-to-date. Wholesale’s depreciation and amortization expense increased $4 million compared to fiscal 2022 year-to-date.

Retail’s Adjusted EBITDA decreased 11.1% for fiscal 2023 year-to-date as compared to fiscal 2022 year-to-date, driven by higher operating expenses from higher employee-related costs and new store start-up costs. Retail’s Adjusted EBITDA excludes depreciation and amortization, share-based compensation, LIFO charge and other adjustments as outlined in Note 13—Business Segments.

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LIQUIDITY AND CAPITAL RESOURCES

Highlights

•Total liquidity as of January 28, 2023 was $1,573 million and consisted of the following:

◦Unused credit under our $2,600 million asset-based revolving credit facility (the “ABL Credit Facility”) was $1,533 million, which decreased $94 million from $1,627 million as of July 30, 2022, primarily due to increased cash utilized to fund working capital increases, partially offset by the reduction in ABL borrowings related to the monetization of certain receivables net of the related $125 million voluntary prepayment on our term loan agreement dated as of October 22, 2018 (as amended, the “Term Loan Agreement”) described below.

◦Cash and cash equivalents was $40 million, which decreased $4 million from $44 million as of July 30, 2022.

•Our total debt decreased $46 million to $2,077 million as of January 28, 2023 from $2,123 million as of July 30, 2022, primarily driven by debt repayments from net cash flow from operating activities, partially offset by payments for capital expenditures and repurchases of common stock during fiscal 2023 year-to-date.

•Working capital decreased $35 million to $1,345 million as of January 28, 2023 from $1,380 million as of July 30, 2022, primarily due to lower accounts receivable levels resulting from the monetization of certain receivables, partially offset by an increase in inventories net of the associated increase in accounts payable.

•In the second quarter of fiscal 2023, we monetized certain receivables previously within accounts receivable, pursuant to a purchase agreement with a third-party financial institution for the sale of certain receivables up to $300 million, which generated net cash proceeds of $282 million. These proceeds were used to make a $125 million voluntary prepayment on the Term Loan Facility and reduce outstanding borrowings under the ABL Credit Facility.

Sources and Uses of Cash

We expect to continue to replenish operating assets and pay down debt obligations with internally generated funds. A significant reduction in operating earnings or the incurrence of operating losses could have a negative impact on our operating cash flow, which may limit our ability to pay down our outstanding indebtedness as planned. Our credit facilities are secured by a substantial portion of our total assets. We expect to be able to fund debt maturities and finance lease liabilities through fiscal 2023 with internally generated funds and borrowings under the ABL Credit Facility.

Our primary sources of liquidity are from internally generated funds and from borrowing capacity under the ABL Credit Facility. We believe our short-term and long-term financing abilities are adequate as a supplement to internally generated cash flows to satisfy debt obligations and fund capital expenditures as opportunities arise. Our continued access to short-term and long-term financing through credit markets depends on numerous factors, including the condition of the credit markets and our results of operations, cash flows, financial position and credit ratings.

Primary uses of cash include debt service, capital expenditures, working capital maintenance and income tax payments. We typically finance working capital needs with cash provided from operating activities and short-term borrowings. Inventories are managed primarily through demand forecasting and replenishing depleted inventories.

We currently do not pay a dividend on our common stock. In addition, we are limited in the aggregate amount of dividends that we may pay under the terms of our Term Loan Facility, ABL Credit Facility and Senior Notes. Subject to certain limitations contained in our debt agreements and as market conditions warrant, we may from time to time refinance indebtedness that we have incurred, including through the incurrence or repayment of loans under existing or new credit facilities or the issuance or repayment of debt securities. Proceeds from the sale of any properties mortgaged and encumbered under our Term Loan Facility are required to be used to make additional Term Loan Facility payments or to be reinvested in the business.

Long-Term Debt

During fiscal 2023 year-to-date, we borrowed a net $83 million under the ABL Credit Facility and made voluntary prepayments on the Term Loan Facility totaling $130 million with a portion of the proceeds received from monetizing certain receivables previously within accounts receivable, and from asset sales.

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Our Term Loan Agreement and Senior Notes do not include any financial maintenance covenants. Our ABL Loan Agreement subjects us to a fixed charge coverage ratio of at least 1.0 to 1.0, calculated at the end of each of our fiscal quarters on a rolling four quarter basis, if the adjusted aggregate availability is ever less than the greater of (i) $210 million and (ii) 10% of the aggregate borrowing base. We have not been subject to the fixed charge coverage ratio covenant under the ABL Loan Agreement, including through the filing date of this Quarterly Report on Form 10-Q. The Term Loan Agreement, Senior Notes and ABL Loan Agreement contain certain operational and informational covenants customary for debt securities of these types that limit our and our restricted subsidiaries’ ability to, among other things, incur debt, declare or pay dividends or make other distributions to our stockholders, transfer or sell assets, create liens on our assets, engage in transactions with affiliates, and merge, consolidate or sell all or substantially all of our and our subsidiaries’ assets on a consolidated basis. We were in compliance with all such covenants for all periods presented. If we fail to comply with any of these covenants, we may be in default under the applicable debt agreement, and all amounts due thereunder may become immediately due and payable.

Derivatives and Hedging Activity

We enter into interest rate swap contracts from time to time to mitigate our exposure to changes in market interest rates as part of our strategy to manage our debt portfolio to achieve an overall desired position of notional debt amounts subject to fixed and floating interest rates. Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures.

As of January 28, 2023, we had an aggregate of $1,000 million of floating rate notional debt subject to active interest rate swap contracts, which effectively hedge the SOFR component of our interest rate payments through pay fixed and receive floating interest rate swap agreements. These fixed rates range from 2.360% to 2.875%, with maturities between March 2023 and October 2025. The fair value of these interest rate derivatives represent a current asset of $17 million and a long-term asset of $5 million as of January 28, 2023, and are subject to volatility based on changes in market interest rates.

From time to time, we enter into fixed price fuel supply agreements and foreign currency hedges. As of January 28, 2023, we had fixed price fuel contracts and foreign currency forward agreements outstanding. Gains and losses and the outstanding assets and liabilities from these arrangements are insignificant.

Payments for Capital Expenditures

Our capital expenditures for fiscal 2023 year-to-date were $151 million compared to $106 million for fiscal 2022 year-to-date, an increase of $45 million, primarily due to investments in automation. Our capital spending for fiscal 2023 and 2022 year-to-date principally included information technology and supply chain expenditures. Fiscal 2022 year-to-date included continued investment in the new Allentown, Pennsylvania distribution center. Fiscal 2023 capital spending is expected to be approximately $350 million and include projects that automate, optimize and expand our distribution network, and finance our technology platform investments. We expect to finance fiscal 2023 capital expenditures requirements with cash generated from operations and borrowings under our ABL Credit Facility. Future investments may be financed through long-term debt or borrowings under our ABL Credit Facility and cash from operations.

Cash Flow Information

The following summarizes our Condensed Consolidated Statements of Cash Flows:

	26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022		Change
Net cash provided by operating activities	$	270	$	43	$	227
Net cash used in investing activities	(143)		(129)		(14)
Net cash (used in) provided by financing activities	(131)		91		(222)
Net (decrease) increase in cash and cash equivalents	(4)		5		(9)
Cash and cash equivalents, at beginning of period	44		40		4
Cash and cash equivalents, at end of period	$	40	$	45	$	(5)

The increase in net cash provided by operating activities in fiscal 2023 year-to-date compared to fiscal 2022 year-to-date was primarily due to the monetization of certain receivables in fiscal 2023 year-to-date discussed above, pursuant to a purchase agreement with a third-party financial institution, which generated net cash proceeds of $282 million.

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The increase in net cash used in investing activities in fiscal 2023 year-to-date compared to fiscal 2022 year-to-date was primarily due to higher capital expenditures, as described above, partially offset by a reduction in payments for investments.

The increase in net cash used in financing activities in fiscal 2023 year-to-date compared to fiscal 2022 year-to-date was primarily due to lower net borrowings under the ABL Credit Facility resulting from increases in net cash provided by operating activities, net of cash used in investing activities, as described above.

Other Obligations and Commitments

Our principal contractual obligations and commitments consist of obligations under our long-term debt, interest on long-term debt, operating and finance leases, purchase obligations, self-insurance liabilities and multiemployer plan withdrawal liabilities.

Except as otherwise disclosed in Note 14—Commitments, Contingencies and Off-Balance Sheet Arrangements and Note 7—Long-Term Debt, there have been no material changes in our contractual obligations since the end of fiscal 2022. Refer to Item 7 of the Annual Report for additional information regarding our contractual obligations.

Pension and Other Postretirement Benefit Obligations

In fiscal 2023, no minimum pension contributions are required to be made under the SUPERVALU INC. Retirement Plan under Employee Retirement Income Security Act of 1974, as amended (“ERISA”). An insignificant amount of contributions are expected to be made to defined benefit pension plans and postretirement benefit plans in fiscal 2023. We fund our defined benefit pension plans based on the minimum contribution required under ERISA, the Pension Protection Act of 2006 and other applicable laws and additional contributions made at our discretion. We may accelerate contributions or undertake contributions in excess of the minimum requirements from time to time subject to the availability of cash in excess of operating and financing needs or other factors as may be applicable. We assess the relative attractiveness of the use of cash to accelerate contributions considering such factors as expected return on assets, discount rates, cost of debt, reducing or eliminating required Pension Benefit Guaranty Corporation variable rate premiums or in order to achieve exemption from participant notices of underfunding.

Off-Balance Sheet Multiemployer Pension Arrangements

We contribute to various multiemployer pension plans under collective bargaining agreements, primarily defined benefit pension plans. These multiemployer plans generally provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Plan trustees typically are responsible for determining the level of benefits to be provided to participants as well as the investment of the assets and plan administration. Trustees are appointed in equal number by employers and unions that are parties to the relevant collective bargaining agreement. Based on the assessment of the most recent information available from the multiemployer plans, we believe that most of the plans to which we contribute are underfunded. We are only one of a number of employers contributing to these plans and the underfunding is not a direct obligation or liability to us.

Our contributions can fluctuate from year to year due to store closures, employer participation within the respective plans and reductions in headcount. Our contributions to these plans could increase in the near term. However, the amount of any increase or decrease in contributions will depend on a variety of factors, including the results of our collective bargaining efforts, investment returns on the assets held in the plans, actions taken by the trustees who manage the plans and requirements under the Pension Protection Act of 2006, the Multiemployer Pension Reform Act and Section 412(e) of the Internal Revenue Code. Furthermore, if we were to significantly reduce contributions, exit certain markets or otherwise cease making contributions to these plans, we could trigger a partial or complete withdrawal that could require us to record a withdrawal liability obligation and make withdrawal liability payments to the fund. Expense is recognized in connection with these plans as contributions are funded, in accordance with GAAP. We made contributions to these plans, and recognized expense of $45 million in fiscal 2022. In fiscal 2023, we expect to contribute approximately $51 million to multiemployer plans, subject to the outcome of collective bargaining and capital market conditions. We expect required cash payments to fund multiemployer pension plans from which we have withdrawn to be insignificant in any one fiscal year, which would exclude any payments that may be agreed to on a lump sum basis to satisfy existing withdrawal liabilities. Any future withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP. Any triggered withdrawal obligation could result in a material charge and payment obligations that would be required to be made over an extended period of time.

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We also make contributions to multiemployer health and welfare plans in amounts set forth in the related collective bargaining agreements. A small minority of collective bargaining agreements contain reserve requirements that may trigger unanticipated contributions resulting in increased healthcare expenses. If these healthcare provisions cannot be renegotiated in a manner that reduces the prospective healthcare cost as we intend, our Operating expenses could increase in the future.

Refer to Note 13—Benefit Plans in Part II, Item 8 of the Annual Report for additional information regarding the plans in which we participate.

Share Repurchases

In September 2022, our Board of Directors authorized a new repurchase program for up to $200 million of our common stock over a term of four years (the “2022 Repurchase Program”). Under the 2022 Repurchase Program, we repurchased approximately 390,000 shares of our common stock for a total cost of $17 million in the second quarter of fiscal 2023 and approximately 729,000 shares of our common stock for a total cost of $29 million in fiscal 2023 year-to-date. As of January 28, 2023, we had $171 million remaining authorized under the 2022 Repurchase Program.

We will manage the timing of any repurchases of our common stock in response to market conditions and other relevant factors, including any limitations on our ability to make repurchases under the terms of our ABL Credit Facility, Term Loan Facility and Senior Notes. We may implement the 2022 Repurchase Program pursuant to a plan or plans meeting the conditions of Rule 10b5-1 under the Exchange Act.

Critical Accounting Policies and Estimates

There were no material changes to our critical accounting policies during the period covered by this Quarterly Report on Form 10-Q. Refer to the description of critical accounting policies included in Item 7 of our Annual Report.

Seasonality

Overall product sales are fairly balanced throughout the year, although demand for certain products of a seasonal nature may be influenced by holidays, changes in seasons or other annual events. Our working capital needs are generally greater during the months of and leading up to high sales periods, such as the buildup in inventory leading to the calendar year-end holidays. Our inventory, accounts payable and accounts receivable levels may be impacted by macroeconomic impacts and changes in food-at-home purchasing rates. These effects can result in normal operating fluctuations in working capital balances, which in turn can result in changes to cash flow from operations that are not necessarily indicative of long-term operating trends.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk results primarily from fluctuations in interest rates on our borrowings and our interest rate swap agreements, and price increases in diesel fuel. Except as described in Note 6—Derivatives and Note 7—Long-Term Debt in Part I, Item 1 of this Quarterly Report on Form 10-Q, which are incorporated herein, there have been no other material changes to our exposure to market risks from those disclosed in our Annual Report.

Item 4. Controls and Procedures

(a)     Evaluation of disclosure controls and procedures. We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

(b)    Changes in internal controls. There has been no change in our internal control over financial reporting that occurred during the second quarter of fiscal 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

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Item 1. Legal Proceedings

From time to time, we are involved in routine litigation or other legal proceedings that arise in the ordinary course of our business, including investigations and claims regarding employment law including wage and hour, pension plans, unfair labor practices, labor union disputes, supplier, customer and service provider contract terms, product liability, real estate and antitrust. Other than as set forth in Note 14—Commitments, Contingencies and Off-Balance Sheet Arrangements in Part I, Item I of this Quarterly Report on Form 10-Q, which is incorporated herein, there are no pending material legal proceedings to which we are a party or to which our property is subject.

Item 1A. Risk Factors

There have been no material changes to our risk factors contained in Part I, Item 1A. Risk Factors, of our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In September 2022, our Board of Directors authorized a new repurchase program for up to $200 million of our common stock over a term of four years (the “2022 Repurchase Program”). Any repurchases will be made in accordance with applicable securities laws from time to time in the open market, through privately negotiated transactions, or otherwise. With respect to open market purchases, we may use a plan or plans meeting the conditions of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which allows us to repurchase shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed blackout periods.

The following table presents purchases of our common stock and related information for each of the months in the quarter ended January 28, 2023.

(in millions, except shares and per share amounts)	Total Number of Shares Purchased(2)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(3)
Period(1):
October 30, 2022 to December 3, 2022	115,252	$	45.66	104,742	$	183
December 4, 2022 to December 31, 2022	159,776	$	39.71	152,800	$	177
January 1, 2023 to January 28, 2023	150,388	$	39.76	132,686	$	171
Total	425,416	$	41.34	390,228	$	171

(1)The reported periods conform to our fiscal calendar.

(2)These amounts represent the deemed surrender by participants in our compensatory stock plans of 35,188 shares of our common stock to cover withholding taxes from the vesting of restricted stock units granted under such plans and the repurchase of 390,228 shares of our common stock under the 2022 Repurchase Program.

(3)The amounts shown in this column represent the amount remaining under the 2022 Repurchase Program as of December 3, 2022, December 31, 2022 and January 28, 2023.

Item 5. Other Information

On March 3, 2023, upon recommendation of the Compensation Committee of the Company’s Board of Directors, the Board of Directors approved the Second Amended and Restated 2020 Equity Incentive Plan (the “Plan”) to make certain amendments that the Board determined to be in the best interests of the Company and its stockholders.

The amendments to the Plan (i) further clarify the intent of the Company that severance will not be paid under the Separation from Service without Cause (as defined in the Plan) provisions of the plan upon a separation due to performance issues, (ii) require the execution of a release in connection with the vesting of any shares as a result of a Separation from Service without Cause (as defined in the Plan), (iii) move restrictive covenant provisions from the Plan to the applicable award agreement to increase flexibility and enforceability, and (iv) other conforming changes.

The foregoing is a summary of, and is subject to, the actual terms and conditions set forth in the Plan and is qualified in its entirety by reference to the Plan and related award agreements. A copy of the Second Amended and Restated 2020 Equity Incentive Plan is filed herewith as Exhibit 10.1. Copies of the Form of RSU Award Agreement and Form of PSU Award Agreement for equity awards granted under the Plan are filed herewith as Exhibits 10.2 and 10.3, respectively.

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Item 6. Exhibits

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated July 25, 2018, by and among SUPERVALU INC., SUPERVALU Enterprises, Inc., the Registrant and Jedi Merger Sub, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on July 26, 2018).
2.2	First Amendment to Agreement and Plan of Merger, dated as of October 10, 2018, by and among United Natural Foods, Inc., Jedi Merger Sub, Inc., SUPERVALU INC. and SUPERVALU Enterprises, Inc. (incorporated by reference to Registrant’s Current Report on Form 8-K, filed on October 10, 2018).
3.1	Certificate of Incorporation of the Registrant, as amended (restated for SEC filing purposes only) (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2015).
3.2	Fourth Amended and Restated Bylaws of the Registrant (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on October 19, 2018).
10.1* **	Second Amended and Restated United Natural Foods, Inc. 2020 Equity Incentive Plan, effective as of March 3, 2023.
10.2* **	Form of RSU Award Agreement pursuant to the Registrant’s Second Amended and Restated 2020 Equity Incentive Plan.
10.3* **	Form of PSU Award Agreement pursuant to the Registrant’s Second Amended and Restated 2020 Equity Incentive Plan.
10.4* **	United Natural Foods, Inc. Annual Incentive Plan, as further amended.
31.1*	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following materials from the United Natural Foods, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended January 28, 2023, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.
104	The cover page from our Quarterly Report on Form 10-Q for the second quarter of fiscal 2023, filed with the SEC on March 8, 2023, formatted in Inline XBRL (included as Exhibit 101).

______________________________________________

*     Filed herewith.

** Denotes a management contract or compensatory plan or arrangement.

*                 *                 *

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

UNITED NATURAL FOODS, INC.

/s/ JOHN W. HOWARD

John W. Howard

Chief Financial Officer

(Principal Financial Officer and duly authorized officer)

Dated: March 8, 2023

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EX-10.1

Exhibit 10.1

SECOND AMENDED AND RESTATED UNITED NATURAL FOODS, INC.

2020 EQUITY INCENTIVE PLAN

(EFFECTIVE AS OF March 3, 2023)

TABLE OF CONTENTS
TABLE OF CONTENTS	A-2
Section 1. Purpose	A-3
Section 2. Definitions	A-3
Section 3. Administration	A-7
Section 4. Shares Available for Awards	A-9
Section 5. Eligibility	A-10
Section 6. Stock Options and Stock Appreciation Rights	A-11
Section 7. Restricted Shares and Restricted Share Units	A-13
Section 8. Performance Awards	A-15
Section 9. Other Stock-Based Awards	A-16
Section 10. Non-Employee Director and Outside Director Awards	A-16
Section 11. Separation from Service	A-17
Section 12. Change in Control	A-20
Section 13. Amendment and Termination	A-22
Section 14. General Provisions	A-22
Section 15. Term of The Plan	A-26

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SECOND AMENDED AND RESTATED UNITED NATURAL FOODS, INC.

2020 EQUITY INCENTIVE PLAN

(EFFECTIVE AS OF MARCH 3, 2023)

Section 1. History and Purpose.

The United Natural Foods, Inc. 2020 Equity Incentive Plan (the “Plan”) was established by United Natural Foods, Inc. (the “Company”) to promote the interests of Company and its stockholders by fulfilling one or more of the following objectives: (i) attracting and retaining key officers, employees and directors of, and consultants to, the Company and its Subsidiaries; (ii) motivating such individuals by means of performance-related incentives to achieve long-term performance goals; (iii) enabling such individuals to participate in the long-term growth and financial success of the Company; (iv) encouraging ownership of stock in the Company by such individuals; and (v) aligning their compensation with the long-term interests of the Company and its stockholders. The Plan has been amended from time to time and the following provisions constitute an amendment and restatement of the Plan as in effect immediately prior to the Effective Date.

Section 2. Definitions.

As used in the Plan, the following terms shall have the meanings set forth below:

2.1 “Acquiror” has the meaning provided in Section 12.1.

2.2 “Affiliate” means (i) any entity that, directly or indirectly, is controlled by the Company, (ii) any entity in which the Company has a significant equity interest, (iii) an affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act; and (iv) any entity in which the Company has at least twenty percent (20%) of the combined voting power of the entity’s outstanding voting securities, in each case as designated by the Board as being a participating employer in the Plan.

2.3 “Award” means any Option, Stock Appreciation Right, Restricted Share Award, Restricted Share Unit, Performance Award, or Other Stock-Based Award granted under the Plan, whether singly, in combination or in tandem, to a Participant by the Committee (or the Board) pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee (or the Board) may establish, or any similar award under the Prior Plan.

2.4 “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant.

2.5 “Board” means the Board of Directors of the Company.

2.6 “Cause” means, unless otherwise defined in the applicable Award Agreement, (i) conviction of the Participant under applicable law of (A) any felony or (B) any misdemeanor involving moral turpitude; (ii) unauthorized acts intended to result in the Participant’s personal enrichment at the material expense of the Company or any Subsidiary or Affiliate or their reputation; (iii) any violation of the Participant’s duties or responsibilities to the Company or a Subsidiary or Affiliate which constitutes willful misconduct or dereliction of duty; or (iv) material breach of the covenants described in Section 14.8 of this Plan.

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2.7 “Change in Control” means, unless otherwise provided in the applicable Award Agreement, the happening of one of the following:

(a) any “person”, including a “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding the Company, any of its Affiliates, or any employee benefit plan of the Company or any of its Affiliates) is or becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the Exchange Act), directly or indirectly, of securities of the Company representing the greater of 30% or more of the combined voting power of the Company’s then outstanding securities;

(b) the stockholders of the Company shall approve a definitive agreement and a transaction is consummated (1) for the merger or other business combination of the Company with or into another corporation if (A) a majority of the directors of the surviving corporation were not directors of the Company immediately prior to the effective date of such merger or (B) the stockholders of the Company immediately prior to the effective date of such merger own less than 60% of the combined voting power in the then outstanding securities in such surviving corporation or (2) for the sale or other disposition of all or substantially all of the assets of the Company;

(c) the purchase of 30% or more of the combined voting power of the Company’s then outstanding securities pursuant to any tender or exchange offer made by any “person”, including a “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company, any of its Affiliates, or any employee benefit plan of the Company or any of its Affiliates; or

(d) the disposal of any line of business representing at least 15% of the Company’s consolidated net sales for the then-most recently completed fiscal year; provided, however, that such disposal shall only be deemed a “Change in Control” for Participants primarily employed in the line of business disposed of, who cease to be employed by the Company following the disposition.

2.8 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

2.9 “Committee” means a committee of the Board composed of not less than two Non-Employee Directors, each of whom shall be (i) a “non-employee director” for purposes of Exchange Act Section 16 and Rule 16b-3 thereunder and (ii) “independent” within the meaning of the listing standards of the New York Stock Exchange and the rules and regulations of the SEC.

2.10 “Company” means United Natural Foods, Inc., a Delaware corporation, and its successors and assigns.

2.11 “Consultant” means any consultant to the Company or its Subsidiaries or Affiliates.

2.12 “Director” means a member of the Board.

2.13 “Disability” means, unless otherwise defined in the applicable Award Agreement, a disability that would qualify as a total and permanent disability under the Company’s then current long-term disability plan. With respect to Awards subject to Section 409A of the Code, unless otherwise defined in the applicable Award Agreement, the term “Disability” shall have the meaning set forth in Section 409A of the Code.

2.14 “Effective Date” has the meaning provided in Section 15.1 of the Plan.

2.15 “Employee” means a current or prospective officer or employee of the Company or of any Subsidiary or Affiliate.

2.16 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

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2.17 “Fair Market Value” with respect to the Shares, means, for purposes of a grant of an Award as of any date, (i) the reported closing sales price of the Shares on the New York Stock Exchange, or any other such market or exchange as is the principal trading market for the Shares, on such date, or in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported or (ii) in the event there is no public market for the Shares on such date, the fair market value as determined, in good faith and by the reasonable application of a reasonable valuation method (as applicable), by the Committee in its sole discretion, and for purposes of a sale of a Share as of any date, the actual sales price on that date.

2.18 “Full Value Award Cap” has the meaning provided in Section 4.1 of the Plan.

2.19 “Good Reason” means, unless otherwise provided in an Award Agreement, the occurrence of any one or more of the following without the Participant’s express written consent: (i) the assignment of duties to a Participant that are materially adversely inconsistent with the Participant’s duties immediately prior to a Change in Control, and failure to rescind such assignment within thirty (30) days of receipt of notice from the Participant; (ii) a material reduction in a Participant’s title, authority or reporting status following a Change in Control as compared to such title, authority or reporting status immediately prior to a Change in Control, (iii) the Company’s requirement that a Participant relocate more than fifty (50) miles from the Participant’s place of employment prior to the Participant performed such duties prior to the Change in Control; (iv) a reduction in the Participant’s base salary as in effect immediately prior to a Change in Control or the failure of the Company to pay or cause to be paid any compensation or benefits when due, and failure to restore such annual base salary or make such payments within five (5) days of receipt of notice from the Participant; (v) the failure to include the Participant in any new employee benefit plans proposed by the Company or a material reduction in the Participant’s level of participation in any existing plans of any type; provided that a Company-wide reduction or elimination of such plans shall not constitute “Good Reason” for purposes of this Plan; or (vi) the failure of the Company to obtain a satisfactory agreement from the Acquiror to assume and perform the Award Agreement; provided that, in each case, (A) within sixty (60) days of the initial occurrence of the specified event the Participant has given the Company or any successor to the Company at least thirty (30) days to cure the Good Reason, (B) the Company or any such successor has not cured the Good Reason within the thirty (30) day period and (C) the Participant resigns within ninety (90) days from the initial occurrence of the event giving rise to the Good Reason.

2.20 “Grant Price” means the price established at the time of grant of an SAR pursuant to Section 6 hereof used to determine whether there is any payment due upon exercise of the SAR.

2.21 “Incentive Stock Option” means an option to purchase Shares from the Company that is granted under Section 6 of the Plan and that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto, or a similar Award under the Prior Plan.

2.22 “Non-Employee Director” means a member of the Board who is not an officer or employee of the Company or any Subsidiary or Affiliate.

2.23 “Non-Qualified Stock Option” means an option to purchase Shares from the Company that is granted under Sections 6 or 10 of the Plan and is not intended to be an Incentive Stock Option, or a similar Award under the Prior Plan.

2.24 “Option” means an Incentive Stock Option or a Non-Qualified Stock Option.

2.25 “Option Price” means the purchase price payable to purchase one Share upon the exercise of an Option.

2.26 “Other Stock-Based Award” means any Award granted under Sections 9 or 10 of the Plan or the Prior Plan. For purposes of determining the number of Awards granted hereunder in relation to the Full Value Award Cap set forth in

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Section 4.1 hereof, an Other Stock-Based Award that is not settled in cash shall be treated as a Restricted Share Award if the amounts payable thereunder will be determined by reference to the full value of a Share.

2.27 “Outside Director” means, with respect to the grant of an Award, a member of the Board then serving on the Committee.

2.28 “Participant” means any Employee, Director, Consultant or other person who receives an Award under the Plan.

2.29 “Performance Award” means any Award granted under Section 8 of the Plan or a similar Award under the Prior Plan. For purposes of determining the number of Awards granted hereunder in relation to the Full Value Award Cap set forth in Section 4.1 hereof, a Performance Award that is not settled in cash shall be treated as a Restricted Share Award if the amounts payable thereunder will be determined by reference to the full value of a Share.

2.30 “Person” means any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity.

2.31 “Prior Plan” means the United Natural Foods, Inc. Second Amended and Restated 2012 Equity Incentive Plan.

2.32 “Relocation” has the meaning provided in Section 11.3 hereof.

2.33 “Restricted Share” means any Share granted under Sections 7 to 10 of the Plan, or solely for the purposes of Section 4.1, a similar Award under the Prior Plan.

2.34 “Restricted Share Unit” means any unit granted under Sections 7 to 10 of the Plan, or solely for the purposes of Section 4.1, a similar Award under the Prior Plan.

2.35 “Retirement” means the termination of the Participant’s employment with the Company and all of its Subsidiaries and Affiliates on or after the date on which both of the following have occurred: (i) the Participant has attained 59 years of age and (ii) the Participant has provided ten (10) years of service to the Company and its Subsidiaries and Affiliates.Years of service will be calculated as full years since the Participant’s most recent “hire date” or “rehire date,” which shall mean the applicable date on file for the Participant in the Company’s human resources books and records, determined in the Company’s sole discretion.

2.36 “SEC” means the Securities and Exchange Commission or any successor thereto.

2.37 “Section 16” means Section 16 of the Exchange Act and the rules promulgated thereunder and any successor provision thereto as in effect from time to time.

2.38 “Section 162(m)” means Section 162(m) of the Code and the regulations promulgated thereunder and any successor provision thereto as in effect from time to time.

2.39 “Separation from Service” or “Separates from Service” shall have the meaning ascribed to such term pursuant to Section 409A of the Code and the regulations promulgated thereunder. In the event an Award is not subject to Section 409A of the Code, the term “Separation from Service” or “Separates from Service” shall mean the termination of employment or service with the Company, the Subsidiaries and the Affiliates.

2.40 “Separation from Service without Cause” has the meaning provided in Section 11.3 hereof.

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2.41 “Share Reserve” has the meaning set forth in Section 4.1 hereof.

2.42 “Shares” means shares of the common stock, par value $0.01 per share, of the Company, or any security into which such shares may be converted by reason of any event of the type referred to in Sections 4.2, 12.1, and 13.3.

2.43 “Specified Employee” has the meaning ascribed to such term pursuant to Section 409A of the Code and the regulations promulgated thereunder.

2.44 “Stock Appreciation Right” or “SAR” means a stock appreciation right granted under Sections 6, 8 or 10 of the Plan, or a similar Award under the Prior Plan, that entitles the holder to receive, with respect to each Share encompassed by the exercise of such SAR, the amount determined by the Committee and specified in an Award Agreement. If the Award Agreement fails to specify the amount to be received by the holder, the holder shall be entitled to receive, with respect to each Share encompassed by the exercise of such SAR, the excess of the Fair Market Value of such Share on the date of exercise over the Grant Price.

2.45 “Subsidiary” means any Person (other than the Company) of which 50% or more of its voting power or its equity securities or equity interest is owned directly or indirectly by the Company.

2.46 “Substitute Awards” means Awards granted solely in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or with which the Company combines.

2.47 “Vesting Period” means the period of time specified by the Committee during which vesting restrictions for an Award are applicable.

Section 3. Administration.

3.1 Authority of Committee. The Plan shall be administered by a Committee, which shall be appointed by and serve at the pleasure of the Board; provided, however, with respect to Awards to Outside Directors, all references in the Plan to the Committee shall be deemed to be references to the Board. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority in its discretion (and in accordance with Section 409A of the Code with respect to Awards subject thereto) to:

(a) designate Participants;

(b) determine eligibility for participation in the Plan and decide all questions concerning eligibility for and the amount of Awards under the Plan;

(c) determine the type or types of Awards to be granted to a Participant;

(d) determine the number of Shares to be covered by, or with respect to which payments, rights or other matters are to be calculated in connection with Awards;

(e) determine the timing, terms, and conditions, including performance objectives, as applicable, and any adjustments thereto, of any Award;

(f) accelerate the time at which all or any part of an Award may be vested, settled or exercised;

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(g) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended;

(h) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee;

(i) grant Awards as an alternative to, or as the form of payment for grants or rights earned or payable under, other bonus or compensation plans, arrangements or policies of the Company or a Subsidiary or Affiliate;

(j) grant Substitute Awards on such terms and conditions as the Committee may prescribe, subject to compliance with the Incentive Stock Option rules under Section 422 of the Code and the nonqualified deferred compensation rules under Section 409A of the Code, where applicable;

(k) make all determinations under the Plan concerning any Participant’s Separation from Service with the Company or a Subsidiary or Affiliate, including whether such separation occurs by reason of Cause, Good Reason, Disability, or Retirement, and whether a leave of absence constitutes a Separation from Service;

(l) make all determinations under the Plan, including by setting a policy, concerning the treatment of a leave of absence that the Committee determines not to constitute a Separation from Service;

(m) interpret and administer the Plan, any Award Agreement and any instrument or agreement relating to the Plan or an Award made under the Plan;

(n) except to the extent otherwise prohibited by the Plan, including Section 6.2 of the Plan, amend or modify the terms of any Award at or after grant with the consent of the holder of the Award, or in the case of an amendment or modification that is to the Participant’s benefit, without the consent of the holder of the Award;

(o) establish, amend, suspend or waive such policies, processes, rules and regulations and, if desired, appoint such agents as it shall deem appropriate for the proper administration of the Plan;

(p) adopt special guidelines and provisions for Persons who are residing in, employed in or subject to the taxes of any domestic or foreign jurisdiction to comply with applicable tax and securities laws of such domestic or foreign jurisdiction;

(q) correct any defect, supply any omission, or reconcile any inconsistency in the Plan or in any agreement related thereto; and

(r) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan, subject to the exclusive authority of the Board under Section 13 hereunder to amend or terminate the Plan.

3.2 Committee Discretion Binding. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Subsidiary or Affiliate, any Participant and any holder or beneficiary of any Award. The Committee shall have no obligation to treat Participants or eligible Participants uniformly, and the Committee may make determinations under the Plan selectively among Participants who receive, or Employees or Directors who are eligible to receive,

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Awards (whether or not such Participants or eligible Employees or Directors are similarly situated). A Participant or other holder of an Award may contest a decision or action by the Committee with respect to such person or Award only on the grounds that such decision or action was arbitrary or capricious or was unlawful, and any review of such decision or action shall be limited to whether the Committee’s decision or action was arbitrary or capricious or was unlawful.

3.3 Delegation. Subject to the terms of the Plan and applicable law, the Committee may delegate to one or more officers of the Company or to a Committee of such officers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to or to cancel, modify or waive rights with respect to, or to alter, discontinue, suspend or terminate Awards held by Participants who are not officers or directors of the Company for purposes of Exchange Act Section 16 or who are otherwise not subject to Section 16. Any resolution delegating authority to grant Awards shall specify the maximum number of Shares underlying Awards that may be granted pursuant to such delegated authority.

3.4 No Liability. No member of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award granted hereunder.

Section 4. Shares Available for Awards.

4.1 Shares Available; Assumption of Prior Plan Awards. Subject to the provisions of Section 4.2 below, the maximum aggregate number of Shares reserved and available for distribution under the Plan shall not exceed the sum of (i) 10,800,000 Shares, plus (ii) the number of shares available for grant under the Prior Plan as of the Effective Date (such aggregate amount, the “Share Reserve”). Awards made under the Prior Plan are hereby assumed as of the Effective Date. The number of Shares with respect to which Incentive Stock Options may be granted under this Plan shall be no more than 1,000,000. Subject to the application of the last sentence of this Section 4.1, the maximum number of Awards that the Company may issue under this Plan from the Share Reserve as Restricted Share Awards and Restricted Share Unit Awards shall be equal to the Share Reserve (the “Full Value Award Cap”). If any Award granted under this Plan or the Prior Plan (whether before or after the Effective Date of this Plan) shall expire, terminate, be settled in cash or otherwise be forfeited or canceled for any reason without the delivery of Shares, then the Shares covered by such Award, or to which such Award relates, or the number of Shares otherwise counted against the Share Reserve, to the extent of any such forfeiture, termination, settlement, expiration or cancellation, shall be added back to the Share Reserve. The Committee may make such other determinations regarding the counting of Shares issued pursuant to this Plan or the Prior Plan as it deems necessary or advisable, provided that such determinations shall be permitted by law. Notwithstanding the foregoing, if an Option or SAR is exercised, in whole or in part, by tender of Shares, or if the Company’s tax withholding obligation for any Award (including Awards granted prior to the Effective Date) is satisfied by withholding Shares, the number of Shares deemed to have been issued for purposes of the limitation set forth in this Section 4.1 shall be the number of Shares that were subject to the Award or portion thereof, and not the net number of Shares actually issued, and any SARs to be settled in Shares shall be counted in full against the number of Shares available for issuance under the Plan, regardless of the number of Shares issued upon the settlement of the SAR. Any Shares that again become available for grant pursuant to this Section 4.1 shall be added back to the Full Value Award Cap if the original Award of such Shares was a Restricted Share Award or Restricted Share Unit Award (or treated as such hereunder).

4.2 Per Participant Limitations. The maximum number of Shares in respect of which Options and SARs may be granted to a Participant during any fiscal year under the Plan is 900,000. The maximum value of Restricted Share Awards, Restricted Share Unit Awards and Performance Awards denominated in Shares that may be granted to any Participant during any fiscal year under the Plan is $10,000,000, excluding, for this purpose, the value of any dividends or dividend equivalents payable in accordance with the Plan on any Award. The value of such Awards shall be based on the grant date fair value. For Performance Awards denominated in Shares, the value shall be the grant date fair value of the target number of Shares. For Performance Awards that are denominated in cash, the maximum value that may be

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granted to any Participant during any fiscal year under the Plan is $10,000,000. The individual Participant limitations set forth in this Section 4.2 shall be cumulative; that is, to the extent that Shares or cash for which Awards are permitted to be granted to a Participant during a fiscal year are not covered by an Award to such Participant in that fiscal year (such shortfall, the “Shortfall Amount”), the number of Shares (or amount of cash, as the case may be) available for Awards to such Participant shall automatically increase in the subsequent fiscal years during the term of the Plan until the earlier of the time the Shortfall Amount has been granted to the Participant, or the end of the third fiscal year following the year to which such Shortfall Amount relates (determined on a “first-in-first-out” basis).

4.3 Adjustments. Without limiting the Committee’s discretion as provided in Section 12 hereof, if there shall occur any change in the capital structure of the Company by reason of any extraordinary dividend or other distribution (whether in the form of cash, Shares, other securities or other property, and other than a normal cash dividend), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other corporate transaction or event having an effect similar to the foregoing, then the Committee shall, in an equitable and proportionate manner as determined by the Committee (and, as applicable, in such manner as is consistent with Sections 162(m), 422 and 409A of the Code and the regulations thereunder), take action as provided in clauses (i), (ii) or (iii) of this Section 4.3, as follows:

(i) adjust any or all of (1) the aggregate number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards (or any particular type of Awards) may be granted under the Plan, in the aggregate or on a per Participant basis, including the Full Value Award Cap; (2) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards under the Plan, provided that the number of Shares subject to any Award shall always be a whole number; (3) the grant or exercise price with respect to any Award under the Plan, and (4) the limits on the number of Shares or Awards that may be granted to Participants under the Plan in any calendar year;

(ii) provide for an equivalent award in respect of securities of the Acquiror or surviving entity of any merger, consolidation or other transaction or event having a similar effect; or

(iii) make provision for a cash payment to the holder of an outstanding Award.

Any such adjustments to outstanding Awards shall be effected in a manner that precludes the material enlargement or dilution of rights and benefits under such Awards.

4.4 Substitute Awards. Any Shares issued by the Company as Substitute Awards in connection with the assumption or substitution of outstanding grants from any acquired corporation shall not reduce the Shares available for Awards under the Plan to the extent that the rules and regulations of any stock exchange or other trading market on which the Shares are listed or traded provide an exemption from shareholder approval for assumption, substitution, conversion, adjustment, or replacement of outstanding awards in connection with mergers, acquisitions, or other corporate combinations.

4.5 Sources of Shares Deliverable under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of issued Shares which have been reacquired by the Company.

Section 5. Eligibility.

Any current or prospective Employee, Director or Consultant shall be eligible to be designated a Participant; provided, however, that Outside Directors shall only be eligible to receive Awards granted consistent with Section 10 and Awards

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to Non-Employee Directors shall be subject to Section 10.3. The vesting and exercise of an Award to a prospective Employee, Director or Consultant shall be conditioned upon such individual attaining such status.

Section 6. Stock Options and Stock Appreciation Rights.

6.1 Grant. Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Participants to whom Options and SARs shall be granted, the number of Shares subject to each Award, the Option Price or Grant Price and the conditions and limitations applicable to the exercise of each Option and SAR. An Option may be granted with or without a related SAR. An SAR may be granted with or without a related Option. The grant of an Option or SAR shall occur when the Committee by resolution, written consent or other appropriate action determines to grant such Option or SAR for a particular number of Shares to a particular Participant at a particular Option Price or Grant Price, as the case may be, or such later date as the Committee shall specify in such resolution, written consent or other appropriate action. The Committee shall have the authority to grant Incentive Stock Options and to grant Non-Qualified Stock Options. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with Section 422 of the Code, as from time to time amended, and any regulations implementing such statute. An Employee who has been granted an Option under the Plan may be granted additional Options under the Plan if the Committee shall so determine; provided, however, that to the extent the aggregate Fair Market Value (determined at the time the Incentive Stock Option is granted) of the Shares with respect to which all Incentive Stock Options are exercisable for the first time by an Employee during any calendar year (under all plans described in Section 422(d) of the Code of the Employee’s employer corporation and its parent and Subsidiaries) exceeds $100,000, or if Options fail to qualify as Incentive Stock Options for any other reason, such Options shall constitute Non-Qualified Stock Options. No dividends or dividend equivalents shall be paid or accrue on any Option.

6.2 Price. The Committee in its sole discretion shall establish the Option Price at the time each Option is granted and the Grant Price at the time each SAR is granted. Except in the case of Substitute Awards, the Option Price of an Option may not be less than the Fair Market Value of a Share on the date such Option is deemed to have been granted pursuant to Section 6.1 hereof, and the Grant Price of an SAR may not be less than the Fair Market Value of a Share on the date such SAR is deemed to have been granted pursuant to such Section 6.1. In the case of Substitute Awards or Awards granted in connection with an adjustment provided for in Section 4.3 hereof in the form of Options or SARs, such grants shall have an Option Price (or Grant Price) per Share that is intended to maintain the economic value of the Award that was replaced or adjusted as determined by the Committee. Notwithstanding the foregoing and except as permitted by the provisions of Section 4.3 hereof, the Committee shall not have the power to (i) lower the Option Price of an Option after it is granted, (ii) lower the Grant Price of an SAR after it is granted, (iii) cancel an Option when the Option Price exceeds the Fair Market Value of the underlying Shares in exchange for cash or another Award (other than in connection with a Change in Control or a Substitute Award) and grant substitute Options with a lower Option Price than the cancelled Options, (iv) cancel an SAR when the Grant Price exceeds the Fair Market Value of the underlying Shares in exchange for cash or another Award (other than in connection with a Change in Control or a Substitute Award), or (v) take any other action with respect to an Option or SAR that would be treated as a repricing under the rules and regulations of the principal securities exchange on which the Shares are traded, in each case without the approval of the Company’s stockholders.

6.3 Term. Subject to the Committee’s authority under Section 3.1 and the provisions of Section 6.6 hereof, each Option and SAR and all rights and obligations thereunder shall expire on the date determined by the Committee and specified in the Award Agreement. The Committee shall be under no duty to provide terms of like duration for Options or SARs granted under the Plan. Notwithstanding the foregoing, but subject to Section 6.4(a) hereof, no Option or SAR shall be exercisable after the expiration of ten (10) years from the date such Option or SAR was granted.

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6.4 Exercise.

(a) Each Option and SAR shall be exercisable at such times and subject to such terms and conditions as the Committee may, in its sole discretion, specify in the applicable Award Agreement or thereafter. The Committee shall have full and complete authority to determine whether an Option or SAR will be exercisable in full at any time or from time to time during the term of the Option or SAR, or to provide for the exercise thereof in such installments, upon the occurrence of such events and at such times during the term of the Option or SAR as the Committee may determine. The Committee may provide, at or after the grant, that the period of time over which an Option, other than an Incentive Stock Option, or SAR may be exercised shall be automatically extended if on the scheduled expiration of such Award, the Participant’s exercise of such Award would violate applicable securities law; provided, however, that during the extended exercise period the Option or SAR may only be exercised to the extent such Award was exercisable in accordance with its terms immediately prior to such scheduled expiration date; provided further, however, that such extended exercise period shall end not later than thirty (30) days after the exercise of such Option or SAR first would no longer violate such laws.

(b) The Committee may impose such conditions with respect to the exercise of Options or SARs, including without limitation, any relating to the application of federal, state or foreign securities laws or the Code, as it may deem necessary or advisable.

(c) An Option or SAR may be exercised in whole or in part at any time, with respect to whole Shares only, within the period permitted thereunder for the exercise thereof, and shall be exercised by written notice of intent to exercise the Option or SAR, delivered to the Company at its principal office, and payment in full to the Company at the direction of the Committee of the amount of the Option Price for the number of Shares with respect to which the Option is then being exercised. Notwithstanding the foregoing, an Award Agreement may provide, or be amended to provide, that if on the last day of the term of an Option or SAR the Fair Market Value of one Share exceeds the Option Price or Grant Price, as applicable, of such Award by an amount as may be determined by the Committee, the Participant has not exercised the Option or SAR and the Option or SAR has not otherwise expired, the Option or SAR shall be deemed to have been exercised by the Participant on such day with payment of the Option Price made by withholding Shares otherwise issuable in connection with the exercise of the Option. In such event, the Company shall deliver to the Participant the number of Shares for which the Option was deemed exercised, less the number of Shares required to be withheld for the payment of the total purchase price and required withholding taxes, and any fractional Share shall be settled in cash; and in the case of an SAR, the net number of Shares that the Participant would have received had the Participant actually exercised such SAR on such date.

(d) Payment of the Option Price shall be made in (i) cash or cash equivalents, (ii) at the discretion of the Committee, by transfer, either actually or by attestation, to the Company of unencumbered Shares previously acquired by the Participant, valued at the Fair Market Value of such Shares on the date of exercise (or next succeeding trading date, if the date of exercise is not a trading date), together with any applicable withholding taxes (which taxes may be satisfied in accordance with Section 14.6 of the Plan), such transfer to be upon such terms and conditions as determined by the Committee, (iii) by a combination of (i) or (ii), or (iv) by any other method approved or accepted by the Committee in its sole discretion, including, if the Committee so determines, (x) a cashless (broker-assisted) exercise that complies with applicable laws or (y) withholding Shares (net-exercise) otherwise deliverable to the Participant pursuant to the Option having an aggregate Fair Market Value at the time of exercise equal to the total Option Price together with any applicable withholding taxes (which taxes may be satisfied in accordance with Section 14.6). Until the optionee has been issued the Shares subject to such exercise, he or she shall possess no rights as a stockholder with respect to such Shares. The Company reserves, at any and all times in the Company’s sole discretion, the right to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a method set forth in subsection (iv) above, including with respect to one or more Participants specified by the Company notwithstanding that such program or procedures may be available to other Participants.

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(e) At the Committee’s discretion, the amount payable as a result of the exercise of an SAR may be settled in cash, Shares or a combination of cash and Shares. A fractional Share shall not be deliverable upon the exercise of a SAR but a cash payment will be made in lieu thereof.

6.5 Separation from Service. Except as otherwise provided in the applicable Award Agreement, an Option or SAR may be exercised only to the extent that it is then exercisable, and if at all times during the period beginning with the effective date of such Award and ending on the date of exercise of such Award the Participant is an Employee, Non-Employee Director or Consultant, and shall terminate immediately upon a Separation from Service by the Participant. Notwithstanding the foregoing provisions of this Section 6.5 to the contrary, the Committee may determine in its discretion that an Option or SAR may be exercised following any such Separation from Service, whether or not exercisable at the time of such separation; provided, however, that in no event may an Option or SAR be exercised after the expiration date of such Award specified in the applicable Award Agreement, except as provided in Section 6.4(a). If provided in the applicable Award Agreement or in accordance with any determination of the Committee at or after grant, an Award shall continue to vest and be exercisable after Retirement.

6.6 Ten Percent Stock Rule. Notwithstanding any other provisions in the Plan, if at the time an Option is otherwise to be granted pursuant to the Plan, the optionee or rights holder owns directly or indirectly (within the meaning of Section 424(d) of the Code) Shares of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its parent or Subsidiary or Affiliate corporations (within the meaning of Section 422(b)(6) of the Code), then any Incentive Stock Option to be granted to such optionee or rights holder pursuant to the Plan shall satisfy the requirement of Section 422(c)(5) of the Code, and the Option Price shall be not less than one hundred ten percent (110%) of the Fair Market Value of the Shares of the Company, and such Option by its terms shall not be exercisable after the expiration of five (5) years from the date such Option is granted.    

Section 7. Restricted Shares and Restricted Share Units.

7.1 Grant.

(a) Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Participants to whom Restricted Shares and Restricted Share Units shall be granted, the number of Restricted Shares and/or the number of Restricted Share Units to be granted to each Participant, the duration of the period during which, and the conditions under which, the Restricted Shares and Restricted Share Units may be forfeited to the Company, and the other terms and conditions of such Awards. The Restricted Share and Restricted Share Unit Awards shall be evidenced by Award Agreements in such form as the Committee shall from time to time approve, which agreements shall comply with and be subject to the terms and conditions provided hereunder and any additional terms and conditions established by the Committee that are consistent with the terms of the Plan.

(b) Each Restricted Share and Restricted Share Unit Award made under the Plan shall be for such number of Shares as shall be determined by the Committee and set forth in the Award Agreement containing the terms of such Restricted Share or Restricted Share Unit Award. Such agreement shall set forth a period of time during which the Participant receiving such Award must remain in the continuous employment (or other service-providing capacity) of the Company in order for the forfeiture and transfer restrictions to lapse. If the Committee so determines, the restrictions may lapse during such restricted period in installments with respect to specified portions of the Shares covered by the Restricted Share or Restricted Share Unit Award. As provided in this Plan, in an applicable Award Agreement or in accordance with any determination of the Committee at or after grant, an Award shall continue to vest and be exercisable after Retirement and may vest in part upon Separation from Service without Cause. The Award Agreement may also, in the discretion of the Committee, set forth performance or other conditions that will subject the Shares to forfeiture and transfer restrictions. The Committee may, at its discretion, waive all or any part of the restrictions applicable to any or all outstanding Restricted Share and Restricted Share Unit Awards.

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7.2 Delivery of Shares and Transfer Restrictions.

(a) At the time a Restricted Share Award is granted, a certificate representing the number of Shares awarded thereunder shall be registered in the name of the Participant receiving such Award. Such certificate shall be held by the Company or any custodian appointed by the Company for the account of the Participant receiving such Award subject to the terms and conditions of the Plan, and shall bear such a legend setting forth the restrictions imposed thereon as the Committee, in its discretion, may determine. The foregoing to the contrary notwithstanding, the Committee may, in its discretion, provide that a Participant’s ownership of Restricted Shares prior to the lapse of any transfer restrictions or any other applicable restrictions shall, in lieu of such certificates, be evidenced by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated agent in the name of the Participant who has received such Award, and confirmation and account statements sent to the Participant with respect to such book-entry Shares may bear the restrictive legend referenced in the preceding sentence. Such records of the Company or such agent shall, absent manifest error, be binding on all Participants who receive Restricted Share Awards evidenced in such manner. The holding of Restricted Shares by the Company or such an escrow holder, or the use of book entries to evidence the ownership of Restricted Shares, in accordance with this Section 7.2(a), shall not affect the rights of Participants as owners of the Restricted Shares awarded to them, nor affect the restrictions applicable to such shares under the Award Agreement or the Plan, including the transfer restrictions.

(b) Unless otherwise provided in the applicable Award Agreement, the Participant receiving an Award of Restricted Shares shall have all rights of a stockholder with respect to the Restricted Shares, including the right to receive dividends and the right to vote such Shares, subject to the following restrictions: (i) the Participant shall not be entitled to delivery of the stock certificate until the expiration of the restricted period and the fulfillment of any other restrictive conditions set forth in the Award Agreement with respect to such Shares; (ii) none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during such restricted period or until after the fulfillment of any such other restrictive conditions; (iii) dividends payable on Restricted Shares for which the forfeiture restrictions have not yet lapsed shall be held in escrow and shall not be payable to the Participant until the expiration of the restricted period and the fulfillment of any other restrictive conditions set forth in the Award Agreement with respect to such Restricted Shares and any dividends paid with respect to Restricted Shares for which the restricted period shall not expire or for which any other restrictive conditions shall not be fulfilled shall be forfeited by the Participant; and (iv) except as otherwise set forth in this Plan, the applicable Award Agreement, or as otherwise determined by the Committee at or after grant, all of the Shares shall be forfeited and all rights of the Participant to such Shares shall terminate, without further obligation on the part of the Company, unless the Participant remains in the continuous employment of the Company for the entire restricted period in relation to which such Shares were granted and unless any other restrictive conditions relating to the Restricted Share Award are met. Restricted Share Units (and any dividend equivalent rights with respect thereto) shall be subject to similar transfer (and payment) restrictions as Restricted Share Awards, except that no Shares are actually awarded to a Participant who is granted Restricted Share Units on the date of grant, and such Participant shall have no rights of a stockholder with respect to such Restricted Share Units until the restrictions set forth in the applicable Award Agreement have lapsed.

7.3 Termination of Restrictions. At the end of the restricted period and provided that any other restrictive conditions of the Restricted Share Award are met, or at such earlier time as otherwise determined by the Committee, all restrictions set forth in the Award Agreement relating to the Restricted Share Award or in the Plan shall lapse as to the Restricted Shares subject thereto, and a stock certificate for the appropriate number of Shares, free of the restrictions and restricted stock legend, shall be delivered to the Participant or the Participant’s beneficiary or estate, as the case may be (or, in the case of book-entry Shares, such restrictions and restricted stock legend shall be removed from the confirmation and account statements delivered to the Participant or the Participant’s beneficiary or estate, as the case may be, in book-entry form). The Company shall have the right to repurchase Restricted Shares at their original issuance price or other stated or formula price (or to require forfeiture of such Shares if issued at no cost) in the event that conditions specified in the

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Award Agreement with respect to such Restricted Shares are not satisfied prior to the end of the applicable restricted period.

7.4 Payment of Restricted Share Units. Each Restricted Share Unit shall have a value equal to the Fair Market Value of a Share. Restricted Share Units may be paid in cash, Shares, other securities or other property, as determined in the sole discretion of the Committee, upon the lapse of the restrictions applicable thereto, or otherwise in accordance with the applicable Award Agreement. If the applicable Award Agreement specifies that a Participant will be entitled to dividend equivalent rights, the amount of any such dividend equivalent right (i) shall equal the amount that would be payable to the Participant as a stockholder in respect of a number of Shares equal to the number of vested Restricted Share Units then credited to the Participant, (ii) shall not be payable to the Participant until the fulfillment of any restrictive conditions set forth in the Award Agreement with respect to such Restricted Share Units and any dividends equivalent rights with respect to Restricted Share Units for which the restrictive conditions shall not be fulfilled shall be forfeited by the Participant, and (iii) shall otherwise be payable in accordance with Section 409A of the Code with regard to Awards subject thereto. Except as otherwise determined by the Committee at or after grant, Restricted Share Units may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of. Except as otherwise determined by the Committee at or after grant, or as provided in this Plan or the applicable Award Agreement, all Restricted Share Units and all rights of the grantee to such Restricted Share Units (and any dividend equivalents with respect thereto) shall terminate, without further obligation on the part of the Company, unless the Participant remains in continuous employment of the Company for the entire restricted period in relation to which such Restricted Share Units were granted and unless any other restrictive conditions relating to the Restricted Share Unit Award are met.

Section 8. Performance Awards.

8.1 Grant. The Committee shall have sole and complete authority to determine the Participants who shall receive a Performance Award, which shall consist of a right that is (i) denominated in cash or Shares (including but not limited to Restricted Shares and Restricted Share Units), (ii) valued, as determined by the Committee, in accordance with the achievement of such performance goals during such performance periods as the Committee shall establish, and (iii) payable at such time and in such form as the Committee shall determine.

8.2 Terms and Conditions. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award and the amount and kind of any payment or transfer to be made pursuant to any Performance Award, and may amend specific provisions of the Performance Award; provided, however, that such amendment may not adversely affect existing Performance Awards made within a performance period commencing prior to implementation of the amendment.

8.3 Payment of Performance Awards. Performance Awards may be paid in a lump sum or in installments following the close of the performance period or, in accordance with the procedures established by the Committee, on a deferred basis. Separation from Service prior to the end of any performance period, other than for reasons of death, Disability, or Retirement or Separation from Service without Cause, will result in the forfeiture of the Performance Award, and no payments will be made. As set forth in accordance with the terms of this Plan, the applicable Award Agreement, or in accordance with any determination of the Committee at or after grant, Performance Awards shall continue to vest after Retirement or Separation from Service without Cause, but Performance Awards granted in the year in which Retirement occurs and Performance Awards held by a Participant upon a Separation from Service without Cause shall be pro-rated to reflect the length of the Participant’s service during the applicable performance period prior to such Retirement or Separation from Service without Cause. Notwithstanding the foregoing, the Committee may in its discretion, waive any performance goals and/or other terms and conditions relating to a Performance Award. A Participant’s rights to any Performance Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed

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of in any manner, except by will or the laws of descent and distribution, and/or except as the Committee may determine at or after grant.

8.4 Establishment of Performance Criteria. In the case of grants of Performance Awards, the Committee shall, in writing, (1) select the performance goal or goals applicable to the performance period, (2) establish the various targets and bonus amounts which may be earned for such performance period, and (3) specify the relationship between performance goals and targets and the amounts to be earned by each Participant for such performance period. The Committee shall make such determination within 90 days after the commencement of the performance period, unless the Committee determines that it is necessary or appropriate to extend the time for determining the performance criteria. Following the completion of each performance period, the Committee shall certify in writing (which may be set forth in the minutes of the Committee) whether the applicable performance targets have been achieved and the amounts, if any, payable for such performance period. In determining the amount earned by a Participant for a given performance period, the Committee shall have the right to adjust the amount of cash or number of Shares payable at a given level of performance to take into account additional factors that the Committee may deem relevant in its sole discretion to the assessment of individual or corporate performance for the performance period.

8.5 Adjustment of Performance Criteria. The Committee may appropriately adjust any evaluation of performance to exclude any of the following events that occurs during a performance period: (i) asset impairments or write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs, (v) any items that are unusual in nature or infrequently occurring (within the meaning of applicable accounting standards or otherwise in the reasonable determination of the Committee) and/or described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year, (vi) the effect of adverse federal, governmental or regulatory action, or delays in federal, governmental or regulatory action; (vii) any other event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; and (viii) any other event, condition or circumstance for which the Committee determines that an adjustment would be appropriate based on Committee guidelines, prior practice or other considerations.

Section 9. Other Stock-Based Awards.

The Committee shall have the authority to determine the Participants who shall receive an Other Stock-Based Award, which shall consist of any right that is (i) not an Award described in Sections 6, 7 or 8 above and (ii) an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of any such Other Stock-Based Award.

Section 10. Non-Employee Director and Outside Director Awards.

10.1 Non-Employee Director Awards. The Board may provide that all or a portion of a Non-Employee Director’s annual retainer, meeting fees and/or other awards or compensation as determined by the Board, be payable (either automatically or at the election of a Non-Employee Director) in the form of Non-Qualified Stock Options, Restricted Shares, Restricted Share Units and/or Other Stock-Based Awards, including, subject to Section 14.17, unrestricted Shares. The Board shall determine the terms and conditions of any such Awards, including the terms and conditions which shall apply upon a Non-Employee Director’s Separation from Service as a member of the Board, and shall have full power and authority in its discretion to administer such Awards, subject to the terms of the Plan and applicable law.

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10.2 Outside Director Awards. The Board may also grant Awards to Outside Directors pursuant to the terms of the Plan, including any Award described in Sections 6, 7 and 9 above. With respect to such Awards, all references in the Plan to the Committee shall be deemed to be references to the Board.

10.3 Equity Limits to Directors. Notwithstanding anything in the Plan to the contrary, the maximum number of Shares subject to Awards granted during any 12-month period to any Non-Employee Director shall not exceed $400,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes and excluding, for this purpose, the value of any dividends or dividend equivalents paid in accordance with the Plan on certain Awards) (the “Director Limit”). The Board may not, without the approval of the stockholders, increase the Director Limit.

10.4 Post-Service Vesting. If a Non-Employee Director ceases to serve as a director for any reason, other than an involuntary removal during the pendency of a term as director, any Award made to such Non-Employee Director may continue to vest if so provided in the Award Agreement or in accordance with any determination of the Board at or after grant.

Section 11. Separation from Service.

11.1 Impact on Awards. Except as provided in Section 11.2 of this Plan, the Committee shall have the full power and authority to determine the terms and conditions that shall apply to any Award upon a Separation from Service, including a Separation from Service with or without Cause, by a Participant voluntarily, including for Good Reason, or by reason of death, Disability, or Retirement, and may provide such terms and conditions in the Award Agreement or in such rules and regulations as it may prescribe. Unless otherwise provided in the Award Agreement, Awards shall fully vest on death or Disability.

11.2 Forfeiture of Performance Awards on Separation from Service; No Acceleration of Vesting. Unless otherwise provided in (i) this Plan or (ii) an Award Agreement or a written employment or similar agreement between the Company or a Subsidiary and a Participant, if a Participant’s Separation from Service occurs before the restrictions imposed on the Award lapse, the performance goals have been satisfied or the Award otherwise vests, such Award shall be forfeited. Except as otherwise provided in this Plan, an Award Agreement or a written employment agreement or similar agreement between the Company or a Subsidiary and a Participant, if a Participant’s employment with or service to the Company or a Subsidiary terminates prior to a Change in Control, for any reason other than death or Disability, the vesting of any unvested Award shall not be triggered by such Separation from Service. Notwithstanding the foregoing, a Separation from Service without Cause or for Good Reason that takes place within four (4) months prior to a Change in Control and that is made at the behest of an Acquiror or in contemplation of such Change in Control shall be treated as if such Separation From Service took place after such Change in Control, if such Change in Control actually occurs.

11.3 Separation from Service without Cause.

(a) The provisions of this Section 11.3 shall apply with respect to Participants who are Employees but are not party to an employment agreement or separate written agreement with the Company governing equity treatment upon Separation from Service.

(b) With respect to Restricted Share Units, provided that a Participant signs and does not revoke a release of claims, as more fully described in Section 11.3(g), upon the date such release becomes irrevocable (the “Release Finalization Date”):

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(i) any Restricted Share Units that were scheduled to vest within 365 days from the date of Separation from Service without Cause and were granted more than 365 days preceding the date of Separation from Service without Cause, shall vest effective as of the Release Finalization Date;

(ii) the RSU Separation Pro-Rated Number (as defined below) of Restricted Share Units that were scheduled to vest within 365 days from the date of Separation from Service without Cause, and were granted less than 365 days prior to the date of Separation from Service without Cause, shall vest effective as of the Release Finalization Date; and

(iii) any remaining time-vesting Restricted Share Units not vesting as provided herein shall be forfeited effective as of the date of Separation from Service without Cause.

The “RSU Separation Pro-Rated Number” for time-vesting Restricted Share Units shall be the product of (A) the total number of time-vesting Restricted Share Units granted under the Award Agreement less than 365 days prior to the date of Separation from Service without Cause and (B) the quotient of (1) the number of days from the grant date of such award to the date of Separation from Service without Cause and (2) 365.

(c) With respect to performance-based Restricted Share Units, provided that a Participant signs and does not revoke a release of claims, as more fully described in Section 11.3(g), upon the Release Finalization Date:

(i) the PSU Separation Pro-Rated Number (as defined below) of performance-based Restricted Share Units shall continue to vest, on the same terms that such performance-based Restricted Share Units would have vested had the Participant remained an Employee, but without the requirement of continued employment, provided, however, that if the vesting date under such terms is earlier than the Release Finalization Date, the performance-based Restricted Share Units shall vest on the Release Finalization Date; and

(ii) any remaining performance-based Restricted Share Units not vesting as provided herein above shall be forfeited effective as of the date of Separation from Service without Cause.

The “PSU Separation Pro-Rated Number” for performance-based Restricted Share Units shall be the product of (A) the total number of performance-based Restricted Share Units and (B) the quotient of (1) the number of days beginning on the first day of the performance period and ending on the date of Separation from Service without Cause, and (2) the total number of days in the performance period (for example 1,095 days for a three-year performance period).

(d)     With respect to Other Stock-based Awards, as contemplated by Section 9 of this Plan, the Committee shall have the authority to determine the terms and conditions of any such Other Stock-Based Award, including without limitation, the treatment of such awards upon a Participant’s Retirement or Separation from Service without Cause at the time of grant of such Other Stock-Based Awards.

(e)    A “Separation from Service without Cause” shall mean a Separation from Service that meets the following criteria:

(i) The Company provides written notice to the Participant that the Separation from Service results from one or more of the following:

    (A) Workforce reduction or reorganization;

        (B) A significant reduction in job responsibilities, accountabilities or authorities;

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    (C) A determination by the Company that the Participant’s qualifications, experience or abilities, are not sufficient to meet the demands and requirements of the job consistently at the nature and level expected for the title, role, authority, or position;

    (D) a material reduction equal to ten percent (10%) or more in the Participant’s total target compensation (including base, bonus and equity) (other than as a result of an across-the-board reduction affecting substantially all Employees with similar authority, status, or job title); or

    (E) the Participant’s job being relocated to a location that is more than 50 miles from the Participant’s then current job location (“Relocation”) and the Participant declines Relocation;

(ii) at the time of the Separation from Service, the Participant has been actively at work (or on an approved leave of absence) during the six-month period immediately preceding the date of the Separation from Service and continues working through the date designated by the Company as the Participant’s Separation from Service date or any earlier date that is designated by the Company as the Participant’s release from duty date;

(iii) the Separation from Service is not for “Cause” as defined in this Plan;

(iv) the Separation from Service does not qualify as Retirement;

(v) the Company has not determined that the Separation from Service was for failure to meet the performance requirements of the Participant’s position, including violations of the UNFI Code of Conduct and/or UNFI stated values or commitments, as documented in written performance feedback previously provided to the Participant;

(vi) except as otherwise determined by the Authorized Officers (as defined below), the Participant has not accepted another position with (or to perform work for) the Company or a Subsidiary or Affiliate (whether as an associate, consultant, or agent) following the Separation from Service;

(vii) except as otherwise determined by the Authorized Officers, if the Participant was employed at a business unit of the Company that was sold or otherwise transferred to a new employer, (A) the Participant has not, within 120 days following such sale or other transfer, accepted a position of employment from the new employer at such business unit, or received an offer of a position from the new employer that does not require Relocation and with base pay that is not less than the Participant’s then current rate of base pay, even if the Participant has not accepted such offer, and (B) the Participant’s position with such business unit has not been continued immediately following the closing of that transaction by operation of law or otherwise. For purposes of this subparagraph (vii), “business unit” shall mean any subunit of the Company as defined at the discretion of the Company (by way of example, a subsidiary, district, region, or cost center may be “business units” under this subparagraph);

(viii) except as otherwise determined by the Authorized Officers, if the Participant’s job at a facility is involuntarily terminated because the Company ceases operations at that facility, but another employer commences operations at that facility, and, prior to such Separation from Service, (A) that other employer has not offered the Participant a position at that facility with base pay that is not less than the Participant’s current base pay from the Company, even if the Participant does not accept such offer, and (B) the Participant has not accepted any position with that other employer;

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(ix) except as otherwise determined by the Authorized Officers, if the Company has outsourced the Participant’s job function, the Participant has not accepted any position with the outsource vendor and the outsource vendor has not offered the Participant a position that does not require Relocation and with base pay that is not less than the Participant’s current base pay, even if the Participant has not accepted such offer; and

(x) except as otherwise determined by the Authorized Officers, the Participanthas not failed to return Company property on or before the Participant’s last day of work.

(f) The determination by any two of the Chief Executive Officer, Chief Human Resources Officer, or Chief Legal Officer (the “Authorized Officers”) of the Company that a Separation from Service constitutes a Separation from Service without Cause for purposes of the foregoing shall constitute a final determination of such status for purposes of the vesting provisions described herein with no further action required by the Committee; the decisions of such two officers, taken together shall be recorded and retained with the books and records relative to equity awards of the Company.

(g) To receive the vesting treatment described in this section 11.3, Participants must sign and not revoke a release of claims and such other agreements as may be requested by the Company. Any release of claims must be in the form and manner prescribed by the Company. The decision whether any other agreements, including but not limited to restrictive covenants, are included shall be made in the discretion of the Company. To the extent any Award vesting in accordance with this Section 11.3 is subject to Section 409A of the Code, and the period for the Participant to consider and/or revoke a release of claims spans two calendar years, then the settlement/payment of Shares pursuant to that Award shall in all cases occur in the second calendar year and the payment timing shall not be conditioned on or based upon the Release Finalization Date.

Section 12. Change in Control.

12.1 Assumption, Continuation or Substitution. In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may (in accordance with Section 409A, to the extent applicable), without the consent of any Participant, either assume or continue the Company’s rights and obligations under each or any Award or portion thereof outstanding immediately prior to the Change in Control or substitute for each or any such outstanding Award or portion thereof a substantially equivalent award with respect to the Acquiror’s stock, as applicable; provided, that in the event of such an assumption, the Acquiror must grant the rights set forth in Section 12.2 of this Plan to the Participant in respect of such assumed Awards. For purposes of this Section, an Award denominated in Shares shall be deemed assumed if, following the Change in Control, the Award (as adjusted, if applicable, pursuant to Section 4.3 hereof) confers the right to receive, subject to any vesting or other terms and conditions of the Plan and the applicable Award Agreement, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a Share on the effective date of the Change in Control was entitled; provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon the exercise or settlement of the Award, for each Share subject to the Award, to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Shares pursuant to the Change in Control.

12.2 Vesting of Assumed or Continued Awards. Unless otherwise expressly provided in (i) the Award Agreement, (ii) an employment agreement or other written agreement with the Company or a Subsidiary and a Participant, or (iii) the definitive transaction agreement governing such Change in Control, in the event of a Change in Control in which the Acquiror does assume or continue outstanding Awards upon the Change in Control, if the Participant’s employment with or service to the Company or a Subsidiary (or any of their successors) is terminated involuntarily for any reason other

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than Cause, or a Participant terminates his or her employment or service for Good Reason, within twelve (12) months of such Change in Control:

(a) Stock Options and Stock Appreciation Rights shall become fully vested as of the termination date, and exercisable no later than 30 days following such termination date;

(b) Restricted Shares and Restricted Share Units shall become fully vested as of such termination date, and shall be delivered no later than 30 days following such termination date; and

(c) Any then-in-progress Performance Awards shall become fully vested at target performance levels as of such termination date, and shall be delivered no later than 30 days following such termination date. Any outstanding Performance Awards relating to performance periods ending prior to the termination date which have been earned but not paid shall become immediately payable.

12.3 No Assumption or Continuation of Awards. Unless otherwise expressly provided in (i) the Award Agreement, (ii) an employment agreement or similar written agreement with the Company or a Subsidiary, or (iii) the definitive transaction agreement governing such Change in Control, in the event of a Change in Control in which the Acquiror does not assume or continue outstanding Awards upon the Change in Control, all outstanding Awards that are not assumed or continued shall be treated as follows (to the extent permitted by Section 409A of the Code):

(a) Stock Options and Stock Appreciation Rights shall become fully vested and exercisable as of date and time immediately prior to the Change in Control;

(b) Restricted Shares and Restricted Share Units shall become fully vested as of the date and time immediately prior to the Change in Control and shall settle immediately following the Change in Control; and

(c) Unless otherwise determined by the Committee pursuant to Section 12.5, to the extent permitted by Section 409A of the Code, any Performance Awards relating to performance periods that will not have ended as of the date of a Change in Control shall automatically vest and become payable at the target level of performance. Any outstanding Performance Awards relating to performance periods ending prior to the Change in Control date which have been earned but not paid shall become immediately payable.

12.4 Cash-Out of Awards. Notwithstanding Sections 12.2 and 12.3, the Committee may (in accordance with Section 409A, to the extent applicable), in its discretion at or after grant and without the consent of any Participant, determine that, upon the occurrence of a Change in Control, each or any Award or a portion thereof outstanding immediately prior to the Change in Control and not previously exercised or settled shall be canceled in exchange for a payment with respect to each Share subject to such Award, whether vested or unvested, in (i) cash, (ii) stock of the Company or of a corporation or other business entity a party to the Change in Control, or (iii) other property which, in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market Value of the consideration to be paid per Share in the Change in Control, reduced by the exercise or purchase price per share, if any, under such Award (which payment may, for the avoidance of doubt, be $0, in the event the per share exercise or purchase price of an Award is greater than the per share consideration in connection with the Change in Control). In the event such determination is made by the Committee, the amount of such payment (reduced by applicable withholding taxes, if any), if any, shall be paid to Participants in respect of the vested portions of their canceled Awards as soon as practicable following the date of the Change in Control and may be paid in respect of the unvested portions of their canceled Awards in accordance with the vesting schedules applicable to such Awards.

12.5 Performance Awards. The Committee may (in accordance with Section 409A, to the extent applicable), in its discretion at or after grant, provide that in the event of a Change in Control, (i) any outstanding Performance Awards relating to performance periods ending prior to the Change in Control which have been earned but not paid shall become

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immediately payable, (ii) all then-in-progress performance periods for Performance Awards that are outstanding shall end, and either (A) any or all Participants shall be deemed to have earned an award equal to the relevant target award opportunity for the performance period in question, or (B) at the Committee’s discretion, the Committee shall determine the extent to which performance criteria have been met with respect to each such Performance Award, if at all, but not above target, and (iii) the Company shall cause to be paid to each Participant such Performance Awards, in cash, Shares or other property as determined by the Committee, within thirty (30) days of such Change in Control, based on the Change in Control consideration, which amount may be zero if applicable. In the absence of such a determination, any Performance Awards relating to performance periods that will not have ended as of the date of a Change in Control shall be terminated and canceled for no further consideration.

Section 13. Amendment and Termination.

13.1 Amendments to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time (and in accordance with Section 409A of the Code with regard to Awards subject thereto); provided that no such amendment, alteration, suspension, discontinuation or termination shall be made without stockholder approval if such approval is necessary to comply with any tax or regulatory requirement for which or with which the Board deems it necessary or desirable to comply.

13.2 Amendments to Awards. Subject to the restrictions of the Plan, including Section 6.2 hereof, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted, prospectively or retroactively in time (and in accordance with Section 409A of the Code with regard to Awards subject thereto); provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary.

13.3 Adjustments of Awards upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (and shall make such adjustments for the events described in Section 4.2 hereof) affecting the Company or any Subsidiary or Affiliate, or the financial statements of the Company or any Subsidiary or Affiliate, or of changes in applicable laws, regulations or accounting principles.

13.4 Foreign Employees. In order to facilitate the making of any Award or combination of Awards under the Plan, the Committee may provide for such special terms for Awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of the Plan as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of the Plan as in effect for any other purpose, and the Corporate Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as the Plan. No such special terms, supplements, amendments or restatements, however, shall include any provisions that are inconsistent with the terms of the Plan as then in effect unless the Plan could have been amended to eliminate such inconsistency without further approval by the shareholders of the Company.

Section 14. General Provisions.

14.1 Limited Transferability of Awards. Except as otherwise provided in the Plan, an Award Agreement or by the Committee at or after grant, no Award shall be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant, except by will or the laws of descent and distribution. No transfer of an Award by will or

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by laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary or appropriate to establish the validity of the transfer. No transfer of an Award for value shall be permitted under the Plan.

14.2 Dividend Equivalents. In the sole and complete discretion of the Committee, but subject to any conditions set forth in this Plan, an Award may provide the Participant with dividends or dividend equivalents, payable in cash, Shares, other securities or other property, but only when the related Award vests. In the case of dividends or dividend equivalents credited in connection with Performance Awards, such amounts shall be subject to the same restrictions as apply to dividends or dividend equivalents payable with respect to the applicable Performance Award type (such as Restricted Shares or Restricted Share Units). The total number of Shares available for grant under Section 4 shall not be reduced to reflect any dividends or dividend equivalents until payment thereof. Notwithstanding the foregoing, with respect to an Award subject to Section 409A of the Code, the payment, deferral or crediting of any dividends or dividend equivalents shall conform to the requirements of Section 409A of the Code and such requirements shall be specified in writing.

14.3 Compliance with Section 409A of the Code. No Award (or modification thereof) shall provide for deferral of compensation that does not comply with Section 409A of the Code unless the Committee, at the time of grant, specifically provides that the Award is not intended to comply with Section 409A of the Code. Notwithstanding any provision of this Plan to the contrary, if one or more of the payments or benefits received or to be received by a Participant pursuant to an Award would cause the Participant to incur any additional tax or interest under Section 409A of the Code, the Committee may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. In addition, if a Participant is a Specified Employee at the time of his or her Separation from Service, any payments with respect to any Award subject to Section 409A of the Code to which the Participant would otherwise be entitled by reason of such Separation from Service shall be made on the date that is six months after the Participant’s Separation from Service (or, if earlier, the date of the Participant’s death). Although the Company intends to administer the Plan so that Awards will be exempt from, or will comply with, the requirements of Section 409A of the Code, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local or foreign law. The Company shall not be liable to any Participant for any tax, interest, or penalties that Participant might owe as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan.

14.4 No Rights to Awards. No Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards need not be the same with respect to each Participant.

14.5 Share Certificates. All certificates for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the SEC or any state securities commission or regulatory authority, any stock exchange or other market upon which such Shares or other securities are then listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

14.6 Tax Withholding. A Participant may be required to pay to the Company or any Subsidiary or Affiliate, and the Company or any Subsidiary or Affiliate shall have the right and is hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan, or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities, other Awards or other property) of any applicable withholding or other tax-related obligations in respect of an Award, its exercise or any other transaction involving an Award, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. The Committee may provide for

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additional cash payments to holders of Options to defray or offset any tax arising from the grant, vesting, exercise or payment of any Award. Without limiting the generality of the foregoing, the Committee may in its discretion permit a Participant to satisfy or arrange to satisfy, in whole or in part, the tax obligations incident to an Award by: (a) electing to have the Company withhold Shares or other property otherwise deliverable to such Participant pursuant to the Award (provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy required federal, state local and foreign withholding obligations using the maximum statutory withholding rates for federal, state, local and/or foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income) and/or (b) tendering to the Company Shares owned by such Participant (or by such Participant and his or her spouse jointly) and purchased or held for the requisite period of time, if any, as may be required to avoid the Company’s or the Subsidiaries’ or Affiliates’ incurring an adverse accounting charge, based, in each case, on the Fair Market Value of the Shares on the payment date as determined by the Committee. All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

14.7 Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement that shall be delivered (including, but not limited to, through an online equity incentive plan management portal) to the Participant and may specify the terms and conditions of the Award and any rules applicable thereto. In the event of a conflict between the terms of the Plan and any Award Agreement, the terms of the Plan shall prevail. The Committee shall, subject to applicable law, determine the date an Award is deemed to be granted. The Committee or, except to the extent prohibited under applicable law, its delegate(s) may establish the terms of agreements or other documents evidencing Awards under this Plan and may, but need not, require as a condition to any such agreement’s or document’s effectiveness that such agreement or document be executed by the Participant, including by electronic signature or other electronic indication of acceptance, and that such Participant agree to such further terms and conditions as specified in such agreement or document. The grant of an Award under this Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in this Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the agreement or other document evidencing such Award.

14.8 Restrictive Covenants. Each Award Agreement shall include, or be deemed to include, restrictive covenants as determined by the Committee or its delegate and each Participant shall agree to adhere to such covenants as a condition to receipt of an Award.

14.9 Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Subsidiary or Affiliate from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of Options, Restricted Shares, Restricted Share Units, Other Stock-Based Awards or other types of Awards provided for hereunder. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Subsidiary or Affiliate unless provided otherwise in such other plan.

14.10 No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Subsidiary or Affiliate. Further, the Company or a Subsidiary or Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan, unless otherwise expressly provided in an Award Agreement.

14.11 No Rights as Stockholder. Subject to the provisions of the Plan and the applicable Award Agreement, no Participant or holder or beneficiary of any Award shall have any rights as a stockholder with respect to any Shares to be distributed under the Plan until such person has become a holder of such Shares. Notwithstanding the foregoing, in connection with each grant of Restricted Shares hereunder, the applicable Award Agreement shall specify if and to what extent the Participant shall not be entitled to the rights of a stockholder in respect of such Restricted Shares.

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14.12 Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to conflicts of laws principles.

14.13 Severability. If any provision of the Plan or any Award is, or becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

14.14 Other Laws. The Company will not be obligated to issue, deliver or transfer any Shares pursuant to the Plan or to remove restrictions from Shares previously delivered pursuant to the Plan until: (a) all conditions of the applicable Award Agreement have been met or removed to the satisfaction of the Committee; (b) all other legal matters, including receipt of consent or approval of any regulatory body and compliance with any state or federal securities or other law, in connection with the issuance and delivery of such Shares have been satisfied; (c) the Participant or holder or beneficiary of the Shares or Award has executed and delivered to the Company such representations or agreements as the Committee may consider appropriate to satisfy the requirements of any state or federal securities or other law; and (d) such issuance would not entitle the Company to recover amounts under Section 16(b) of the Exchange Act from such Participant or holder or beneficiary of the Shares or Award. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel necessary to the lawful issuance of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue the Shares as to which such requisite authority shall not have been obtained.

14.15 No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary or Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary.

14.16 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and any obligation to deliver fractional Shares shall be deemed fully satisfied by the delivery of the next lower number of whole Shares.

14.17 Clawback; Cancellation of Awards. Each Award granted to a Participant under the Plan shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recovery policy adopted by the Company as in effect from time to time, including any such policy that may be adopted or amended to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the SEC or the New York Stock Exchange. In addition, the Committee or the Board may cancel unpaid Awards held by a Participant from whom the Committee or the Board would be entitled to recover compensation under any compensation recovery policy then in effect.

14.18 Minimum Vesting Requirements. Except for Substitute Awards, as determined by the Committee following the grant of an Award in connection with the death or Disability of the Participant, or in the event of a Change in Control or a Separation from Service without Cause, Awards granted hereunder shall have a Vesting Period of not less than one (1) year from the date of grant; provided, that the Committee has the discretion to waive this requirement with respect to an Award at the time of granting such Award so long as the total number of Shares that are issued under this Plan pursuant to Awards having an originally stated Vesting Period of less than one year from the date of grant (or, in the case of vesting of Performance Awards or other Awards the vesting of which is subject to the achievement of performance-based

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objectives, over a period of less than one year measured from the commencement of the period over which performance is evaluated) shall not exceed 5% of the Share Reserve.

14.19 Headings. Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

Section 15. Term of The Plan.

15.1 Effective Date. The Plan shall be effective upon the date that it is adopted by the Board (the “Effective Date”), subject to the approval of the Plan by the Company’s stockholders at a meeting duly held in accordance with applicable law within twelve (12) months following the Effective Date. Upon such approval of the Plan, all Awards granted under the Plan on or after the Effective Date shall be fully effective as if such approval had occurred on the Effective Date. If the Plan is not approved as set forth in this section, any Awards granted under the Plan following the Effective Date shall be null and void and of no effect.

15.2 Expiration Date. No new Awards shall be granted under the Plan after the seventh (7th) anniversary of the Effective Date. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted hereunder may, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award or to waive any conditions or rights under any such Award shall, continue after the seventh (7th) anniversary of the Effective Date.

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EX-10.2

Exhibit 10.2

UNITED NATURAL FOODS, INC.

2020 EQUITY INCENTIVE PLAN

RESTRICTED SHARE UNIT AWARD AGREEMENT

[time vesting for employees]

This Restricted Share Unit Award Agreement (this “Agreement”) effective as of [ ] __, 20__ (the “Grant Date”), between United Natural Foods, Inc. (the “Company”) and __________________ (the “Participant”), evidences an Award denominated in Restricted Share Units to the Participant under the United Natural Foods, Inc. 2020 Equity Incentive Plan (as amended from time to time, the “Plan”). Except in the preceding sentence and where the context otherwise requires, the term “Company” shall include the Company and all present and future Subsidiaries. All capitalized terms that are used in this Agreement without definition shall have the meanings set forth in the Plan.

1.Definitions.

(a)    “Participant,” solely for the purpose of this Agreement, means the employee designated above.

(b)    “Restricted Share Unit” means a right to receive a payment in the form of any one Share of the Company’s common stock, par value $0.01 per share, subject to the terms and conditions set forth in this Agreement and in the Plan.

(c)    “Vesting Period” means the period beginning on [ ]and ending on [ ].

2.    Grant of Restricted Share Units.  In consideration of services to be rendered by the Participant to the Company, the Company hereby grants to the Participant [______] Restricted Share Units, on the terms and conditions and subject to the restrictions set forth in this Agreement and the Plan. The grant of Restricted Share Units shall be subject to adjustment as provided in Section 4.3 of the Plan. This grant is conditional upon the Participant signing a counterpart of this Agreement and delivering such signed counterpart to the Company within sixty (60) days of this Agreement, including by electronic means if provided by the Company pursuant to Section 18. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.

3.    Vesting & Effect of Separation from Service.

(a)    Except as otherwise provided herein or in the Plan, if the Participant remains continuously employed by the Company through the applicable vesting date, the Restricted Share Units will vest in accordance with the following schedule:

Vesting DateRestricted Share Units

[Vesting date]        [Number or % of shares that vest on the vesting date]

[Vesting date]        [Number or % of shares that vest on the vesting date]

[Vesting date]        [Number or % of shares that vest on the vesting date]

1

(b)    Retirement: In the event the Participant has a Separation from Service on account of Retirement in the 365-day period beginning on the Grant Date (the “Grant Year”), the Pro-Rated Number of Restricted Share Units will continue to vest through the Vesting Period. The “Pro-Rated Number” shall be the product of (i) the total number of Restricted Share Units granted under this Agreement and (ii) the quotient of (A) the number of days beginning with the Grant Date and ending on the date of the Participant’s Separation from Service as a result of Retirement and (B) 365, the number of days in the Grant Year. In the event that the Participant has a Separation from Service on account of Retirement before the end of the Vesting Period but after the Grant Year, all of the then-unvested Restricted Share Units granted under this Agreement will continue to vest through the Vesting Period. The rights of the Participant in the event of Retirement with respect to any then-unvested Restricted Share Units shall become non-forfeitable only at such time as the Shares issuable in settlement of such Restricted Stock Units would have been issued pursuant to Section 4 hereof had the Participant continued to be employed through the end of the Vesting Period.

(c)    Death and Disability: In the event that the Participant dies or has a Separation from Service on account of Disability at any time after grant, all of the then-unvested Restricted Share Units shall fully vest.

(d)    Change in Control: In the event the Participant’s employment with the Company or any successor to the Company is terminated without Cause, or the Participant terminates his or her employment for Good Reason, within twelve months after a Change in Control (and before the Restricted Share Units otherwise have become vested under Section 3(a), (b) or (c)), the Participant shall vest in all of the Restricted Share Units granted under Section 2 of this Agreement and the Participant’s rights to such Restricted Share Units shall become non-forfeitable as of the date on which the Participant’s employment with the Company or its successor is terminated. In the event that this Award is not assumed by the Acquiror in connection with a Change in Control, all of the Restricted Share Units shall vest immediately prior to the Change in Control and shall settle immediately following the Change in Control (notwithstanding the longer period of time for settlement provided in Section 4 below). In the event that settlement of the Restricted Share Units at the time described above would result in the imposition of tax on the Participant (if the Participant is eligible for Retirement) pursuant to the operation of Code Section 409A (as defined below), such settlement shall take place on the earliest date upon which settlement may be made without resulting in the imposition of such tax.

(e)    Separation from Service without Cause: If the Participant has a Separation from Service without Cause (as defined in the Plan), then:

(i) any unvested Restricted Share Units that were scheduled to vest within 365 days from the date of separation and were granted more than 365 days preceding the date of separation, shall vest effective as of the Release Finalization Date;

(ii) the Separation Pro-Rated Number of Restricted Share Units that were scheduled to vest within 365 days from the date of separation, and were granted less than 365 days prior to the date of separation, shall vest effective as of the Release Finalization Date; and

(iii) any remaining Restricted Share Units not vesting as provided above shall be forfeited effective as of the date of Separation from Service without Cause.

        Notwithstanding the foregoing, the vesting and payout of any Restricted Share Units pursuant to this Section 3(e) shall be subject to the satisfaction of any conditions required for payout of the Restricted Share Units pursuant to this Agreement and the Plan.

2

The “Separation Pro-Rated Number” shall be the product of (A) the total number of Restricted Share Units granted under this Agreement less than 365 days prior to the date of Separation from Service without Cause and (B) the quotient of (1) the number of days from the Grant Date to the date of Separation from Service without Cause and (2) 365.

(f)    Except as provided in Section 3(b),(c), (d) or (e) above or as otherwise provided in any written agreement by and between the Company and the Participant, if the Participant’s employment with the Company terminates for any reason prior to the expiration of the Vesting Period, all then-unvested Restricted Share Units shall be canceled immediately and shall not be payable to the Participant.

4.    Payment. The Company shall issue to the Participant one Share for each Restricted Share Unit which has become vested with respect to the vesting schedule pursuant to Section 3 of this Agreement. The payment of the Shares shall be made to the Participant (or the Participant’s assignee or beneficiary if permitted by the Plan or the Committee) in accordance with the Company’s grant and award policy no later than March 15th of the calendar year next following the calendar year in which the vesting period ends and may be made as a book-entry confirmation or through the issuance of a certificate evidencing such Shares; provided, however, that if the Participant is eligible for Retirement at any point during the Vesting Period, payment of the Shares shall be made as soon as practicable following the applicable vesting date set forth in Section 3, but in no event later than December 31 of the calendar year in which such vesting date occurs.

5.    Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any Shares which may be issued upon the vesting of the Restricted Share Units (including, without limitation, voting rights and any rights to receive dividends or non-cash distributions with respect to such Shares) unless and until the Shares have been issued to the Participant. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such Shares are issued.

6.    Withholding. The Company’s obligation to make payment of vested Restricted Share Units shall be subject to the Participant’s satisfaction of any applicable federal, state, local and foreign withholding obligations or withholding taxes, including any employer minimum statutory withholding (“Withholding Taxes”), and the Participant shall pay the amount of any such Withholding Taxes to the Company as set forth in this Section 6. The Participant may satisfy his or her obligation to pay the Withholding Taxes by (i) having the Company withhold Shares otherwise deliverable to the Participant pursuant to settlement of vested Restricted Share Units; or (ii) delivering, actually or by attestation, to the Company shares of Common Stock already owned by the Participant; provided that the amount of such Shares withheld or shares of Common Stock delivered (with the value of such Shares being based on the Fair Market Value of a Share of the Company’s Common Stock as of the payment date as determined by the Committee) shall not exceed the amount necessary to satisfy the minimum amount of Withholding Taxes. The Participant acknowledges and agrees that the Company has the right to deduct from compensation or other amounts owing to the Participant an amount not to exceed the Withholding Taxes.

7.    Covenants. As a condition to the receipt of the Award (which shall be forfeited in the event of noncompliance with this Section 7), the Participant hereby covenants with the Company as follows:

(a) Confidential Information. The Participant shall not disclose or reveal to any unauthorized person or knowingly use for the Participant’s own benefit, or another person or entity’s benefit, any trade secret or other confidential information relating to the Company, or to any of the businesses operated by it, including, without limitation, any customer lists, customer needs, price and performance information, processes, specifications, hardware, software, devices, supply sources and characteristics, business opportunities, potential business interests, marketing, promotional pricing and financing techniques, or other information relating to the business of the Company (“Confidential Information”), and the

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Participant confirms that Confidential Information constitutes the exclusive property of the Company. Such restrictions shall not apply to information which is (i) generally available in the industry, or (ii) disclosed through no fault of the Participant, or (iii) required to be disclosed pursuant to applicable law or regulation or the order of a governmental or regulatory body (provided that the Company is given reasonable notice of any such required disclosure). The Participant agrees that Participant will immediately return to the Company upon request, but in any event upon Separation from Service, any physical embodiment of any Confidential Information and/or any summaries containing any Confidential Information, in whole in part, in any media. For the avoidance of doubt, nothing in this Agreement prohibits the Participant from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any Inspector General, or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation. The Participant does not need the prior authorization of the Company to make any such reports or disclosures, and the Participant is not required to notify the Company that the Participant has made such reports or disclosure.

The Participant acknowledges and agrees that the Company has provided the Participant with written notice below that the Defend Trade Secrets Act, 18 U.S.C. § 1833(b), provides an immunity for the disclosure of a trade secret to report suspected violations of law and/or in an anti-retaliation lawsuit, as follows:

(1) IMMUNITY — An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that —

(A) is made —

(i) in confidence to a Federal, State or local government official, either directly or indirectly, or to an attorney; and

(ii) solely for the purpose of reporting or investigating a suspected violation of law; or

(B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(2) USE OF TRADE SECRET INFORMATION IN ANTI-RETALIATION LAWSUIT — An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—

(A) files any document containing the trade secret under seal; and

(B) does not disclose the trade secret, except pursuant to court order.

(b) Non-Competition. Except with the prior written consent of the Company’s Board of Directors, during the term of employment, and for a period of one year following the Participant’s Separation from Service for any reason (the “Restricted Period”), the Participant shall not engage, directly or indirectly, in Competition with the Company. “Competition” means providing services in the Restricted Area in any capacity (whether as an employee, independent contractor, consultant, principal, agent, partner,officer, director, investor, or shareholder, except as a shareholder of less than five (5%) percent of a publicly

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traded company) to a Competitor of the Company that: (i) are the same or similar in function or purpose to the services the Participant provided to the Company or (ii) will likely result in the disclosure of Confidential Information to a Competitor or the use of Confidential Information on behalf of a Competitor. The “Restricted Area” means the geographic area the Participant served at any time during the previous two years of the Participant’s employment. For avoidance of doubt, if the Participant’s job duties encompassed the United States, the Restricted Area shall be the United States. “Competitor” means any person, corporation, joint venture or other entity that provides one or more of the business offerings of the Company, including new products or services under active consideration by the Company at the time of the Participant’s Separation from Service.

(c)    Non-Solicitation – Business Partners. During the Restricted Period, the Participant shall not interfere with the Company’s relationship with its Business Partners by soliciting or communicating (regardless of who initiates the communication) with a Business Partner to: (i) induce or encourage the Business Partner to stop doing business or reduce its business with the Company, or (ii) buy a product or service that competes with a product or service offered by the Company’s business. “Business Partner” means: a customer (person or entity), prospective customer (person or entity), supplier or manufacturer with which the Company has a business relationship and with which the Participant had business-related contact or dealings, or about which the Participant received Confidential Information, in the two years prior to the Participant’s Separation from Service.

(d)    Non-Solicitation – Employees/Contractors. During the Restricted Period, the Participant shall not interfere with the Company’s relationship with any employee or contractor of the Company by: (i) soliciting or communicating with the employee or contractor to induce or encourage him or her to leave the Company’s employ or engagement (regardless of who first initiates the communication); (ii) helping another person or entity evaluate such employee or contractor as an employment or contractor candidate; or (iii) otherwise helping any person or entity hire an employee or contractor away from the Company.

(e) The Participant hereby acknowledges that the Participant will treat as for the Company’s sole benefit, and fully and promptly disclose and assign to the Company without additional compensation, all ideas, information, discoveries, inventions and improvements which are based upon or related to any Confidential Information protected under Section 7(a) herein, and which are made, conceived or reduced to practice by the Participant during the Participant’s period of employment by the Company and the Restricted Period. The provisions of this Section 7(e) shall apply whether such ideas, discoveries, inventions, improvements or knowledge are conceived, made or gained by the Participant alone or with others, whether during or after usual working hours, either on or off the job, directly or indirectly related to the Company’s business interests (including potential business interests), and whether or not within the realm of the Participant’s duties.

(f) The Participant shall, upon request of the Company, but at no expense to the Participant, at any time during or after employment by the Company, sign all instruments and documents and cooperate in such other acts reasonably required to protect rights to the ideas, discoveries, inventions, improvements and knowledge referred to above, including applying for, obtaining and enforcing patents and copyrights thereon in any and all countries.

(g)    During the Restricted Period, upon reasonable request of the Company, the Participant shall cooperate in any internal or external investigation, litigation or any dispute relating to any matter in which

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he or she was involved during his or her employment with the Company; provided, however, that the Participant shall not be obligated to spend time and/or travel in connection with such cooperation to the extent that it would unreasonably interfere with the Participant’s other commitments and obligations. The Company shall reimburse the Participant for all expenses the Participant reasonably incurs in so cooperating.

(h)    Before accepting employment with any other person, organization or entity while employed by the Company and during the Restricted Period, the Participant will inform such person, organization or entity of the restrictions contained in this Section 7. The Participant further consents to notification by the Company to the Participant’s subsequent employer or other third party of the Participant’s obligations under this Agreement.

(i) The Participant recognizes that the possible restrictions on the Participant’s activities which may occur as a result of the Participant’s performance of the Participant’s obligations under Sections 7(a) through (d) of this Agreement are required for the reasonable protection of the Company and its investments, and the Participant expressly acknowledges that such restrictions are fair and reasonable for that purpose. The Participant acknowledges that money damages would not be an adequate or sufficient remedy for any breach of Sections 7(a) through (d), and that in the event of a breach or threatened breach of Sections 7(a) through (d), the Company, in addition to other rights and remedies existing in its favor, shall be entitled, as a matter of right, to injunctive relief, including specific performance, from a court of competent jurisdiction in order to enforce, or prevent any violations of, the provisions of Sections 7(a) through (d). The terms of this Section 7(i) shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages from the Participant. If any of the provisions of this Agreement are held to be in any respect an unreasonable restriction upon the Participant then they shall be deemed to extend only over the maximum period of time, geographic area, and/or range of activities as to which they may be enforceable. The Participant expressly agrees that all payments and benefits due the Participant under this Agreement shall be subject to the Participant’s compliance with the provisions set forth in Sections 7(a) through (d).

8.    No Guarantee of Employment.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in the employ of the Company, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Participant at any time for any reason whatsoever, with or without Cause.

9.    Amendment. Subject to the restrictions contained in the Plan, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, this Agreement and the Restricted Share Units, prospectively or retroactively in time (and in accordance with Section 409A of the Code with regard to awards subject thereto); provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of the Participant or any holder or beneficiary of the Restricted Share Units shall not to that extent be effective without the consent of the Participant, holder or beneficiary; and provided further that no consent of the Participant or any holder or beneficiary shall be required for any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination to the extent necessary to conform this Agreement to mandatory provisions of applicable federal or state laws, regulations or rulings, including but not limited to the provisions of Section 409A of the Code necessary to avoid tax penalties to

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the Participant. The Committee is authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, this Agreement and the Restricted Share Units as set forth in the Plan.

10.    Determinations by the Committee. Except as otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons.

11.    Provisions of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan with this Agreement and agrees to be bound by all the terms and provisions of the Plan. This Agreement is governed by the terms of the Plan, and in the case of any inconsistency between this Agreement and the terms of the Plan, the terms of the Plan shall govern. This Agreement, read together with the Plan, represents the entire understanding and agreement between the Company and the Participant, and shall supersede any prior agreement and understanding between the parties with respect to the matters contained herein. This Agreement, and any payment of Shares in settlement of the Restricted Share Units, shall be subject to any policy of the Company regarding the recoupment or clawback of compensation as in effect at the date of this Agreement or hereafter adopted by the Board.

12.    Nontransferability of Restricted Share Units.  Except as otherwise provided in the Plan, the Restricted Share Units and this Agreement shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Share Units otherwise than as permitted by the Plan and this Agreement shall, at the election of the Company, be null and void. Transfer of the Restricted Share Units for value is not permitted under the Plan or this Agreement.

13.    Notices. Any notice required or permitted to be given to the Participant under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the United States mail with postage and fees prepaid. Any notice or communication required or permitted to be given to the Company under this Agreement shall be in writing and shall be deemed effective only upon receipt by the Secretary of the Company at the Company’s principal office.

14.    Waiver. The waiver by the Company of any provision of this Agreement at any time or for any purpose shall not operate as or be construed to be a waiver of the same or any other provision of this Agreement at any subsequent time or for any other purpose.

15.    Section 409A.

(a)    For the avoidance of doubt, the Restricted Share Units granted under this Agreement are intended to be exempt from or otherwise comply with Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be either exempt from or in compliance therewith. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Participant by Code Section 409A or damages for failing to comply with Code Section 409A.

(b)    Notwithstanding any other payment schedule provided herein to the contrary, if the Participant is deemed on the date of Separation from Service to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then any payment due under this Agreement that is considered “deferred compensation” under Section 409A of the Code payable on account of a

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Participant’s Separation from Service shall not be made until the date which is the earlier of (A) the expiration of the six (6) month period measured from the date of such Separation from Service of the Participant, and (B) the date of the Participant’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 15(b) shall be paid to the Participant in a lump sum in accordance with the Agreement.

(c)    For the avoidance of doubt, any payment due under this Agreement within a period following the Participant’s Separation from Service, death, Disability, Retirement or other event, shall be made on a date during such period as determined by the Company in its sole discretion.

16.    Governing Law. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to conflicts of laws principles.

17.    Successors. This Agreement shall inure to the benefit of and be binding upon any successor to the Company and shall inure to the benefit of the Participant's legal representative. All obligations imposed upon the Participant and all rights granted to the Company under this Agreement shall be binding upon the Participant's heirs, executors, administrator and successors.

18.    Electronic Communication. The Company may, in its sole discretion, decide to deliver any document related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

[signature page follows]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer of the Company, and the Participant has accepted and signed this Agreement, all on the day and year first mentioned above.

                        UNITED NATURAL FOODS, INC.

                        By: __________________________

                        PARTICIPANT

                         ______________________________

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EX-10.3

Exhibit 10.3

UNITED NATURAL FOODS, INC.

2020 EQUITY INCENTIVE PLAN

PERFORMANCE-BASED VESTING

RESTRICTED SHARE UNIT AWARD AGREEMENT

[cliff-vesting for employees]

This Performance-Based Vesting Restricted Share Unit Award Agreement (this “Agreement”) effective as of [ ] __, 20__, (the “Grant Date”) between United Natural Foods, Inc. (the “Company”) and __________________ (the “Participant”), evidences a Performance Award denominated in Restricted Share Units to the Participant under the United Natural Foods, Inc. 2020 Equity Incentive Plan (as amended from time to time, the “Plan”). Except in the preceding sentence and where the context otherwise requires, the term “Company” shall include the Company and all present and future Subsidiaries. All capitalized terms that are used in this Agreement without definition shall have the meanings set forth in the Plan.

1.Definitions.

(a)    “Participant,” solely for the purpose of this Agreement, means the employee designated above.

(b)    “Performance Criteria” means the performance targets related to one or more performance goals set forth on Exhibit A hereto.

(c)    “Performance Period” means the period beginning on [ ] and ending on [ ].

(d)    “Restricted Share Unit” means a right to receive a payment in the form of any one Share of the Company’s common stock, par value $0.01 per share, subject to the terms and conditions set forth in this Agreement and in the Plan, following the successful attainment of the Performance Criteria to the satisfaction of the Committee.

2.    Grant of Restricted Share Units.  In consideration of services to be rendered by the Participant to the Company, the Company hereby grants to the Participant, subject to the terms and conditions set forth in this Agreement and in the Plan, [______] Restricted Share Units (the “Target Amount”). The Target Amount shall be subject to adjustment as provided in Section 4.3 of the Plan. This grant is conditional upon the Participant signing a counterpart of this Agreement and delivering such signed counterpart to the Company within sixty (60) days of this Agreement, including by electronic means if provided by the Company pursuant to Section 18. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.

3.    Vesting & Effect of Separation from Service.

(a)    Performance Criteria: Exhibit A hereto identifies the Performance Criteria and the levels of performance that must be achieved in order to receive payment of Shares at the percentage of the Target Amount specified in Exhibit A, based on achievement of the Performance Criteria, as determined in accordance with this Agreement and the Plan. The percentage of the Target Amount based on actual achievement of the Performance Criteria as of the last day of the Performance Period is referred to herein as

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the “Earned Amount.” Except as otherwise provided herein or in the Plan, if the Participant remains continuously employed by the Company throughout the Performance Period, the Participant will vest in the Earned Amount, and any amount in excess of the Earned Amount will be forfeited. Prior to the issuance of any Shares in settlement of any Restricted Share Units, the Committee shall determine and certify in writing (which may be set forth in the minutes of a meeting of the Committee) the extent to which the Performance Criteria and all other material terms of this Agreement have been met. In making such determination, the Committee shall have the right to adjust the number of Shares payable at a given level of performance to take into account additional factors that the Committee may deem relevant in its sole discretion to the assessment of individual or corporate performance.

(b)    Retirement, Death, or Disability: In the event the Participant has a Separation from Service on account of Retirement in the 365-day period beginning on the Grant Date (the “Grant Year”), the Pro-Rated Number of Restricted Share Units will vest at the end of the Performance Period. The “Pro-Rated Number” shall be the product of (i) the Earned Amount that the Participant would have earned if he or she did not have a Separation from Service on account of Retirement and (ii) the quotient of (A) the number of days beginning with the first day of the Performance Period and ending on the date of the Participant’s Separation from Service as a result of Retirement and (B) 365, the number of days in the Grant Year (and, for the avoidance of doubt, no additional Restricted Share Units in which the Participant may have been entitled to vest in accordance with the Performance Criteria shall vest). In the event that the Participant has a Separation from Service on account of Retirement before the end of the Performance Period but after the Grant Year, or in the event that the Participant dies or has a Separation from Service on account of Disability at any time after the Grant Date then, at the conclusion of the Performance Period, the Participant (or the Participant’s estate or beneficiaries in the event of Participant’s death) will vest in the Earned Amount that the Participant would have earned had had his or her employment continued through the end of the Performance Period. The rights of the Participant (or the Participant’s estate or beneficiaries in the event of Participant’s death) in any event described in this Section 3(b) shall become non-forfeitable only at such time as the Shares issuable in settlement of such Restricted Stock Units would have been issued pursuant to Section 4 hereof had the Participant continued to be employed through the end of the Performance Period.

(c)    Change in Control: In the event this Award is assumed in connection with a Change in Control, the Committee shall make such adjustments to the Performance Criteria as are necessary to equitably account for the Change in Control. In the event the Participant’s employment with the Company or any successor to the Company is terminated without Cause, or the Participant terminates his or her employment for Good Reason, within twelve months after a Change in Control (and before the Restricted Share Units otherwise have become vested under Section 3(a) or (b)), the Participant shall vest in the Restricted Share Units at the Target Amount granted under Section 2 of this Agreement and the Participant’s rights to such vested amount of Restricted Share Units shall become non-forfeitable as of the date on which the Participant’s employment with the Company or its successor is terminated. In the event that this Award is not assumed by the Acquiror in connection with a Change in Control, the Participant shall vest in the Restricted Share Units at the Target Amount immediately prior to the Change in Control and shall settle immediately following the Change in Control (notwithstanding the longer period of time for settlement provided in Section 4 below).

(d)    Separation from Service without Cause: If the Participant has a Separation from Service without Cause (as defined in the Plan), then:

(i) the PSU Separation Pro-Rated Number of performance-based Restricted Share Units shall continue to vest, on the same terms that such performance-based Restricted Share Units would have vested had the Participant remained an employee, but without the requirement of continued

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employment provided, however, that if the vesting date under such terms is earlier than the Release Finalization Date, the performance-based Restricted Share Units shall vest effective as of the Release Finalization Date; and

(ii) any remaining performance-based Restricted Share Units not vesting as provided above shall be forfeited effective as of the date of Separation from Service without Cause.

    Notwithstanding the foregoing, the vesting and payout of any performance-based Restricted Share Units pursuant to this Section 3(e) shall be subject to the satisfaction of any conditions required for payout of the performance-based Restricted Share Units pursuant to this Agreement and the Plan.

The “PSU Separation Pro-Rated Number” for performance-based Restricted Share Units shall be the product of (A) the total number of performance-based Restricted Share Units and (B) the quotient of (1) the number of days beginning on the first day of the Performance Period and ending on the date of the Participant’s Separation from Service without Cause, and (2) the total number of days in the Performance Period (for example 1,095 days for a three-year performance period).

(e)    Except as provided in Section 3(b), (c), or (d) above or as otherwise provided in any written agreement by and between the Company and the Participant, if the Participant has a Separation from Service for any reason prior to the expiration of the Performance Period, all then-unvested Restricted Share Units shall be canceled immediately and shall not be payable to the Participant.

(f)    In case of any conflict between the terms of this Section 3 and any written employment agreement between the Company and the Participant, the terms of such written employment agreement shall control.

4.    Payment. The Company shall issue to the Participant one Share for each Restricted Share Unit which has become vested with respect to the Performance Period pursuant to Section 3 of this Agreement. The payment of the Shares shall be made to the Participant (or the Participant’s assignee or beneficiary if permitted by the Plan or the Committee) in accordance with the Company’s grant and award policy no later than March 15th of the calendar year next following the calendar year in which the Performance Period ends and may be made as a book-entry confirmation or through the issuance of a certificate evidencing such Shares.

5.    Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any Shares which may be issued upon the vesting of the Restricted Share Units (including, without limitation, voting rights and any rights to receive dividends or non-cash distributions with respect to such Shares) unless and until the Shares have been issued to the Participant. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such Shares are issued.

6.    Withholding. The Company’s obligation to make payment of vested Restricted Share Units shall be subject to the Participant’s satisfaction of any applicable federal, state, local and foreign withholding obligations or withholding taxes, including any employer minimum statutory withholding (“Withholding Taxes”), and the Participant shall pay the amount of any such Withholding Taxes to the Company as set forth in this Section 6. The Participant may satisfy his or her obligation to pay the Withholding Taxes by (i) having the Company withhold Shares otherwise deliverable to the Participant pursuant to settlement of vested Restricted Share Units; or (ii) delivering, actually or by attestation, to the Company shares of Common Stock already owned by the Participant; provided that the amount of such Shares withheld or shares of Common Stock delivered (with the value of such Shares being based on the Fair Market Value of a Share of the Company’s Common Stock as of the payment date as determined by the Committee) shall not exceed the amount necessary to satisfy the minimum amount of Withholding Taxes. The Participant

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acknowledges and agrees that the Company has the right to deduct from compensation or other amounts owing to the Participant an amount not to exceed the Withholding Taxes.

7.    Covenants. As a condition to the receipt of the Award (which shall be forfeited in the event of noncompliance with this Section 7 ), the Participant hereby covenants with the Company as follows:

(a) Confidential Information. The Participant shall not disclose or reveal to any unauthorized person or knowingly use for the Participant’s own benefit, or another person or entity’s benefit, any trade secret or other confidential information relating to the Company, or to any of the businesses operated by it, including, without limitation, any customer lists, customer needs, price and performance information, processes, specifications, hardware, software, devices, supply sources and characteristics, business opportunities, potential business interests, marketing, promotional pricing and financing techniques, or other information relating to the business of the Company (“Confidential Information”), and the Participant confirms that Confidential Information constitutes the exclusive property of the Company. Such restrictions shall not apply to information which is (i) generally available in the industry, or (ii) disclosed through no fault of the Participant, or (iii) required to be disclosed pursuant to applicable law or regulation or the order of a governmental or regulatory body (provided that the Company is given reasonable notice of any such required disclosure). The Participant agrees that Participant will immediately return to the Company upon request, but in any event upon Separation from Service, any physical embodiment of any Confidential Information and/or any summaries containing any Confidential Information, in whole in part, in any media. For the avoidance of doubt, nothing in this Agreement prohibits the Participant from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any Inspector General, or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation. The Participant does not need the prior authorization of the Company to make any such reports or disclosures, and the Participant is not required to notify the Company that the Participant has made such reports or disclosure.

The Participant acknowledges and agrees that the Company has provided the Participant with written notice below that the Defend Trade Secrets Act, 18 U.S.C. § 1833(b), provides an immunity for the disclosure of a trade secret to report suspected violations of law and/or in an anti-retaliation lawsuit, as follows:

(1) IMMUNITY — An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that —

(A) is made —

(i) in confidence to a Federal, State or local government official, either directly or indirectly, or to an attorney; and

(ii) solely for the purpose of reporting or investigating a suspected violation of law; or

(B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

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(2) USE OF TRADE SECRET INFORMATION IN ANTI-RETALIATION LAWSUIT — An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—

(A) files any document containing the trade secret under seal; and

(B) does not disclose the trade secret, except pursuant to court order.

(b)    Non-Competition. Except with the prior written consent of the Company’s Board of Directors, during the term of employment, and for a period of one year following the Participant’s Separation from Service for any reason (the “Restricted Period”), the Participant shall not engage, directly or indirectly, in Competition with the Company. “Competition” means providing services in the Restricted Area in any capacity (whether as an employee, independent contractor, consultant, principal, agent, partner, officer, director, investor, or shareholder, except as a shareholder of less than five (5%) percent of a publiclytraded company) to a Competitor of the Company that: (i) are the same or similar in function or purpose to the services the Participant provided to the Company or (ii) will likely result in the disclosure of Confidential Information to a Competitor or the use of Confidential Information on behalf of a Competitor. The “Restricted Area” means the geographic area the Participant served at any time during the previous two years of the Participant’s employment. For avoidance of doubt, if the Participant’s job duties encompassed the United States, the Restricted Area shall be the United States. “Competitor” means any person, corporation, joint venture or other entity that provides one or more of the business offerings of the Company, including new products or services under active consideration by the Company at the time of the Participant’s Separation from Service.

(c)    Non-Solicitation – Business Partners. During the Restricted Period, the Participant shall not interfere with the Company’s relationship with its Business Partners by soliciting or communicating (regardless of who initiates the communication) with a Business Partner to: (i) induce or encourage the Business Partner to stop doing business or reduce its business with the Company, or (ii) buy a product or service that competes with a product or service offered by the Company’s business. “Business Partner” means: a customer (person or entity), prospective customer (person or entity), supplier or manufacturer with which the Company has a business relationship and with which the Participant had business-related contact or dealings, or about which the Participant received Confidential Information, in the two years prior to the Participant’s Separation from Service.

(d)    Non-Solicitation – Employees/Contractors. During the Restricted Period, the Participant shall not interfere with the Company’s relationship with any employee or contractor of the Company by: (i) soliciting or communicating with the employee or contractor to induce or encourage him or her to leave the Company’s employ or engagement (regardless of who first initiates the communication); (ii) helping another person or entity evaluate such employee or contractor as an employment or contractor candidate; or (iii) otherwise helping any person or entity hire an employee or contractor away from the Company.

(e) The Participant hereby acknowledges that the Participant will treat as for the Company’s sole benefit, and fully and promptly disclose and assign to the Company without additional compensation, all ideas, information, discoveries, inventions and improvements which are based upon or related to any Confidential Information protected under Section 7(a) herein, and which are made, conceived or reduced to

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practice by the Participant during the Participant’s period of employment by the Company and the Restricted Period. The provisions of this Section 7(e) shall apply whether such ideas, discoveries, inventions, improvements or knowledge are conceived, made or gained by the Participant alone or with others, whether during or after usual working hours, either on or off the job, directly or indirectly related to the Company’s business interests (including potential business interests), and whether or not within the realm of the Participant’s duties.

(f) The Participant shall, upon request of the Company, but at no expense to the Participant, at any time during or after employment by the Company, sign all instruments and documents and cooperate in such other acts reasonably required to protect rights to the ideas, discoveries, inventions, improvements and knowledge referred to above, including applying for, obtaining and enforcing patents and copyrights thereon in any and all countries.

(g)    During the Restricted Period, upon reasonable request of the Company, the Participant shall cooperate in any internal or external investigation, litigation or any dispute relating to any matter in which he or she was involved during his or her employment with the Company; provided, however, that the Participant shall not be obligated to spend time and/or travel in connection with such cooperation to the extent that it would unreasonably interfere with the Participant’s other commitments and obligations. The Company shall reimburse the Participant for all expenses the Participant reasonably incurs in so cooperating.

(h)    Before accepting employment with any other person, organization or entity while employed by the Company and during the Restricted Period, the Participant will inform such person, organization or entity of the restrictions contained in this Section 7. The Participant further consents to notification by the Company to the Participant’s subsequent employer or other third party of the Participant’s obligations under this Agreement.

(i) The Participant recognizes that the possible restrictions on the Participant’s activities which may occur as a result of the Participant’s performance of the Participant’s obligations under Sections 7(a)through (d) of this Agreement are required for the reasonable protection of the Company and its investments, and the Participant expressly acknowledges that such restrictions are fair and reasonable for that purpose. The Participant acknowledges that money damages would not be an adequate or sufficient remedy for any breach of Sections 7(a) through (d), and that in the event of a breach or threatened breach of Sections 7(a) through (d), the Company, in addition to other rights and remedies existing in its favor, shall be entitled, as a matter of right, to injunctive relief, including specific performance, from a court of competent jurisdiction in order to enforce, or prevent any violations of, the provisions of Sections 7(a) through (d). The terms of this Section 7(i) shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages from the Participant. If any of the provisions of this Agreement are held to be in any respect an unreasonable restriction upon the Participant then they shall be deemed to extend only over the maximum period of time, geographic area, and/or range of activities as to which they may be enforceable. The Participant expressly agrees that all payments and benefits due the Participant under this Agreement shall be subject to the Participant’s compliance with the provisions set forth in Sections 7(a) through (d).

8.    No Guarantee of Employment. Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in the employ of the Company, or shall interfere with or restrict in any

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way the rights of the Company, which are hereby expressly reserved, to discharge the Participant at any time for any reason whatsoever, with or without Cause.

9.    Amendment. Subject to the restrictions contained in the Plan, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, this Agreement and the Restricted Share Units, prospectively or retroactively in time (and in accordance with Section 409A of the Code with regard to awards subject thereto); provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of the Participant or any holder or beneficiary of the Restricted Share Units shall not to that extent be effective without the consent of the Participant, holder or beneficiary; and provided further that no consent of the Participant or any holder or beneficiary shall be required for any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination to the extent necessary to conform this Agreement to mandatory provisions of applicable federal or state laws, regulations or rulings, including but not limited to the provisions of Section 409A of the Code necessary to avoid tax penalties to the Participant. The Committee is authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, this Agreement and the Restricted Share Units as set forth in the Plan.

10.    Determinations by the Committee. Except as otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons.

11.    Provisions of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan with this Agreement and agrees to be bound by all the terms and provisions of the Plan. This Agreement is governed by the terms of the Plan, and in the case of any inconsistency between this Agreement and the terms of the Plan, the terms of the Plan shall govern. This Agreement, read together with the Plan, represents the entire understanding and agreement between the Company and the Participant, and shall supersede any prior agreement and understanding between the parties with respect to the matters contained herein. This Agreement, and any payment of Shares in settlement of the Restricted Share Units, shall be subject to any policy of the Company regarding the recoupment or clawback of compensation as in effect at the date of this Agreement or hereafter adopted by the Board.

12.    Nontransferability of Restricted Share Units.  Except as otherwise provided in the Plan, the Restricted Share Units and this Agreement shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Share Units otherwise than as permitted by the Plan and this Agreement shall, at the election of the Company, be null and void. Transfer of the Restricted Share Units for value is not permitted under the Plan or this Agreement.

13.    Notices. Any notice required or permitted to be given to the Participant under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the United States mail with postage and fees prepaid. Any notice or communication required or permitted to be given to the Company under this Agreement shall be in writing and shall be deemed effective only upon receipt by the Secretary of the Company at the Company’s principal office.

14.    Waiver. The waiver by the Company of any provision of this Agreement at any time or for any purpose shall not operate as or be construed to be a waiver of the same or any other provision of this Agreement at any subsequent time or for any other purpose.

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15.    Section 409A.

(a)    For the avoidance of doubt, the Restricted Share Units granted under this Agreement are intended to be exempt from or otherwise comply with Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be either exempt from or in compliance therewith. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Participant by Code Section 409A or damages for failing to comply with Code Section 409A.

(b)    Notwithstanding any other payment schedule provided herein to the contrary, if the Participant is deemed on the date of Separation from Service to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then any payment due under this Agreement that is considered “deferred compensation” under Section 409A of the Code payable on account of a Participant’s Separation from Service shall not be made until the date which is the earlier of (A) the expiration of the six (6) month period measured from the date of such Separation from Service of the Participant, and (B) the date of the Participant’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 15(b) shall be paid to the Participant in a lump sum in accordance with the Agreement.

(c)    For the avoidance of doubt, any payment due under this Agreement within a period following the Participant’s Separation from Service, death, Disability, Retirement or other event, shall be made on a date during such period as determined by the Company in its sole discretion.

16.    Governing Law. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to conflicts of laws principles.

17.    Successors. This Agreement shall inure to the benefit of and be binding upon any successor to the Company and shall inure to the benefit of the Participant's legal representative. All obligations imposed upon the Participant and all rights granted to the Company under this Agreement shall be binding upon the Participant's heirs, executors, administrator and successors.

18.    Electronic Communication. The Company may, in its sole discretion, decide to deliver any document related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third-party designated by the Company.

[signature page follows]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer of the Company, and the Participant has accepted and signed this Agreement, all on the day and year first mentioned above.

                        UNITED NATURAL FOODS, INC.

                        By: __________________________

                        PARTICIPANT

                         ______________________________

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EXHIBIT A

Performance criteria and levels required to be achieved for payout;

payout percentage of Target Amount

[TO BE DETERMINED ON OR PRIOR TO GRANT]

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EX-10.4

Exhibit 10.4

United Natural Foods, Inc.

Annual Incentive Plan

Effective September 25, 2019; most recently amended March 3, 2023

Administration of Incentive Plan

This Annual Incentive Plan (the “Incentive Plan”) of United Natural Foods, Inc. (the “Company”) is administered by the Compensation Committee (the “Compensation Committee”) of the Company’s Board of the Directors (the “Board”). The Compensation Committee may delegate to certain associates or committees the authority to manage the day-to-day administrative operations of the Incentive Plan as it may deem advisable, and does hereby delegate to the Company’s Senior Leadership Team (which shall include the Chief Executive Officer, Chief Human Resources Officer, Chief Financial Officer, and General Counsel and Corporate Secretary, and such other members as may serve on such team from time to time) the administration of the Incentive Plan as to all associates that are not executive officers as designated by the Company’s Board. Any references to the Compensation Committee’s administrative authority hereunder is understood to include such delegated authority to the Senior Leadership Team

The Compensation Committee (but not including the Senior Leadership Team) reserves the right to amend, modify, or terminate the Incentive Plan at any time in its sole discretion.

The Compensation Committee shall have the authority to establish and modify the terms of any individual’s participation in the Incentive Plan, to determine the the amount of any incentive payments for which a participant is eligible and the performance period to which such payments relate, to establish performance objectives in respect of such performance periods and to determine whether such performance objectives were attained. The Compensation Committee is authorized to interpret the Incentive Plan, to establish, amend and rescind any rules and regulations relating to the Incentive Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Incentive Plan. The Compensation Committee may correct any defect or omission or reconcile any inconsistency in the Incentive Plan in the manner and to the extent the Compensation Committee deems necessary or desirable. Any decision of the Compensation Committee in the interpretation and administration of the Incentive Plan, as described herein, shall be subject to its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. Determinations made by the Compensation Committee under the Incentive Plan need not be uniform and may be made selectively among participants in the Incentive Plan, whether or not such participants are similarly situated. Any and all changes will be communicated to those associates participating in the Incentive Plan that are affected by the changes.

I.Incentive Plan Eligibility

The Compensation Committee shall determine the U.S. associates of the Company or its Subsidiaries who are eligible for participation in the Incentive Plan.

Participants in the Incentive Plan hired or promoted in the applicable fiscal year will be eligible for a prorated payout at the end of such fiscal year if the required performance objectives are achieved and the participant is actively employed with the Company on the date the payment is made. Additionally, if any participant receives a change in annual base salary (in the case of a participant who is classified as a salaried associate) or Specified Earnings (defined below) (in the case of an associate who is classified as an hourly associate) or bonus target during the performance period, the amount payable under the Incentive Plan, if any, will be prorated accordingly. In the case of a new hire, the prorated payment shall be calculated based on the number of days the participant was employed by the Company in such fiscal year compared to the total number of days in such fiscal year. In the case of a promotion, bonus target, or other change to annual base salary or Specified Earnings, the prorated payment shall be calculated based on the number of days at each rate of pay in such fiscal year, compared to the number of days in such fiscal year.

For purposes of the Incentive Plan, “Specified Earnings” means regular, incentive, overtime, and premium pay.

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All Incentive Plan participants must accept the commitment and responsibility to perform all duties in compliance with the Company’s Code of Conduct. Any participant who manipulates or attempts to manipulate the Incentive Plan for personal gain at the expense of customers, other associates, or Company objectives will be subject to appropriate disciplinary actions.

Participants must not divulge to any outsider (other than the Company’s financial, accounting and legal advisors) any non-public information regarding this Incentive Plan or any specific performance objectives applicable to the participant or any other participant.

Participation in the Incentive Plan does not constitute a contract or promise of employment between the Company and any participant in the Incentive Plan, and nothing in the Incentive Plan shall be construed as conferring on a participant any right to continue in the employment of the Company or any of its subsidiaries. Any promise or representations, oral or written, which are inconsistent with or different from the terms of the Incentive Plan are invalid.

Participation in and receipt of payment under the Incentive Plan requires that participants comply with the covenants in Part IV below.

II.Termination Provisions

Participants in the Incentive Plan must be actively employed with the Company on the date that payment under the Incentive Plan is to be made to be eligible for such payment, except as described below or as otherwise set forth in any written agreement between the Company and the participant. Payment under the Incentive Plan is made as soon as administratively practicable after the Company’s Board of Directors has approved the calculation of payments hereunder, which will generally be 10 to 12 weeks following the end of the Company’s fiscal year.

If a participant’s employment is terminated due to death, the Company shall pay to the participant’s estate, subject to applicable withholding and deductions, any Earned Incentive Compensation (as hereinafter defined) as soon as administratively practicable following such participant’s death, but no later than December 31 of the calendar year following the calendar year in which the participant’s death occurs.

If a participant’s employment is terminated due to Retirement (as defined below), or by the Company without Cause (as hereinafter defined) under circumstances that would qualify the participant for benefits under the United Natural Foods, Inc. Severance Pay Plan for Non-Union Associates (as amended from time to time) (“Severance Plan”), or a participant resigns for Good Reason (as hereinafter defined), then, subject to any limitation imposed under applicable law, and any other agreement between the Company and the participant, the Company shall pay to the participant, subject to applicable withholding and deductions, any Earned Incentive Compensation (as hereinafter defined), when such Earned Incentive Compensation would otherwise be payable, if the participant’s employment was not terminated, but no later than December 31 of the calendar year following the end of the Company’s fiscal year in which the termination date occurred.

For purposes of the Incentive Plan, “Retirement” means the termination of the participant’s employment with the Company and all of its Subsidiaries on or after the date on which both of the following have occurred: (i) the participant has attained fifty-nine (59) years of age and (ii) the date the participant has provided ten (10) years of service to the Company or any of its Subsidiaries.  Years of service will be calculated as full years since the participant’s most recent “hire date” or “rehire date,” which means the applicable date on file for the participant in the Company’s human resources books and records, determined in the Company’s sole discretion.

“Earned Incentive Compensation” consists of: (a) to the extent not previously paid, the incentive compensation that the participant would otherwise receive based on the Company’s actual performance for

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the most recent fiscal year ended before the participant’s termination date and (b) the Pro-Rated Portion (as hereinafter defined) of any incentive compensation that the participant would otherwise receive, based on the Company’s actual performance for the fiscal year during which the participant’s employment is terminated, provided, however, in the case of a participant’s death only, such incentive compensation shall be based on the participant’s target incentive compensation (i.e., a percentage of the participant’s annual base salary (in the case of a participant who is classified as a salaried associate) or Specified Earnings (in the case of a participant who is classified as an hourly associate)), without regard to attainment of any performance objective. The “Pro-Rated Portion” shall be the portion represented by the number of days in such fiscal year prior to the participant’s termination date, compared to the total number of days in such fiscal year.

If a participant is terminated for Cause at any time, he or she will not be eligible for any payment under the Incentive Plan and shall forfeit any payments that may have been due to the participant under the Incentive Plan prior to or subsequent to the participant’s employment being terminated for Cause. “Cause” means, unless otherwise defined in a written agreement between the participant and the Company, (i) conviction of the participant under applicable law of (A) any felony or (B) any misdemeanor involving moral turpitude; (ii) unauthorized acts intended to result in the participant’s personal enrichment at the material expense of the Company or any subsidiary or affiliate or their reputation; (iii) any violation of the participant’s duties or responsibilities to the Company or a subsidiary or affiliate of the Company which constitutes willful misconduct or dereliction of duty; or (iv) material breach of the Company’s Code of Conduct or the covenants described in Section IV of this Plan.

In addition, if a participant is terminated other than for Cause and under circumstances that do not qualify the participant for benefits under the Severance Plan, he or she will not be eligible for any payment under the Incentive Plan except to the extent that such termination results in an a separation agreement between the participant and the Company, and the participant is entitled to Earned Incentive Compensation (or such other amount as may be mutually agreed) pursuant to the terms of such separation agreement.

If a participant becomes disabled or is granted a leave of absence for any other reason in any fiscal year, amounts owed hereunder shall be governed by the provisions of the United Natural Foods, Inc. Leave of Absence Policy (Long-Term and Annual Incentive Plans) (or any replacement policy) as in effect at the time such leave of absence commenced. Except as otherwise provided in a written agreement between the Company and a participant, if a participant voluntarily terminates his or her employment under circumstances that do not qualify as a Retirement or resignation for Good Reason before the date that payment under the Incentive Plan is to be made, the participant will not be eligible for any payment under the Incentive Plan.

Unless otherwise specified by any applicable severance plans or severance, employment, change in control or other written agreement to which a participant is subject (in which case, there shall be no duplication of benefits) or by the Compensation Committee at the time when performance objectives are established with respect to the applicable fiscal year, in the event of a Change in Control (as hereinafter defined), then, subject to the Compensation Committee’s ability to exercise negative discretion to reduce the size of any payments hereunder pursuant to the first paragraph of Section V, each participant eligible to receive incentive compensation hereunder shall receive an amount of incentive compensation based upon achievement at the “target” level of the applicable performance objectives for the full fiscal year, with such payments being due and payable on a date selected by the Company that is not later than the first payroll date following the Change in Control.

“Change in Control” means, unless otherwise provided in the applicable award agreement, the happening of one of the following:

            (I) any “person”, including a “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) but excluding the Company,

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any of its affiliates, or any employee benefit plan of the Company or any of its affiliates) is or becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the Exchange Act), directly or indirectly, of securities of the Company representing the greater of 30% or more of the combined voting power of the Company’s then outstanding securities;

            (ii) the stockholders of the Company shall approve a definitive agreement and a transaction is consummated (1) for the merger or other business combination of the Company with or into another corporation if (A) a majority of the directors of the surviving corporation were not directors of the Company immediately prior to the effective date of such merger or (B) the stockholders of the Company immediately prior to the effective date of such merger own less than 60% of the combined voting power in the then outstanding securities in such surviving corporation or (2) for the sale or other disposition of all or substantially all of the assets of the Company;

            (iii) the purchase of 30% or more of the combined voting power of the Company’s then outstanding securities pursuant to any tender or exchange offer made by any “person”, including a “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company, any of its affiliates, or any employee benefit plan of the Company or any of its affiliates; or

            (iv) the disposal of any line of business representing at least 15% of the Company’s consolidated net sales for the then-most recently completed fiscal year; provided, however, that such disposal shall only be deemed a “Change in Control” for participants primarily employed in the line of business disposed of, who cease to be employed by the Company following the disposition.

“Good Reason” means, unless otherwise provided in a written agreement between the participant and the Company, the occurrence of any one or more of the following without the participant’s express written consent: (i) the assignment of duties to a participant that are materially adversely inconsistent with the participant’s duties immediately prior to thereto and failure to rescind such assignment within thirty (30) days of receipt of notice from the participant; (ii) a material reduction in a participant’s title, authority or reporting status as compared to such title, authority or reporting status immediately prior to thereto, (iii) the Company’s requirement that a participant relocate more than fifty (50) miles from the participant’s place of employment prior to the place the participant performed such duties prior thereto; (iv) a reduction in the participant’s base salary as in effect immediately prior to a Change in Control or the failure of the Company to pay or cause to be paid any compensation or benefits when due, and failure to restore such annual base salary or make such payments within five (5) days of receipt of notice from the participant; (v) the failure to include the participant in any new employee benefit plans proposed by the Company or a material reduction in the participant’s level of participation in any existing plans of any type; provided that a Company-wide reduction or elimination of such plans shall not constitute “Good Reason” for purposes of this Incentive Plan; or (vi) the failure of the Company to obtain a satisfactory agreement from the acquiring party in a Change in Control to assume and provide the payments contemplated hereunder ; provided that, in each case, (A) within sixty (60) days of the initial occurrence of the specified event the participant has given the Company or any successor to the Company at least thirty (30) days to cure the Good Reason, (B) the Company or any such successor has not cured the Good Reason within the thirty (30) day period and (C) the participant resigns within ninety (90) days from the initial occurrence of the event giving rise to the Good Reason.

III. Performance Measures

Participants in the Incentive Plan may receive a cash payment upon the attainment of performance objectives which may be corporate and/or individual objectives and which will be communicated to the participant by the Compensation Committee. The percentage of any amount payable pursuant to the Incentive Plan shall be based on the weights assigned to the applicable performance objective by the Compensation Committee. Each participant’s target incentive payment is based on a designated percentage of the participant’s annual base salary (in the case of a participant who is classified as a salaried associate) or Specified Earnings (in the

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case of a participant who is classified as an hourly associate) and is established by the Compensation Committee. The Compensation Committee shall determine whether and to what extent each performance objective has been met. In determining whether and to what extent a performance objective has been met, the Compensation Committee may consider such matters as the Compensation Committee deems appropriate.

IV. Restrictive Covenants

(a) Confidential Information. Participant shall not disclose or reveal to any unauthorized person or knowingly use for participant’s own benefit or another person or entity’s benefit, any trade secret or other confidential information relating to the Company, or to any of the businesses operated by it, including, without limitation, any customer lists, customer needs, price and performance information, processes, specifications, hardware, software, devices, supply sources and characteristics, business opportunities, potential business interests, marketing, promotional pricing and financing techniques, or other information relating to the business of the Company (“Confidential Information”), and participant confirms that Confidential Information constitutes the exclusive property of the Company. Such restrictions shall not apply to information which is (i) generally available in the industry or (ii) disclosed through no fault of participant or (iii) required to be disclosed pursuant to applicable law or regulation or the order of a governmental or regulatory body (provided that the Company is given reasonable notice of any such required disclosure). Participant agrees that participant will immediately return to the Company upon request, but in any event upon termination of employment, any physical embodiment of any Confidential Information and/or any summaries containing any Confidential Information, in whole in part, in any media. For the avoidance of doubt, nothing in this Section IV prohibits participant from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any Inspector General, or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation. Participant does not need the prior authorization of the Company to make any such reports or disclosures, and participant is not required to notify the Company that participant has made such reports or disclosure.

Participant acknowledges and agrees that the Company has provided participant with written notice below that the Defend Trade Secrets Act, 18 U.S.C. § 1833(b), provides an immunity for the disclosure of a trade secret to report suspected violations of law and/or in an anti-retaliation lawsuit, as follows:

(1)IMMUNITY. — An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that —

(A) is made —

(i) in confidence to a Federal, State or local government official, either directly or indirectly, or to an attorney; and

(ii) solely for the purpose of reporting or investigating a suspected violation of law; or

(B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(2) USE OF TRADE SECRET INFORMATION IN ANTI-RETALIATION LAWSUIT.— An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—

(A) files any document containing the trade secret under seal; and

(B) does not disclose the trade secret, except pursuant to court order.

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(b) Non-Competition. Except with the prior written consent of the Company’s Board of Directors, during the term of employment, and for a period of one year following termination of such employment for any reason (the “Restricted Period”), Participant shall not engage, directly or indirectly in Competition with the Company. “Competition” means providing services in the Restricted Area in any capacity (whether as an employee, independent contractor, consultant, principal, agent, partner, officer, director, investor, or shareholder, except as a shareholder of less than five (5%) percent of a publicly traded company) to a Competitor of the Company that: (i) are the same or similar in function or purpose to the services participant provided to the Company or (ii) will likely result in the disclosure of Confidential Information to a Competitor or the use of Confidential Information on behalf of a Competitor. The “Restricted Area” means the geographic area participant served at any time during the previous two years of Participant’s employment. For avoidance of doubt, if participant’s job duties encompassed the United States, the Restricted Area shall be the United States. “Competitor” means any person, corporation, joint venture or other entity that provides one or more of the business offerings of the Company, including new products or services under active consideration by the Company at the time of participant’s termination.

(c)    Non-Solicitation – Business Partners. During the Restricted Period, participant shall not interfere with the Company’s relationship with its Business Partners by soliciting or communicating (regardless of who initiates the communication) with a Business Partner to: (i) induce or encourage the Business Partner to stop doing business or reduce its business with the Company, or (ii) buy a product or service that competes with a product or service offered by the Company’s business. “Business Partner” means: a customer (person or entity), prospective customer (person or entity), supplier or manufacturer with which the Company has a business relationship and with which participant had business-related contact or dealings, or about which participant received Confidential Information, in the two years prior to the termination of participant’s employment with the Company.

(d) Non-Solicitation – Employees/Contractors. During the Restricted Period, participant shall not interfere with the Company’s relationship with any employee or contractor of the Company by: (i) soliciting or communicating with the employee or contractor to induce or encourage him or her to leave the Company’s employ or engagement (regardless of who first initiates the communication); (ii) helping another person or entity evaluate such employee or contractor as an employment or contractor candidate; or (iii) otherwise helping any person or entity hire an employee or contractor away from the Company.

(e) Participant hereby acknowledges that participant will treat as for the Company’s sole benefit, and fully and promptly disclose and assign to the Company without additional compensation, all ideas, information, discoveries, inventions and improvements which are based upon or related to any Confidential Information protected under Section 5(a) herein, and which are made, conceived or reduced to practice by participant during participant’s period of employment by the Company and the Restricted Period. The provisions of this subsection (e) shall apply whether such ideas, discoveries, inventions, improvements or knowledge are conceived, made or gained by participant alone or with others, whether during or after usual working hours, either on or off the job, directly or indirectly related to the Company’s business interests (including potential business interests), and whether or not within the realm of participant’s duties.

(f) Participant shall, upon request of the Company, but at no expense to participant, at any time during or after employment by the Company, sign all instruments and documents and cooperate in such other acts reasonably required to protect rights to the ideas, discoveries, inventions, improvements and knowledge referred to above, including applying for, obtaining and enforcing patents and copyrights thereon in any and all countries.

(g)    During the Restricted Period, upon reasonable request of the Company, the participant shall cooperate in any internal or external investigation, litigation or any dispute relating to any matter in which he or she was involved during his or her employment with the Company; provided, however, that the participant shall not be obligated to spend time and/or travel in connection with such cooperation to the extent that it

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would unreasonably interfere with the participant’s other commitments and obligations. The Company shall reimburse the participant for all expenses the participant reasonably incurs in so cooperating.

(h)    Before accepting employment with any other person, organization or entity while employed by the Company and during the Restricted Period, the participant will inform such person, organization or entity of the restrictions contained in this Section. The participant further consents to notification by the Company to participant’s subsequent employer or other third party of participant’s obligations under this Section IV.

(i) The participant recognizes that the possible restrictions on the participant’s activities which may occur as a result of the participant’s performance of the participant’s obligations under Sections (a) through (d) of this Section IV are required for the reasonable protection of the Company and its investments, and the participant expressly acknowledges that such restrictions are fair and reasonable for that purpose. The participant acknowledges that money damages would not be an adequate or sufficient remedy for any breach of Sections (a) through (d), and that in the event of a breach or threatened breach of Sections (a) through (d), the Company, in addition to other rights and remedies existing in its favor, shall be entitled, as a matter of right, to injunctive relief, including specific performance, from a court of competent jurisdiction in order to enforce, or prevent any violations of, the provisions of Sections (a) through (d). The terms of this Section shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages from the participant. If any of the provisions of this Section IV are held to be in any respect an unreasonable restriction upon participant then they shall be deemed to extend only over the maximum period of time, geographic area, and/or range of activities as to which they may be enforceable. The participant expressly agrees that all payments and benefits due the participant under this Section IV shall be subject to the participant’s compliance with the provisions set forth in Sections (a) through (d).

V.Miscellaneous Provisions

Notwithstanding anything to the contrary herein, the Compensation Committee, in its sole discretion and subject to any applicable requirements of Section 409A (as defined below), may, unless otherwise provided for in a written agreement between the Company and the participant, (i) reduce any amounts otherwise payable to a participant hereunder in order to satisfy any liabilities owed to the Company or any of its Subsidiaries by the participant and (ii) modify (upward or downward) the amount of any incentive payment based on such criteria it shall determine, including, but not limited to, financial results, individual performance, or other factors, and may base such modification on the recommendation of a participant’s manager, the performance of the participant’s business unit, the Company performance, or any other factors that the Compensation Committee, in its sole discretion, shall deem appropriate.

In the event of any material change in the business assets, liabilities or prospects of the Company, any division or any Subsidiary, the Compensation Committee in its sole discretion and without liability to any person may make such adjustments, if any, as it deems to be equitable as to any affected terms of outstanding awards.

The Company is the sponsor and legal obligor under the Incentive Plan and shall make all payments hereunder, other than any payments to be made by any of the Company’s subsidiaries (in which case payment shall be made by such subsidiary, as appropriate). The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to ensure the payment of any amounts under the Incentive Plan, and the participant’s rights to the payment hereunder shall be not greater than the rights of the Company’s (or its subsidiary’s) unsecured creditors. All expenses involved in administering the Incentive Plan shall be borne by the Company.

The Incentive Plan shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in the State of Delaware.

8

Each participant agrees that payouts under this Incentive Plan are subject to the Company’s Recoupment (Clawback) Policy for performance-based incentive compensation or any other similar policy that may be adopted or amended thereafter by the Board or Compensation Committee from time to time, to conform to regulations related to recoupment or clawback of compensation adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and also further agrees to promptly return to the Company, if the Company shall so request, all or a portion of any incentive amounts paid to such participant pursuant to this Incentive Plan based upon financial information or performance objectives later found to be materially inaccurate and/or otherwise in accordance with the terms of the Company’s clawback policy, a copy of which will be made available to participants. The amount to be recovered shall be equal to the excess amount paid out over the amount that would have been paid out had such financial information or performance objective been fairly stated at the time the payout was made and/or otherwise in accordance with the Company’s clawback policy.

Notwithstanding anything herein to the contrary, the Compensation Committee, in its sole discretion, may make payments (including pro rata payments) to participants who do not meet the eligibility requirements of the Incentive Plan, including, but not limited to, the length of service requirements described in Section II above if the Compensation Committee determines that such payments are in the best interest of the Company.

The Incentive Plan is intended to comply with or be exempt from Section 409A of the Code and any rules, regulations or other official guidance promulgated thereunder (“Section 409A”) and will be interpreted in a manner intended to comply with Section 409A. Notwithstanding anything herein to the contrary, if at the time of the participant’s separation from service with the Company or any of its Subsidiaries the participant is a “specified employee” as defined in Section 409A, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such separation from service is necessary in order to prevent the imposition of any accelerated or additional tax under Section 409A, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the participant) until the date that is six months and one day following the participant’s separation from service with the Company or any of its Subsidiaries (or the earliest date as is permitted under Section 409A), if such payment or benefit is payable upon a separation from service with the Company or any of its Subsidiaries. Each payment made under the Incentive Plan shall be designated as a “separate payment” within the meaning of Section 409A.

If any provision of the Incentive Plan is, or becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any participant, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Incentive Plan, such provision shall be stricken as to such jurisdiction or participant and the remainder of the Incentive Plan shall remain in full force and effect.

9

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION

302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Alexander Miller Douglas, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of United Natural Foods, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

March 8, 2023

/s/ J. ALEXANDER MILLER DOUGLAS

J. Alexander Miller Douglas
Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION

302 OF THE SARBANES-OXLEY ACT OF 2002

I, John W. Howard, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of United Natural Foods, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

March 8, 2023

/s/ John W. Howard

John W. Howard

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, in his capacity as the Chief Executive Officer of United Natural Foods, Inc., a Delaware corporation (the “Company”), hereby certifies that the Quarterly Report of the Company on Form 10-Q for the quarterly period ended January 28, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects, the financial condition and results of operations of the Company.

/s/ J. ALEXANDER MILLER DOUGLAS

J. Alexander Miller Douglas
Chief Executive Officer

March 8, 2023

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, in his capacity as the Chief Financial Officer of United Natural Foods, Inc., a Delaware corporation (the “Company”), hereby certifies that the Quarterly Report of the Company on Form 10-Q for the quarterly period ended January 28, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects, the financial condition and results of operations of the Company.

/s/ John W. Howard

John W. Howard

Chief Financial Officer

March 8, 2023

XML

Cover - shares	6 Months Ended
	Jan. 28, 2023	Mar. 03, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jan. 28, 2023
Document Transition Report	false
Entity File Number	001-15723
Entity Registrant Name	UNITED NATURAL FOODS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	05-0376157
Entity Address, Address Line One	313 Iron Horse Way,
Entity Address, City or Town	Providence,
Entity Address, State or Province	RI
Entity Address, Postal Zip Code	02908
City Area Code	401
Local Phone Number	528-8634
Title of 12(b) Security	Common stock, par value $0.01
Trading Symbol	UNFI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		59,397,933
Entity Central Index Key	0001020859
Current Fiscal Year End Date	--07-29
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022
ASSETS
Cash and cash equivalents	$ 40	$ 44
Accounts receivable, net	992	1,214
Inventories, net	2,512	2,355
Prepaid expenses and other current assets	197	184
Total current assets	3,741	3,797
Property and equipment, net	1,719	1,690
Operating lease assets	1,218	1,176
Goodwill	20	20
Intangible assets, net	783	819
Other long-term assets	154	126
Total assets	7,635	7,628
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	1,797	1,742
Accrued expenses and other current liabilities	249	260
Accrued compensation and benefits	166	232
Current portion of operating lease liabilities	161	156
Current portion of long-term debt and finance lease liabilities	23	27
Total current liabilities	2,396	2,417
Long-term debt	2,065	2,109
Long-term operating lease liabilities	1,107	1,067
Long-term finance lease liabilities	18	23
Pension and other postretirement benefit obligations	18	18
Deferred income taxes	14	8
Other long-term liabilities	172	194
Total liabilities	5,790	5,836
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 5.0 shares; none issued or outstanding	0	0
Common stock, $0.01 par value, authorized 100.0 shares; 60.9 shares issued and 59.6 shares outstanding at January 28, 2023; 58.9 shares issued and 58.3 shares outstanding at July 30, 2022	1	1
Additional paid-in capital	592	608
Treasury stock at cost	(53)	(24)
Accumulated other comprehensive loss	(9)	(20)
Retained earnings	1,311	1,226
Total United Natural Foods, Inc. stockholders’ equity	1,842	1,791
Noncontrolling interests	3	1
Total stockholders’ equity	1,845	1,792
Total liabilities and stockholders’ equity	$ 7,635	$ 7,628

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000.0	5,000,000.0
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000.0	100,000,000.0
Common stock, shares issued (in shares)	60,900,000	58,900,000
Common stock, shares outstanding (in shares)	59,600,000	58,300,000
Pension and other postretirement benefit obligations	$ 18	$ 18

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Income Statement [Abstract]
Net sales	$ 7,816	$ 7,416	$ 15,348	$ 14,413
Cost of sales	6,747	6,341	13,183	12,296
Gross profit	1,069	1,075	2,165	2,117
Operating expenses	1,002	944	2,002	1,876
Restructuring, acquisition and integration related expenses	3	5	5	8
Loss (gain) on sale of assets	1	1	(4)	1
Operating income	63	125	162	232
Net periodic benefit income, excluding service cost	(7)	(10)	(14)	(20)
Interest expense, net	39	44	74	84
Other income, net	0	(2)	(1)	(1)
Income before income taxes	31	93	103	169
Provision for income taxes	9	25	14	24
Net income including noncontrolling interests	22	68	89	145
Less net income attributable to noncontrolling interests	(3)	(2)	(4)	(3)
Net income attributable to United Natural Foods, Inc.	$ 19	$ 66	$ 85	$ 142
Earnings Per Share
Basic earnings per share (in dollars per share)	$ 0.32	$ 1.13	$ 1.43	$ 2.47
Diluted earnings per share (in dollars per share)	$ 0.31	$ 1.08	$ 1.38	$ 2.33
Weighted average shares outstanding:
Basic (in shares)	59.8	58.3	59.3	57.6
Diluted (in shares)	61.0	61.0	61.3	61.0

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Statement of Comprehensive Income [Abstract]
Net income including noncontrolling interests		$ 22	$ 68	$ 89	$ 145
Other comprehensive (loss) income:
Recognition of pension and other postretirement benefit obligations, net of tax		1	1	1	2
Recognition of interest rate swap cash flow hedges, net of tax	[1]	(4)	15	14	28
Foreign currency translation adjustments		1	(2)	(2)	(2)
Recognition of other cash flow derivatives, net of tax	[2]	(2)	1	(2)	2
Total other comprehensive (loss) income		(4)	15	11	30
Less comprehensive income attributable to noncontrolling interests		(3)	(2)	(4)	(3)
Total comprehensive income attributable to United Natural Foods, Inc.		$ 15	$ 81	$ 96	$ 172

[1] Amounts are net of tax (benefit) expense of $(1) million and $6 million for the second quarters of fiscal 2023 and 2022, respectively, and $5 million and $10 million for fiscal 2023 and 2022 year-to-date, respectively.

[2] Amounts are net of tax (benefit) expense of $(1) million and $1 million for the second quarters of fiscal 2023 and 2022, respectively, and $(1) million and $1 million for fiscal 2023 and 2022 year-to-date, respectively.

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Statement of Comprehensive Income [Abstract]
Recognition of interest rate swap cash flow hedges, tax expense (benefit)	$ (1)	$ 6	$ 5	$ 10
Recognition of other cash flow derivatives, tax expense (benefit)	$ (1)	$ 1	$ (1)	$ 1

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) shares in Millions, $ in Millions	Total	Total United Natural Foods, Inc. Stockholders’ Equity	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Noncontrolling Interests
Beginning balance (in shares) at Jul. 31, 2021			57.0	0.6
Beginning balance at Jul. 31, 2021	$ 1,514	$ 1,515	$ 1	$ (24)	$ 599	$ (39)	$ 978	$ (1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock vestings (in shares)			1.8
Restricted stock vestings	(35)	(35)			(35)
Share-based compensation	23	23			23
Other comprehensive income (loss)	30	30				30
Distributions to noncontrolling interests	(3)							(3)
Proceeds from issuance of common stock, net	9	9			9
Net income	145	142					142	3
Ending balance (in shares) at Jan. 29, 2022			58.8	0.6
Ending balance at Jan. 29, 2022	1,683	1,684	$ 1	$ (24)	596	(9)	1,120	(1)
Beginning balance (in shares) at Oct. 30, 2021			58.7	0.6
Beginning balance at Oct. 30, 2021	1,587	1,589	$ 1	$ (24)	582	(24)	1,054	(2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock vestings (in shares)			0.1
Restricted stock vestings	(2)	(2)			(2)
Share-based compensation	12	12			12
Other comprehensive income (loss)	15	15				15
Distributions to noncontrolling interests	(1)							(1)
Proceeds from issuance of common stock, net	4	4			4
Net income	68	66					66	2
Ending balance (in shares) at Jan. 29, 2022			58.8	0.6
Ending balance at Jan. 29, 2022	$ 1,683	1,684	$ 1	$ (24)	596	(9)	1,120	(1)
Beginning balance (in shares) at Jul. 30, 2022	58.3		58.9	0.6
Beginning balance at Jul. 30, 2022	$ 1,792	1,791	$ 1	$ (24)	608	(20)	1,226	1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock vestings (in shares)			2.0
Restricted stock vestings	(39)	(39)			(39)
Share-based compensation	23	23			23
Repurchases of common stock (in shares)				0.7
Repurchases of common stock	(29)	(29)		$ (29)
Other comprehensive income (loss)	11	11				11
Distributions to noncontrolling interests	(2)							(2)
Net income	$ 89	85					85	4
Ending balance (in shares) at Jan. 28, 2023	59.6		60.9	1.3
Ending balance at Jan. 28, 2023	$ 1,845	1,842	$ 1	$ (53)	592	(9)	1,311	3
Beginning balance (in shares) at Oct. 29, 2022			60.9	1.0
Beginning balance at Oct. 29, 2022	1,835	1,835	$ 1	$ (36)	583	(5)	1,292	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock vestings	(2)	(2)			(2)
Share-based compensation	11	11			11
Repurchases of common stock (in shares)				0.3
Repurchases of common stock	(17)	(17)		$ (17)
Other comprehensive income (loss)	(4)	(4)				(4)
Net income	$ 22	19					19	3
Ending balance (in shares) at Jan. 28, 2023	59.6		60.9	1.3
Ending balance at Jan. 28, 2023	$ 1,845	$ 1,842	$ 1	$ (53)	$ 592	$ (9)	$ 1,311	$ 3

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions	6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests	$ 89	$ 145
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	147	138
Share-based compensation	23	23
(Gain) loss on sale of property and equipment	(9)	1
Closed property and other restructuring charges	0	1
Net pension and other postretirement benefit income	(14)	(20)
Deferred income tax expense	1	0
LIFO charge	50	30
Provision for losses on receivables	(3)	1
Non-cash interest expense and other adjustments	8	15
Changes in operating assets and liabilities	(22)	(291)
Net cash provided by operating activities	270	43
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for capital expenditures	(151)	(106)
Proceeds from dispositions of assets	12	3
Payments for investments	(4)	(26)
Net cash used in investing activities	(143)	(129)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under revolving credit line	1,944	2,521
Repayments of borrowings under revolving credit line	(1,861)	(2,232)
Repayments of long-term debt and finance leases	(143)	(168)
Repurchases of common stock	(29)	0
Proceeds from the issuance of common stock and exercise of stock options	0	9
Payments of employee restricted stock tax withholdings	(39)	(35)
Payments for debt issuance costs	0	(1)
Distributions to noncontrolling interests	(2)	(3)
Repayments of other loans	(1)	0
Net cash (used in) provided by financing activities	(131)	91
EFFECT OF EXCHANGE RATE ON CASH	0	0
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(4)	5
Cash and cash equivalents, at beginning of period	44	40
Cash and cash equivalents, at end of period	40	45
Supplemental disclosures of cash flow information:
Cash paid for interest	65	67
Cash payments for federal, state, and foreign income taxes, net	3	0
Leased assets obtained in exchange for new operating lease liabilities	133	123
Leased assets obtained in exchange for new finance lease liabilities	0	1
Additions of property and equipment included in Accounts payable	$ 31	$ 16

XML

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jan. 28, 2023

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1—SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

United Natural Foods, Inc. and its subsidiaries (the “Company” or “UNFI”) is a leading distributor of natural, organic, specialty, produce and conventional grocery and non-food products, and provider of support services to retailers. The Company sells its products primarily throughout the United States and Canada.

Fiscal Year

The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to the second quarter of fiscal 2023 and 2022 relate to the 13-week fiscal quarters ended January 28, 2023 and January 29, 2022, respectively. References to fiscal 2023 and 2022 year-to-date relate to the 26-week fiscal periods ended January 28, 2023 and January 29, 2022, respectively.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. In the Company’s opinion, these Condensed Consolidated Financial Statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. However, the results of operations for interim periods may not be indicative of the results that may be expected for a full year. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 30, 2022 (the “Annual Report”). There were no material changes in significant accounting policies from those described in the Annual Report.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows. As of January 28, 2023 and July 30, 2022, the Company had net book overdrafts of $263 million and $266 million, respectively.

Reclassifications

Within the Condensed Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current period presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.

Inventories, Net

Substantially all of the Company’s inventories consist of finished goods. To value discrete inventory items at lower of cost or net realizable value before application of any last-in, first-out (“LIFO”) reserve, the Company utilizes the weighted average cost method, perpetual cost method, the retail inventory method and the replacement cost method. Allowances for vendor funds and cash discounts received from suppliers are recorded as a reduction to Inventories, net and subsequently within Cost of sales upon the sale of the related products. Inventory quantities are evaluated throughout each fiscal year based on actual physical counts in the Company’s distribution facilities and stores. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated variances as of the end of each fiscal year. The LIFO reserve was approximately $275 million and $225 million as of January 28, 2023 and July 30, 2022, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

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RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Jan. 28, 2023

Accounting Standards Update and Change in Accounting Principle [Abstract]

RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update also require additional disclosures for equity securities subject to contractual sale restrictions. The Company is required to adopt this guidance in the first quarter of fiscal 2025. The Company is in the process of reviewing the provisions of the new standard but does not expect the adoption to have a material impact on the Company’s consolidated financial statements.

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REVENUE RECOGNITION

6 Months Ended

Jan. 28, 2023

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

NOTE 3—REVENUE RECOGNITION

Disaggregation of Revenues

The Company records revenue to five customer channels within Net sales, which are described below:

•Chains, which consists of customer accounts that typically have more than 10 operating stores and excludes stores included within the Supernatural and Other channels defined below;

•Independent retailers, which includes smaller size accounts, including single store and multiple store locations, and group purchasing entities that are not classified within Chains above or Other discussed below;

•Supernatural, which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of one customer;

•Retail, which reflects the Company’s Retail segment, including Cub Foods and Shoppers stores, and

•Other, which includes international customers outside of Canada, foodservice, eCommerce, conventional military business and other sales.

The following tables detail the Company’s Net sales 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)	January 28, 2023
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	3,322	$	—	$	—	$	—	$	3,322
Independent retailers	1,980		—		—		—		1,980
Supernatural	1,659		—		—		—		1,659
Retail	—		660		—		—		660
Other	553		—		56		—		609
Eliminations	—		—		—		(414)		(414)
Total	$	7,514	$	660	$	56	$	(414)	$	7,816
	Net Sales for the 13-Week Period Ended
(in millions)	January 29, 2022
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	3,243	$	—	$	—	$	—	$	3,243
Independent retailers	1,905		—		—		—		1,905
Supernatural	1,453		—		—		—		1,453
Retail	—		643		—		—		643
Other	531		—		50		—		581
Eliminations	—		—		—		(409)		(409)
Total	$	7,132	$	643	$	50	$	(409)	$	7,416
	Net Sales for the 26-Week Period Ended
(in millions)	January 28, 2023
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	6,546	$	—	$	—	$	—	$	6,546
Independent retailers	3,927		—		—		—		3,927
Supernatural	3,172		—		—		—		3,172
Retail	—		1,273		—		—		1,273
Other	1,128		—		116		—		1,244
Eliminations	—		—		—		(814)		(814)
Total	$	14,773	$	1,273	$	116	$	(814)	$	15,348
	Net Sales for the 26-Week Period Ended
(in millions)	January 29, 2022
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	6,325	$	—	$	—	$	—	$	6,325
Independent retailers	3,655		—		—		—		3,655
Supernatural	2,831		—		—		—		2,831
Retail	—		1,245		—		—		1,245
Other	1,055		—		106		—		1,161
Eliminations	—		—		—		(804)		(804)
Total	$	13,866	$	1,245	$	106	$	(804)	$	14,413

(1)Eliminations primarily includes the net sales elimination of Wholesale to Retail sales and the elimination of sales from segments included within Other to Wholesale.

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 United States and Canada, and international distribution occurs through freight-forwarders. The Company does not have any performance obligations on international shipments subsequent to delivery to the domestic port.

Accounts and Notes Receivable Balances

Accounts and notes receivable are as follows:

(in millions)	January 28, 2023		July 30, 2022
Customer accounts receivable	$	989	$	1,213
Allowance for uncollectible receivables	(17)		(18)
Other receivables, net	20		19
Accounts receivable, net	$	992	$	1,214
Notes receivable, net, included within Prepaid expenses and other current assets	$	5	$	6
Long-term notes receivable, net, included within Other long-term assets	$	10	$	12

During the second quarter of fiscal 2023, the Company entered into a purchase agreement with a third-party financial institution for the sale of certain customer accounts receivable up to a maximum outstanding amount of $300 million, without recourse, subject to eligibility criteria established by the financial institution. Pursuant to the terms of the agreement, certain customer receivables are sold to the third-party financial institution on a revolving basis, subject to certain limitations. After these sales, the Company does not retain any interest in the receivables. The Company’s continuing involvement in transferred receivables is limited to servicing the receivables.

Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of January 28, 2023, was approximately $292 million. Net proceeds received are included within net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows in the period of sale. The loss on sale of receivables was $5 million during the second quarter of fiscal 2023 and is recorded within Loss (gain) on sale of assets in the Condensed Consolidated Statements of Operations.

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GOODWILL AND INTANGIBLE ASSETS, NET

6 Months Ended

Jan. 28, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

NOTE 4—GOODWILL AND INTANGIBLE ASSETS, NET

Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following:

(in millions)	Wholesale			Other			Total
Goodwill as of July 30, 2022	$	10	(1)	$	10	(2)	$	20
Change in foreign exchange rates	—			—			—
Goodwill as of January 28, 2023	$	10	(1)	$	10	(2)	$	20

(1)Wholesale amounts are net of accumulated goodwill impairment charges of $717 million as of July 30, 2022 and January 28, 2023.

(2)Other amounts are net of accumulated goodwill impairment charges of $10 million as of July 30, 2022 and January 28, 2023.

Identifiable intangible assets, net consisted of the following:

	January 28, 2023						July 30, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Amortizing intangible assets:
Customer relationships	$	1,007	$	324	$	683	$	1,007	$	294	$	713
Pharmacy prescription files	33		20		13		33		18		15
Operating lease intangibles	6		4		2		6		4		2
Trademarks and tradenames	84		55		29		84		51		33
Total amortizing intangible assets	1,130		403		727		1,130		367		763
Indefinite lived intangible assets:
Trademarks and tradenames	56		—		56		56		—		56
Intangibles assets, net	$	1,186	$	403	$	783	$	1,186	$	367	$	819

Amortization expense was $18 million and $18 million for the second quarters of fiscal 2023 and 2022, respectively, and $36 million and $36 million for fiscal 2023 and 2022 year-to-date, respectively. The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of January 28, 2023 is as shown below:

Fiscal Year:	(in millions)
Remaining fiscal 2023	$	36
2024	72
2025	70
2026	66
2027	63
Thereafter	420
	$	727

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FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

6 Months Ended

Jan. 28, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

NOTE 5—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Recurring Fair Value Measurements

The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:

	Condensed Consolidated Balance Sheets Location	Fair Value at January 28, 2023
(in millions)		Level 1		Level 2		Level 3
Assets:
Interest rate swaps designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	17	$	—
Interest rate swaps designated as hedging instruments	Other long-term assets	$	—	$	5	$	—
Liabilities:
Fuel derivatives designated as hedging instruments	Accrued expenses and other current liabilities	$	—	$	1	$	—

	Condensed Consolidated Balance Sheets Location	Fair Value at July 30, 2022
(in millions)		Level 1		Level 2		Level 3
Assets:
Fuel derivatives designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	3	$	—
Interest rate swaps designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	3	$	—
Interest rate swaps designated as hedging instruments	Other long-term assets	$	—	$	1	$	—
Liabilities:
Interest rate swaps designated as hedging instruments	Other long-term liabilities	$	—	$	2	$	—

Interest Rate Swap Contracts

The fair values of interest rate swap contracts are measured using Level 2 inputs. The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, SOFR swap rates and credit default swap rates. As of January 28, 2023, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $12 million; a 100-basis point decrease in forward SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $12 million. Refer to Note 6—Derivatives for further information on interest rate swap contracts.

Fair Value Estimates

For certain of the Company’s financial instruments including cash and cash equivalents, receivables, accounts payable, accrued vacation, compensation and benefits, and other current assets and liabilities the fair values approximate carrying amounts due to their short maturities. The fair value of notes receivable is estimated by using a discounted cash flow approach prior to consideration for uncollectible amounts and is calculated by applying a market rate for similar instruments using Level 3 inputs. The fair value of debt is estimated based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs. In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs.

	January 28, 2023				July 30, 2022
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable, including current portion	$	20	$	14	$	23	$	17
Long-term debt, including current portion	$	2,077	$	2,091	$	2,123	$	2,153

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DERIVATIVES

6 Months Ended

Jan. 28, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

NOTE 6—DERIVATIVES

Management of Interest Rate Risk

The Company enters into interest rate swap contracts from time to time to mitigate its exposure to changes in market interest rates as part of its overall strategy to manage its debt portfolio to achieve an overall desired position of notional debt amounts subject to fixed and floating interest rates. Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company’s interest rate swap contracts are designated as cash flow hedges as of January 28, 2023. Interest rate swap contracts are reflected at their fair values in the Condensed Consolidated Balance Sheets. Refer to Note 5—Fair Value Measurements of Financial Instruments for further information on the fair value of interest rate swap contracts.

Details of active swap contracts as of January 28, 2023, which are all pay fixed and receive floating, are as follows:

Effective Date	Swap Maturity	Notional Value (in millions)		Pay Fixed Rate		Receive Floating Rate	Floating Rate Reset Terms
November 16, 2018	March 31, 2023	150		2.7770	%	One-Month Term SOFR	Monthly
January 23, 2019	March 31, 2023	50		2.4245	%	One-Month Term SOFR	Monthly
November 30, 2018	September 30, 2023	50		2.6980	%	One-Month Term SOFR	Monthly
October 26, 2018	October 31, 2023	100		2.7880	%	One-Month Term SOFR	Monthly
January 11, 2019	March 28, 2024	100		2.3600	%	One-Month Term SOFR	Monthly
January 23, 2019	March 28, 2024	100		2.4250	%	One-Month Term SOFR	Monthly
November 30, 2018	October 31, 2024	100		2.7385	%	One-Month Term SOFR	Monthly
January 11, 2019	October 31, 2024	100		2.4025	%	One-Month Term SOFR	Monthly
January 24, 2019	October 31, 2024	50		2.4090	%	One-Month Term SOFR	Monthly
October 26, 2018	October 22, 2025	50		2.8725	%	One-Month Term SOFR	Monthly
November 16, 2018	October 22, 2025	50		2.8750	%	One-Month Term SOFR	Monthly
November 16, 2018	October 22, 2025	50		2.8380	%	One-Month Term SOFR	Monthly
January 24, 2019	October 22, 2025	50		2.4750	%	One-Month Term SOFR	Monthly
		$	1,000

The Company performs an initial quantitative assessment of hedge effectiveness using the “Hypothetical Derivative Method” in the period in which the hedging transaction is entered. Under this method, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. In future reporting periods, the Company performs a qualitative analysis for quarterly prospective and retrospective assessments of hedge effectiveness. The Company also monitors the risk of counterparty default on an ongoing basis and noted that the counterparties are reputable financial institutions. The entire change in the fair value of the derivative is initially reported in Other comprehensive income (outside of earnings) in the Condensed Consolidated Statements of Comprehensive Income and subsequently reclassified to earnings in Interest expense, net in the Condensed Consolidated Statements of Operations when the hedged transactions affect earnings.

The location and amount of gains or losses recognized in the Condensed Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pre-tax basis, are as follows:

	13-Week Period Ended				26-Week Period Ended
	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
(in millions)	Interest expense, net				Interest expense, net
Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	39	$	44	$	74	$	84
Loss on cash flow hedging relationships:
Loss reclassified from comprehensive income into earnings	$	4	$	(10)	$	4	$	(21)

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LONG-TERM DEBT

6 Months Ended

Jan. 28, 2023

Debt Disclosure [Abstract]

LONG-TERM DEBT

NOTE 7—LONG-TERM DEBT

The Company’s long-term debt consisted of the following:

(in millions)	Average Interest Rate at January 28, 2023	Fiscal Maturity Year	January 28, 2023		July 30, 2022
Term Loan Facility	7.69%	2026	$	670	$	800
ABL Credit Facility	5.46%	2027	923		840
Senior Notes	6.75%	2029	500		500
Other secured loans	5.01%	2024-2025	16		23
Debt issuance costs, net			(25)		(29)
Original issue discount on debt			(7)		(11)
Long-term debt, including current portion			2,077		2,123
Less: current portion of long-term debt			(12)		(14)
Long-term debt			$	2,065	$	2,109

Senior Notes

On October 22, 2020, the Company issued $500 million of unsecured 6.750% senior notes due October 15, 2028 (the “Senior Notes”). The Senior Notes, which are presented net of debt issuance costs of $7 million as of January 28, 2023 and July 30, 2022 in the Condensed Consolidated Balance Sheets, are guaranteed by each of the Company’s subsidiaries that are borrowers under or that guarantee the ABL Credit Facility or the Term Loan Facility (defined below).

ABL Credit Facility

The revolving credit agreement dated as of June 3, 2022 (the “ABL Loan Agreement”), by and among the Company (the “U.S. Borrower”), UNFI Canada (the “Canadian Borrower” and, together with the U.S. Borrower, the “Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “ABL Lenders”), Wells Fargo Bank, N.A. as administrative agent for the ABL Lenders, and the other parties thereto, provides for a secured asset-based revolving credit facility (the “ABL Credit Facility”), of which up to $2,600 million is available to the Borrowers, including a U.S. Dollar equivalent of $100 million sublimit for borrowings in Canadian dollars. Under the ABL Loan Agreement, the Borrowers may, at their option, increase the aggregate amount of the ABL Credit Facility in an amount of up to $750 million without the consent of any ABL Lenders not participating in such increase, subject to certain customary conditions and applicable lenders committing to provide the increase in funding. There is no assurance that additional funding would be available.

The Borrowers’ obligations under the ABL Credit Facility are guaranteed by most of the Company’s wholly owned subsidiaries (collectively, the “Guarantors”), subject to customary exceptions and limitations. The Borrowers’ obligations under the ABL Credit Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on certain accounts receivable, certain inventory and certain other assets arising therefrom or related thereto of the Borrowers and Guarantors (including substantially all of their deposit accounts, collectively, the “ABL Assets”) and (ii) a second-priority lien on all of the Borrowers’ and Guarantors’ assets that do not constitute ABL Assets, in each case, subject to customary exceptions and limitations.

Availability under the ABL Credit Facility is subject to a borrowing base (the “Borrowing Base”), which is based on 90% of eligible accounts receivable, plus 90% of eligible credit card receivables, plus 90% to 92.5% of the net orderly liquidation value of eligible inventory, plus 90% of eligible pharmacy receivables, plus certain pharmacy prescription files availability to the Borrowers, after adjusting for customary reserves, but at no time shall exceed the lesser of the aggregate commitments under the ABL Credit Facility (currently $2,600 million) or the Borrowing Base.

The assets included in the Condensed Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis, and the unused credit and fees under the ABL Credit Facility, were as follows:

Assets securing the ABL Credit Facility (in millions):	January 28, 2023		July 30, 2022
Certain inventory assets included in Inventories, net	$	1,950	$	1,789
Certain receivables included in Accounts receivable, net	667		878
Pharmacy prescription files included in Intangible assets, net	13		15
Total	$	2,630	$	2,682

As of January 28, 2023, the Borrowers’ Borrowing Base, net of $95 million of reserves, was $2,740 million, which is above the $2,600 million limit of availability, resulting in total availability of $2,600 million for loans and letters of credit under the ABL Credit Facility. As of January 28, 2023, the Borrowers had $923 million of loans outstanding under the ABL Credit Facility, which are presented net of debt issuance costs of $9 million and are included in Long-term debt in the Condensed Consolidated Balance Sheets. As of January 28, 2023, the U.S. Borrowers had $144 million in letters of credit outstanding under the ABL Credit Facility. The Company’s resulting remaining availability under the ABL Credit Facility was $1,533 million as of January 28, 2023.

Availability under the ABL Credit Facility (in millions):	January 28, 2023
Total availability for ABL loans and letters of credit	$	2,600
ABL loans	$	923
Letters of credit	$	144
Unused credit	$	1,533

The applicable interest rates, unutilized commitment fees and letter of credit fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Loan Agreement), and were as follows:

Interest rates and fees under the ABL Credit Facility:	Range of Facility Rates and Fees (per annum)	January 28, 2023
Borrowers’ applicable margin for base rate loans	0.00% - 0.25%	0.00	%
Borrowers’ applicable margin for SOFR and BA loans(1)	1.00% - 1.25%	1.00	%
Unutilized commitment fees	0.20%	0.20	%
Letter of credit fees	1.125% - 1.375%	1.125	%

(1) The U.S. Borrower utilizes SOFR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.

Term Loan Facility

The term loan agreement dated as of October 22, 2018 (as amended, the “Term Loan Agreement”), by and among the Company and SUPERVALU INC. (“Supervalu” and, collectively with the Company, the “Term Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “Term Lenders”), Credit Suisse, as administrative agent for the Term Lenders, and the other parties thereto, provides for senior secured first lien term loans in an initial aggregate principal amount of $1,950 million, consisting of a $1,800 million seven-year tranche and a $150 million 364-day tranche that was repaid in fiscal 2020 (the “Term Loan Facility”). The net proceeds from the Term Loan Facility were used to finance the Supervalu acquisition and related transaction costs. Any amounts then outstanding will be payable in full on October 22, 2025.

The obligations under the Term Loan Facility are guaranteed by the Guarantors, subject to customary exceptions and limitations. The Term Borrowers’ obligations under the Term Loan Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ ABL Assets, in each case, subject to customary exceptions and limitations, including an exception for owned real property with net book values of less than $10 million. As of January 28, 2023 and July 30, 2022, there was $618 million and $629 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets.

The Company must prepay loans outstanding under the Term Loan Facility no later than 130 days after the fiscal year end in an aggregate principal amount equal to a specified percentage (which percentage ranges from 0 to 75 percent depending on the Consolidated First Lien Net Leverage Ratio as of the last day of such fiscal year) of Excess Cash Flow (as defined in the Term Loan Agreement), minus certain types of voluntary prepayments of indebtedness made during such fiscal year. As of January 28, 2023, there is no Excess Cash Flow payment expected to be required in fiscal 2024.

As of January 28, 2023, the Company had borrowings of $670 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $9 million and an original issue discount on debt of $7 million. As of January 28, 2023, no amount of the Term Loan Facility was classified as current.

In the second quarter of fiscal 2023, the Company made a $125 million voluntary prepayment on the Term Loan Facility with a portion of the proceeds received from monetizing certain receivables within Accounts receivable, net associated with the Company’s purchase agreement with a third-party financial institution as previously discussed within Note 3—Revenue Recognition. This voluntary prepayment will count towards any requirement to prepay the Term Loan Facility from Excess Cash Flow (as defined in the Term Loan Agreement) generated during fiscal 2023, which would be due in fiscal 2024.

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COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

6 Months Ended

Jan. 28, 2023

Equity [Abstract]

COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

NOTE 8—COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2023 year-to-date were as follows:

(in millions)	Other Cash Flow Derivatives		Benefit Plans		Foreign Currency Translation		Swap Agreements		Total
Accumulated other comprehensive income (loss) at July 30, 2022	$	2	$	(3)	$	(19)	$	—	$	(20)
Other comprehensive (loss) income before reclassifications	(3)		—		(2)		17		12
Amortization of amounts included in net periodic benefit income	—		1		—		—		1
Amortization of cash flow hedges	1		—		—		(3)		(2)
Net current period Other comprehensive (loss) income	(2)		1		(2)		14		11
Accumulated other comprehensive income (loss) at January 28, 2023	$	—	$	(2)	$	(21)	$	14	$	(9)

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2022 year-to-date were as follows:

(in millions)	Other Cash Flow Derivatives		Benefit Plans		Foreign Currency Translation		Swap Agreements		Total
Accumulated other comprehensive income (loss) at July 31, 2021	$	—	$	37	$	(16)	$	(60)	$	(39)
Other comprehensive income (loss) before reclassifications	1		—		(2)		13		12
Amortization of amounts included in net periodic benefit income	—		2		—		—		2
Amortization of cash flow hedges	1		—		—		15		16
Net current period Other comprehensive income (loss)	2		2		(2)		28		30
Accumulated other comprehensive income (loss) at January 29, 2022	$	2	$	39	$	(18)	$	(32)	$	(9)

Items reclassified out of Accumulated other comprehensive loss had the following impact on the Condensed Consolidated Statements of Operations:

	13-Week Period Ended				26-Week Period Ended				Affected Line Item on the Condensed Consolidated Statements of Operations
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Pension and postretirement benefit plan net assets:
Amortization of amounts included in net periodic benefit income(1)	$	1	$	1	$	1	$	2	Net periodic benefit income, excluding service cost
Income tax benefit	—		—		—		—		Provision for income taxes
Total reclassifications, net of tax	$	1	$	1	$	1	$	2
Swap agreements:
Reclassification of cash flow hedges	$	(4)	$	10	$	(4)	$	21	Interest expense, net
Income tax expense (benefit)	1		(3)		1		(6)		Provision for income taxes
Total reclassifications, net of tax	$	(3)	$	7	$	(3)	$	15
Other cash flow hedges:
Reclassification of cash flow hedge	$	1	$	2	$	2	$	2	Cost of sales
Income tax benefit	(1)		(1)		(1)		(1)		Provision for income taxes
Total reclassifications, net of tax	$	—	$	1	$	1	$	1

(1)Reclassification of amounts included in net periodic benefit income include reclassification of prior service cost and reclassification of net actuarial loss as reflected in Note 10—Benefit Plans.

As of January 28, 2023, the Company expects to reclassify $16 million related to unrealized derivative gains on interest rate swap hedges out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

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SHARE-BASED AWARDS	6 Months Ended
	Jan. 28, 2023
Share-Based Awards [Abstract]
SHARE-BASED AWARDS	NOTE 9—SHARE-BASED AWARDS In fiscal 2023 year-to-date, the Company granted restricted stock units and performance share units to its directors, executive officers and certain employees representing a right to receive an aggregate of 1.6 million shares. As of January 28, 2023, there were 1.6 million shares available for issuance under the Amended and Restated 2020 Equity Incentive Plan.

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BENEFIT PLANS

6 Months Ended

Jan. 28, 2023

Retirement Benefits [Abstract]

BENEFIT PLANS

NOTE 10—BENEFIT PLANS

Net periodic benefit income and contributions to defined benefit pension and other postretirement benefit plans consisted of the following:

	13-Week Period Ended
	Pension Benefits				Other Postretirement Benefits
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net Periodic Benefit (Income) Cost
Interest cost	$	15	$	9	$	—	$	—
Expected return on plan assets	(23)		(20)		—		—
Amortization of prior service cost	—		—		1		1
Net periodic benefit (income) cost	$	(8)	$	(11)	$	1	$	1
Contributions to benefit plans	$	—	$	—	$	—	$	(1)

	26-Week Period Ended
	Pension Benefits				Other Postretirement Benefits
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net Periodic Benefit (Income) Cost
Interest cost	$	32	$	19	$	—	$	—
Expected return on plan assets	(47)		(41)		—		—
Amortization of prior service cost	—		—		1		2
Net periodic benefit (income) cost	$	(15)	$	(22)	$	1	$	2
Contributions to benefit plans	$	—	$	—	$	—	$	(2)

Contributions

No minimum pension contributions are required to be made under the SUPERVALU INC. Retirement Plan under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) in fiscal 2023. The Company expects to contribute approximately $1 million to its other defined benefit pension plans and $1 million to its postretirement benefit plans in fiscal 2023.

Multiemployer Pension Plans

The Company contributed $12 million and $11 million in the second quarters of fiscal 2023 and 2022, respectively, and $23 million and $22 million in fiscal 2023 and 2022 year-to-date, respectively, to multiemployer pension plans, which are included within Operating expenses.

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INCOME TAXES

6 Months Ended

Jan. 28, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 11—INCOME TAXES

The effective tax rate for the second quarter of fiscal 2023 was 29.0% compared to 26.9% for the second quarter of fiscal 2022. The change was driven primarily by the reduction in pre-tax income during the second quarter of fiscal 2023.

The effective tax rate for fiscal 2023 year-to-date was 13.6% compared to 14.2% for fiscal 2022 year-to-date. The effective tax rate for both fiscal 2023 and fiscal 2022 year-to-date was reduced by the impact of discrete tax benefits related to the vesting of employee stock awards.

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EARNINGS PER SHARE

6 Months Ended

Jan. 28, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 12—EARNINGS PER SHARE

The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share:

	13-Week Period Ended				26-Week Period Ended
(in millions, except per share data)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Basic weighted average shares outstanding	59.8		58.3		59.3		57.6
Net effect of dilutive stock awards based upon the treasury stock method	1.2		2.7		2.0		3.4
Diluted weighted average shares outstanding	61.0		61.0		61.3		61.0
Basic earnings per share(1)	$	0.32	$	1.13	$	1.43	$	2.47
Diluted earnings per share(1)	$	0.31	$	1.08	$	1.38	$	2.33
Anti-dilutive share-based awards excluded from the calculation of diluted earnings per share	0.8		0.4		0.8		0.9

(1)Earnings per share amounts are calculated using actual unrounded figures.

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BUSINESS SEGMENTS

6 Months Ended

Jan. 28, 2023

Segment Reporting [Abstract]

BUSINESS SEGMENTS

NOTE 13—BUSINESS SEGMENTS

The Company has two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each with a different customer base, marketing strategy and management structure. The Company organizes and operates the Wholesale reportable segment through four U.S geographic regions: Atlantic; South; Central; and Pacific; and Canada Wholesale, which is operated separately from the U.S. Wholesale business. The U.S. Wholesale and Canada Wholesale operating segments have similar products and services, customer channels, distribution methods and economic characteristics, and therefore have been aggregated into a single reportable segment. Reportable segments are reviewed on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

In fiscal 2022, the Company changed its measure of segment profit to exclude the impact of the non-cash LIFO charge or benefit from Adjusted EBITDA. Prior period Adjusted EBITDA amounts and the reconciliation to Income before income taxes have been recast to reflect this change in the measure of segment profit.

The following table provides Net sales and Adjusted EBITDA by reportable segment and reconciles that information to consolidated Net sales and Income before income taxes, respectively:

	13-Week Period Ended				26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net sales:
Wholesale(1)	$	7,514	$	7,132	$	14,773	$	13,866
Retail	660		643		1,273		1,245
Other	56		50		116		106
Eliminations	(414)		(409)		(814)		(804)
Total Net sales	$	7,816	$	7,416	$	15,348	$	14,413
Adjusted EBITDA:
Wholesale(2)	$	137	$	176	$	308	$	351
Retail(2)	28		32		48		54
Other	15		12		34		16
Eliminations	1		—		(2)		(1)
Adjustments:
Net income attributable to noncontrolling interests	3		2		4		3
Net periodic benefit income, excluding service cost	7		10		14		20
Interest expense, net	(39)		(44)		(74)		(84)
Other income, net	—		2		1		1
Depreciation and amortization	(73)		(69)		(147)		(138)
Share-based compensation	(11)		(12)		(23)		(23)
LIFO charge(2)	(29)		(19)		(50)		(30)
Restructuring, acquisition and integration related expenses	(3)		(5)		(5)		(8)
(Loss) gain on sale of assets	(1)		(1)		4		(1)
Multiemployer pension plan withdrawal benefit	—		8		—		8
Other retail benefit	—		1		—		1
Business transformation costs	(4)		—		(9)		—
Income before income taxes	$	31	$	93	$	103	$	169
Depreciation and amortization:
Wholesale	$	62	$	61	$	126	$	122
Retail	10		8		18		15
Other	1		—		3		1
Total depreciation and amortization	$	73	$	69	$	147	$	138
Payments for capital expenditures:
Wholesale	$	74	$	46	$	131	$	98
Retail	10		4		20		8
Total capital expenditures	$	84	$	50	$	151	$	106

(1)As presented in Note 3—Revenue Recognition, the Company recorded $353 million and $356 million for the second quarters of fiscal 2023 and 2022, respectively, and $687 million and $695 million in fiscal 2023 and 2022 year-to-date, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

(2)As a result of the segment profit measurement revision discussed above, previously reported Adjusted EBITDA disclosures by segment and the reconciliation to Income before income taxes has been recast to exclude the impact of the non-cash LIFO charge.

Total assets by reportable segment were as follows:

(in millions)	January 28, 2023		July 30, 2022
Assets:
Wholesale	$	6,684	$	6,733
Retail	637		599
Other	352		335
Eliminations	(38)		(39)
Total assets	$	7,635	$	7,628

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COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

6 Months Ended

Jan. 28, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

NOTE 14—COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

Guarantees and Contingent Liabilities

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of January 28, 2023. These guarantees were generally made to support the business growth of wholesale customers. The guarantees are generally for the entire terms of the leases, fixture financing loans or other debt obligations with remaining terms that range from less than one year to seven years, with a weighted average remaining term of approximately four years. For each guarantee issued, if the wholesale customer or other third-party defaults on a payment, the Company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees. The Company reviews performance risk related to its guarantee obligations based on internal measures of credit performance. As of January 28, 2023, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $16 million ($14 million on a discounted basis). Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of January 28, 2023, a total estimated loss of $1 million is recorded in the Condensed Consolidated Balance Sheets.

The Company is a party to a variety of contractual agreements under which it may be obligated to indemnify the other party for certain matters in the ordinary course of business, which indemnities may be secured by operation of law or otherwise. These agreements primarily relate to the Company’s commercial contracts, service agreements, contracts entered into for the purchase and sale of stock or assets, operating leases and other real estate contracts, financial agreements, agreements to provide services to the Company and agreements to indemnify officers, directors and employees in the performance of their work. While the Company’s aggregate indemnification obligations could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability. No amount has been recorded in the Condensed Consolidated Balance Sheets for these contingent obligations as the fair value has been determined to be de minimis.

In connection with Supervalu’s sale of New Albertson’s, Inc. (“NAI”) on March 21, 2013, the Company remains contingently liable with respect to certain self-insurance commitments and other guarantees as a result of parental guarantees issued by Supervalu with respect to the obligations of NAI that were incurred while NAI was Supervalu’s subsidiary. Based on the expected settlement of the self-insurance claims that underlie the Company’s commitments, the Company believes that such contingent liabilities will continue to decline. Subsequent to the sale of NAI, NAI collateralized most of these obligations with letters of credit and surety bonds to numerous state governmental authorities. Because NAI remains a primary obligor on these self-insurance and other obligations and has collateralized most of the self-insurance obligations for which the Company remains contingently liable, the Company believes that the likelihood that it will be required to assume a material amount of these obligations is remote. Accordingly, no amount has been recorded in the Condensed Consolidated Balance Sheets for these guarantees, as the fair value has been determined to be de minimis.

Agreements with Save-A-Lot and Onex

The Agreement and Plan of Merger pursuant to which Supervalu sold the Save-A-Lot business in 2016 (the “SAL Merger Agreement”) contains customary indemnification obligations of each party with respect to breaches of their respective representations, warranties and covenants, and certain other specified matters, on the terms and subject to the limitations set forth in the SAL Merger Agreement. Similarly, Supervalu entered into a Separation Agreement (the “Separation Agreement”) with Moran Foods, LLC d/b/a Save-A-Lot (“Moran Foods”), which contains indemnification obligations and covenants related to the separation of the assets and liabilities of the Save-A-Lot business from the Company. The Company also entered into a Services Agreement with Moran Foods (the “Services Agreement”), pursuant to which the Company provided Save-A-Lot with various technical, human resources, finance and other operational services. The Company primarily ceased providing services under the Services Agreement in fiscal 2022. The Services Agreement generally requires each party to indemnify the other party against third-party claims arising out of the performance of or the provision or receipt of services under the Services Agreement. While the Company’s aggregate indemnification obligations to Save-A-Lot and Onex, the purchaser of Save-A-Lot, could result in a material liability, the Company is not aware of any matters that are expected to result in a material liability. The Company has recorded the de minimis fair value of the guarantee in the Condensed Consolidated Balance Sheets within Other long-term liabilities.

Other Contractual Commitments

In the ordinary course of business, the Company enters into supply contracts to purchase products for resale and service contracts for fixed asset and information technology systems. These contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. As of January 28, 2023, the Company had approximately $562 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the ordinary course within one year.

As of January 28, 2023, the Company had commitments of $755 million for future undiscounted minimum lease payments on leases signed but not yet commenced with terms of up to 21 years from commencement date.

Legal Proceedings

The Company is one of dozens of companies that have been named in various lawsuits alleging that drug manufacturers, retailers and distributors contributed to the national opioid epidemic. Currently, UNFI, primarily through its subsidiary, Advantage Logistics, is named in approximately 43 suits pending in the United States District Court for the Northern District of Ohio where thousands of cases have been consolidated as Multi-District Litigation (“MDL”). In accordance with the Stock Purchase Agreement dated January 10, 2013, between New Albertson’s Inc. (“New Albertson’s”) and the Company (the “Stock Purchase Agreement”), New Albertson’s is defending and indemnifying UNFI in a majority of the cases under a reservation of rights as those cases relate to New Albertson’s pharmacies. In one of the MDL cases, MDL No. 2804 filed by The Blackfeet Tribe of the Blackfeet Indian Reservation, all defendants were ordered to Answer the Complaint, which UNFI did on July 26, 2019. To date, no discovery has been conducted against UNFI in any of the actions. On October 7, 2022, the MDL Court issued an order directing the Company and numerous other “non-litigating” defendants to submit by November 1, 2022, a list of opioid cases where the Company is named and opioid dispensing and distribution data. The Company produced the data in compliance with the order. The Company believes these claims are without merit and is vigorously defending this matter.

On January 21, 2021, various health plans filed a complaint in Minnesota state court against the Company, Albertson’s Companies, LLC (“Albertson’s”) and Safeway, Inc. alleging the defendants committed fraud by improperly reporting inflated prices for prescription drugs for members of health plans. The Plaintiffs assert six causes of action against the defendants: common law fraud, fraudulent nondisclosure, negligent misrepresentation, unjust enrichment, violation of the Minnesota Uniform Deceptive Trade Practices Act and violation of the Minnesota Prevention of Consumer Fraud Act. The plaintiffs allege that between 2006 and 2016, Supervalu overcharged the health plans by not providing the health plans, as part of usual and customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that Supervalu match competitor prices. Plaintiffs seek an unspecified amount of damages. Similar to the above case, for the majority of the relevant period Supervalu and Albertson’s operated as a combined company. In March 2013, Supervalu divested Albertson’s and pursuant to the Stock Purchase Agreement, Albertson’s is responsible for any claims regarding its pharmacies. On February 19, 2021, Albertson’s and Safeway removed the case to Minnesota Federal District Court and on March 22, 2021 plaintiffs’ filed a motion to remand to state court. On February 26, 2021, defendants filed a motion to dismiss. The hearing on the remand motion and motions to dismiss occurred on May 20, 2021. On September 21, 2021, the Federal District Court remanded the case to Minnesota state court and did not rule on the motion to dismiss, which was refiled in state court. On February 1, 2022, the state court denied the motion to dismiss. The Company believes these claims are without merit and is vigorously defending this matter.

UNFI is currently subject to a qui tam action alleging violations of the False Claims Act (“FCA”). In United States ex rel. Schutte and Yarberry v. Supervalu, New Albertson’s, Inc., et al, which is pending in the U.S. District Court for the Central District of Illinois, the relators allege that defendants overcharged government healthcare programs by not providing the government, as a part of usual and customary prices, the benefit of discounts given to customers purchasing prescription medication who requested that defendants match competitor prices. The complaint was originally filed under seal and amended on November 30, 2015. The government previously investigated the relators’ allegations and declined to intervene. Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim. Relators elected to pursue the case on their own and have alleged FCA damages against Supervalu and New Albertson’s in excess of $100 million, not including trebling and statutory penalties. For the majority of the relevant period Supervalu and New Albertson’s operated as a combined company. In March 2013, Supervalu divested New Albertson’s (and related assets) pursuant to the Stock Purchase Agreement. Based on the claims that are currently pending and the Stock Purchase Agreement, Supervalu’s share of a potential award (at the currently claimed value by relators) would be approximately $24 million, not including trebling and statutory penalties. Both sides moved for summary judgment. On August 5, 2019, the Court granted one of the relators’ summary judgment motions finding that the defendants’ lower matched prices are the usual and customary prices and that Medicare Part D and Medicaid were entitled to those prices. On July 2, 2020, the Court granted the defendants’ summary judgment motion and denied the relators’ motion, dismissing the case. On July 9, 2020, the relators filed a notice of appeal with the 7th Circuit Court of Appeals, and on September 30, 2020 filed an appellate brief. On November 30, 2020, the Company filed its response. The hearing before the 7th Circuit Court of Appeals occurred on January 19, 2021. On August 12, 2021, the 7th Circuit affirmed the District Court’s decision granting summary judgment in defendants’ favor. On September 23, 2021, the relators filed a petition for rehearing and defendants filed a response on November 9, 2021. On December 3, 2021, the 7th Circuit denied the petition for rehearing. On April 1, 2022, the relators filed a petition for a writ of certiorari with the United States Supreme Court. The Company filed its response on June 20, 2022. On August 22, 2022, the Supreme Court issued an order inviting the Solicitor General to file a brief setting forth the views of the government on the petition for a writ of certiorari. On December 6, 2022, the Solicitor General submitted its brief recommending that the Supreme Court grant the petition for certiorari. On January 13, 2023, the Supreme Court granted the petition for certiorari and oral argument is set for April 18, 2023.

From time to time, the Company receives notice of claims or potential claims or becomes involved in litigation, alternative dispute resolution, such as arbitration, or other legal and regulatory proceedings that arise in the ordinary course of its business, including investigations and claims regarding employment law, including wage and hour (including class actions); pension plans; labor union disputes, including unfair labor practices, such as claims for back-pay in the context of labor contract negotiations and other matters; supplier, customer and service provider contract terms and claims, including matters related to supplier or customer insolvency or general inability to pay obligations as they become due; product liability claims, including those where the supplier may be insolvent and customers or consumers are seeking recovery against the Company; real estate and environmental matters, including claims in connection with its ownership and lease of a substantial amount of real property, both retail and warehouse properties; and antitrust. Other than as described above, there are no pending material legal proceedings to which the Company is a party or to which its property is subject.

Predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial uncertainties that could cause actual outcomes, costs and exposures to vary materially from current expectations. Management regularly monitors the Company’s exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and estimates with respect to related costs and exposures. As of January 28, 2023, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

Although management believes it has made appropriate assessments of potential and contingent loss in each of these cases based on current facts and circumstances, and application of prevailing legal principles, there can be no assurance that material differences in actual outcomes from management’s current assessments, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates will not occur. The occurrence of any of the foregoing, could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jan. 28, 2023

Accounting Policies [Abstract]

Nature of Business

Nature of Business

United Natural Foods, Inc. and its subsidiaries (the “Company” or “UNFI”) is a leading distributor of natural, organic, specialty, produce and conventional grocery and non-food products, and provider of support services to retailers. The Company sells its products primarily throughout the United States and Canada.

Fiscal Year

Fiscal Year

The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks. References to the second quarter of fiscal 2023 and 2022 relate to the 13-week fiscal quarters ended January 28, 2023 and January 29, 2022, respectively. References to fiscal 2023 and 2022 year-to-date relate to the 26-week fiscal periods ended January 28, 2023 and January 29, 2022, respectively.

Basis of Presentation

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. In the Company’s opinion, these Condensed Consolidated Financial Statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. However, the results of operations for interim periods may not be indicative of the results that may be expected for a full year. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 30, 2022 (the “Annual Report”). There were no material changes in significant accounting policies from those described in the Annual Report.

Use of Estimates

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash EquivalentsCash equivalents consist of highly liquid investments with original maturities of three months or less. The Company’s banking arrangements allow it to fund outstanding checks when presented to the financial institution for payment. The Company funds all intraday bank balance overdrafts during the same business day. Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows.

Reclassifications

Reclassifications

Within the Condensed Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current period presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.

Inventories, Net

Inventories, Net

Substantially all of the Company’s inventories consist of finished goods. To value discrete inventory items at lower of cost or net realizable value before application of any last-in, first-out (“LIFO”) reserve, the Company utilizes the weighted average cost method, perpetual cost method, the retail inventory method and the replacement cost method. Allowances for vendor funds and cash discounts received from suppliers are recorded as a reduction to Inventories, net and subsequently within Cost of sales upon the sale of the related products. Inventory quantities are evaluated throughout each fiscal year based on actual physical counts in the Company’s distribution facilities and stores. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated variances as of the end of each fiscal year. The LIFO reserve was approximately $275 million and $225 million as of January 28, 2023 and July 30, 2022, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update also require additional disclosures for equity securities subject to contractual sale restrictions. The Company is required to adopt this guidance in the first quarter of fiscal 2025. The Company is in the process of reviewing the provisions of the new standard but does not expect the adoption to have a material impact on the Company’s consolidated financial statements.

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REVENUE RECOGNITION (Tables)

6 Months Ended

Jan. 28, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables detail the Company’s Net sales 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)	January 28, 2023
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	3,322	$	—	$	—	$	—	$	3,322
Independent retailers	1,980		—		—		—		1,980
Supernatural	1,659		—		—		—		1,659
Retail	—		660		—		—		660
Other	553		—		56		—		609
Eliminations	—		—		—		(414)		(414)
Total	$	7,514	$	660	$	56	$	(414)	$	7,816
	Net Sales for the 13-Week Period Ended
(in millions)	January 29, 2022
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	3,243	$	—	$	—	$	—	$	3,243
Independent retailers	1,905		—		—		—		1,905
Supernatural	1,453		—		—		—		1,453
Retail	—		643		—		—		643
Other	531		—		50		—		581
Eliminations	—		—		—		(409)		(409)
Total	$	7,132	$	643	$	50	$	(409)	$	7,416
	Net Sales for the 26-Week Period Ended
(in millions)	January 28, 2023
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	6,546	$	—	$	—	$	—	$	6,546
Independent retailers	3,927		—		—		—		3,927
Supernatural	3,172		—		—		—		3,172
Retail	—		1,273		—		—		1,273
Other	1,128		—		116		—		1,244
Eliminations	—		—		—		(814)		(814)
Total	$	14,773	$	1,273	$	116	$	(814)	$	15,348
	Net Sales for the 26-Week Period Ended
(in millions)	January 29, 2022
Customer Channel	Wholesale		Retail		Other		Eliminations(1)		Consolidated
Chains	$	6,325	$	—	$	—	$	—	$	6,325
Independent retailers	3,655		—		—		—		3,655
Supernatural	2,831		—		—		—		2,831
Retail	—		1,245		—		—		1,245
Other	1,055		—		106		—		1,161
Eliminations	—		—		—		(804)		(804)
Total	$	13,866	$	1,245	$	106	$	(804)	$	14,413

(1)Eliminations primarily includes the net sales elimination of Wholesale to Retail sales and the elimination of sales from segments included within Other to Wholesale.

Schedule of Accounts, Notes, Loans and Financing Receivable

Accounts and notes receivable are as follows:

(in millions)	January 28, 2023		July 30, 2022
Customer accounts receivable	$	989	$	1,213
Allowance for uncollectible receivables	(17)		(18)
Other receivables, net	20		19
Accounts receivable, net	$	992	$	1,214
Notes receivable, net, included within Prepaid expenses and other current assets	$	5	$	6
Long-term notes receivable, net, included within Other long-term assets	$	10	$	12

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GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jan. 28, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying Value of Goodwill

Changes in the carrying value of Goodwill by reportable segment that have goodwill consisted of the following:

(in millions)	Wholesale			Other			Total
Goodwill as of July 30, 2022	$	10	(1)	$	10	(2)	$	20
Change in foreign exchange rates	—			—			—
Goodwill as of January 28, 2023	$	10	(1)	$	10	(2)	$	20

(1)Wholesale amounts are net of accumulated goodwill impairment charges of $717 million as of July 30, 2022 and January 28, 2023.

(2)Other amounts are net of accumulated goodwill impairment charges of $10 million as of July 30, 2022 and January 28, 2023.

Identifiable Intangible Assets

Identifiable intangible assets, net consisted of the following:

	January 28, 2023						July 30, 2022
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Amortizing intangible assets:
Customer relationships	$	1,007	$	324	$	683	$	1,007	$	294	$	713
Pharmacy prescription files	33		20		13		33		18		15
Operating lease intangibles	6		4		2		6		4		2
Trademarks and tradenames	84		55		29		84		51		33
Total amortizing intangible assets	1,130		403		727		1,130		367		763
Indefinite lived intangible assets:
Trademarks and tradenames	56		—		56		56		—		56
Intangibles assets, net	$	1,186	$	403	$	783	$	1,186	$	367	$	819

Estimated Future Amortization Expense

The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of January 28, 2023 is as shown below:

Fiscal Year:	(in millions)
Remaining fiscal 2023	$	36
2024	72
2025	70
2026	66
2027	63
Thereafter	420
	$	727

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FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jan. 28, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:

	Condensed Consolidated Balance Sheets Location	Fair Value at January 28, 2023
(in millions)		Level 1		Level 2		Level 3
Assets:
Interest rate swaps designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	17	$	—
Interest rate swaps designated as hedging instruments	Other long-term assets	$	—	$	5	$	—
Liabilities:
Fuel derivatives designated as hedging instruments	Accrued expenses and other current liabilities	$	—	$	1	$	—

	Condensed Consolidated Balance Sheets Location	Fair Value at July 30, 2022
(in millions)		Level 1		Level 2		Level 3
Assets:
Fuel derivatives designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	3	$	—
Interest rate swaps designated as hedging instruments	Prepaid expenses and other current assets	$	—	$	3	$	—
Interest rate swaps designated as hedging instruments	Other long-term assets	$	—	$	1	$	—
Liabilities:
Interest rate swaps designated as hedging instruments	Other long-term liabilities	$	—	$	2	$	—

Fair Value, By Balance Sheet Grouping

In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs.

	January 28, 2023				July 30, 2022
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable, including current portion	$	20	$	14	$	23	$	17
Long-term debt, including current portion	$	2,077	$	2,091	$	2,123	$	2,153

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DERIVATIVES (Tables)

6 Months Ended

Jan. 28, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

Details of active swap contracts as of January 28, 2023, which are all pay fixed and receive floating, are as follows:

Effective Date	Swap Maturity	Notional Value (in millions)		Pay Fixed Rate		Receive Floating Rate	Floating Rate Reset Terms
November 16, 2018	March 31, 2023	150		2.7770	%	One-Month Term SOFR	Monthly
January 23, 2019	March 31, 2023	50		2.4245	%	One-Month Term SOFR	Monthly
November 30, 2018	September 30, 2023	50		2.6980	%	One-Month Term SOFR	Monthly
October 26, 2018	October 31, 2023	100		2.7880	%	One-Month Term SOFR	Monthly
January 11, 2019	March 28, 2024	100		2.3600	%	One-Month Term SOFR	Monthly
January 23, 2019	March 28, 2024	100		2.4250	%	One-Month Term SOFR	Monthly
November 30, 2018	October 31, 2024	100		2.7385	%	One-Month Term SOFR	Monthly
January 11, 2019	October 31, 2024	100		2.4025	%	One-Month Term SOFR	Monthly
January 24, 2019	October 31, 2024	50		2.4090	%	One-Month Term SOFR	Monthly
October 26, 2018	October 22, 2025	50		2.8725	%	One-Month Term SOFR	Monthly
November 16, 2018	October 22, 2025	50		2.8750	%	One-Month Term SOFR	Monthly
November 16, 2018	October 22, 2025	50		2.8380	%	One-Month Term SOFR	Monthly
January 24, 2019	October 22, 2025	50		2.4750	%	One-Month Term SOFR	Monthly
		$	1,000

Schedule of Interest Rate Derivatives

The location and amount of gains or losses recognized in the Condensed Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pre-tax basis, are as follows:

	13-Week Period Ended				26-Week Period Ended
	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
(in millions)	Interest expense, net				Interest expense, net
Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	39	$	44	$	74	$	84
Loss on cash flow hedging relationships:
Loss reclassified from comprehensive income into earnings	$	4	$	(10)	$	4	$	(21)

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LONG-TERM DEBT (Tables)

6 Months Ended

Jan. 28, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The Company’s long-term debt consisted of the following:

(in millions)	Average Interest Rate at January 28, 2023	Fiscal Maturity Year	January 28, 2023		July 30, 2022
Term Loan Facility	7.69%	2026	$	670	$	800
ABL Credit Facility	5.46%	2027	923		840
Senior Notes	6.75%	2029	500		500
Other secured loans	5.01%	2024-2025	16		23
Debt issuance costs, net			(25)		(29)
Original issue discount on debt			(7)		(11)
Long-term debt, including current portion			2,077		2,123
Less: current portion of long-term debt			(12)		(14)
Long-term debt			$	2,065	$	2,109

Schedule of Line of Credit Facilities

The assets included in the Condensed Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis, and the unused credit and fees under the ABL Credit Facility, were as follows:

Assets securing the ABL Credit Facility (in millions):	January 28, 2023		July 30, 2022
Certain inventory assets included in Inventories, net	$	1,950	$	1,789
Certain receivables included in Accounts receivable, net	667		878
Pharmacy prescription files included in Intangible assets, net	13		15
Total	$	2,630	$	2,682

The Company’s resulting remaining availability under the ABL Credit Facility was $1,533 million as of January 28, 2023.

Availability under the ABL Credit Facility (in millions):	January 28, 2023
Total availability for ABL loans and letters of credit	$	2,600
ABL loans	$	923
Letters of credit	$	144
Unused credit	$	1,533

The applicable interest rates, unutilized commitment fees and letter of credit fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Loan Agreement), and were as follows:

Interest rates and fees under the ABL Credit Facility:	Range of Facility Rates and Fees (per annum)	January 28, 2023
Borrowers’ applicable margin for base rate loans	0.00% - 0.25%	0.00	%
Borrowers’ applicable margin for SOFR and BA loans(1)	1.00% - 1.25%	1.00	%
Unutilized commitment fees	0.20%	0.20	%
Letter of credit fees	1.125% - 1.375%	1.125	%

(1) The U.S. Borrower utilizes SOFR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.

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COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

6 Months Ended

Jan. 28, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2023 year-to-date were as follows:

(in millions)	Other Cash Flow Derivatives		Benefit Plans		Foreign Currency Translation		Swap Agreements		Total
Accumulated other comprehensive income (loss) at July 30, 2022	$	2	$	(3)	$	(19)	$	—	$	(20)
Other comprehensive (loss) income before reclassifications	(3)		—		(2)		17		12
Amortization of amounts included in net periodic benefit income	—		1		—		—		1
Amortization of cash flow hedges	1		—		—		(3)		(2)
Net current period Other comprehensive (loss) income	(2)		1		(2)		14		11
Accumulated other comprehensive income (loss) at January 28, 2023	$	—	$	(2)	$	(21)	$	14	$	(9)

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2022 year-to-date were as follows:

(in millions)	Other Cash Flow Derivatives		Benefit Plans		Foreign Currency Translation		Swap Agreements		Total
Accumulated other comprehensive income (loss) at July 31, 2021	$	—	$	37	$	(16)	$	(60)	$	(39)
Other comprehensive income (loss) before reclassifications	1		—		(2)		13		12
Amortization of amounts included in net periodic benefit income	—		2		—		—		2
Amortization of cash flow hedges	1		—		—		15		16
Net current period Other comprehensive income (loss)	2		2		(2)		28		30
Accumulated other comprehensive income (loss) at January 29, 2022	$	2	$	39	$	(18)	$	(32)	$	(9)

Reclassification Out of Accumulated Other Comprehensive Income

Items reclassified out of Accumulated other comprehensive loss had the following impact on the Condensed Consolidated Statements of Operations:

	13-Week Period Ended				26-Week Period Ended				Affected Line Item on the Condensed Consolidated Statements of Operations
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Pension and postretirement benefit plan net assets:
Amortization of amounts included in net periodic benefit income(1)	$	1	$	1	$	1	$	2	Net periodic benefit income, excluding service cost
Income tax benefit	—		—		—		—		Provision for income taxes
Total reclassifications, net of tax	$	1	$	1	$	1	$	2
Swap agreements:
Reclassification of cash flow hedges	$	(4)	$	10	$	(4)	$	21	Interest expense, net
Income tax expense (benefit)	1		(3)		1		(6)		Provision for income taxes
Total reclassifications, net of tax	$	(3)	$	7	$	(3)	$	15
Other cash flow hedges:
Reclassification of cash flow hedge	$	1	$	2	$	2	$	2	Cost of sales
Income tax benefit	(1)		(1)		(1)		(1)		Provision for income taxes
Total reclassifications, net of tax	$	—	$	1	$	1	$	1

(1)Reclassification of amounts included in net periodic benefit income include reclassification of prior service cost and reclassification of net actuarial loss as reflected in Note 10—Benefit Plans.

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BENEFIT PLANS (Tables)

6 Months Ended

Jan. 28, 2023

Retirement Benefits [Abstract]

Net Periodic Benefit Cost (Income) Recognized in Other Comprehensive Income (Loss)

Net periodic benefit income and contributions to defined benefit pension and other postretirement benefit plans consisted of the following:

	13-Week Period Ended
	Pension Benefits				Other Postretirement Benefits
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net Periodic Benefit (Income) Cost
Interest cost	$	15	$	9	$	—	$	—
Expected return on plan assets	(23)		(20)		—		—
Amortization of prior service cost	—		—		1		1
Net periodic benefit (income) cost	$	(8)	$	(11)	$	1	$	1
Contributions to benefit plans	$	—	$	—	$	—	$	(1)

	26-Week Period Ended
	Pension Benefits				Other Postretirement Benefits
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net Periodic Benefit (Income) Cost
Interest cost	$	32	$	19	$	—	$	—
Expected return on plan assets	(47)		(41)		—		—
Amortization of prior service cost	—		—		1		2
Net periodic benefit (income) cost	$	(15)	$	(22)	$	1	$	2
Contributions to benefit plans	$	—	$	—	$	—	$	(2)

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jan. 28, 2023

Earnings Per Share [Abstract]

Schedule of Earnings (Loss) Per Share

The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share:

	13-Week Period Ended				26-Week Period Ended
(in millions, except per share data)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Basic weighted average shares outstanding	59.8		58.3		59.3		57.6
Net effect of dilutive stock awards based upon the treasury stock method	1.2		2.7		2.0		3.4
Diluted weighted average shares outstanding	61.0		61.0		61.3		61.0
Basic earnings per share(1)	$	0.32	$	1.13	$	1.43	$	2.47
Diluted earnings per share(1)	$	0.31	$	1.08	$	1.38	$	2.33
Anti-dilutive share-based awards excluded from the calculation of diluted earnings per share	0.8		0.4		0.8		0.9

(1)Earnings per share amounts are calculated using actual unrounded figures.

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BUSINESS SEGMENTS (Tables)

6 Months Ended

Jan. 28, 2023

Segment Reporting [Abstract]

Schedule of Business Segment Information

The following table provides Net sales and Adjusted EBITDA by reportable segment and reconciles that information to consolidated Net sales and Income before income taxes, respectively:

	13-Week Period Ended				26-Week Period Ended
(in millions)	January 28, 2023		January 29, 2022		January 28, 2023		January 29, 2022
Net sales:
Wholesale(1)	$	7,514	$	7,132	$	14,773	$	13,866
Retail	660		643		1,273		1,245
Other	56		50		116		106
Eliminations	(414)		(409)		(814)		(804)
Total Net sales	$	7,816	$	7,416	$	15,348	$	14,413
Adjusted EBITDA:
Wholesale(2)	$	137	$	176	$	308	$	351
Retail(2)	28		32		48		54
Other	15		12		34		16
Eliminations	1		—		(2)		(1)
Adjustments:
Net income attributable to noncontrolling interests	3		2		4		3
Net periodic benefit income, excluding service cost	7		10		14		20
Interest expense, net	(39)		(44)		(74)		(84)
Other income, net	—		2		1		1
Depreciation and amortization	(73)		(69)		(147)		(138)
Share-based compensation	(11)		(12)		(23)		(23)
LIFO charge(2)	(29)		(19)		(50)		(30)
Restructuring, acquisition and integration related expenses	(3)		(5)		(5)		(8)
(Loss) gain on sale of assets	(1)		(1)		4		(1)
Multiemployer pension plan withdrawal benefit	—		8		—		8
Other retail benefit	—		1		—		1
Business transformation costs	(4)		—		(9)		—
Income before income taxes	$	31	$	93	$	103	$	169
Depreciation and amortization:
Wholesale	$	62	$	61	$	126	$	122
Retail	10		8		18		15
Other	1		—		3		1
Total depreciation and amortization	$	73	$	69	$	147	$	138
Payments for capital expenditures:
Wholesale	$	74	$	46	$	131	$	98
Retail	10		4		20		8
Total capital expenditures	$	84	$	50	$	151	$	106

(1)As presented in Note 3—Revenue Recognition, the Company recorded $353 million and $356 million for the second quarters of fiscal 2023 and 2022, respectively, and $687 million and $695 million in fiscal 2023 and 2022 year-to-date, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

(2)As a result of the segment profit measurement revision discussed above, previously reported Adjusted EBITDA disclosures by segment and the reconciliation to Income before income taxes has been recast to exclude the impact of the non-cash LIFO charge.

Total assets by reportable segment were as follows:

(in millions)	January 28, 2023		July 30, 2022
Assets:
Wholesale	$	6,684	$	6,733
Retail	637		599
Other	352		335
Eliminations	(38)		(39)
Total assets	$	7,635	$	7,628

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SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022
Accounting Policies [Abstract]
Net book overdrafts	$ 263	$ 266
FIFO inventory amount	$ 275	$ 225

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REVENUE RECOGNITION - Narrative (Details) $ in Millions		3 Months Ended
	Jan. 28, 2023 USD ($) channel store	Jan. 28, 2023 USD ($) channel store
Disaggregation of Revenue [Line Items]
Number of customer channels | channel	5	5
Authorized amount of accounts receivable to be sold	$ 300	$ 300
Accounts receivable sold	$ 292
Loss on sale of accounts receivable		$ 5
Chains
Disaggregation of Revenue [Line Items]
Number of stores | store	10	10

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REVENUE RECOGNITION - Disaggregation of Revenues (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Revenue from External Customer [Line Items]
Net sales	$ 7,816	$ 7,416	$ 15,348	$ 14,413
Chains
Revenue from External Customer [Line Items]
Net sales	3,322	3,243	6,546	6,325
Independent retailers
Revenue from External Customer [Line Items]
Net sales	1,980	1,905	3,927	3,655
Supernatural
Revenue from External Customer [Line Items]
Net sales	1,659	1,453	3,172	2,831
Retail
Revenue from External Customer [Line Items]
Net sales	660	643	1,273	1,245
Other
Revenue from External Customer [Line Items]
Net sales	609	581	1,244	1,161
Operating segments | Wholesale
Revenue from External Customer [Line Items]
Net sales	7,514	7,132	14,773	13,866
Operating segments | Wholesale | Chains
Revenue from External Customer [Line Items]
Net sales	3,322	3,243	6,546	6,325
Operating segments | Wholesale | Independent retailers
Revenue from External Customer [Line Items]
Net sales	1,980	1,905	3,927	3,655
Operating segments | Wholesale | Supernatural
Revenue from External Customer [Line Items]
Net sales	1,659	1,453	3,172	2,831
Operating segments | Wholesale | Retail
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Wholesale | Other
Revenue from External Customer [Line Items]
Net sales	553	531	1,128	1,055
Operating segments | Retail
Revenue from External Customer [Line Items]
Net sales	660	643	1,273	1,245
Operating segments | Retail | Chains
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Retail | Independent retailers
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Retail | Supernatural
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Retail | Retail
Revenue from External Customer [Line Items]
Net sales	660	643	1,273	1,245
Operating segments | Retail | Other
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Other
Revenue from External Customer [Line Items]
Net sales	56	50	116	106
Operating segments | Other | Chains
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Other | Independent retailers
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Other | Supernatural
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Other | Retail
Revenue from External Customer [Line Items]
Net sales	0	0	0	0
Operating segments | Other | Other
Revenue from External Customer [Line Items]
Net sales	56	50	116	106
Eliminations
Revenue from External Customer [Line Items]
Net sales	$ (414)	$ (409)	$ (814)	$ (804)

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REVENUE RECOGNITION - Accounts Receivable (Details) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022
Revenue from Contract with Customer [Abstract]
Customer accounts receivable	$ 989	$ 1,213
Allowance for uncollectible receivables	(17)	(18)
Other receivables, net	20	19
Accounts receivable, net	992	1,214
Notes receivable, net, included within Prepaid expenses and other current assets	5	6
Long-term notes receivable, net, included within Other long-term assets	$ 10	$ 12

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GOODWILL AND INTANGIBLE ASSETS, NET - Carrying Value of Goodwill (Details) - USD ($) $ in Millions	6 Months Ended
	Jan. 28, 2023	Jul. 30, 2022
Goodwill [Roll Forward]
Goodwill as of beginning of period	$ 20
Change in foreign exchange rates	0
Goodwill as of end of period	20
Operating segments | Wholesale
Goodwill [Roll Forward]
Goodwill as of beginning of period	10
Change in foreign exchange rates	0
Goodwill as of end of period	10
Accumulated goodwill impairment charges	717	$ 717
Operating segments | Other
Goodwill [Roll Forward]
Goodwill as of beginning of period	10
Change in foreign exchange rates	0
Goodwill as of end of period	10
Accumulated goodwill impairment charges	$ 10	$ 10

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GOODWILL AND INTANGIBLE ASSETS, NET - Identifiable Intangible Assets (Details) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022
Schedule of Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 1,130	$ 1,130
Intangible assets, accumulated amortization	403	367
Finite-lived intangible assets, net	727	763
Indefinite-lived intangible assets, gross carrying amount	1,186	1,186
Indefinite-lived intangible assets, accumulated amortization	403	367
Indefinite-lived intangible assets, net carrying value	783	819
Trademarks and tradenames
Schedule of Intangible Assets [Line Items]
Indefinite-lived intangible assets, gross	56	56
Indefinite-lived intangible assets, accumulated amortization	0	0
Indefinite-lived intangible assets, net	56	56
Customer relationships
Schedule of Intangible Assets [Line Items]
Finite-lived intangible assets, gross	1,007	1,007
Intangible assets, accumulated amortization	324	294
Finite-lived intangible assets, net	683	713
Pharmacy prescription files
Schedule of Intangible Assets [Line Items]
Finite-lived intangible assets, gross	33	33
Intangible assets, accumulated amortization	20	18
Finite-lived intangible assets, net	13	15
Operating lease intangibles
Schedule of Intangible Assets [Line Items]
Finite-lived intangible assets, gross	6	6
Intangible assets, accumulated amortization	4	4
Finite-lived intangible assets, net	2	2
Trademarks and tradenames
Schedule of Intangible Assets [Line Items]
Finite-lived intangible assets, gross	84	84
Intangible assets, accumulated amortization	55	51
Finite-lived intangible assets, net	$ 29	$ 33

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GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Goodwill and Intangible Assets [Abstract]
Amortization expense	$ 18	$ 18	$ 36	$ 36

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GOODWILL AND INTANGIBLE ASSETS, NET - Estimated Future Amortization Expense (Details) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022
Goodwill and Intangible Assets [Abstract]
Remaining fiscal 2023	$ 36
2024	72
2025	70
2026	66
2027	63
Thereafter	420
Finite-lived intangible assets, net	$ 727	$ 763

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FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS - Recurring Fair Value Measurements (Details) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration]	Prepaid expenses and other current assets	Prepaid expenses and other current assets
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other long-term assets	Other long-term assets
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued expenses and other current liabilities
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]		Other long-term liabilities
Fair value, measurements, recurring | Level 1 | Fuel derivatives | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Current derivative assets		$ 0
Current derivative liability	$ 0
Fair value, measurements, recurring | Level 1 | Interest rate swaps | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Current derivative assets	0	0
Noncurrent derivative assets	0	0
Noncurrent derivative liability		0
Fair value, measurements, recurring | Level 2 | Fuel derivatives | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Current derivative assets		3
Current derivative liability	1
Fair value, measurements, recurring | Level 2 | Interest rate swaps | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Current derivative assets	17	3
Noncurrent derivative assets	5	1
Noncurrent derivative liability		2
Fair value, measurements, recurring | Level 3 | Fuel derivatives | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Current derivative assets		0
Current derivative liability	0
Fair value, measurements, recurring | Level 3 | Interest rate swaps | Designated as hedging instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Current derivative assets	0	0
Noncurrent derivative assets	$ 0	0
Noncurrent derivative liability		$ 0

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FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS - Narrative (Details) $ in Millions	Jan. 28, 2023 USD ($)
Fair Value Disclosures [Abstract]
Effect of one percent increase on fair value of interest rate fair value hedging instruments	$ 12
Effect of one percent decrease on fair value of interest rate fair value hedging instruments	$ 12

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FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS - Fair Value Estimates (Details) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable, including current portion	$ 20	$ 23
Long-term debt, including current portion	2,077	2,123
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable, including current portion	14	17
Long-term debt, including current portion	$ 2,091	$ 2,153

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DERIVATIVES - Outstanding Swap Contracts (Details) $ in Millions	Jan. 28, 2023 USD ($)
Derivative [Line Items]
Derivative, notional value	$ 1,000
Interest rate swap due March 31, 2023
Derivative [Line Items]
Derivative, notional value	$ 150
Derivative, forward interest rate	2.777%
Interest rate swap due March 31, 2023
Derivative [Line Items]
Derivative, notional value	$ 50
Derivative, forward interest rate	2.4245%
Interest rate swap due September 30, 2023
Derivative [Line Items]
Derivative, notional value	$ 50
Derivative, forward interest rate	2.698%
Interest rate swap due October 31, 2023
Derivative [Line Items]
Derivative, notional value	$ 100
Derivative, forward interest rate	2.788%
Interest rate swap due March 28, 2024
Derivative [Line Items]
Derivative, notional value	$ 100
Derivative, forward interest rate	2.36%
Interest rate swap due March 28, 2024
Derivative [Line Items]
Derivative, notional value	$ 100
Derivative, forward interest rate	2.425%
Interest rate swap due October 31, 2024
Derivative [Line Items]
Derivative, notional value	$ 100
Derivative, forward interest rate	2.7385%
Interest rate swap due October 31, 2024
Derivative [Line Items]
Derivative, notional value	$ 100
Derivative, forward interest rate	2.4025%
Interest rate swap due October 31, 2024
Derivative [Line Items]
Derivative, notional value	$ 50
Derivative, forward interest rate	2.409%
Interest rate swap due October 22, 2025
Derivative [Line Items]
Derivative, notional value	$ 50
Derivative, forward interest rate	2.8725%
Interest rate swap due October 22, 2025
Derivative [Line Items]
Derivative, notional value	$ 50
Derivative, forward interest rate	2.875%
Interest rate swap due October 22, 2025
Derivative [Line Items]
Derivative, notional value	$ 50
Derivative, forward interest rate	2.838%
Interest rate swap due October 22, 2025
Derivative [Line Items]
Derivative, notional value	$ 50
Derivative, forward interest rate	2.475%

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DERIVATIVES - Narrative (Details) $ in Millions	Jan. 28, 2023 USD ($)
Derivative [Line Items]
Derivative, notional value	$ 1,000

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DERIVATIVES - Interest Rate Swap Contracts (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$ 39	$ 44	$ 74	$ 84
Loss reclassified from comprehensive income into earnings	$ 4	$ (10)	$ 4	$ (21)

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LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Millions	6 Months Ended
	Jan. 28, 2023	Jul. 30, 2022
Debt Instrument [Line Items]
Debt issuance costs, net	$ (25)	$ (29)
Original issue discount on debt	(7)	(11)
Long-term debt, including current portion	2,077	2,123
Less: current portion of long-term debt	(12)	(14)
Long-term debt	$ 2,065	2,109
ABL Credit Facility
Debt Instrument [Line Items]
Average Interest Rate	5.46%
Long-term debt, gross	$ 923	840
Other secured loans
Debt Instrument [Line Items]
Average Interest Rate	5.01%
Long-term debt, gross	$ 16	23
Secured Debt | Term Loan Facility
Debt Instrument [Line Items]
Average Interest Rate	7.69%
Long-term debt, gross	$ 670	800
Debt issuance costs, net	(9)
Original issue discount on debt	$ (7)
Senior Notes | Senior Notes due 2028, 6.750%
Debt Instrument [Line Items]
Average Interest Rate	6.75%
Long-term debt, gross	$ 500	$ 500

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LONG-TERM DEBT - Senior Notes (Details) - USD ($) $ in Millions	Jan. 28, 2023	Jul. 30, 2022	Oct. 22, 2020
Debt Instrument [Line Items]
Debt issuance costs, net	$ 25	$ 29
Senior Notes | Senior Notes Due October 2028, 6.750%
Debt Instrument [Line Items]
Debt instrument, face amount			$ 500
Stated interest rate			6.75%
Debt issuance costs, net	$ 7	$ 7

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LONG-TERM DEBT - ABL Credit Facility (Details) - USD ($)	Jan. 28, 2023	Jul. 30, 2022	Jun. 03, 2022	Oct. 19, 2018
Debt Instrument [Line Items]
Notes payable	$ 2,065,000,000	$ 2,109,000,000
Debt issuance costs, net	25,000,000	$ 29,000,000
Letter of credit
Debt Instrument [Line Items]
Line of credit facility, current borrowing capacity	144,000,000
Letter of credit | ABL Loans
Debt Instrument [Line Items]
Line of credit facility, current borrowing capacity	923,000,000
Line of credit | Revolving credit facility | ABL Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 2,600,000,000
Line of credit facility, maximum borrowing capacity, optional increase			750,000,000
Line of credit | Revolving credit facility | ABL Credit Facility | Accounts receivable
Debt Instrument [Line Items]
Line of credit facility, borrowing base, eligibility percent				90.00%
Line of credit | Revolving credit facility | ABL Credit Facility | Pharmacy receivable
Debt Instrument [Line Items]
Line of credit facility, borrowing base, eligibility percent				90.00%
Line of credit | Revolving credit facility | ABL Credit Facility | Credit card receivable
Debt Instrument [Line Items]
Line of credit facility, borrowing base, eligibility percent				90.00%
Line of credit | Revolving credit facility | ABL Credit Facility | Inventories | Minimum
Debt Instrument [Line Items]
Line of credit facility, borrowing base, eligibility percent				90.00%
Line of credit | Revolving credit facility | ABL Credit Facility | Inventories | Maximum
Debt Instrument [Line Items]
Line of credit facility, borrowing base, eligibility percent				92.50%
Line of credit | Revolving credit facility | ABL Credit Facility | United States
Debt Instrument [Line Items]
Line of credit facility, borrowing capacity, reserves	95,000,000
Line of credit facility, current borrowing capacity	2,740,000,000
Debt issuance costs, net	$ 9,000,000
Line of credit | Letter of credit | ABL Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 100,000,000

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LONG-TERM DEBT - Line of Credit Facilities (Details) - USD ($) $ in Millions	6 Months Ended
	Jan. 28, 2023	Jul. 30, 2022
Line of Credit Facility [Line Items]
Unused credit	$ 1,533
Revolving credit facility | ABL Credit Facility
Line of Credit Facility [Line Items]
Unused facility fees (as a percent)	0.20%
Revolving credit facility | ABL Credit Facility | Maximum
Line of Credit Facility [Line Items]
Unused facility fees (as a percent)	0.20%
Letter of credit
Line of Credit Facility [Line Items]
Availability	$ 144
Letter of credit | ABL Loans
Line of Credit Facility [Line Items]
Availability	$ 923
Letter of credit | ABL Credit Facility
Line of Credit Facility [Line Items]
Letter of credit fees (as a percent)	1.125%
Letter of credit | ABL Credit Facility | Minimum
Line of Credit Facility [Line Items]
Letter of credit fees (as a percent)	1.125%
Letter of credit | ABL Credit Facility | Maximum
Line of Credit Facility [Line Items]
Letter of credit fees (as a percent)	1.375%
Line of credit | Revolving credit facility
Line of Credit Facility [Line Items]
Debt instrument, collateral amount	$ 2,630	$ 2,682
Line of credit | Revolving credit facility | ABL Credit Facility | Base rate
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	0.00%
Line of credit | Revolving credit facility | ABL Credit Facility | Base rate | Minimum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	0.00%
Line of credit | Revolving credit facility | ABL Credit Facility | Base rate | Maximum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	0.25%
Line of credit | Revolving credit facility | ABL Credit Facility | LIBOR and BA
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.00%
Line of credit | Revolving credit facility | ABL Credit Facility | LIBOR and BA | Minimum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.00%
Line of credit | Revolving credit facility | ABL Credit Facility | LIBOR and BA | Maximum
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.25%
Line of credit | Revolving credit facility | Certain inventory assets included in Inventories, net
Line of Credit Facility [Line Items]
Debt instrument, collateral amount	$ 1,950	1,789
Line of credit | Revolving credit facility | Certain receivables included in Accounts receivable, net
Line of Credit Facility [Line Items]
Debt instrument, collateral amount	667	878
Line of credit | Revolving credit facility | Pharmacy prescription files included in Intangible assets, net
Line of Credit Facility [Line Items]
Debt instrument, collateral amount	$ 13	$ 15

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LONG-TERM DEBT - Term Loan Facility (Details) - USD ($)		3 Months Ended	6 Months Ended
	Oct. 22, 2018	Jan. 28, 2023	Jan. 28, 2023	Jul. 30, 2022
Debt Instrument [Line Items]
Debt issuance costs, net		$ 25,000,000	$ 25,000,000	$ 29,000,000
Original issue discount on debt		7,000,000	7,000,000	11,000,000
Current portion of long-term debt		12,000,000	12,000,000	14,000,000
Secured debt | Term Loan Facility
Debt Instrument [Line Items]
Debt instrument, guarantees exception, carrying value of owned real property	$ 10,000,000
Debt instrument, collateral amount		618,000,000	618,000,000	$ 629,000,000
Debt issuance costs, net		9,000,000	9,000,000
Original issue discount on debt		7,000,000	$ 7,000,000
Secured debt | Term Loan Facility | Maximum
Debt Instrument [Line Items]
Period to prepay loans outstanding			130 days
Debt instrument, covenant compliance, percentage of loans outstanding required to be paid following specified term following fiscal year end (as a percent)			75.00%
Secured debt | Term Loan Facility | Minimum
Debt Instrument [Line Items]
Debt instrument, covenant compliance, percentage of loans outstanding required to be paid following specified term following fiscal year end (as a percent)			0.00%
Secured debt | Term Loan Facility, Term B Tranche
Debt Instrument [Line Items]
Debt instrument, face amount	$ 1,950,000,000	670,000,000	$ 670,000,000
Debt instrument, term (in years)	7 years
Current portion of long-term debt		0	$ 0
Repayments of debt		$ 125,000,000
Secured debt | 2018 Term Loan Facility, Seven-Year Tranche
Debt Instrument [Line Items]
Debt instrument, face amount	$ 1,800,000,000
Secured debt | 2018 Term Loan Facility, 364-day Tranche
Debt Instrument [Line Items]
Debt instrument, face amount	$ 150,000,000
Debt instrument, term (in years)	364 days

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COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Changes by Component (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 1,835	$ 1,587	$ 1,792	$ 1,514
Other comprehensive (loss) income before reclassifications			12	12
Amortization				16
Net current period Other comprehensive (loss) income	(4)	15	11	30
Ending balance	1,845	1,683	1,845	1,683
AOCI Attributable to Parent
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance			(20)	(39)
Net current period Other comprehensive (loss) income				30
Ending balance	(9)	(9)	(9)	(9)
Benefit Plans
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance			(3)	37
Amortization			1	2
Net current period Other comprehensive (loss) income			1	2
Ending balance	(2)	39	(2)	39
Foreign Currency Translation
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance			(19)	(16)
Other comprehensive (loss) income before reclassifications			(2)
Net current period Other comprehensive (loss) income			(2)	(2)
Ending balance	(21)	(18)	(21)	(18)
Foreign Currency Translation | Swap Agreements
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Other comprehensive (loss) income before reclassifications				(2)
Cash Flow Derivatives
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Amortization			(2)	2
Cash Flow Derivatives | Other Cash Flow Derivatives
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance			2	0
Other comprehensive (loss) income before reclassifications			(3)	1
Amortization			1	1
Net current period Other comprehensive (loss) income			(2)	2
Ending balance	0	2	0	2
Cash Flow Derivatives | Swap Agreements
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance			0	(60)
Other comprehensive (loss) income before reclassifications			17	13
Amortization			(3)	15
Net current period Other comprehensive (loss) income			14	28
Ending balance	$ 14	$ (32)	$ 14	$ (32)

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COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassification out of Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of sales	$ 6,747	$ 6,341	$ 13,183	$ 12,296
Provision for income taxes	9	25	14	24
Total reclassifications, net of tax	22	68	89	145
Total reclassifications			16
Reclassification out of accumulated other comprehensive income | Benefit plans
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net periodic benefit income, excluding service cost	1	1	1	2
Provision for income taxes	0	0	0	0
Total reclassifications, net of tax	1	1	1	2
Reclassification out of accumulated other comprehensive income | AOCI Attributable to Parent | Swap agreements
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense, net	(4)	10	(4)	21
Provision for income taxes	1	(3)	1	(6)
Total reclassifications, net of tax	(3)	7	(3)	15
Reclassification out of accumulated other comprehensive income | AOCI Attributable to Parent | Other cash flow hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of sales	1	2	2	2
Provision for income taxes	(1)	(1)	(1)	(1)
Total reclassifications, net of tax	$ 0	$ 1	$ 1	$ 1

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SHARE-BASED AWARDS (Details) shares in Millions	Jan. 28, 2023 shares
2020 Equity incentive plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	1.6
Restricted Stock Units and Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares authorized (in shares)	1.6

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BENEFIT PLANS - Net Periodic Benefit Cost (Income) Recognized in Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Pension Benefits
Net Periodic Benefit (Income) Cost
Interest cost	$ 15	$ 9	$ 32	$ 19
Expected return on plan assets	(23)	(20)	(47)	(41)
Amortization of prior service cost	0	0	0	0
Net periodic benefit (income) cost	(8)	(11)	(15)	(22)
Contributions to benefit plans	0	0	0	0
Other Postretirement Benefits
Net Periodic Benefit (Income) Cost
Interest cost	0	0	0	0
Expected return on plan assets	0	0	0	0
Amortization of prior service cost	1	1	1	2
Net periodic benefit (income) cost	1	1	1	2
Contributions to benefit plans	$ 0	$ (1)	$ 0	$ (2)

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BENEFIT PLANS - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Multiemployer plan, contributions by employer	$ (12)	$ (11)	$ (23)	$ (22)
Minimum
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, expected future employer contributions, current fiscal year	$ 1		$ 1

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INCOME TAXES (Details)	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate, continuing operations, percent	29.00%	26.90%	13.60%	14.20%

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EARNINGS PER SHARE (Details) - $ / shares shares in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022
Reconciliation of the basic and diluted number of shares used in computing earnings per share:
Basic weighted average shares outstanding (in shares)	59.8	58.3	59.3	57.6
Net effect of dilutive stock awards based upon the treasury stock method (in shares)	1.2	2.7	2.0	3.4
Diluted weighted average shares outstanding (in shares)	61.0	61.0	61.3	61.0
Earnings Per Share
Basic earnings per share (in dollars per share)	$ 0.32	$ 1.13	$ 1.43	$ 2.47
Diluted earnings per share (in dollars per share)	$ 0.31	$ 1.08	$ 1.38	$ 2.33
Anti-dilutive stock-based awards excluded from the calculation of diluted earnings per share (in shares)	0.8	0.4	0.8	0.9

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BUSINESS SEGMENTS - Narrative (Details)	6 Months Ended
	Jan. 28, 2023 reportingUnit
Segment Reporting [Abstract]
Number of reportable segments	2
Number of operating segments	2

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BUSINESS SEGMENTS - Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jan. 28, 2023	Jan. 29, 2022	Jan. 28, 2023	Jan. 29, 2022	Jul. 30, 2022
Business segment information
Net sales	$ 7,816	$ 7,416	$ 15,348	$ 14,413
Net periodic benefit income, excluding service cost	(7)	(10)	(14)	(20)
Interest expense, net	39	44	74	84
Other income, net	0	2	1	1
LIFO charge			50	30
Income before income taxes	31	93	103	169
Depreciation and amortization	73	69	147	138
Payments for capital expenditures:	84	50	151	106
Assets	7,635		7,635		$ 7,628
Continuing operations
Business segment information
Assets	7,635		7,635		7,628
Operating segments | Wholesale
Business segment information
Net sales	7,514	7,132	14,773	13,866
Adjusted EBITDA:	137	176	308	351
Depreciation and amortization	62	61	126	122
Payments for capital expenditures:	74	46	131	98
Operating segments | Wholesale | Continuing operations
Business segment information
Net sales	353	356	687	695
Assets	6,684		6,684		6,733
Operating segments | Retail
Business segment information
Net sales	660	643	1,273	1,245
Adjusted EBITDA:	28	32	48	54
Depreciation and amortization	10	8	18	15
Payments for capital expenditures:	10	4	20	8
Operating segments | Retail | Continuing operations
Business segment information
Assets	637		637		599
Operating segments | Other
Business segment information
Net sales	56	50	116	106
Adjusted EBITDA:	15	12	34	16
Depreciation and amortization	1	0	3	1
Operating segments | Other | Continuing operations
Business segment information
Assets	352		352		335
Eliminations
Business segment information
Net sales	(414)	(409)	(814)	(804)
Adjusted EBITDA:	1	0	(2)	(1)
Eliminations | Continuing operations
Business segment information
Assets	(38)		(38)		$ (39)
Adjustments:
Business segment information
Net income attributable to noncontrolling interests	3	2	4	3
Net periodic benefit income, excluding service cost	7	10	14	20
Interest expense, net	(39)	(44)	(74)	(84)
Other income, net	0	2	1	1
Depreciation and amortization	(73)	(69)	(147)	(138)
Share-based compensation	(11)	(12)	(23)	(23)
LIFO charge	(29)	(19)	(50)	(30)
Restructuring, acquisition and integration related expenses	(3)	(5)	(5)	(8)
(Loss) gain on sale of assets	(1)	(1)	4	(1)
Multiemployer pension plan withdrawal benefit	0	8	0	8
Other retail benefit	0	1	0	1
Other	$ (4)	$ 0	$ (9)	$ 0

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COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS (Details) $ in Millions		6 Months Ended
	Jan. 21, 2021 case	Jan. 28, 2023 USD ($) case
Loss Contingencies [Line Items]
Non-cancelable future purchase obligations		$ 562
Lease payments, signed, not yet commenced		$ 755
Lease, term (in years)		21 years
Multi-District Litigation
Loss Contingencies [Line Items]
Number of suits pending | case		43
Complaint from Various Health Plans
Loss Contingencies [Line Items]
Number of new causes of action | case	6
Schutte and Yarberry v. SuperValu, New Albertson's, Inc., et al
Loss Contingencies [Line Items]
Alleged damages (in excess of)		$ 100
Share of potential award		24
Guarantee Obligations
Loss Contingencies [Line Items]
Estimated loss		1
Indemnification Agreement
Loss Contingencies [Line Items]
Estimated loss		0
Payment guarantee
Loss Contingencies [Line Items]
Guarantor obligations, maximum exposure, undiscounted		16
Guarantor obligations, maximum exposure, discounted		$ 14
Payment guarantee | Minimum
Loss Contingencies [Line Items]
Guarantor obligations, guarantees term		1 year
Payment guarantee | Maximum
Loss Contingencies [Line Items]
Guarantor obligations, guarantees term		7 years
Payment guarantee | Weighted average
Loss Contingencies [Line Items]
Guarantor obligations, guarantees term		4 years