United Natural Foods Inc. (UNFI) saw its stock soar 5.13% in Wednesday's pre-market trading session, following the release of its fiscal 2025 first-quarter earnings results. The surge was driven by the company's strong financial performance, raised full-year outlook, and progress in implementing lean management principles to drive efficiency and service levels.

The organic and specialty food distributor reported a 4.2% year-over-year increase in revenue to $7.87 billion for the quarter, fueled by nearly 2% growth in wholesale volumes. Despite a 3% decline in retail sales, United Natural Foods managed to deliver a 15% increase in adjusted EBITDA to $134 million, marking its fifth consecutive quarter of sequentially improving profitability.

While gross margins contracted by 40 basis points due to changes in business mix and lower procurement gains, the company achieved operating leverage by reducing operating expenses by 65 basis points as a percentage of net sales. Adjusted earnings per share of $0.16 represented a significant improvement compared to a loss of $0.04 in the prior-year period.

Encouraged by the strong start to fiscal 2025, United Natural Foods raised its full-year guidance across key metrics. The company now expects net sales between $30.6 billion and $31 billion, adjusted EBITDA in the range of $530 million to $580 million, and adjusted EPS of $0.40 to $0.80 per share. Additionally, free cash flow is projected to exceed $100 million, reflecting the company's focus on efficiency and deleveraging.

One of the key drivers behind United Natural Foods' improved performance has been the implementation of lean management principles, which have already yielded positive results. The company reported a 5% improvement in cases per hour and an 11% increase in fulfillment quality at pilot distribution centers. These initiatives are expected to drive further efficiency gains and service level improvements as they are rolled out across the company's network.