United Natural Foods Reports Record Revenues of $732.5 Million for the Third Quarter of Fiscal 2007 on 15% Comparable Growth

May 22, 2007
                       Updates Guidance for Fiscal 2007

DAYVILLE, Conn., May 22 /PRNewswire-FirstCall/ -- United Natural Foods, Inc. (Nasdaq: UNFI) (the "Company") today reported net income of $13.7 million, or $0.32 per diluted share, for the third quarter of fiscal 2007, ended April 28, 2007. The Company reported revenues for the third quarter of fiscal 2007 of $732.5 million, an increase of $95.4 million, or 15.0%, from the $637.1 million recorded in the third quarter of fiscal 2006. Both the supernatural and supermarket channels of the wholesale segment contributed to the record sales, with both channels showing comparable growth rates in excess of 20%.

For the third quarter of fiscal 2007, net income increased 11.4% to $13.7 million, or $0.32 per diluted share, compared to $12.3 million, or $0.29 per diluted share, for the third quarter of fiscal 2006.

Gross margin as a percent of sales for the third quarter of fiscal 2007 was 17.7%, which represents a 1.2% decline from the gross margin of 18.9% for the third quarter of fiscal 2006, ended April 29, 2006. The gross margin decline was driven by a combination of factors. First, the Company's level of forward buying in the Western Region during the third quarter of fiscal 2007 continued to run below historical levels, negatively impacting gross margin by approximately $1.9 million. Second, the Company incurred an unusually high level of inventory adjustments within broadline distribution during the quarter of approximately $1.9 million. Third, a number of new customer agreements were in place during the third quarter compared to the prior fiscal year. Additionally, unanticipated delays in the completion of its previously announced strategy to acquire emerging brands and launch new products have prevented the Company's United Natural Brands' division from contributing the planned level of sales and incremental gross margin expected.

For the quarter ended April 28, 2007, operating expenses were 14.3% of net sales, or $104.8 million, an increase of $7.4 million, or 7.5%, over operating expenses of $97.5 million, or 15.3% of net sales, for the third quarter of fiscal 2006.

In the third quarter of fiscal 2007, the Company recorded share-based compensation expense of $1.0 million, in accordance with Statement of Financial Accounting Standard ("SFAS") No. 123R, Share-Based Payment, compared to $1.2 million of share-based compensation expense for the third quarter of fiscal 2006, which ended April 29, 2006.

"Our sales growth during the third quarter improved as we had expected, driven by solid growth of over 23% in our supermarket channel. Also, growth in the supernatural channel exceeded 20% for the quarter due to continued strong consumer demand for natural and organic products, aided by new store openings and our increased market share in the West," said Michael Funk, President and Chief Executive Officer.

Mr. Funk added, "We experienced some short-term erosion of gross margin during the quarter due to our forward buying of inventory remaining below historical levels and specific inventory write-offs in broadline distribution,

but we remain confident that the gross margin will improve over the next two quarters with these issues behind us."

Updates Fiscal 2007 Earnings Guidance

The Company is updating its projected revenues guidance to $2.75 billion to $2.8 billion for fiscal year 2007, ending July 28, 2007, which represents a 13% to 15% increase over fiscal 2006. In addition, the Company is revising its GAAP guidance on earnings per share for fiscal 2007 to a range of $1.20 to $1.22 per diluted share. Previously, on February 20, 2007, the Company had announced GAAP earnings per share guidance of $1.25 to $1.30 per diluted share for fiscal 2007. Excluding the impact of $2.2 million of losses related to the Company's two Auburn, California facilities and $0.7 million in fees related to the early termination of unused leased space and the write-off of abandoned leasehold improvements at a facility in Minnesota, both reported in the second quarter of fiscal 2007, the Company is revising its earnings per share guidance for fiscal 2007 to a range of $1.24 to $1.26 per diluted share. Previously, the Company announced earnings per share guidance for fiscal 2007, excluding these items, of a range of $1.27 to $1.30 per diluted share. Finally, the Company also reiterated its anticipated fiscal 2007 capital expenditures guidance of $40 to $45 million.

The Company's guidance is based on a number of assumptions, which are subject to change and many of which are outside the Company's control. If any of these assumptions vary, the Company's guidance may change. There can be no assurance that the Company will achieve these results.

Conference Call

Management will conduct a conference call and audio webcast at 11:00 a.m. EDT on May 22, 2007 to review the Company's quarterly results, market trends and future outlook. The conference call dial-in number is (303) 262-2075. An audio webcast of the conference call will be available to the public, on a listen-only basis, via the Internet at www.earnings.com or at the Investor Relations section of the Company's website at www.unfi.com. Please allow extra time prior to the call to visit the site and download the necessary software to listen to the Internet broadcast. The online archive of the webcast will be available for 30 days.

About United Natural Foods

United Natural Foods, Inc. carries and distributes more than 40,000 products to more than 18,000 customers nationwide. The Company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel. United Natural Foods was ranked by Forbes in 2005 as one of the "Best Managed Companies in America," ranked by Fortune in 2007 and 2006 as one of its "Most Admired Companies," and ranked by Business Ethics as one of its "100 Best Corporate Citizens for 2006." For more information on United Natural Foods, Inc., visit the Company's website at www.unfi.com.

                           Financial Tables Follow

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, including but not limited to general business conditions, the impact of competition and our dependence on principal customers, see "Risk Factors" in the Company's quarterly report on Form 10-Q filed with the Commission on March 6, 2007, and its other filings under the Securities Exchange Act of 1934, as amended. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced projections, but it is not obligated to do so.

                          UNITED NATURAL FOODS, INC.
                    (In thousands, except per share data)

                               Three months ended          Nine months ended
                              April 28,    April 29,    April 28,    April 29,
                                  2007         2006         2007         2006

    Net sales                 $732,516     $637,068   $2,047,494   $1,813,790
    Cost of sales              602,573      516,904    1,669,912    1,466,955

      Gross profit             129,943      120,164      377,582      346,835

    Operating expenses         104,670       97,318      306,689      288,887
    Impairment on assets held
     for sale                        -            -          756            -
    Amortization of intangibles    148          142          437          428
      Total operating expenses 104,818       97,460      307,882      289,315

      Operating income          25,125       22,704       69,700       57,520

    Other expense (income):
     Interest expense            3,021        2,747        9,282        8,310
     Interest income              (324)         (78)        (618)        (219)
     Other, net                    (39)         (84)          332        (207)
      Total other expense        2,658        2,585        8,996        7,884

      Income before income
       taxes                    22,467       20,119       60,704       49,636

    Provision for income taxes   8,762        7,819       23,675       19,035

      Net income               $13,705      $12,300      $37,029      $30,601

    Per share data - basic:
      Net income                 $0.32        $0.29        $0.87        $0.74

    Weighted average basic
     shares of common stock     42,595       41,885       42,396       41,568

    Per share data - diluted:
      Net income                 $0.32        $0.29        $0.87        $0.73

    Weighted average diluted
     shares of common stock     42,884       42,446       42,784       42,210

                          UNITED NATURAL FOODS, INC.
                   CONSOLIDATED BALANCE SHEETS (Unaudited)
                                (In thousands)

                                                   April 28,       July 29,
                                                       2007           2006
    Current assets:
     Cash and cash equivalents                       $20,544        $20,054
     Accounts receivable, net                        167,486        147,686
     Notes receivable, trade, net                      1,285          1,254
     Inventories                                     302,468        257,259
     Prepaid expenses and other current assets        13,822         12,596
     Deferred income taxes                            10,911         10,911
      Total current assets                           516,516        449,760

    Property & equipment, net                        163,365        163,247

    Other assets:
     Goodwill                                         79,900         78,016
     Notes receivable, trade, net                      2,320          2,760
     Intangible assets, net                            5,957            251
     Other                                             9,535          6,561

      Total assets                                  $777,593       $700,595

    Current liabilities:
     Accounts payable                               $134,221        102,146
     Notes payable                                   114,001       $125,005
     Accrued expenses and other current liabilities   33,232         34,245
     Current portion of long-term debt                 6,269          5,433
      Total current liabilities                      287,723        266,829

    Long-term debt, excluding current portion         67,510         59,716
    Deferred income taxes                              9,029          9,693
    Other long-term liabilities                          874            883
      Total liabilities                              365,136        337,121

    Stockholders' equity:
     Preferred stock, $0.01 par value,
      authorized 5,000 shares at April 28, 2007
      and July 29, 2006; none issued and outstanding       -              -
     Common stock, $0.01 par value,
      authorized 100,000 shares; 43,042 issued and
      42,813 outstanding shares at April 28, 2007;
      42,477 issued and 42,248 outstanding shares
      at July 29, 2006                                   430            425
     Additional paid-in capital                      162,730        149,840
     Unallocated shares of Employee Stock Ownership
      Plan                                            (1,257)        (1,380)
     Treasury stock                                   (6,092)        (6,092)
     Accumulated other comprehensive (loss) income       (17)         1,047
     Retained earnings                               256,663        219,634
       Total stockholders' equity                    412,457        363,474

    Total liabilities and stockholders' equity      $777,593       $700,595

                          UNITED NATURAL FOODS, INC.
                                (In thousands)

                                                       Nine months ended
                                                    April 28,      April 29,
                                                        2007           2006
    Net income                                       $37,029        $30,601
    Adjustments to reconcile net income to net cash
     provided by operating activities:
      Depreciation and amortization                   13,793         12,557
      (Gain) loss on disposals of property &
        equipment                                      1,999           (25)
      Impairment on assets held for sale                 756              -
      Provision for doubtful accounts                  1,008          2,800
      Share-based compensation                         2,956          4,712
    Changes in assets and liabilities,
     net of acquired companies:
      Accounts receivable                            (20,808)       (23,215)
      Inventory                                      (43,391)       (24,479)
      Prepaid expenses and other assets               (5,688)         1,067
      Notes receivable, trade                            409           (763)
      Accounts payable                                25,829         12,996
      Accrued expenses and other current liabilities  (1,393)        (3,258)
       Net cash provided by operating activities      12,499         12,993

    Capital expenditures                             (20,684)       (14,804)
    Purchases of acquired businesses,
     net of cash acquired                             (6,470)        (3,292)
    Proceeds from sale of property and equipment       5,448             57
    Other investing activities                        (1,042)             -
      Net cash used in investing activities          (22,748)       (18,039)

    Net repayments under note payable                (11,004)        (6,573)
    Proceeds from borrowings of long-term debt        10,000              -
    Proceeds from exercise of stock options            7,086         17,879
    Increase (decrease) in bank overdraft              6,246         (7,397)
    Repayments on long-term debt                      (4,438)        (4,401)
    Tax benefit from exercise of stock options         2,853          5,485
    Principal payments of capital lease obligations       (4)          (409)
    Purchases of treasury stock                            -         (6,092)
      Net cash provided by (used in) financing
       activities                                     10,739         (1,508)

    NET INCREASE (DECREASE) IN CASH                      490         (6,554)
    Cash at beginning of period                       20,054         12,615
    Cash at end of period                            $20,544         $6,061

    Supplemental disclosures of cash flow information:
      Interest paid, net of amounts capitalized       $9,235         $8,021
      Federal and state income taxes paid,
       net of refunds                                $19,771        $14,993

SOURCE United Natural Foods, Inc.

CONTACT: Mark Shamber, Chief Financial Officer, United Natural Foods,
Inc., 1-860-779-2800; or Joseph Calabrese, Financial Relations Board, General
Information, 1-212-827-3772
Web site: http://www.unfi.com