United Natural Foods Inc. (UNFI) reported a lackluster second quarter on Wednesday, prompting CEO Sandy Douglas to promise a full-scale turnaround for the wholesaler. In fact, "transformation" was mentioned nearly a dozen times in a call with analysts this week.
UNFI's transformation plan “is focused on improving our customer and supplier experience and addressing legacy integration and capability gaps in our digital and physical infrastructure," Douglas told analysts.
J. Alexander “Sandy” Miller Douglas assumed the helm of UNFI in 2021, and last year, UNFI made leadership changes structured around four growth platforms of services: services, wholesale, retail, and corporate and business transformation.
On the earnings call this week Douglas reiterated UNFI’s need to develop and execute a multifaceted transformation plan.
“It has become increasingly clear to me in the 18 months since I joined UNFI that we need more scalable and streamlined capabilities and attendant cost structures so that we can more efficiently serve our growing customer base,” Douglas said, according to a transcript from financial services site Sentieo. "To accomplish this, we've assembled a highly skilled and motivated management team to develop and execute a multifaceted transformation plan, which we reviewed with our board this quarter."
Tech upgrades and automation are central to the wholesaler's reimagined vision.
“As we talk more about the transformation agenda, that's where we're focused on applying process and technology to make further gains not only from an operating perspective, but also in terms of quality to our customers and capital utilization. But we think there's room for continuous improvement that we're pursuing urgently,” Douglas said.
Despite the wholesaler’s stock price dropping more than 30% over the past two days, UNFI promised its “transformational plan” and data-enhanced capabilities and enhanced technological infrastructure would generate sustained growth.
“Our improvement efforts are already well underway," Douglas said in a statement. "We’ve assembled a highly skilled and motivated management team that is developing a multifaceted transformation plan to continue to drive improvements in our customer and supplier experience, and address legacy integration and capability gaps in our digital and physical infrastructure."
He said the company would share more details about its turnaround plans in the future.