United Natural Foods Inc (NYSE:UNFI) Q4 2020 Earnings Conference Call - Final Transcript

Sep 29, 2020 • 08:30 am ET

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United Natural Foods Inc (NYSE:UNFI) Q4 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Your first question comes from Bill Kirk of MKM Partners. Your line is open.

Analyst
Bill Kirk

Hey, thank you for taking the question. I wanted to talk a little bit about the upcoming holiday season and what you're seeing maybe in terms of actions by your retail customers. Are you seeing anything from them in terms of increasing inventory days that they're willing to hold or pull forward -- pulling forward some of their holiday spending or holiday assortment?

Executive
Christopher P. Testa

Hey, Bill. This is Chris. Good morning. So, the retailers are -- they've got limited space, so they would probably like to increase their inventory, but they are limited in what they can do. I can tell you from our perspective, two major things that's happening. One, we began talking about the holidays early in the summer and began to build up on those holiday-like items, broc [Phonetic], cranberry sauce, pumpkin spice and so forth because we think it's going to be a big holiday season with a lot of small gatherings versus big gatherings.

From a retailer perspective, the one behavior that we're seeing is at our recent show, there was a huge interest from our retailers to secure inventory ahead of time. In other words, commit to the inventory to be delivered to make sure they're stocked -- their shelves were stocked. And then finally for any of those products that are still long-term out of stocks and we all know what they are, we've been finding alternative supply for our retailers to make sure their shelves are full for the holiday season.

Analyst
Bill Kirk

Okay, great. And I guess related, what are you seeing in terms of freight lanes or freight availability for this holiday season?

Executive
Eric A. Dorne

Bill, this is Eric. We are seeing increased requests for freight lanes. We obviously have a great deal of strength in that. And we are leveraging our side to secure the lanes we need. So, at this time, we do not see an issue with that, but we're watching it very carefully.

Executive
Steven L. Spinner

Yeah. Remember Bill that the vast majority of the fleet, we own and operate. And for product that we move cross country or by rail, we do have contract carriers with contracted volume. So, that's not a problem that we're going to face.

Analyst
Bill Kirk

Awesome. Thank you. I'll hop back in the queue.

Operator
Operator

Your next question comes from Karen Short of Barclays. Your line is open.

Analyst
Karen Short

Hi, thanks very much. Congratulations, Steve. Been talking to you for a long time. I know -- we'll get a few more quarters in there. Congratulations.

Executive
Steven L. Spinner

Thanks, Karen.

Analyst
Karen Short

So, I'm sorry to start off with this, but there is just so many things model related, so idea was to start with some housekeeping questions. I guess, the first question I had with respect to retail EBITDA. Are you burdening that EBITDA margin? So, when I look at the margin, are you burdening that with distribution costs, meaning allocating for distribution costs to retail or it's a seller --