UNITED NATURAL FOODS INCUNFI
UNITED NATURAL FOODS INC Leases Disclosure
NOTE 11—LEASES
The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Lease assets and liabilities, net, are as follows (in millions):
| Lease Type | Consolidated Balance Sheets Location | August 2, 2025 | August 3, 2024 | |||||||||||||||||
| Operating lease assets | Operating lease assets | $ | 1,474 | $ | 1,370 | |||||||||||||||
| Finance lease assets | 15 | 16 | ||||||||||||||||||
| Total lease assets | $ | 1,489 | $ | 1,386 | ||||||||||||||||
| Operating liabilities | Current portion of operating lease liabilities | $ | 173 | $ | 181 | |||||||||||||||
| Finance liabilities | 5 | 7 | ||||||||||||||||||
| Operating liabilities | Long-term operating lease liabilities | 1,400 | 1,263 | |||||||||||||||||
| Finance liabilities | Long-term finance lease liabilities | 11 | 12 | |||||||||||||||||
| Total lease liabilities | $ | 1,589 | $ | 1,463 | ||||||||||||||||
The Company’s lease cost under ASC 842 is as follows (in millions):
| Lease Expense Type | Consolidated Statements of Operations Location | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Operating lease cost | Operating expenses | $ | 316 | $ | 298 | $ | 261 | |||||||||||||||||||
| Short-term lease cost | Operating expenses | 6 | 10 | 17 | ||||||||||||||||||||||
| Variable lease cost | Operating expenses | 94 | 87 | 73 | ||||||||||||||||||||||
| Sublease income | Operating expenses | (4) | (5) | (8) | ||||||||||||||||||||||
| Sublease income | Net sales | (7) | (10) | (14) | ||||||||||||||||||||||
| Other sublease income, net | Restructuring, acquisition and integration related expenses(1) | 6 | — | (1) | ||||||||||||||||||||||
| Net operating lease cost | 411 | 380 | 328 | |||||||||||||||||||||||
| Amortization of leased assets | Operating expenses | 6 | 6 | 7 | ||||||||||||||||||||||
| Interest on lease liabilities | Interest expense, net | 2 | 2 | 3 | ||||||||||||||||||||||
| Finance lease cost | 8 | 8 | 10 | |||||||||||||||||||||||
| Total net lease cost | $ | 419 | $ | 388 | $ | 338 | ||||||||||||||||||||
(1)Includes $32 million, $28 million and $27 million of lease expense in fiscal 2025, 2024 and 2023, respectively, and $(26) million, $(28) million, and $(28) million of lease income in fiscal 2025, 2024 and 2023, respectively, that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations.
As discussed in Note 5—Property and Equipment, Net, the Company recorded a $24 million non-cash asset impairment charge related to our Allentown, Pennsylvania distribution center during the third quarter of fiscal 2025, of which $13 million related to operating lease assets. The impairment charge is recorded within Loss on sale of assets and other asset charges in the Consolidated Statements of Operations.
During fiscal 2025, the Company entered into a lease agreement for a new distribution center in Sarasota, Florida. We recognized a $118 million right-of-use asset and operating lease liability for this distribution center in the Consolidated Balance Sheets upon its commencement in the first quarter of fiscal 2025.
During fiscal 2023, the Company entered into a lease agreement for a new distribution center in Manchester, Pennsylvania. We recognized a $205 million right-of-use asset and operating lease liability for this distribution center in the Consolidated Balance Sheets upon its commencement in the second quarter of fiscal 2024.
The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) include payments to be made by the Company or certain third parties in the case of assigned noncancellable operating leases and finance leases. Future minimum lease and subtenant rentals (“Lease Receipts”) include expected cash receipts from operating subleases, and in the case of assigned noncancellable leases receipts for stores sold to third parties, which they operate. As of August 2, 2025, these Lease Liabilities and Lease Receipts consisted of the following (in millions):
| Lease Liabilities | Lease Receipts | Net Lease Obligations | ||||||||||||||||||||||||||||||||||||
| Fiscal Year | Operating Leases(1) | Finance Leases (2) | Operating Leases | Finance Leases | Operating Leases | Finance Leases | ||||||||||||||||||||||||||||||||
| 2026 | $ | 311 | $ | 6 | $ | (31) | $ | — | $ | 280 | $ | 6 | ||||||||||||||||||||||||||
| 2027 | 254 | 4 | (23) | — | 231 | 4 | ||||||||||||||||||||||||||||||||
| 2028 | 259 | 3 | (20) | — | 239 | 3 | ||||||||||||||||||||||||||||||||
| 2029 | 227 | 3 | (15) | — | 212 | 3 | ||||||||||||||||||||||||||||||||
| 2030 | 223 | 2 | (12) | — | 211 | 2 | ||||||||||||||||||||||||||||||||
| Thereafter | 1,258 | 2 | (25) | — | 1,233 | 2 | ||||||||||||||||||||||||||||||||
| Total undiscounted lease liabilities and receipts | $ | 2,532 | $ | 20 | $ | (126) | $ | — | $ | 2,406 | $ | 20 | ||||||||||||||||||||||||||
Less interest(3) | (959) | (4) | ||||||||||||||||||||||||||||||||||||
| Present value of lease liabilities | 1,573 | 16 | ||||||||||||||||||||||||||||||||||||
| Less current lease liabilities | (173) | (5) | ||||||||||||||||||||||||||||||||||||
| Long-term lease liabilities | $ | 1,400 | $ | 11 | ||||||||||||||||||||||||||||||||||
(1)There were no operating leases for which the extension options are reasonably certain of being exercised, nor were there any excluded legally binding minimum lease payments for leases signed but not yet commenced.
(2)There were no finance leases for which the extension options are reasonably certain of being exercised, nor were there any excluded legally binding minimum lease payments for leases signed but not yet commenced.
(3)Calculated using the interest rate for each lease.
The following tables provide other information required by ASC 842:
| Lease Term and Discount Rate | August 2, 2025 | August 3, 2024 | ||||||||||||
| Weighted-average remaining lease term (years) | ||||||||||||||
| Operating leases | 9.9 years | 9.9 years | ||||||||||||
| Finance leases | 4.6 years | 4.1 years | ||||||||||||
| Weighted-average discount rate | ||||||||||||||
| Operating leases | 9.6 | % | 9.4 | % | ||||||||||
| Finance leases | 9.6 | % | 9.9 | % | ||||||||||
| Other Information | ||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||||||||
Operating cash flows from operating leases | $ | 311 | $ | 284 | $ | 249 | ||||||||||||||
Operating cash flows from finance leases | $ | 2 | $ | 2 | $ | 2 | ||||||||||||||
Financing cash flows from finance leases | $ | 7 | $ | 12 | $ | 10 | ||||||||||||||
| Leased assets obtained in exchange for new finance lease liabilities | $ | 5 | $ | 8 | $ | — | ||||||||||||||
| Leased assets obtained in exchange for new operating lease liabilities | $ | 321 | $ | 361 | $ | 237 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Oct 1, 2025 | Showing above |
| 2024 | Oct 1, 2024 | |
| 2023 | Sep 26, 2023 | |
| 2022 | Sep 27, 2022 | |
| 2021 | Sep 28, 2021 | |
| 2020 | Sep 29, 2020 | |
| 2019 | Oct 1, 2019 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.