UNFI Revises Fiscal 2025 Outlook Following Cyberattack
United Natural Foods Inc., (UNFI) held a business update call on July 16 to discuss its revised fiscal 2025 outlook, which reflects its strong performance during the first three fiscal quarters of 2025, and the estimated costs associated with a previously disclosed cyber incident.
Last month, North America's largest publicly traded wholesale distributor of health and specialty foods revealed that it was the victim of a cyberattack. After immediately taking its systems offline, UNFI activated its network of third-party experts and contained the issue to help protect its data, its business partners' data and the restorability of its systems.
As experts worked to secure company systems, UNFI simultaneously began collaborating closely with customers and suppliers on various temporary workarounds to get as much product into the stores as quickly as possible. Nonetheless, customers such as Whole Foods Market were still left with empty shelves for a period of time.
Ten days after taking its systems offline, UNFI safely restored its primary electronic ordering systems, which allowed the company to begin receiving and shipping most customer orders.
“We've continued working closely with our customers and suppliers to catch up on various business processes, including purchase orders, invoicing and payments that were temporarily delayed during the disruption period,” said Sandy Douglas, UNFI’s CEO. “We've also been focused on restoring our remaining value-added tools and systems, including our customized reporting and insights.”
As of this week, UNFI’s commercial operating capacity has been restored to normalized levels. Average outbound fill rates, on-time deliveries and units shipped are at or close to pre-incident levels, with some variation across distribution centers. The company expects continued improvement as it completes recovery in the coming weeks.
UNFI believes that the operational impact of the cyberattack, while meaningful, will be largely isolated to its fourth quarter of FY2025, as the company just released its Q3 earnings report last month, which reflected another solid quarter of sales growth.
Taking this into consideration, UNFI has updated its FY2025 outlook to reflect its steady performance and the impact of the cyberattack.
“Broadly speaking, we're modestly increasing our outlook for full-year net sales while modestly lowering the range and midpoint for adjusted EBITDA and adjusted EPS,” said CFO Giorgio “Matteo” Tarditi. “Our full-year capital spending outlook has decreased, partially due to resource reallocation over the past month.”
UNFI’s updated outlook for net sales has increased 0.6% at the midpoint to a range of $31.6 billion to $31.8 billion, which is about 2.3% higher than fiscal 2024 when adjusting for the extra week last year. This increase reflects the benefit of UNFI’s underlying momentum and strategy execution, which is offset by the expected negative impact of approximately $350 million to $400 million in lost sales in Q4 from the cyber incident.
The updated full-year adjusted EBITDA outlook range is $535 million to $565 million, with a midpoint of $550 million, which includes a $40 million-to-$50 million expected impact from the cyber incident.
“Our capital spending outlook has declined $50 million to $250 million. This is partly the result of reallocating resources to manage the business through the incident as well as our year-to-date spending level,” explained Tarditi.
“We are grateful to our customers, suppliers and associates for their resilience and collaboration as we worked through a challenging period for all of us. With our operations returning to more normalized levels, we remain focused on adding value for our customers and suppliers while becoming a more efficient and effective partner,” said Douglas.
“With a proven multi-year strategy and consistent execution through the third quarter of fiscal 2025, we are confident in our underlying momentum and our ability to achieve our multi-year financial targets at an accelerated pace compared to the initial targets we communicated in October 2024,” he added.
UNFI is known as North America’s premier grocery wholesaler, delivering the widest variety of fresh, branded and own-brand products to more than 30,000 locations throughout North America, including natural product superstores, independent retailers, conventional supermarket chains, e-commerce providers and foodservice customers. The Providence, R.I.-based company is No. 20 on The PG 100, Progressive Grocer’s 2025 list of the top food and consumables retailers in North America.
