United Natural Foods Inc. (UNFI) saw its stock plummet 6.75% in Tuesday's intraday trading session, despite reporting better-than-expected third-quarter results. The sharp decline comes as the company grapples with multiple challenges that have overshadowed its positive earnings report.

UNFI announced the termination of its Amended and Restated Northeast Supply Agreement with Key Food Stores Co-Operative, Inc., effective around September 20, 2025. This move ends UNFI's role as the primary grocery wholesaler to Key Food locations in the Northeast and is part of the company's strategy to exit an unprofitable relationship. Additionally, UNFI plans to discontinue operations at its Allentown, Pennsylvania distribution center as part of efforts to optimize its distribution network.

Further compounding investor concerns, UNFI cut its profit outlook for the year. The company now expects a loss of $80 million to $55 million, or $1.30 to $0.90 per share, compared to its previous guidance of a loss of $13 million to a profit of $3 million. This revised outlook reflects costs associated with exiting the Key Food contract and optimizing the Northeast distribution network. Adding to the company's woes, UNFI is also dealing with the aftermath of a cyber incident that occurred on June 5, which has affected its ability to fulfill and distribute orders. Due to the ongoing assessment of this incident's impact, the company has refrained from updating its adjusted earnings and sales outlook for the year.

These negative factors have overshadowed UNFI's strong Q3 performance, where the company reported adjusted earnings of $0.44 per share, surpassing analysts' expectations of $0.21, and net sales of $8.06 billion, beating estimates of $7.78 billion. The market's reaction reflects growing concerns about UNFI's near-term challenges and their potential impact on the company's financial performance.