MW How a cyberattack and job cuts did nearly $300 million in damage to this food company's value

By Steve Gelsi

United Natural Foods, which will cut 700 jobs by exiting a supply agreement, might have raised its full-year outlook if not for a recent cyberattack

The bad news keeps coming for United Natural Foods Inc., as the food distributor followed the disclosure of an ongoing cyberattack by saying on Tuesday that the ending of a supply agreement would lead to the loss of hundreds of jobs.

As a result, the company decided it could not raise its full-year sales outlook, despite stronger-than-expected results in the most recent quarter, while it assesses the financial impact of the cyberattack.

The stock $(UNFI)$ tumbled 11.2% toward a seven-month low in afternoon trading, after sinking 6.9% on Monday. The two-day selloff of 17.3%, which would be the worst two-day performance in 15 months, would wipe out $292.3 million in market capitalization for the Rhode Island-based company.

On Monday, United Natural Foods said it became aware of unauthorized activity on some of its information-technology systems on June 5, but it had not collected enough data until late the next day to decide to shut them down.

This has affected the company's ability to fulfill and distribute some customer orders. It has carried out some workarounds to continue servicing its customers where possible.

Separately, United Natural Foods said that in September it will terminate its supply agreement as the primary grocery wholesaler to Key Food grocery stores in the Northeast, as the company looks to break up unprofitable relationships.

As a result, the company said it would close its distribution center in Allentown, Penn.

"The consolidation of our Allentown DC will impact approximately 700 associates in operational and administrative roles," a company spokesperson told MarketWatch.

And while the company reported strong results for its fiscal third quarter through April, it kept its adjusted full-year guidance, which excludes nonrecurring items, intact.

"With one quarter remaining and strong performance to date in fiscal 2025, we would have raised our key [adjusted] financial outlook metrics, if not for the unauthorized activity on certain of our information technology $(IT)$ systems," United Natural Foods said Tuesday. "We're still working to assess the impact. Otherwise, our underlying business momentum has been accelerating."

While net sales for the latest quarter increased by 7.5% from a year ago to $8.06 billion, ahead of the analyst estimate of $7.78 billion, the company said it still expects full fiscal-year sales of $31.3 billion to $31.7 billion.

And while the company's adjusted third-quarter profit increased to 44 cents a share from 10 cents a share and soundly beat the FactSet consensus estimate of 22 cents a share, the full-year outlook for earnings per share was kept at 70 cents to 90 cents.

-Steve Gelsi

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June 10, 2025 15:32 ET (19:32 GMT)

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