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PROVIDENCE, R.I. - United Natural Foods, Inc. (NYSE:UNFI), a grocery wholesaler with a market capitalization of $1.4 billion and current trading price of $23.39, has updated its fiscal 2025 outlook to reflect both strong performance through the first three quarters and the impact of a previously disclosed cyber incident, according to a press release issued Wednesday. According to InvestingPro analysis, the company is currently trading near its Fair Value, with analysts maintaining a neutral stance.
The grocery wholesaler estimates the cyber incident will reduce fiscal 2025 net sales by approximately $350 to $400 million and impact net income by $50 to $60 million. The company expects adjusted EBITDA to be affected by $40 to $50 million, a significant impact considering its last twelve months EBITDA of $539 million. These figures do not include anticipated insurance proceeds, which UNFI believes will adequately cover the incident.
Despite the setback, UNFI maintained its full-year adjusted EBITDA outlook at a midpoint of $550 million, representing a 6.2% increase from fiscal 2024. The company now projects net sales of $31.6 to $31.8 billion, up 2.3% from the previous year. InvestingPro data reveals the company has maintained a healthy 6.6% revenue growth rate over the last twelve months, with 8 additional key metrics and insights available to subscribers.
"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," said Sandy Douglas, UNFI’s CEO. "With our operations returning to more normalized levels, we remain focused on adding value for our customers and suppliers."
UNFI reported strong performance for the first three quarters of fiscal 2025, with net sales increasing 5.5% compared to the same period last year. The company also improved its net loss by $44 million, increased adjusted EBITDA by 16%, and generated $310 million in operating cash flow.
The company expects to reduce its net leverage to nearly 2.5x by the end of fiscal 2026, approximately one year earlier than initially projected. UNFI does not anticipate meaningful operational or financial impacts from the cyber incident beyond the fourth quarter of fiscal 2025, aside from insurance reimbursement. For deeper insights into UNFI’s financial health and future prospects, including exclusive Fair Value models and comprehensive analysis, explore the full research report available on InvestingPro.
This information is based on a press release statement from United Natural Foods, Inc.
In other recent news, United Natural Foods Inc. reported strong third-quarter earnings for fiscal year 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $0.44 compared to the forecasted $0.21. The company also reported revenue of $8.1 billion, exceeding the anticipated $7.78 billion. Despite these positive financial results, United Natural Foods recently experienced a cybersecurity incident that temporarily impacted its operations, although it has since restored critical systems. The company expects this incident to have a material impact on its net income and adjusted EBITDA for the fourth quarter of fiscal 2025.
Analysts have responded to these developments with mixed reactions. UBS lowered its price target for United Natural Foods to $26.00 from $30.00 while maintaining a Neutral rating, citing uncertainties introduced by the cybersecurity breach. Similarly, Jefferies reduced its price target to $26.00 from $28.00, maintaining a Hold rating due to the potential near-term uncertainties caused by the systems disruption. Despite the challenges, United Natural Foods has made significant progress in its longer-term objectives, including reducing net debt and improving its financial leverage.
The company plans to provide an updated financial outlook in July to reflect the quantitative impact of the cybersecurity incident. Additionally, United Natural Foods has adequate cybersecurity insurance coverage, though the claim and settlement process is expected to extend into fiscal year 2026. As the company continues to address the situation, it remains focused on achieving its previously disclosed strategic and financial objectives.
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