UNFI’s lost sales due to last month’s cyberattack could cost the wholesaler as much as $425 million, it revealed during a call with financial analysts on July 16. The Providence, RI-based company said that “anticipated insurance” would offset most of those losses, and that UNFI does not expect a meaningful operational financial impact beyond the fourth quarter which ends August 2.
In fact, UNFI has revised its sales projection forecast for fiscal year 2025 and now forecasts net sales to increase to between $31.6 billion and $31.8 billion, up from a previous range of $31.3 billion to $31.7 billion.
“With strong performance through the third quarter and above-market growth expected in fiscal 2025, we believe our strategy and execution are delivering results,” said Matteo Tarditi, president and CFO of UNFI, said during the analysts’ call.
However, the impact of the cyberattack will clearly be adversely impactful to its full fiscal results, which are now estimated to be between negative $90-$115 million. In March, the distributor projected a slight profit for fiscal ’25, which would have been its first black ink posting for the first time in three years.
In an SEC filing last month, UNFI stated that it first detected the cyberattack on June 5 and shut down its entire network the following day, which quickly created massive out-of-stocks for its customers both nationally and in the Mid-Atlantic market. Those affected included more than 500 Whole Food Markets as well as regional independent grocers such as Redner’s, McCaffrey’s, Boyer’s, Murphy’s, Karns, Landis Markets, B. Green, Graul’s and Key Food, which in June announced it would be leaving UNFI (for C&S) beginning next month.
UNFI said it restored its online ordering platform on June 16 and, according to CEO Sandy Douglas, “broadly returned to more normal operating capacity” nationally by June 26. However, several of those retailers listed above said that previous service levels weren’t restored until earlier this month.
All told, cyberattack-related customer sales losses were between $300-$400 million. Internal charges, including shrink and customized workarounds, added approximately $20 million to UNFI’s tab, and another $5 million was doled out to cybersecurity and other third-party firms involved with helping resolve the outage.
Douglas noted, “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, several independent retailers remained upset that the situation wasn’t handled more quickly and effectively.”