UNFI Says Cyberattack Cost is up to $400M in Sales, $50M in EBITDA

UNFI expects a loss of sales from a June cyberattack but remains on track to meet its long-term financial goals ahead of schedule.

Health and specialty food wholesale distributor Unified Natural Foods Inc. updated its fiscal outlook for 2025, following the restoration of its core operations after a cyberattack in June that disrupted its business.

The cyberattack led UNFI to shut down critical systems which temporarily impacted the distribution and fulfillment of orders. The company restored its primary ordering platform within 10 days and resumed most distribution and administrative functions by late June.

In a statement and business update call on July 15, the company said that while sales have recovered, the incident will negatively affect fourth-quarter earnings and increase operating expenses, and detailed the estimated financial impacts of it.

As of that statement, UNFI said its commercial operating capacity has been restored to normalized levels and that 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 complete its recovery in the coming weeks.

“We believe the instance operational impact, while meaningful, will be largely isolated to Q4 of fiscal 2025 and that our underlying momentum will continue as we enter fiscal 2026,” UNFI Chief Executive Sandy Douglas said on the call. “There’s some diversity across our DCs, so we’re continuing to refine. And in those cases, we’re surging the right support to get those DCs online, but we’re very close to the key operating metrics that we had before the incident started.”

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UNFI estimates a sales loss between $350 million and $400 million based on preliminary June figures, which are subject to revision. The company expects a loss on adjusted EBITDA of between $40 million and $50 million, and pre-tax costs related to the incident to be between $65 million and $75 million.

Estimated costs related to the incident include:

$5 million in cybersecurity and legal expenses
$20 million from additional labor, product spoilage and inefficiencies due to manual processes
Increased overtime pay and reduced warehouse productivity during the outage

“We remain on track to achieve our multiyear financial targets at an accelerated pace compared to our initial October 2024 targets,” UNFI President & CFO Matteo Tarditi said in the July 16 business update call. “We expect to provide our updated multiyear financial targets in our fiscal 2026 outlook this fall after we complete our planning process. We anticipate our baseline expectations for fiscal 2026 will be built on fiscal 2025, excluding the impact of the cyber event.”

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“With our updated outlook, we remain on track to achieve our multiyear financial targets at an accelerated pace compared to the initial targets we communicated in October 2024,” Douglas added. “This includes our expectation that we’ll reduce net leverage to nearly 2.5x by the end of fiscal 2026, which is a year earlier than we previously expected.”