Dive Brief:
- United Natural Foods, Inc. on Tuesday reported net sales of $7.7 billion for the fourth quarter of fiscal 2025, down 5.6% from the same period last year.
- The grocery retailer and wholesaler believes its sales for the quarter would have increased were it not for the cyberattack it experienced in June, which brought down its sales growth rate by about 5%, President and CFO Matteo Tarditi said during an earnings call. The fact that the quarter had an additional week last year also played a role in the decline, he said.
- UNFI posted quarterly and full-year financial results that met or exceeded its expectations, as a multiyear plan to drive growth it announced last October has borne fruit, CEO Sandy Douglas said during the call.
Dive Insight:
UNFI has raised its expectations after recording better organic growth in recent months than the company had projected, according to Douglas. The grocer and wholesaler now expects net sales during the period that will end in fiscal 2027 to grow in the low single digits, a change from its earlier expectation that sales during the period would be flat, he said.
The improved outlook reflects UNFI’s ability to expand its relationships with existing customers and add new customers, Douglas said. The company has also benefited from “enduring consumer tailwinds towards health, wellness and differentiated products,” he said.
“We’re increasingly confident in our trajectory and in our ability to create sustainable long term value for our customers, suppliers, associates and shareholders,” said Douglas.
UNFI’s results for Q4 reflect a notable sales impact related to the cyberattack, which forced the company to take down critical online systems for several weeks. The company recorded a net loss for Q4 of $87 million. Conventional segment sales fell during the quarter by almost 13%, while retail sales declined by nearly 9%.
The company said it incurred $15 million in costs associated with the cyberattack.
For the full year, UNFI recorded sales of just under $32 billion, a year-over-year increase of 2.6%. Adjusted EBITDA was up nearly 7% during the year, but that figure was down by nearly a fifth during Q4.
Douglas said the company made significant progress toward two key areas of focus that it laid out last year: creating more value for customers and improving efficiency. UNFI has generated sales by providing services like credit card processing, digital shelf tags and retail media capabilities, which he said are “helping our customer base do the research and the homework to understand which digital applications are best for them, and then connecting the dots for everybody to accelerate growth.”
Douglas added that UNFI believes it is well positioned to benefit from a trend among consumers to buy more healthy foods.
“We think, regardless of the economy, there’s a significant uptick in mindful eating, healthy eating, wellness in general, and that traverses economic segments to a degree,” Douglas said. “So we think that it’s a very durable tailwind.”
