United Natural Foods(US:UNFI)2025-07-16 13:30UNFI Business Update Conference Call Summary Company Overview - Company: United Natural Foods, Inc. (UNFI) - Industry: Food Supply Chain and Distribution Key Points and Arguments Business Recovery and Cyber Incident - UNFI experienced a cyber incident that disrupted operations, prompting immediate action to shut down systems to protect data and restore services [5][7] - The company successfully restored primary electronic ordering systems by June 16, allowing for efficient order processing [8] - By June 26, core systems were restored, and operations returned to normalized levels, with key metrics like fill rates and on-time deliveries close to pre-incident levels [10][22] Financial Outlook - The revised fiscal 2025 outlook includes a modest increase in net sales by 0.6% to a range of $31.6 billion to $31.8 billion, reflecting a 4.3% increase from fiscal 2024 [13] - Adjusted EBITDA is projected to be between $535 million and $565 million, with an expected impact of $40 million to $50 million from the cyber incident [14] - Free cash flow outlook increased from at least $150 million to approximately $200 million due to reduced capital spending and operational performance [14] Impact of Cyber Incident - Estimated lost sales due to the cyber incident range from $350 million to $400 million, with a significant impact on Q4 of fiscal 2025 [13] - The incident resulted in additional costs, including $5 million for cybersecurity experts and $20 million for operational inefficiencies [15] Strategic Focus and Future Plans - UNFI aims to reduce net leverage to nearly 2.5 times by the end of fiscal 2026, a year earlier than previously expected [11] - The company plans to continue investing in technology and cybersecurity to prevent future incidents and enhance operational efficiency [34][43] - UNFI's strategy remains focused on adding value for customers and suppliers while improving free cash flow [16] Customer Relationships and Market Position - UNFI has maintained strong relationships with customers during the disruption, with collaborative efforts to manage supply chain challenges [20][36] - The company is optimistic about onboarding new customers and expects business development conversations to remain productive [24] Operational Metrics - As of the latest update, average outbound fill rates and units shipped are at or near pre-incident levels, indicating a return to operational stability [10][22] Additional Important Insights - UNFI's leadership emphasized the importance of collaboration with customers and suppliers during the recovery process, which has strengthened partnerships [37][68] - The company is committed to transparency regarding the cyber incident and is working to enhance its cybersecurity measures based on lessons learned [34][52] This summary encapsulates the critical aspects of UNFI's business update conference call, highlighting the company's recovery from a cyber incident, financial outlook, strategic focus, and customer relationships.