United Natural Foods Inc. (UNFI) launched Value Path in late 2020 and now there is a lawsuit claiming the retailer led investors down the wrong path.
UNFI is being accused of not providing proper communication to investors that the company was not in position to post millions of dollars in cost savings that were originally projected. UNFI allegedly did not make improvements to its data management systems that would have allowed for an adequate response when inflation and other costs kicked in. The troubled economy did not allow UNFI to match the gains it saw during Q2 of FY 2022 during Q2 of its current fiscal year. The suit claims profitability was “adversely impacted.”
“These material misstatements and/or omissions created an unrealistically positive assessment of United Natural Foods and its business, operations and prospects, thus causing the price of the company’s securities to be artificially inflated at all relevant times, and when disclosed, negatively affected the value of the company shares,” according to the suit.
The suit also says UNFI should cover all damages as a result of the claim, as well as attorney fees and other costs. The suit is armed with a number of press releases, conference calls and regulatory filings which show the retailer did not properly inform investors. The suit wants UNFI officials to be held liable for shareholder losses because it happened under their influence and control.
“Individual defendants were provided with or had unlimited access to copies of the company’s reports, press releases, public filings, and other statements alleged by the plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected,” the suit claims.
