May 09, 2024 ROSEMONT, Ill.–(BUSINESS WIRE)–US Foods Holding Corp. BB #:134354, one of the largest foodservice distributors in the United States, today announced results for the first quarter fiscal year 2024.
First Quarter Fiscal 2024 Highlights
- Net sales increased 4.8% to $8.9 billion
- Total case volume increased 4.2%; independent restaurant case volume increased 4.6%
- Gross profit increased 4.9% to $1.5 billion
- Net income available to common shareholders was $82 million
- Adjusted EBITDA increased 5.6% to $356 million
- Diluted EPS increased 3.1% to $0.33; Adjusted Diluted EPS increased 8.0% to $0.54
“Our results for the first quarter were in line with our expectations, demonstrating the strength of our business model and our ability to win in any environment as we overcame both internal and external headwinds to start the year. Our team remains focused on capturing profitable market share with our target customer types and driving further progress on our strategic initiatives to improve profitability. Our differentiated model and strong value proposition are resonating with our customers which has helped propel us to grow share with independent restaurants for twelve consecutive quarters,” said Dave Flitman, CEO.
“We continue to make significant improvements in our operational performance as we achieved a 30% improvement in our safety results and drove nearly 4% improvement in delivery productivity, in line with our goal to increase productivity by 3% to 5% annually.”
“We closed on our previously announced acquisition of IWC Food Service in April and are excited to welcome the team to US Foods. IWC expands our presence in the central Tennessee market and serves the greater Nashville area, one of the fastest growing markets in the country. I also want to thank our 30,000 associates for their incredible resilience, dedication and hard work to help our customers Make It. Looking ahead, we remain intensely focused on executing our strategy and will maintain our disciplined approach to capital deployment to drive long-term shareholder value creation. We look forward to updating you on a new long-range plan at our upcoming investor day on June 5.”
“We executed well in the first quarter despite the challenging start to the year by staying focused on what we can control,” added Dirk Locascio, CFO. “We continue to execute our strategy and focus on driving profitability improvement, accelerating free cash flow generation and maintaining our strong balance sheet. Given our performance for the first quarter and outlook for the full year, we are reaffirming our fiscal year 2024 guidance.”
First Quarter Fiscal 2024 Results
Net sales of $8.9 billion for the quarter increased 4.8% from the prior year, driven by case volume growth and food cost inflation of 1.5%. Total case volume increased 4.2% from the prior year driven by a 4.6% increase in independent restaurant case volume, a 6.4% increase in healthcare volume, a 0.9% increase in hospitality volume and a 3.7% increase in chain volume.
Gross profit of $1.5 billion increased by $70 million, or 4.9% from the prior year, primarily as a result of an increase in organic case volume, improved cost of goods sold, the impact of acquisitions and pricing optimization, partially offset by an unfavorable year-over-year LIFO adjustment. Gross profit as a percentage of net sales was 16.7%. Adjusted Gross profit was $1.5 billion, an increase of $95 million or 6.6% from the prior year. Adjusted Gross profit as a percentage of net sales was 17.2% and adjusted Gross profit per case continued at strong levels.
Operating expenses of $1.3 billion increased by $92 million, or 7.4% from the prior year, primarily as a result of an increase in organic case volume, higher distribution costs, reflecting increased labor costs, the impact of acquisitions and incremental costs to serve our customers during January labor disruptions, partially offset by continued productivity improvement. Operating expenses as a percentage of net sales were 14.9%. Adjusted Operating expenses were $1.2 billion, an increase of $76 million or 6.9% from the prior year. Adjusted Operating expenses as a percentage of net sales were 13.2%.
Net income available to common shareholders was $82 million, an increase of $7 million compared to the prior year, driven by preferred stock dividends paid in the prior year period. Adjusted EBITDA was $356 million, an increase of $19 million or 5.6%, compared to the prior year. Adjusted EBITDA margin was 4.0%, an increase of 3 basis points compared to the prior year. Diluted EPS was $0.33; Adjusted Diluted EPS was $0.54.
M&A Update
Subsequent to quarter-end, the Company closed on its previously announced acquisition of IWC Food Service, a broadline distributor which serves the greater Nashville area, for a purchase price of approximately $220 million. IWC has approximately 220 associates and approximately $200 million in annual sales.
About US Foods
With a promise to help its customers Make It, US Foods is one of America’s great food companies and a leading foodservice distributor, partnering with approximately 250,000 restaurants and foodservice operators to help their businesses succeed. With more than 70 broadline locations and approximately 90 cash and carry stores, US Foods and its 30,000 associates provides its customers with a broad and innovative food offering and a comprehensive suite of e-commerce, technology and business solutions. US Foods is headquartered in Rosemont, Ill. Visit www.usfoods.com to learn more.
