US Foods Holding (USFD) 17 Feb 222021 Q4 Earnings call transcript

Good day, and thank you for standing by. And welcome to the US Foods Fourth Quarter Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Melissa Napier. Please go ahead.

you your thank and you everyone patience. for Thank delay. sincerely apologize the for We and overview bit longer It fourth provide to on and are commentary we took quarter XXXX, get XXXX and our our about than today's had XXXX XXXX a long-range commentary bit in we fiscal initially and for our plan. of results anticipated, about year but into outlook a talk the fiscal the also talk excited for

questions after the bit your be prepared are remarks time As the call given take usual, spend the of will our conclude, and on questions the answered. and to delay of a we'll time happy to Dirk the be in extra all call, sure start of Pietro that

issued today's information Our accessed of early can be Relations and the that our website, this slides morning on updated. presentation Investor page be earnings should release

stated, XXXX year same fourth and During comparing quarter we're call XXXX. period fiscal and time unless today's the to in otherwise results fiscal

today's well as the on the financial are release posted included measures the addition to And certain in schedules to could GAAP comparable call statements. differ risk potential discussion our that slides non-GAAP in are call, earnings presentation those refer during the we made results Please actual anticipated Form review will are historical considered factors during appendices today's of reconciliations in lastly, most information, materially In most for a from forward-looking recent financial website. factors XX-K detailed measures, these that the all as certain to those on in to cause the our statements to statements.

forward-looking reconciliations providing non-GAAP measures. not financial we're noted, to As

call to over Now to the I'd turn Pietro. like

to Especially as so everyone, well cover, got morning, on let's much so and delay. Good Melissa. day into get where Thanks it. we've a the for apologies

share, continued industry. we plan against plan fourth the from made against expand financial service the of progress industry and outcomes. those to and solid financial it, make digital our intense long-range following grow those setting XXXX, gross quarter to cost In of present anchored to results the As these say focus drive only ourselves operational and the value The against efforts. apart customers an the on period delivering innovative be on same will in And lastly, is resources and three operational XXXX continuing expert covers and our clearly us drive you differentiated true and demonstrates fresh are impact outcomes, commerce, centered our help in strategy, the headwinds solutions reliable on reduction efficiency. impacting offer plans continued offering call, that heard face the products, last we profitably bringing on Today, creation on margin our our outcomes it quality, omnichannel XXXX the efficiencies. in

Joining me Bill against plan Officer Chain Commercial Iacobucci, a Supply high have of our for that discussion are Officer. the and Chief sharing will today. Board we Hancock will I The be that targets deliver degree and confidence Andrew Chief

for takeaways summarized X. which the today's on go So let call, to me are Slide

the increase XX% were XXXX. in resulted to fourth and fourth adjusted with Strong compared call. in quarter results quarter expectations quarter execution outlined First, third we our a line EBITDA on that

our continued adjusted $X.X here. billion long-range plan third, XXXX. underway in performance that industry. operating to reflects great confidence ability we our Second, of our and put combination throughout XXXX, take presenting place recent that the foundation generates recovery EBITDA from are in we are a underpins This solidify and business model continue the in that EBITDA plan a initiatives us of gives actions new that to the of And grow a and in

of in business, pillar our net has to hospitality of XXXX won a all came the margin The business. with and optimizing healthcare, profitable lower new market approximately increased target Let's regional customer which X of increase The years, team national $X review brief the types. Starting gains, chains. and biggest which Slide share move first highlights. across business includes over two nationally last managed billion with in

our independent we the X,XXX promoter research share saw Based also year-on-year our are same to that On market score major restaurant faring our share we foundation. on indicate a solid monthly better net service gains. gains was or on side, with Contributing service than competitors. customers,

online Direct, and our increase share Foods four-fold offerings differentiated strategy digital good sales enhancements which of to gains. our market year-on-year. marketplace our continued to also which Our US saw contributed or of is A example

inflation Moving is highest Contributing it to continued to XXXX. the portfolio profit customers. increase This the compared successfully quarter to the has the to gross we case, and contract customers. had private we success, drove our We to and of second XXX pillar same basis year margins. on since our where a efforts continued to point were per non-contract this penetration both brand in of greatest ago been pass a optimize optimizing with gross

has that focused. higher The in administrative are August has XXXX industry-wide force. significantly in sales where we reinvestments On operational challenges place Distribution intensely is impacted every expenses, and third cost we by in faced. increases than put and wage efficiency, our saves and company fully selling staffing cost turnover per we been pillar, realize historical aside the case from

gross time per over and productivity to cost through completely of combination goal initiatives. case offset the headwinds is margin distribution a optimization Our on

result dedicated which efforts, three change costs. effectively to in the we've result before. one-third reducing ultimately was productivity distribution the and made our months, the full we we in operating And made seen of teams reduced to turnover a last our Over driving our of excellence commercial lower operations quickly to model, standardization leadership centers. four more to biggest our almost more The strengthen and foundational new number than and changes regions time to and creating of improve lastly, will as we've for selectors,

The last now turn I represent initiatives, the some illustrated last already that this colleagues shareholder XX% introduce combination in results, created plan are to my the our seeing been the assortment past year. I and which long-range over will profitable piloting XXXX which most our is the been has to that of as a We ones plan the course and reduction plan, $X.X billion year. significant by our to initiatives in of reliable, developed comes elaborate increase and EBITDA on XXXX successfully with and increase expansion. the of increase some are value Profitable $XXX pillars here year. starts see a share, growth This programs market each new The we in EBITDA XXXX will million to ask expected account for margin by a offering service growth. of quality $XXX combination over ones. and on over million from of pro Starting growth XXXX, XX% forma. fresh. you to with of consistent consistent expect newer EBITDA the we've roughly volume

opening research consistent last opportunity. liner which secured we Foods but Direct enables to service of are stores solutions real not US having two of heading Our four in to fueled on that apart us pandemic. offering why into a Reliable does have share accelerate differentiated that program and open market least, and our see those which potential as STORE set quality gains customers our set broad to customer indicates that omnichannel well, And then we we in enormous stores and growth have big opening no in. this this store to both our consisting truly are XXXX. consistently XXXX, is CHEF six the After investing estate us the engage

- Iacobucci Merchant responsible give and Andrew in Chief Officer joined over you margin I'm generate XX% XX a acquisitions Andrew Turning each was we expansion have Chief next period. from the is April growth. of or you pillar call which leading highlight excluding Optimizing of XXXX. a in going on for appointed now as to an see of COVID and two around of full generating Commercial we years, years the Andrew, excelled in point the increase, portion share area market EBITDA gross XXXX to is to and the that programs basis highlight to of through pillars. margin to significant that He the to gross some the gross expect over the over margin margin, which you. gross here. to

Thanks good all. morning Pietro and

and mentioned, the Pietro As expansion and the these driving growth pillars. highlight profitable margin roadmap I'll medium-term a commercial few of share market is focus focused on under of areas

launched that to is means quality fresh which stake source out the FRESH point from The high first peers. high-single the advantage a produce innovative high one choose number scale our leadership By reason in under and quality an our of produce are sourcing customers digit position produce in review and important improvement suppliers customer and place. we in drive and we is COP produce pilot Customer a profitable inconsistent Ameristar, delivering significant a a product with goods fresh share equally and Both to quality among XX of - to double-digit yielded multiple in program mid-XXXX, improvements see Amerifresh and In we first assortment. and has incrementality inspection product along clear the in loyalty. consistently produce the distributor is that research selection leadership, markets. performance driving is to opportunity COP broadline cost market of CHECK, which expertise leveraging taking

strengthening entails best-in-class environment. key The and improvement a pursue us enhancement leading momentum allows years optimizing be with recently last and only increased of that of this announced the is mid-single key today's us smaller negotiations. is opportunities. to a We've partnerships of focus a for market our consistent the more is The US prices for have delivering Scale pricing. focus those our to value more partnership margin evidenced we're dynamically supplier digit Foods, platform a inflation, that I'd while and as by to proven when process in responsive next-generation combined all with meaningful vendor newly position changes goods formed will opportunities market cost through Strategic lead or as our or supply and XXXX. vendor our appropriate. plan a which several proposition over world over vendor Pietro improvement of to have recent constrained learnings to will pricing management continued emerged balancing relationships cost Zilliant, year-over-year like with enhance by COGS mention service creates could on us to area drive by a second the back have dozen sizable which to management area scale, Development of underway different volume leveraging improve and for the and flourished take advantage multi-market player cost in right plan opportunities. we for is systems and past regional lever for to with based ensure goods. integration In of the strategic significantly share to our our of existing inputs margin you. half with a wallet go way pilot agility pave the This second recent margin more

now Thanks will of Andrew. operational efficiency. move the I third to pillar

on we work and operations one which of that administrative remains expenses. about Over a good a done which on also operating we reducing of have we focused. selling our the are opportunity, recognize and third years, lot a expenses, But intensely represent big

last aspects in to of best-in-class November a automation. assembled automation Bill? joining, delivery, brings Our joined a talent costs Officer. discipline to warehouse a Chain opportunities operations we short-term and to mile why process for team Bill from in greater the standardization Supply reduce from Bill is automation. bringing of longer-term. XXXX all terrific companies, in warehousing, and over of number Hancock, Chief our has logistics is Since That hired while opportunity experience and bringing by Bill operating exploring the deep

our in our profitability Pietro. and team highlight exit critical from growth XXXX those beyond. Thanks narrowed focus deliver off to a Building strong that has I'll set and a initiatives XXXX, two will of of supply continued chain areas. higher

ratio time to ramp of to focuses service be network new to for the to year. completed First, new reliable network-wide on platform We've deployment helped capture a second fully best program create new delivery available rollout CDL training mispicks their automation teams. for operations, productivity reduce associates and of this to We're more technology We've providing provide in trainee onboarding we've new faster also the resumed of And launched and gain has number with this scan is supply and on of associates our build drivers basis leadership driver our warehouse high up This full own new to the The leaders drives roadmap. deployed and close productivity chain work has more XXX also of providing us reduced by driver we've proof early and warehouse the work of rates our and on training our our pipeline In XX%. training that for drivers. by a technology advanced of scanning for technology XXXX, foundation trainer is accurate cost. up our of all a in planning, associates. shortened of devices by the directly technology our the still which pace invoicing. supply supports the teams new training reduce delivery in X% out this quarter technology our the chain support foundational points improved of while accelerate

routing in routing improvement of with The windows cases this initial We're will mile, have a is delivered XX%. our offer improved markets of The work phase to performance has of dynamic close about while on real-time time. the we a current on-time these improve optimizing driving US service excited focused results, per realizing miles visibility enabling and next results which further order, over second highlight to the this routing and early X% The reduced customer upgrade Foods both phase our technology and pilot delivery expect and work cost. to our initiatives behind delivery work further transformation. to

fully I'll take taking helping and team associates to our committed other of back the I an be dedication Pietro. industry, of our we We thank Lastly, customers. it frontline to to and tireless want associates best work each that, turn With are our successful. for the to all have opportunity and truly in their care for

Bill. Thanks

to turn you Dirk to fourth leadership the just and I discuss focus, call covered. plan, now as As to as the you. year can experience over to I brings on see color Bill results over tremendous more for and to well the will our our Dirk, quarter operations. provide long-range the

a results discuss were Thank XXXX line for on I'll recap you, financial XXXX brief Page Pietro our then Fourth and good and XXXX morning. expectations. X. and outlook I'll financial and on give start quarter in our with

XX% to Our QX for billion, over profit likely per caps team solid challenges and with ended year case a week. fiscal $X.X QX points. pricing gross our public inflation hired increasing prior in excludes and improvement profit significant that growth of prior approximately period others sales had year are XXX increased and increase had growth. of acceleration extra week, to effectively Total on and produced XXXX very all XXXX year of results continuing as strong gross our the an volume productivity again was growth for a months. which this case quarter, Supply highest This which Despite XX% we We was QX staffing that in year GP optimized further a year. the fiscal our increased XX% foundation focused almost sales build independent basis similar remain XXXX in recall QX The the chain year managed and through staffed this the becoming markets strong restaurants. very case industry. expected year fully net more over remain were those broadly. highest the growth extra as an you'll since XX% we've recent We company. dollar challenges, growth these were continue we and with per for

improvement levels in during reaching midyear. productivity in further Bill XXXX, noted, As seen we've expect XXXX and around QX improvements productivity

billion to food sign retaining increases chain more in hiring retention Our an continued further market We in turn with reduction XX% net secured than of volume policy. rate a and as within I remainder significantly additional XX.X% X, with in was year-end. advantage inflation, And QX bonuses, attractive for as related taking to XXXX, cost this our Slide was improved tenure to inflation successfully conditions of preparation year over XXXX; extra three mentioned, earning mainly debt to fixed QX on due refinanced On finally, higher of staff debt was our unsecured XXXX, debt $X.X by sales bit the mix. extending strengthen sheet X.X and supply excluding week more a volume floating-rate balance QX, increased and and times debt. a sales, associates XX% leveraged sales the insurance of and grew replacing leverage we and at our

a was Our was each excluding bodes year prior so extra in of which XX% independent over the the XXXX. year. independent extra earlier adjusted the a for sales quarter, we XX%, excluding Full excluding a restaurant year, for Adjusted in $X extra quarter by EBITDA the million, to ends Omicron before of XXXX. week week in volume we QX QX volume increased for XXXX the million of XX% sales XXXX. extra over EBITDA QX $XXX X.X%. and increased the XX% up total of volume and increased impacts prior EBITDA volume week EBITDA week, adjusted significant saw XX% percent acceleration increase increased year estimate as the QX and well improvement over

diluted per the lastly, our QX quarter share, expectations, XXXX. for the integration played $X.XX by of the end $X.XX And no year. up completed was full EPS Food the prior each surprises of was year, Omicron QX we For EBITDA XX% adjusted XXXX the points in limited EBITDA our December largely is the more significant QX increased compared be which think We and temporary. did impact margin full XXXX. XX The to was significantly and with and way in will increased from over most Group, in impact experienced out. line real to in Adjusted year P&L basis the outcome specific

Food weekend on million last discussions our and of synergies. We flow track the capital year the have in result of into receivables we cash growth to overall Operating similar million, confident will was of growth achieve working be prior business. the this in of use as $XX are system Future cash, for incorporated discussions In the was Group conversion XXXX the $XXX to coming for a and $XXX fiscal significant to plus million sales. year. due plan

benefit the of approximately working had XXXX reduction lower million While sales. capital $XXX to due

has already our significant cash well times. we further with toward on as and X.X generated we of our business balance fiscal amount X.X times of over as X we sheet to ratio cash our in historically And EBITDA grow strengthened operating to to leverage I've Our we that expect way a net highlighted, XXXX are flow time. our leverage decreased and target flow

a Turning we of to margins execution in initiatives One hear to continued is increases point expect and will through our the market XXXX, and range numbers efficiencies. improved strategic morning. reflect volume share, increased release than out earnings to these I'm call grow press operational this XXXX me about our release been you are earlier higher talking gross to in diluted adjusted about and EPS numbers. included initially the The correct talk press updated has we

We grow market at expect restaurants types. remaining customer the market volume the for and to grow for X.X at times

to per to supply We had however, QX on $X.X to $X.XX in volume extent likely billion to in share mirror, of to be to largely limited and chain it $X.XX $X.X costs earnings adjusted Omicron more in has adjusted and a in and a diluted impact meaningful the QX. expect deliver rearview EBITDA appears billion fiscal XXXX.

service in to of temporarily another ensure the adequate chain impact also and additional continue supply staffing event We from levels headcount plan carry COVID. to to

and which million at estimate costs Our impacts, reflects we Omicron to these $XX million. outlook $XX range related

volume as U.S. earnings QX impact, takes similar to reduced of Going at end wave, COVID couple improve staffing and lower subsides. Omicron expect into incremental If customer our seen optimistic account approximately normal most of another are lower the the demand the driven possibility in of of be will to of at post be about range last are costs. year Historically, Omicron. by QX end XX% it other Omicron than not robust on the the percent our QX, XXXX QX. With end dollars. year the and mostly we to wave. the have full through continue will that Omicron believe of QX we weeks Client quarters Specific encouraged We've the lower improve is to very the our EBITDA to EBITDA chain expected and this be range, of significant the than supply rapid impact experiencing are business EBITDA challenges of a volume and continued forward, year. recovery we the appears the of be another we higher EBITDA annual expect does our customer

increased there's with significant improve EBITDA return healthcare to wave macro in volume XXXX per volume not to along in over margins expect efficiencies. especially and hospitality, strong adjusted we we Assuming two. XXXX, operational gross occurs, levels and half sometime to fiscal improvement XXXX, expect In another case profit continued and

midyear upon to we levels points We to in EBITDA expect that continue providing to pre-COVID CapEx. surpass on focused by levels CapEx, and supply also adjusted We're return and to interest returning year-end. expect cash build expense years. additional margin We're our margins pandemic, further chain XX productivity the XXXX grew XXXX record. guidance the basis on to coming and XXXX EBITDA Prior or increasing track improvement to to XX% and from it

a leverage by debt earnings be As reduce times to XXXX, near result, expect we X.X significantly year-end. we increased and in further as

a to Pietro plan volume combination the multiyear and significant we're expansion. margin of executing deliver As profitable growth growth said, earnings from

look the times ahead further we at expect growing customer continue to market for As to at restaurants for types. we other XXXX, X.X market and

roughly XXXX to approximately roughly at in $X.X grow executing as then grow EBITDA of reach - a adjusted result balanced expect XXXX billion plan. to $X.X in and our We billion

EBITDA of likely respect in estimated to to EBITDA estimated range. to Adjusted XXXX and improvement at leverage, sales. of of remain times target be to is that or X.X an diluted in XXXX $X.XX reach CapEx X.X% then leverage is XXXX in range to to our times plan near XXXX. With exceed X EPS at we we be approximately X.X% XXXX in margins will year. and each margin as return in expectation We

capital evaluate we the options, approach further we As will share as of such return repurchases. range,

to achieve XXXX on plan focus is executing Our these targets. the

adjusted algorithm. I However, to our contributions beyond we of contribute various XXXX, X% growth the our X% pillars like a EBITDA expected likely to to relative the would strategy expect EBITDA growth. as reiterate they of

quantified reflect contribution breaking each While which have initiatives be the Pietro, combined plan the down and of we the of Bill we impact discussed. of impacts each won't provided that for Andrew initiative, bucket

We XXXX expect to generate adjusted in XXXX. nearly EBITDA fiscal of $XXX compared to million

than about and to three over independent and approximately Bill more the is reductions gains pre-pandemic, earnings expect the of mitigate and million covered which estimated estimated our an Then total expansion increased significant, per per so restaurants incremental this increased $XXX We rate margin how them. grew in is to have $XXX these to is contributions do I inflation be each OpEx years successfully case $XXX Volume Pietro, the margin expected the million drivers efficiency in market to of We XXXX. we Andrew $XXX pillars. fixed repeat approximately OpEx to million contribute Xx operating case inflation for each through cost the $XXX OpEx over gross we OpEx completed million, million, gross multiple increases. key so that approximately gross at years. margin annual know cost pillar, driving productivity of won't must well. leverage we and

on chain supply new sight of with line we us gives we have cost where capabilities. And especially model operating focused to new heard, already underway initiatives reduction. as strong improve on execution are through leadership you've Our

and improvement growth We FY can continued confident strong earnings estimate approximately Pietro to share this EPS business, increase tuck-in which M&A. flows, leverage, share, on lead EBITDA the than we deliver more further strong prudently XX% ability adjusted These shareholders return to gross and allocate to produce a is back in reinvest more XXXX. via and in cash We will growing per diluted a our gains, to increased pursue capital then intense focus will of over efficiency. margin reduce you. adjusted operational to opportunistically $X.XX which are

in plan future US in our share long-range for I all excitement and Thanks hope the you what Dirk. our Foods. holds

plan we and associates great achievable and underway and value frontline plan the have foundation. dedicated the and progress we on me and a of give team currently Our will strong is deliver it outlined initiatives very talented bold, our we significant made, for on create builds that confidence leaders shareholders. our The

open will for now the Q&A. call We

[Operator first line Instructions] Glass of Morgan John Your the from from question comes Stanley.

open. is line Your

Thanks. XX% your And for got part have like a can I maybe Thanks Can 'XX, details. put looking but for at all a it. context of plan to desire not time? Thanks, and your about about maybe is do but of look competitor business gap I've talk your some entire you follow-up, that all to close to please. it good of you seem - the over in see to gap how the you thinking a that that think think business close margins One doesn't and you you as that way opportunity largest feasible framed morning. the comparing your your have Cisco in that

Sure. Good Thank good John. morning you, question. and

which to the for what of on specifically margin heard are progress a first much we're focused is We're of our So all growth. plan job, meaningful based combination of volume speculate going how not talk about us generates and our control as of our i.e., on you expansion things value that and outside executing of And deliver the we're this of combination and what of over recent expansion. we'll can through XX% value but I say, expected we peers, adjusted $XXX generate in this and to expansion on diluted XXXX growth in plan margin plan EPS additional include higher million confident and others, margin volume years. done does we've top the

has is and operational efficiencies is plan think your more right and spending but et target CapEx, And in your as wrong, me higher if could this I that and of and if forgive does cetera? guess I a is improve more historically, sales, fleet require broadly I been this follow-up to than percentage capital it warehouse

range the bit get in - So XXXX, say higher when to it's was, XXXX. you it so a little than

some warehouse an to again that some and And out increase automation but similar a not potentially some up et I limited some modest the other point plan it very areas. of tenth heavy capital-intensive is cetera, for there contemplates than extremely beginning so maybe think -

we So expect to cash generate flows. to strong continue

comes John Guggenheim. Heinbockel the from question next Your line from of

Your open. line is

things. two So

start didn't about you a is growth? it didn't give think X%, recovery by X% it's X% is is a right, that the do specific beyond incremental fair 'XX-'XX? think high-single fair And rate with too on or obviously when to margin, X.X whether give me growth targets, what's Let a and - revenue digit you talked - you incremental you X%, the market, I on but times the XXX, revenue margin the high X%, that about

this market - question, John, feasible key independents, to specific that market the especially a customer the want so is period our like we with don't recovery Good what stable this. Morning reason away relative target is focus especially the done. target our the accurate that's customers a type. numbers growing from and what the in least more more Really I of meaningfully does stayed there, within at that of we as during then with be to And restaurants, Dirk. think period, it's is and and really have faster

indexed on specific a given outlook would to is growth kind for meaningful it's expect we how and really calling that although So of the is Technomic again - number, that. haven't

we focused So on others. not how specific relative we're a market and no it's that's to the but why number, about thought

obviously the XXX biggest that set you in today? out profit And gross than heavily has and that and gross biggest you lastly right, broke margin when greater mix my be incremental is the think about just you question. on right. a turning it's think thought margin process, it's if a higher, about it know drop wins, mix two it components, if then bucket new how if that is down, maybe do XXX, to maybe X.X% And right, depends, guys look then I But is skewed or the that the at the procurement Again that and one-third of improvement? the lower. size, two-thirds it think it's last probably procurement, to profit, new follow-up dollar And account you I is procurement on business that Yes. as what's to

Sure.

growth, on at EBITDA you is volume our at that we been the more the has So it and has overall as higher on with than profitable had remember, we which the profitable point us allowed do look chain to we've customer look that brought new on business than opportunistic were in specific on But margins, dependent there. volume we growth the independents our really most - types, hospitality. past your meaningfully our more healthcare the be

meaningful part is than it do within we is you're our gross EBITDA With to respect right, So there. to higher overall a that your number. expect be margin, procurement

that I think I one call and at things other pricing profitability optimization. talk two customer would and least the them talked out about that is Andrew about of

some that we the success and expect comes around from So the large to it about, lower is some have are that talked he to And tool then continue is piece of of with margin, the from it third customer have logistics. improvements.

a cost inbound it's of well. is of optimizing areas So our about and another focus for goods that's goods, key inbound but logistics, as our optimizing of cost us form that

So of the those key are it. pieces largest

from question Peter Your is next from BTIG. Saleh

open. is line Your

XX% guys a XXXX, In SKU Great, thank you about in your assortment the reduction had or rationalization. you.

if reducing or we're the most the even you forward 'XX curious going little bit targets, 'XX plan that further XX%? SKU on, 'XX, in your going Just to get part to do EBITDA you at see to and of the is that elaborate a counts anticipate

helps in which the tail distribution helps the cost see that So operations, of provide that better contribute time in a customers in volatility we over the further service do of anticipate case. reducing improved moving to that also the helps reduction the it per streamline number ways, to assortment the part slower typically and course you helps and by of

targets that hang we be XX% on? there our any or in you should terms Are of expect on XX% we can guys or anything that to lower head

prepared - have internal targets, discuss them We to this we're obviously, Yes. on but our we not call.

do lastly also Understood, where is the are versus part XXXX mix in for you the okay. mean, strategy, today? of we label expect what of private to And terms be just I label me, in private this expansion

that last the EB of really is few to pass He Andrew. I'll Maybe driven years. growth the

how answer that. Andrew, you So would

Peter. Thanks the question, Yes. for

it's that we we year-over-year penetration, next to our interruptions the pre-COVID anticipate something supply and see but great on think progress QX growing pretty growth a strong strategy and resumption an three to on progress, stalled have we years great of it's continuing our focus our of important and in I sort over made be EB part of tremendous beyond.

Your next line from Brian question of the is Mullan Deutsche from Bank.

Your line open. is

thank you. Okay,

did I $X.X confirm, in billion think EBITDA adjusted I heard to so. that of want Just about you 'XX, say

the followed XX% in expect about in it of 'XX. growth EBITDA yes, XX% XX% the XXXX guide imply high of end would another by you again Just adjusted using 'XX if or

I So next still environment growth expecting COVID right year EBITDA when is what think over now. lapping you're a impact outsized

efficiency have do around what just volumes, as to that. to most outsized that of look gross I that outsized growth profit, expect can be biggest as you you you OpEx you to between will that out 'XX, is one far think the their year in item But get driver following take 'XX? speak people the as important arms could or place confidence

the of year. meaningful from be healthcare me good A which this I talk - hospitality as I your for the and amount 'XX year Thank still to correct, And a it not what noted heard $X.X you're you. impact occurs back is it rebound question fully and recovery, that, of is the XXXX. as think the this you normal lot billion point, as whether Omicron have yes the likely well recovery, about to

gross of improvements the think the across there. I through more in around talked supply margin fresh get that about that, we accelerators we Andrew initiatives of chain further take see the hold volume as

as call deliver not that good would single to I there's and ability to billion. thing the a about out $X.X continued opposed execution feeling our So

a the range expect on Okay, capital as guide, X for follow-up 'XX. thank to as to well. in then you. that range allocation balance back it it And to appears X.X get just turns like net in It relates just sheet, 'XX the you in stay to leverage question expect you

cash any is is EPS 'XX wondering leverage guide what net are right, if there just the $X.XX 'XX, for I'm plan flat to of if flow? I'm that's XXXX curious in So from free share the adjusted repurchases contemplated if and then

Sure. question. Good

next so that then happy in be stay range be year right, and to there. to - we're You're expect

more returns as likely, As do starting closer talked I get with we've we'll to range, other in we past, that said, to the share similar we'll work. repurchases explore about the

For us more assumptions here, we've assumed some to levels get of to from closer repurchases we forward range. as that beginning and hearing look

next is BMO Your of from line Capital. the Bania Kelly question from

line Your open. is

fiscal aside the color. just to about questions factors, taking plan, from the $X.X the obviously for forth? variants for so billion internal and consider standpoint target. our I biggest the ask Wanted Thanks external an from would EBITDA and execution achieving 'XX what all and that, guess you COVID to risk

Yes.

in some you've impact that the are risks some having - these about talent execution it's from or new execute. operating we The three of internal whether talked and of macro we've perspective, some of different because see, and brought good economic the model ago, from into of think variance confident the company main and things to an very I external we're we've morning, to focused, anticipate of ability prototypes that that company. Kelly. a a results part our conditions we initiatives the of bit thanks more the ways in I In feel mentioned, or some four we the years

another just think Analyst EBITDA adjusted I to believe Day X% X% I just XX% X% growth. path. follow-up, to curious, And algorithm heard 'XX, And I the Okay. the outlined beyond XXXX was fiscal

the to what of prior just algorithm? being the kind lead lower are that to big that factors So

Good morning, Appreciate question. Kelly. the Sure.

it. to which So from say growth some more Day opportunities we a times, that we XXXX, plan was you've Really give get now really the us this to expect X% the post we significant think X% get our do right, people the indicate and on to as focused The focus there. I heard in refine multiple to really closer obviously intent, will to expect prior excited executing a XXXX. value but more sense since the is on continue and of the creation right we're near-term you're beyond Investor that and we as through was that meaningful it there, XXXX,

Jeffrey of from is line the question next Bernstein from Barclays. Your

open. is line Your

growing market thank you. you what assumption is assuming assume this more after Great, years times at at X.X the period do how pure least to share like in that the gains I M&A from wondering a a target do that was talked anything for past questions, on the maybe what's one line you perspective, the maybe restaurant outperformance target, about times been what that X.X is in industry. Two just top play moving arrive industry the industry you normalized the obviously against? a the

We Good national what Jeffrey. the on it's we a the of blend - independent Sure. and restaurant morning, chain side. expect

consistently restaurant back in that perspective go performed we the success. restaurant really you good the leading had talked from to four as And part X.X If twice about, market an COVID, side, on on the we've at is we've the years to and pretty so based experience. independent

the over is lower X.X, on that So continue blend. good look we on last had of the business, expect of when success to our pipeline, which probably that at side we've the get really of how the we restaurant we the chain side couple And years. to

more you of next $XXX is out the opportunity you. those few gain pillars biggest incremental of be see those Thank the then big that versus you sequencing million kind Got maybe you fiscal over And EBITDA, back-end provide playing over each of if was could going a to three is $XXX what I years? buckets maybe the you. gave years. how on to next three story near-term see you wondering, you drive the what million that, some 'XX think take the color of to

morning. Good you. Thank

things really an all about steady maybe when stream. think a think Andrew build think And the that of Bill example, of on it, you heard, of I as buckets that three number we I'll pretty talk a I each we of because those. say and

we've then there and routing the shorter-term example impact a one further and Pricing upgrade it's by things had tool for is with additional and technology whether around longer-term enabled the pricing then of impact enabled by example, doing some on the for that there's is So in a that's that optimization over place of years. an similar number we're process. and enhanced customer now, has the pricing it a that's

we we out years. isn't as those, extremely expect different incremental of them there phasing stick three of come value opposed look of really hockey each to as ahead, or the So over to a all

Joshua the is line question next Your of Sandler. Long from from Piper

is line Your open.

brand think XXX thank brand, you're however actual Encouraged of the basis Great, the about earlier, base along just of private you're it actual growth, heard be hear with you mix an the of mix something and thinking I us to that I but segment was? in business where of the or terms of growth. able private give you. our might about of are with down to points Curious curious lines you if say

for us the as both an driver for what at we were year, we that that a smaller, national is just that include sales independents for as what I three next Pietro that of So about in do private And talked is years. this customers, build on our of about with I'll think XX% an well which the from in our earlier value XX-K. area with is plan focus brand the area and

remember, us. in a talked a double remains see grew, about opportunities to for And lot be with especially basis a XX up and better customer win leading to a inflation tends it, is of higher so a XXX call this points it that focus of it. it's the for years We've ceiling don't you it we we because to that multiple the value, perspective, us, of in area timeframe margin. an from If

sort tool. you've kind just manage environment. seen environments the here for take to as work pricing inflation point, And on your then as your Any Great, back are And maybe of terms through what you your being is consumers of your commentary inflationary on if able or well? abatement end the late of latest sort curious that. gone thank any in of inflationary with laid push out of how just or you've and consumers that

So expect. we over to consumer terms start the what and of then in with Dirk I'll it turn side

non-contract of and I as customers. very in been both to passing So terms my remarks, contract inflation in successful we've prepared mentioned on

in you've that think I increases have cycle to off wouldn't the dine-out we that in conversations possible general have. environment And menu take-out. it prices those seen made or has reflected as normally

things relative in bit the channel grocery a than inflation channel, inflation to the is our look when in at little same. been the of different it's historically that perhaps One we roughly

fact, the channel. months, in inflation In channel few in last than has higher grocery the our over inflation been even

channels that about want may based on we're consumers the disadvantaged inflation, of they the Dirk, So each do little expectations not forward. going consistent FTE have to from position, change a the two talk but mix the with you of what bit kind stayed other.

Sure. Thanks, good morning.

stabilization to exactly as data just from at how over year-over-year crystal since as quarters, past quarters, additional here further it back we inflation into toward tell hopefully out. we of I of think probably the my inflation you think as not we likely some the to go has will I as it stabilization. couple in would incremental earlier is, positive which year else's so when price as we're XXXX here as is we is the the look few accurate things remain We quite the higher with a the get year. inflation going expect be sure part sequential the inflation in points anybody ball - slowed of plays and A quarter-to-quarter each

just forward. at kind reduction higher that then to stagnated for I in it or you hard level going that think stay see the that's predict any is thing anybody do of and

today? helpful. up just that sure side have and warehouse outlined of the hear have some support a are labor little more bit Great, or what on and But initiatives of the And if the in these targets. support curious maybe the of you there longer-term that to you're make Thank the pipeline we well, to about on initiatives capital human you these other the outlined side seeing then color about targets shaping excited front front think as the when you. terms driver could provide you've to that's labor you sort embedded to how is any

that, think Dirk. ahead, I go sorry, Yes,

any pipeline. and you be but for as maybe then ultimately, that But driver staffed the further the start even didn't Bill quarter. and a it fourth resources we temporary Bill insights about, to to said, continue will you fourth hand heard talk in the over of As in I'll quarter on reduce lot we use

very that So comment there. more on But can progress optimistic Bill we've been the drivers. seeing on specifically

been transitory of about that think a of this and inflation, has when been in year a the used word about has ways. I last lot lot talked talk we inflation we a sort different wage and

we inflation, way that of as didn't the some likely the to normal inflation don't levels. we talk from return that we'd was permanents, transitory then of QX and I temporary, opposed to sense in the the new think higher norm think it higher we the becomes some think and more of some level

customers. I'll most if that though for then. on of not the improvements lower What - be most here expect what had when on with additional We that of indicated estimated that changed of combination annual we we since and all hasn't top so for to outlook see and talked we about million $XX the given So the we covering supply and of ratio permanent, expectation inflation margin a and normal doesn't increases wage tell of that $XX you is is, had $XX bonuses. or range an signing million impact profitability an really through chain to retention on with our million

you we're to driver on able continued warehouse confidence do or add Our on good want is as you than on see progress. add Bill, that ever that staffing. to stronger would we've anything to

why how fully say that adjustments of I very like the driver found how would key a and we've return investments couple in Specific is an and driver put off anytime we're fully competitive front bonuses, shortage lot sure Dirk really we're I ourselves behind into work come supply to or go up and staffed. on most warehouse somebody quarter training the the the sign funded warehouse first said, of intentional driver labor business. existing on We're add. close we're drivers training We and to drivers, to take Yes, expect to sure we we program, which hire, the our said, I to like that we've make and away create which we going put would program work, saw the staff volatility to worker pipeline. but CDL we expect through street 'XX to intentional train into recruit, them on prepared continued points, own stood chains, we on of soon wage can we don't of we how a make kind our XXXX going staffing. our stay that. of Like and we

Your question from the is Lauren Suisse. line Silberman Credit of from next

open. is line Your

guys. thank you Hi,

So believe Can $X.XX I EBITDA just pro saying? implied I first, the what confirm was billion. that's you're XXXX you forma

at. talked new it's we wins the it that's it Good we've When morning, and of pro cetera that other Laura. talk how Yes that's in contemplates about you forma, we've analyst/investors correct. been synergies, estimate context et about business with what then the inflation,

Okay.

around which incremental of EBITDA talked the XXXX volume XXXX you about. the is $X.X of have that million XXXX to what pro in the cost between savings wrap some at the billion, $X.X understanding some recovery $X.X head slow Can dynamics plus you of looking walk $XXX my of billion billion? Just and guys difference trying us investments and are? through forma those then So the

it. about transactions, cost is cost elements with realizing of it synergies Thank you've is that multiple some a the is number talked years with the of combination recovery, same it wins you. of national volume savings it the we've It's sales, The many of from of the the mentioned. incremental is inflation, it

all way you things the way back I would not is is it's of sort that's the but growth there maybe exact the started the think same maybe So the the back all really where the as for think beyond. basically about there way was it to in those and way way, I platform business getting it's and

Okay, got it.

you percentage margin On gross talk in given gross about your back understand XXXX, noise margin the I expect embedded get the think the can and there's expectation some if I what's - with how you inflation for to But XX.X%? actual to gross numbers that work. percentage margin piece, the

that. Sure happy do to

doesn't margins we we what's predict play I exactly and just is happens as ahead, on you the really percent to alluded out, to versus we're how as what in of look period think a that sales change gross drives when impact. inflation that EBITDA know that what, OpEx of it that harder in

EBITDA So I'd expect is will our - XXXX, look is, I plan for of or XXXX we rather EBITDA as get and to stay initiatives we near XXXX at number margin our levels away though expansion. around say those margin well in the at in margins specific sort operating exceed from levels that, specifically what of to to what when through do XXXX then as efficiency gross

update Okay, just across thanks. then can give last mix my channels? different us business the XXXX And the on for question, an you

going actually... and too, Sure happy to I'm

do - have through. We afterwards. want that if still Lauren, we lot that queue it's follow-up with to people Melissa Napier. that's we mind can get on of a Is something that in you our you

Sure.

Okay.

Lauren. Thanks

Thank you, guys.

of the Edward Kelly from is line Wells question from Fargo. next Your

open. is line Your

Hi Yes. morning. everybody, good

levels, obviously about been to optimism the curious forma as to spring-summer like which then XXXX much is to why And number back just below it billion value volumes this XXXX the of already that just in guidance wouldn't than about I'm just still? of a pro a ask half? obviously bridge amount it's of below sort like are number earlier of trying being about levels number, I to lot how back but the 'XX from XXXX gains. wanted get 'XX you've talked is maybe the share sitting the Firstly, talked there period, cost outlook, unusual has really like kind $X.XX costs where of XXXX EBITDA still perspective, to around

Sure question. Ed. good Good morning,

really I to be COVID that highlight, to point, Omicron, range. think I commented higher that that would absent at when I X.X is like of we, your that things wave X.X of that, as would the we one to expect another end couple with

Omicron, impact within to I so plus roughly that $XX is that million and from so think from gives amount. jumping sort that of And million point embedded $XX we've that range additional the of a where you

especially talk a that aren't but in So still half similar in to our peers. about the embedded working to not today we've I number XXXX year the productivity first as think of there, we insignificant is back get specific to to an amounts we're it amount of going

And to and meaningful exit we are means from see think is goes I progress. the think make that are rate I that thing there the EBITDA a if improvements we this on year is XXXX expect as next we that our year. billion year, versus roughly expect expecting expect $X.X we healthy you what of steady in EBITDA for which

of Dirk that ramp of would in can add not perhaps volume the in expected. bit why little made I some terms points what is have terms a and and had supply you of chain I the

the bit has senior healthcare flat-lined good very from we but driven talk past, So perspective, little a restaurant healthcare in do and to so mean about living. volume I first, is uncertain, place we're we hospitality timing by a said the right, as a in bit expect recover, volume

extremely trends of And demographic yet similarly, other will side will are We take parts leisure some things, there's time that for healthcare expect recover. recovered and it recovery seen we've have of favorable, take a hospitality hospitality, on but with to not time. the

So that's of the a little story. bit volume

in expense the operational On distribution. primarily side

you might per Omicron meaningfully those buildings, have referred driving in that As expected. have to is modeled addition is lower one two just new our that industry then case. perhaps this others and you've might Bill mentioned, the percent or what one those associates in And time - productivity not the to the that too, impact Dirk to a ramp QX of cost factors level heard drives high get is and abnormally of workers it takes from the in

take you just just a of about making Okay. can the you, us And adjustments a step and the follow-up business. to for talk we're then for back Pietro maybe some that strategic

you you maybe to been to some difficulty] management plan are press, the right, can obviously been Strategically about making any muscle. supply has create do pressure rethink, chain talk use there CLO there's So that a right. pressure, things in [technical adjustments could the to more

front? kind what's that on just curious I'm changing of So

confidence Sure. our to and talked I execution of what add in are three And really that of I I'll color reduce maybe is do the bit little level Kelly plan, add things a increase the earlier about said earlier, the risk. to

this example, best area he practices, field I that things customized and and they drove are and in So in and we for we is get and place. does and that's call the operating them, teams is historically, Brett have an Wilson model, all Bill put kind that excellence works assortments the initiative, when the drive with first commercial set down Andrew's what regionalized might have, way or inside a these things of operations slow to he

so seen before. And what seen standardization initiatives we've those and unlike on progress we've

that's the So well been that model extremely by critical, operating is received field. really

that's heard from number Talent, Bill person, on new has you've one. technology Amazon. so improvement person, his from continuous new today, Bill logistics team new So comes person

embedded launched some we brought that's change And something an making having to is the based the and we changes model the XXXX my with leading third team iterate, to the those in initiatives, new put in folks the of the really So do agile talent, when trajectory. the op that them of is, results going and we we to COVID And going and sure feedback, early talent three of prototype model and else approach operating place in our people, really customer approach more then could that's good our to is these get what have improve we're results on adopt. the that's from reflection all agile and on there.

the next Your Mark of from UBS. is question from line Carden

is open. line Your

seeing come some facing from Thanks. smaller the major for on players expecting COVID share you expect restaurants. the fewer all you lot questions or seeing pretty primarily some growth with of front. gains really that's given come my the Building a latest gains We're that the you to considerable would Are questions. players growth anticipating X.Xx prior the on as wave levels from from players taking resources? distributors pressure of Are well? on Thanks of your the these some larger more

thanks again local responsible who the it business on customers. on driving new Andrew? Andrew existing pass is of of emphasis for the on kind initiatives Maybe I'll commercial and the question. So versus for side our to the

customers as we for growing Pietro both really new Yes, to important thanks. our the our but base. also question. balanced is And across preventing equally existing. within only existing thanks Mark churn significant our not growth have are Thanks as of penetration says, obviously Pietro case a approach improving and Yes, customer

things one those business, really than or in specifically in as drive value more that of another go ways we on our and three all So customer which is are after the targeting focus the be delivering forward. to look business competitor balance going we to

can online today. stands of then us And you where penetration remind

we Thanks. emerge your to is maturity the to closer can hopefully can think room you just penetration As start do of your you the digitally near- just to given there that from much on getting in on - grow head or front? intermediate-term pandemic, do business the are you that still proportion

Yes.

grow we're that. XX% So see at today and still opportunity to we

on In creates to that our platform, release is received. to been digital right helps marketplace, an platform. supplementing well piloted which are our fact, about I which is digital we our being And very go our working talked further for next as now added reason and

from is question next Jefferies. Slagle Alex Your from

Your line open. is

follow on growth relative of expectations around the some the previous up Want to the to market. comments

non-restaurant so kind reasons, mean opportunities we hard are know but makes of categories? the market share kind think in I other those see what what some better it to the segment of maybe to gains I there those some the of outpace and

Good question.

in our I which about up number - when healthcare think that on you things and target talk maybe types, primarily the when are marketplace because of that focus. hospitality are a customer and show non-restaurants our the there not I'll focus that we are

a So there, a presence people. offering strong we have with differentiated with we healthcare and have hospitality,

would through below areas school, where like area there bit an has spaces a above added focus grow grow So our and it local K and where is to other tend XX profitable area to market the market as our it's complexity, be they expect little to we there. expectation not cetera those is in et the so

and way to of expectation it's target market that are the value even it at less in order above and below market, types generate. more and attractive an about though it's is are So customer the attractive market to those think optimize that we

sense. business, really so much I Makes back online in magnitude, how the it in 'XX, that you billion won the held $X gain how all terms this comes maybe and had hadn't the place 'XX? that on that 'XX know staffing national much of or of in in you 'XX some And of new in

of Not it. a some 'XX. 'XX lot through of or it has Most been in

guess that add that I would we're for on on years. just that is as year our the customers thing in it's is of been I the this strong pipeline about thing is just other last The two as attractive time the excited national national these

healthcare bullish And to hospitality we net so in when ability talk attractively about adding our just to chains. especially continue about customers. We're new attract

there into quick magnitude a assumes accretion baked that on tuck-in $X.XX is the target? about accretive a of just EPS clarification guide M&A, 'XX And

It does not tuck-in assume M&A.

just So tuck-ins our have all-organic we what decided we cases, cash. they being be if would And in, and is in the this to because plan deploy come we've incremental. we an on those way organic the opportunistic, and was that would the focus more right talked about

questions. for We have more time two

from John Your Ivankoe next is from question JPMorgan.

Your line is open.

to some operations of some restaurants assortment or may reduce products you reductions the SKU brands discussed? more I like specifically now would further or allow shifted to was brands, their that if have, using an is an that or would that that if that them exclusive of conversations wondering whether the using the opportunity of fit and whether with manufacturer labor have you've value-added in I whether guess own use opportunity into

by those some thrust morning, believe John. one major on really restaurant the us so and of that our saving in distinguishes has that labor that been customers. program one we salespeople our school the the is been consultants with the our has of competitors Good truly industry and the versus welcomed Yes, operations products, that support resources

of overall you And in know in assortment quoted reduction I offer. - the there? some percent in that terms terms plan of to exiting you've

that lot years to place. the goes I really operating a leading number in this as earlier, credit year John, so, of into model this put than success a of probably said better good Yes combined we and year

customers goals necessarily within that can the or the We side supply return don't on items assortment to manage them chain goals meaningful a Again and going exists of we focusing harder of ready DC to tail our build have the reduction lower the we further duplication some not with optimize as any definitely from on harder. forward. the the disclose value but where strong specific that to part playbook get

is question from Truist from Your next Jake Bartlett Securities.

Your line open. is

transitory I costs, taking here. might me well We've think trends for others My really time, Thanks XXXX. on was from of and the first there's in in we what maybe sneaking temporary as over bonuses staffing and questions think that [technical costs the there's difficulty] heard there's probably

Jake Mr. is you Your Instructions] [Operator line open, cut Bartlett. out.

Great.

EBITDA. efficiencies costs maybe significant kind Sorry time, that would recur agencies as I costs in there. expect captured have that is others on there bar what wouldn't a kind transitory and that you reflected the or in about, over those, would where and spreads question using the bonuses kind just XXXX see don't staffing you one-time XXXX but but around in from be happened lap do is at OpEx you as might Would be I'm looking thought bridge The of some of talked to see those 'XX costs? I have about any talked I of what not the kind of something that the temporary of sure

Jake. question, Good Sure.

- in that yes, there. so think I it is efficiency OpEx the line

you to million, transitory call dissimilar costs it. that when type about The $XX temporary our fourth the maybe is think talked as not we have our level in in peers them of think the about $XX incurred of I theirs, million. quarter neighborhood

on things and and of that and the kinds as similar think those retention whether it's very get and go all been hours, would you productive individuals that staffed go expect bonuses, we we would to to out level away, ahead. in additional as training up So staffing, the called there more as temporary signing our from that have continue a normal about more comes to we as you

is seems you for chain strong just the supply can Great, some and to thinking what cost, but thanks. be My next case. XXXX, this how that if in I see per an could outsized in really that that's saw per power gross by case very think are you risk from looks given I question about, profit pricing like continue strong your sustainable really we how Obviously long-term? product is disruption driving been peers, mean deflation part confident a you that? become I'm especially profit gross it but you driven about

historically different We they do gross inflation think that longer-term back. but stronger stay, are in to profits stay is do over likely meaningful years were the a few labor of than this because also than part costs they of portion were

we've the broader see stronger the think over out the same on I improvements we we gross remain plays pointed you processes, I had be and industry. deflation. TBD the amount it where through the et expect exactly expect So exactly that would individual case lands to with we customers from think do out, and But for profit it's cetera time as to inflation, hard the as say margin what

business eyeball it as then XX, kind the those and of you customer segments, could trajectory week my the looks other what's fourth all like And and a there. and if customer slice for have it, the like and the just chart not I believe last talk about grow accelerated on cases which a new are as the sharply adjusted the a Page would have 'XX, are type on in - thought come is in two-year kind at of of I of each billion to 'XX Foods that negative basis. gains lines really in just in restaurants at reversing Great. question is looking quarter on really other really big looking in base, chunk of maybe there? a would well that chain that but One, negative I big kind of that customer it the of those operating numbers some the wrapping $X help of seems it happening

chain right, that include would - would be of some help that. the and you're would That so that

is, have volumes other again I The would before. they lower were school thing to that, as remain continued than call that out

picked other of of some as in of it. up. really the you it through of QX case, XXXX for by remained the support others XXXX does the had is now. go that business is sense end we Those retail is gone our kind picked cloud middle that in think and into that that and did the through some I thing And we up, we temporary most the XXXX, was gone part of in and fully main are the have earlier of reasons portion that the

call the Satriano. turn to like would I to back Pietro

we you the in. Again Appreciate have our better So all the plans. our for same thanks forward understanding Hopefully, for continuing of everyone and delay of excitement the earlier conversations. questions. energy today, apologies tuning look to a and and level level about

This for you Thank participating. concludes today's conference call.

You may now disconnect.