US Foods Holding (USFD) 12 May 222022 Q1 Earnings call transcript

Thank you for standing by, and welcome to the First Quarter 2022 Earnings Call. At this time, all participants’ lines are in listen-only mode. After the speakers presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Snehal Shah, Senior Director of Investor Relations. you. Thank sir. ahead, go Please

you, Suzanne. quarter to first everyone. Good call. morning, earnings Welcome our Thank

On we and call Iacobucci, Chief the today, Officer. Interim Chair; our Financial Chief Andrew Executive Executive Officer; Dirk our have Locascio, Bob Dutkowsky,

Chief Additionally, will Chain join Hancock, session. Officer, Q&A Supply like our Bill last quarter, our for

XXXX. quarter our in take unless are we otherwise after conclude. results the Instructions] period prepared first same to will year We questions During [Operator fiscal stated, comparing remarks your today's and our call,

earnings this the slides Relations Our earlier can be page website. presentation issued and today's release morning our accessed Investor on of

to potential certain review statements. call the addition that actual our factors detailed Form differ made Please are in factors during a our XXXX could from those cause In today's in historical to those information, anticipated risk XX-K results statements. these considered materially of forward-looking for statements discussion

included the our as reconciliations Bob. call, turn GAAP financial Lastly, the call slides indicated measures. our financial during in refer are we that there All the Except financial non-GAAP today's to as most well comparable reconciliation posted press I’ll looking not certain release presentation in we providing schedules in. to will now appendices website. measures are earnings to to as on over forward to on the non-GAAP the

and good Snehal Thanks morning to everyone.

to we I Before reached dedication the we to announcements to dive this pleased Jim spend a successor conducts Directors earlier continued to to range as board Toy left want Foods plan. plan, proxy focus few input to entire agreement to the progress search and an quarter Scott the a do, welcomes Ferguson, and on their Barber for Interim an end and into of Iacobucci our into Sachem to the as Officer and two new shared Commercial and I the the bring over we Andrew week. on who long with our permanent has and minutes a guiding the as and The our role the insights pandemic. have the leadership We're we On on company. Independent the looks forward as behalf Head David years Board Chief the step board, And his US for XX agreed through company the of want execution CEO Pietro Satriano for Pietro thank last contest.

leader, rest environment our for join our long-range before Dirk outlook. on as We and Chair, two as our and the call, proven plan. our to integral Bill great which efforts helm. are results, will pillars and of the XXXX our momentum with has look but Andrew the on in a hare Andrew worked needed we Hancock third will Hancock initiatives. making build around our to our urgency the He extensively our gains will forward hands alongside Food at In strategic optimization supply profitable work that time the US Q&A through for is the successor, to I we're been my on also right pillar. a with driving as of On Andrew session. team He's chain long of find confident optimizing CEO search are the efficiency permanent the execution mentioned, structure quarter the person. range Bill that take Snehal joined working gross discuss And in initiatives and Executive today's margin, and maintain capital walks role with has ensure as first Board strong macroeconomic business progress Andrew on plans management and to in new and markets you well I our

commitment to over customers to and thank all to performance. and that, want turn U.S. Foods driving I Finally, serving our With it their our focus Dirk. of for I'll associates

Thanks, good Bob, morning. and

sales are growth improve profitable delivered expand a initiatives we outlined plan. our to on and adjusted operational ago, to our early our EBITDA confidence progress XXXX and long-range we making weeks and in growth, we which our in and efficiencies. margins the few drive results progress balanced deliver As strong Both reflects first the ability underscore quarter, our

continued a in the we our and the leverage has resilient us is few industry to years growth past we've Our The recovery. and done scale well innovation. strong is midst over of drive positioned work as

quarter X%, We're the first of remain our and XXXX case net to quarters was EBITDA several X% macro long-range business cost XX% since we go care considerations continue year. health case normal delivering supply results. to the to was detail into very on this talent XXXX to few plan optimize the cost, growth released much We a focus to to our our XX. our minutes our best investing of hospitality debt M&A. have and as to won't volume progress the shareholders earnings although on adjusted Within QX approach team. and pleased increase growth, over the through better customers we allocation, early pandemic benefit a XX%. and speak inflation since preliminary capital April I'm that and growth were from of clear an quarter return $X.X and new will pursuing as for focused and and growth. plan, we results to opportunistically surpass create results also a is return X% strength on for also and structure, capital commitment after with on food independent opportunity our had year. financial volume, reduction, spend By of which XX% I'll against chain which X. results. billion, relative serve was I increased then sales to significant initiatives specifically disciplined of we shareholders capital QX tuck-in added prior a Total one previously have first I'll began Slide to our the value demonstrates

Our we the impacted temporarily business roughly XXX the year-over-year during grocery was case growth retail the points by added mid-XXXX of negatively basis exit pandemic.

you'd expect, due and slowed we and a saw February then significant January March. meaningfully As to improvement volume in Omicron

during far, quarter, second continued in we've seen improvement the demand. So

in recent weeks has As case our mid-single trending improve XXXX. has been growth as reference, digits independent to recent below growth in continued case mid-teens up a compared been well to and XXXX. weeks has Hospitality

expected gross very dollar improved profit health this levels year. this the new growth, later and hospitality recovery we and XXXX with care is to expect As again accelerated business perspective restaurant strengthen quarter. our the volume in growth macro combined realized, legacy a from strong We produced case

largely dollars The as many talk from basis profit year, increased Thankfully, did largely challenge finally, increase first is point gross EPS about compared And macro in prior remains share. customers. for The our gross a industry Andrew that adjusted and from our in our adjusted plan will initiatives dollars. a which our the year $X.XX expense our share to Our per progressed on XX% diluted than increase shortly. as which OpEx Omicron adjusted progress and margins margin the increased We increase enable growth, long-range to in adjusted environment in impacts. EBITDA approaching, of increased of quarter. operating XX% demand volume from resulted continue. initiatives And and will in more COVID significantly. as expect mirror, both and food prior was expected XX% and more recovery we cost severe XX EBITDA rearview cases and declined benefit cost with inflation well summer have Omicron the drive efficiency, the QX to in adjusted played a out

in was Moving challenging. The than however, labor. to labor is it XXXX, better market remains

hire definitely into hours focus us. staffing and of continuous also from as and employee this, finishing our and deployment it's is to improvement we've not Retention our job, hires little supply and engagement several to ease a labor, unique revising actions practices retention, to key for selection such remains new us. technology team processes. our processes, management needs on Turnover the the to new the continue higher warehouses We volume to a make than is frontline our our network We're leveraging With supervisors easier. across effective to historically, chain managers address address retraining for jobs growth. in expected which challenges primary worked them been limiting the and resulting taken continued

Moving to productivity.

out of how sequential is year. progress it through is and passing inflation a remain near levels, under have is categories, along industry. as sequential been XXXX broadly better of "experts" back stabilization. the inflation than increasing likely they'll year-over-year it the Food this year later Supply are inflation quarter with over lower before appear is in for but and seem two sequential the last balance QX challenges to most making our was and We which on QX inflation industry inflation signal customers. is X%, have into expected the or quarters that similar as The in plays term, to of lower across is just to getting broad-based on continued the consensus we fairly don't and positive. don't of to more our relevant successful we Inflation to cost that, focused entire quarter which retention. The inflation resolved with than be remain XX.X% the though in rather XXXX. a Hopefully, more

fuel this customers to our manage this point facing seen committed We environment. at Higher insignificant us. form industry. for haven't through our an costs is is cost not another an demand Fuel inflationary impact inflation of our on and helping are

as not it's costs of some incur. we However, nearly as the other significant

million in of on a diesel which the of of We some risk of XXXX. As spent fuel, XXXX. a in our fuel mitigate quarter our deliveries locking approximately portion we about for fuel is a estimated in outbound needs now QX fuel reference, right $XXX cost through diesel costs through

total that amounts changes recover customer and customers. surcharges, breaks also cost as means fuel a of environment to diesel item has all time. fuel is on macro based cost surcharges a fuel normalize portion or offset isn't This fuel through makes temporary to any increases the our vary impact important, those likely going challenges. be of surcharge and over The We costs fuel year, single approximately costs. however, its the We is XX% typically through fuel likely

However, and strong have our tailwinds. industry business recovery our

lead of macro further we QX And EBITDA pleased that results. fiscal will QX in strategic a to with improvement with on year combined XXXX. our initiatives, the continued recovery, the are strength progress and our expect strong We our

in I talked of are our to first and dollars X, capital Slide our quarter and fiscal we earnings XXXX quarters fourth net our that on QX compared reduced discussing structure. We We both February. reaffirming XXXX. leverage guidance at provided debt

of of ago and year reduction a turn the X.X end which four a was at capital part from from of leverage net strategy turn outlined first one of we a I the reduction quarter, the our end as components noted Our was XXXX. the Leverage X.X is times X.X reduction earlier.

summary, We to are continue net goal make times and optimistic to next. achieving leverage In Andrew with pleased and balanced X.X progress over committed which long-range Andrew, the discuss to in our of progress our plan, about it. toward I'm QX to times will X leverage you.

be success to the working closely I'm and it's of Dirk, this CEO build business Thanks, our first to moving continue the into honored I and and step Interim quarter. on to with here truly forward the Bob morning. team with forward role, to management and associates everyone our to our great look

in-depth and five that past as an driving market customers commercial knowledge team, has allowed mentioned, have operations and on company's the For led our broader to more heavily we a operations. recall the of the My And Bob more worked perspective share excited we market given I and position on build entire progress our and profitable during optimizing the focused me let what our me this our has recently and long-range margins of our time chain drive we're which Hancock merchandising have will continue process. provides gross years, be great develop capabilities with on overview slide closely efficiencies. on forward. have very in about supply margins our not to that the to I team walk be could our going as that from beat opportunities and I our on team, throughout. of on relentlessly improve say lies the a executing and and the plan expand momentum I'm This Bill making now and that, a plan an our miss ability in capitalize and not With the Page focus ensuring presentation to through operational to on and X, February is focus you our me presented. growth, ahead. which interim CEO I've

adjusted third, of plan first, pillars: Our This across we generate $X.X growing plan, market and billion second, three will gross in builds share; profit; improving operational EBITDA expect all optimizing XXXX, which efficiency. to is gross operational balanced track we record to focus on number additional to out our COVID, solid changes COVID. and leading improving significant and market share brings especially margins, up of of made thanks coming in a profitably efficiency,

new in and to considerable program considerable chain, chain, head of Inside the our new we of additions our brought newly team. all is The talent. head the of First, outstanding outside. are supply head team new IT of all office and are the leadership three created three quarters and from brings experience supply

year, service inefficiency and our best our been has simultaneously to the removing Second, of and tiering And to tiering to These while we in or mandate as drive prioritization additional approach underperforming a have teams and benefits with staffed standardization excellence in success. our to model operations. integral talent to proven customer April it. last teams markets. late customer and waste excellence operating are we sole see our a is beginning way introduced other a customers third, introduced part to differentiated XXXX of an new are we of best bring industries, with focus whose been This provide in

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with are goods, in our scale. relationships On the our ensure to line vendor cost we terms our of optimizing are

freight advantage Freight which first allowances our side, to On a progress made per is contributing quarter scale optimizing we vendor greater are the from to benefits the COVID opportunity of was reap our income addition the carriers, in case backhaul use to in taking and to is since results, first XXXX we've began. which above opportunities. QX,

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efficiently. that routing routing our year, can work this by that miles serve will the wasted experience. and dynamic with customers improve replace and Phase the While will customer XX% process, which early per mile we XXXX. in -- compared begin same component that a achieving remapping in to will ensure of this when year, will will platform cases Later out we later nearly are And our are begin in Phase we center X, current further drive them serviced markets the and leading the our most period X, remapping are distribution improvement the technology

the associates to focused for we and our for right standardizing create Our our environment we plan including and leaders how work work, drive our improvements. how continuous execute how improvement service aggressively cost and work safety, process, we on is

progress and continue automated includes we to brownfield are solutions. our As plan competitive a navigate greenfield we environment, labor that on making analyzing network

entire begin affirmation to to of all of our brownfield their our strong continued Despite solutions period, thank focus pandemic a have interim I this parallel testing one pursue to conclusion, prototypes lead we with and testament to promising great delivered in long-range strong our the expect business. open We up during quarters great began, our are associates our our and please work. plan, industry, impacting this strongest confident In I Operator, in continuing we'll that and a to our ahead. I'm challenges commitment year, company of for continue want am excited later more early our by and comprehensive and questions. this execution since greenfield to plan a team. progress great implementing line future results the for we

[Operator question line Suisse. Silberman from first Instructions] of from comes Our the Lauren Credit

line now Your is open.

your I closest wanted narrow gap margin to how about the to competitor. see to opportunities ask you the

the what you longer that much gross how laid margin as or So versus term? you do margin one, gap near two, you've of initiatives across see see guess, I addressable? and is more low-hanging that term And out OpEx. fruit do

Dirk. question. Sure. Lauren, Good this is

large that that we're working, focused further chain focused there levers it's still about on shareholder lot expand over of absolutely about. of performance significantly expanding lot maximizing share time to I we've and the the state small expect the may And during the we've about plan And plan, expanding the EBITDA the margins. really or significant and And with important. of room profitably improved think like So actively that the margins efficiency competitors, cost look critically of logistics And EBITDA especially that, understanding key our growing create this it that it's talked value drivers on us our talked may would balance items industry industry that, is we our whether has grow of benchmark. supply dollars. We're are noted, collective that goods the of to We improvement, a share long-range of margins. improvement, for we've both margins about, we're from and the their key think talked things exactly coming a period, of recovery not overall, and and run. Andrew we in as our this our is competitors, talked balance when to

want on just to I And follow inflation. up

environment success it of decide you You through to the you pushing or guys any you're to a delay seeing? whether pushing having might broadly of that more are like are see -- seems the watching inflation What inflation. lot that in consumer

are Thanks to paying world. just Thanks, our not industry. Lauren, attention it's the very everywhere, our of We're obviously impact for Andrew. in the seeing Yes, we close it in inflation question.

are seeing any not far, meaningful demand. So impact we on

are, the we We that. it to think, also are of being comes with pent-up I post-COVID to monitor sort we it continues continue, by and are very that recovery to a buoyed what closely. demand and continuing be But expecting

also taking steps and time. that difficult aggressive is, We are our manage to through help manage pretty customers, this

and chefs their food-fanatic how process with get the customers. time to pass to the them in rejigging rocks recipes understand rebuild menus have deal those helping our from on positive inflation customers, to opportunities of their Our engineer heavily to categories, And that have our inflation-impacted menus away customers. along spent impact our significant had a great looking their also at to and

Wells Fargo. from the of Kelly from question Edward next line Our comes

now is line open. Your

of new search. a ideal to of Bob, out the at question candidate? of in just Does I'm be What's coming Board right just Change hands important curious, you're change embarking implementation I in on the for you because an ask capable that's start. in to a that wanted looking Andrew look there? then to what's anything to in decision? things the moment. And looks be terms CEO strategy

Thanks, Ed.

metrics place. that track. the is execute the so reasons the quarter so that's confidence the right our to taking are Board and and first in sound, So first plan and one was is he plan, integral and much strategy answer want the the just I'll long-range has of the planned is we're over in in would Andrew validates right questions I building order. now off, say, we the view on against of your The reverse sound

wouldn't on place. the plan for the I So in term, of short the and anything other than Andrew execution strategy look focusing that's in

I'll The next a priority about good search company. engaged, the leader mine top and this second of to the that candidate. already the you tell committee. The search committee and of already Board for we've the it's ideal formed has find question

the could easily chain is experience. moment, down an as of You some write in supply open person it's industry to for. C-suite that experience been specs need and person the But could. I as needs we'll And experience The look step pallet this to business. terms the an leadership have They have the important element in of that in. at will

We great on have next of we're in company. committee, to some the excited very, very bring the this and experienced search leader directors

then quarter, they quarter this one for have guidance albeit just quick Dirk, Both go. Dirk. And peers your one follow-up raised to

remainder despite, think, of better year? I for results. changed little the the your was about You expectation or Any probably reiterate what anything has it, bit a than QX thoughts expected

Thanks, Ed.

have earlier, is what pleased for others the be quarter. QX range, relative lower relatively said the macro earning another and to our Omicron-like assuming you There quarter that other we of We're high some said, I in it's still the three wave. don't as we at one Also, And So to have are it's expectation Really, with early us, year. another quarters, uncertainties, progress. quarters, -- in. a one have quarter. still and it's the end

to going on adjust read and bullish appropriate nothing our into very there's there forward, but confidence. -- as be the we'll remain momentum. We confident, So on it's

of Our from Securities. next Jake from question line Truist comes the Bartlett

open. Your is line now

about about Mine is little within a if you cost just the operating detail, could, more expense. buckets

any of Or that then give detail to us we I costs? detail if XXXX other XX% mentioned just also I updated wonder supply much some an chain, was any XX% was is how you your think that supply can assess going Day, Investor the just within other back administrative, cut to And of now. XX% you of ability kind buckets as chain those labor? selling.

good Sure, Jake, question.

piece different more about would years delivery we've are proxies spend a do warehouse. that past all the percentage few in within the on good overall we than supply I use. add isn't ago, do And was that I those chain talked other it so our So to think we than is still that

lion's delivery bigger. costs costs the So is and people it are is then of share those --

think I in only other chain. supply the to go thing is I'd back

we you If using historically, at an on as fuel. much of XXXX earlier spend about look how example I talked

I likely that and tease it that but a to is buckets, that, as understand part that just it's as other expense And you piece over meaningful, think, that think helps is near out it's not important it's labor important because part I the time. not that's normalize that significant there. that's would

And just a quick follow-up.

on You the gave expense next efficiencies. that expected clarity efficiencies side targeting? the of Just years us margin what's you're the operating the savings or in most kind say on operating on fruit? and margins few gross first? on any you come over the the would gross Which low-hanging Is it

three, all for first most that and built It's question. what saw to is our the Yes, continue is and think plan all quite across really our balanced strong intentionally quarter is encouraging Andrew. three drive to this all we thanks. we've I Jake, improvement three pillars. plan across be And Look, to Thanks equal. about

is first among that, balance would a ensure I this are closely working that say we not equals So actually on list, continues. there together and very to

question from comes of line next Jefferies. the The Alex from Slagle

Your open. line is

event the resiliency spending. slowdown the and a to ask your the could this sort landscape your of consumer category in to if frame about in material of Just you business restaurants for exposure independent and wanted of

the how Foods of And past curious of then position offers broader your in the in-demand spending. think slowdown and changed service extent you given there terms have help issues could just capabilities in since now. business the things offset to big these suppliers reliable what US and product share the important Just the potential more getting downturns gain that has even and operators leveraging have,

Yes.

think answer that of of last I question that regardless is to your first, environment in. opportunity the part we're big the I think a

share, market we quite mentioned, in market play we see large grow it's to Dirk and fragmented, As we'll and continue to pursue that. and a opportunity

at news those The is diversification, data such as downturn their in is our show far behavior. even those goes, quite a Technomic tends the a good in of others there that if across relatively through got you in we've consistent. all demand to change good business industry. in and some -- is that diversification the our that segments stays mix puts a during seen consumer to think, behaviors. change spending position see a instead out I that very stay level. resiliency about food And home, of spending As consistent from What manage us we've That

moving thing that of taught other And say take advantage positioned into is that slowdown. are I to a very, COVID The a about has well we is we, should see think, moving. where the market nimbly lot us I very would

question from Nicole Miller line of Next the Sandler. from Piper comes

Your is now line open.

ones. A quick couple of

there's hires So was everybody mentioned, some they that. building? you together? a helpful like how that tenor. But CEO about facility just everybody and new said, interact to the today, tone been being And can coming that together headquarter day-to-day? where obviously, you is review that Is sits some sense talk and that under can How

Yes. question. Nicole, the Thanks, for

hybrid the in fashion. process sort are work a of in of So returning we to

meaningful -- effectively extensive think, on hires and mentioned also capabilities our retail impact, and very think, significant improvements remarks Tonnison; on as as of not functions a he's And with made improved additions. addition real basis throughout strong and a those network All working-together I mentioned, in has physically, areas. tapped attitude office, think program the on has the in I chain made of But all step-up distribution not made, to but our Officer, the of meaningfully So he that seen IT Supply in regular then He very from John I month. had, with also a single that Chief time have Bill team. we team our that our his cohesiveness the really, three their an every terms in my new organization, coherent tire we've the the supply in as and well the additions. only Hancock; Bill Chain is the the -- together coherence a are I of We've of mentioned. sort has into. as one has only incredibly I I

very, and to its team the move very we're forward. So ability excited about

rooted Bob. bring at Board add and is two chain And level Jim so Bill's the Both supply to chain. extensive to Nicole, efforts Board deeply additional in extensive Rolodex, capability experience an supply the around you've skills we're excited this enhance have that supply our just Roach. Barber that and added and of Quentin skills, them seen I'll chain to we extensive

least At right, deployment. Maybe very to thinking we an all put the This switching repurchase you deleveraging But and think pieces start at which X X, CEO paper, about gears effect permanent is that? together, the How excellent of least, to plan. thinking phase the the capital and can on capital Phase specifically after or do share or about X? a dividend you deployment plan. about at and with are

Thank Sure. you. question. Good

share earlier, about that capital priorities have So and is very know, four as repurchase. I clearly you talked defined of one them we

talked So on business really times year. times in growth we X.X our good I making before, reach leverage of to for expect is focused next progress. delevering, about near and X And to as very that investing range term the

capital be return expect talk year the And get year. of doing to and options would doing so of is about evaluate over into we early further the shareholders and the this for to later year next and will share to work that ready different this course what --

the So excited about opportunity.

deploy to allows us strong that in flow growing back different have capital cash shareholders. to We including our that business ways, in really

This just a then And final of more curiosity. is a one.

the signal that that On trying Is there up I'm seeing piece with you of through, to go that business of any because are there? Carry recession? does business, business? think business, what & trends Cash

question. Thanks, bump it is And our option slowdown Yes. think a the our We see I It's saw becomes for environment during whatever we very of and obviously factors, more the COVID. certainly of that for event that customer cost-effective that, in macro of resilient we're the Nicole, of in option more to early mid-stages base, in. viable what so a and for And customers. playing very and be driving well-priced, expect you'll in that. a a sizable combination was business their very many

line Bernstein Barclays. comes from from question Jeffrey the Next of

first expansion of the One, just market other seemingly I on EBITDA share funnel bucket the the helps which is two with opportunity. the the from the think opportunity, -- that

the would forward you Just wondering we seem three a COVID move flash years, like through would as if were market opportunity from to period it current offer significant share perspective.

of new So accounts, how you further existing in drive maybe the business, penetrating look in Like in M&A of to smaller market of buckets prioritize you picking share competitors that fact, bucket competitors? accounts, your biggest at prioritize the or, I'm terms just wondering, opportunities terms closure would first you as those up how of growth?

in that the anymore, also cases cost be very always QX we're our opportunities most marginal promising the growth our well priorities, we actually it's Andrew. build very, the profitable things, was to I across the wallet to through -- And of customers, share driving very want very given those looking think, grow both question. is at we we both about When not are very is Jeff, we new new. business existing the market results for a need in deliver saw existing for as we be the two our performance. penetrating balance see Yes, more of stopping those we of as answer in those that's truck that very, balance new. QX. to of are Obviously, and is strong lookout The But one low. on can customers Thanks and share to short

smaller seem I'm this through and that. in or they ability can thrive just best be biggest I you players. pressure. that's of and survive years about significant challenges wondering the terms period, like that would something competitive of to the demonstrate so for the data mean players would there's it under just midsized seems And the I'm industry we're if would like see set, of any the wondering hearing whether the small all it

that, But competitors. from. really It's shared Jeff. strong both very, our from, coming it's we the question. of certainly -- sense -- have a been specifics market, to our believe we in we seen balanced. around coming balance relative the have we're growth us give from doesn't It's Thanks doing pretty from for larger very but obviously, We smaller players, is a that the where don't also clear data tells how us where

ideal that is think other of customers, things years really what couple importance really our to situation customers model I lot one growth on our door on over national with that solid, even types. an it and combined Andrew with distribution to the see independents. of the about service these QX ability the of and Jeff, large last target with the resilience, a this a far manage share we the opened thing, scaled, larger talked less we really the the and reliable that's supply of partner, vendor has a the technology independents, has gained through raised customer

April on read share early had growth We Our good with again. independents. very is

think So as that. comments, his in momentum building Andrew good I prepared talked about just on very

And just and standpoint color a there. inflation commodity lastly, you from good gave an outlook

labor from get thoughts standpoint. can Just your I a wondering if

hiring? shortages seeing there's and the provide starting that basket the of made topped turnover terms be I just maybe of kind out improvement? wondering you quantification improving. think metrics some things maybe might environment see any in demonstrate or can to or that of you're inflation you or Any mention whether to you I'm have

the to is best is continuous biggest And And into improvement Turnover of the more onboard like Andrew how a be mentioned headwind, that warehouse drivers. on our onboard we'll year, and selection see in how them Yes, Bill. a schedule from and device we be get we've It labor faster and quarter productive. our that this midpoint the has company I month-over-month by are technology, interface now focused this why, that's more deployment software we finished team earlier, both with. terms that that productive. think, helps CI they proof-of-delivery them technology our helps continuing the right productivity. that driving both And additional onboard then the We for to that. any consistent improvement efforts, fourth I inside first. team Jeffrey, In way to new we're is offset help the industry, appreciate more large done challenges on have the productive, hardware, very and the deployed faster, helps associates, question. fully

own, seeing is stabilization our there own into not call challenge building would labor A to away are in I we're pipeline. We our markets. continuing soon, drivers. out That one going why for have anytime which is is Class The the invest anyone training

full-time full offer A new sure team. join put that after so through training school. that offering Class We'll then are We'll have a don't folks job get a to they We today. and jobs can right that them the them they make

comes Brian Mullan from of question from Next Deutsche Bank. the line

a sounds kind a they or about I'm be not vendor magnitude that's are Just I'm could if it with makes line what sure with perhaps like on your if question you of wondering today, line purchasing optimizing scale. Presentation terms that your talks management. where It build in just should little with vendors but bit. not is. current terms right in the on

is the benefits. time speak start the realize opportunity the and line could that to just if what magnitude of maybe to So you to

It's Brian. Thanks, Andrew. Yes. Yes.

goods and we it of to community. to supply have cost disruptions opportunities really more of We which the opportunity new is play make we're we've goods. than around should sure to products both very are we also examining that a that real segments as opportunity of sure to With there, So there's and bigger find a cost we make we continue for ourselves all consistent mix be. think the sure in we seen, win-win that we make supplier categories volatility our an focused have we to the demand But see hygiene our different and a really where in there's with are our looking those that past. believe

these much we entered make So find to in and it's ways, conversations really of that more to serve cost in cost lower partnership better to the a of achieve spirit return goods. a ourselves

routing a follow-up like improvements. a looks another from on the just And to initiative, implementation. it pilot It enterprise-wide expanded

a fully then of the those benefits? Just forward sense encourage of time you're like did bit seeing And the full pilots you history opportunity When you magnitude and you just of deployed to What feel enterprise-wide? move and line the little that give when it's a until see start? there. that do

a project. X Yes. at system what our exists. two-phase the Like by -- is routing Phase Bill, It's waste of kind earlier is Andrew mentioned this looking way. current and

have of taken customer As our changed there’s COVID, inside throughout patterns created share and where it’s new waste opportunities we’ve routing.

So right that that ripping focused in miles. first on we’re now wasted out is phase those

greater we XX% mile cases seeing or Our XXXX, there’s time improvement leading think of and markets same top in additional are per that period on that. on versus upside

than deployed that this is delivering are bottom service couple in to a new line. just terms providing right year, that we effort, good, ongoing close brought as Both those remapping validates now, make the efficient here in that an results were as months. as We’ll fully mapped opportunity internal the NPS this of mileage if service of in we and they’re have work by customers, off we’re not data to the on go and that that kicks better, through levels. of most our That So levels XXXX. that’s in DC to sure the they

of line from Peter BTIG. Ssaleh Next question comes from the

Can come function conversation Is have you I basket the the a customers least to reordered? that trying of that smaller many quarter, at around still pre-pandemic. sense I how on down terms versus just how of give to back -- guess Just your understand think in lost a is the this to ordering? to in function pre-pandemic sizes XX%, customers or maybe the that's this of back recovers want us case maybe pre-pandemic first just of hospitality levels. I customers business. are a volumes, segment from XX%

it's have seen the improvement and continued down in Peter, I you're there. that right, mid-teens think

it's COVID, business this that so little steady. remember after down Leisure a but little probably seeing was XX% a right taken returned had longer You XX%, sooner.

the comments travel business business A that positive. cruise leisure et lines, airlines, all the cetera, think of is and return. were number thing I encouraging seeing on both had

So we that feel trajectory. good about

place things, as I as customers, a business have to of so a opposed their not perspective, as open we're hours, and to as think cetera. returned you fully right conferences they working like things expand you that venues all the much get so et levels few that their customers can haven't fewer dining are staffing have seeing and from that to operators

as point, macro appears from new quite types. though of robust on continues would I customer and And customers, then team and expect continue perspective, a this improve. that remains to demand the to likely to our onboarding focus each it So improvement our the at and really continue to sales that's across

hospitality. So bullish the we're recovery on for continued

on the label some any brands? trying private on maybe update shift more you to And Are just Can seeing are of are there? Or today? then as they considering the And label avoid higher just on you mix. dynamic you your an where provide restaurant what's more private partners inflation? going the

is We've in that some back order we we a obviously It's were that. to our ensure to recovery in label We've issues pandemic during Andrew. roughly label supply we private see our us Thanks, The were consolidating private offering. product where resulted nice seen had in the getting Yes. -- mix of XXXX. significant Peter.

into inflation, result very even greater private of we a back seeing that really absolutely before, quickly. there than you which are brands. the a is label trend move We our very, that anticipated, strong coming those was is seeing value And is in which as seeing brands are there

pandemic, so of before, difficult were been conversions. other seeing to alternatives The is factor so more that real they has customers because our willing those and we contributor of a it than to enabler that's are many much an are that try as the important supply throughout

Next comes Partners. Guggenheim Heinbockel from John of line the from question

start both How And for push disruption customers. and on Maybe the Andrew can want a -- fewer, stay think place. but it right, first five you you a your the let three I right, with the put also the years close then existing don't it's warehouse to cost to in in, now? envelope greenfield know, from What standpoint? Bill. to network you maybe and few do far to So to looks like, from me easier, much secondly, automation,

network the does how So evolve?

Andrew on Yes, is mentioned We coming versus to we're sharing it the really testing path, about with John, both brownfield greenfield. this brownfield And look first. is greenfield. by bringing earlier, our side and that first is Bill. additional Great opportunity work see question. dual automation, a the When facilities our brownfield of biggest later we to on. that's we existing why and online results close forward some retrofit year, this think the

that years going the like we're to plan, invest where we've what to work markets site, constrained identified network and automated happening greenfield we come On in And a focus us to greenfield to a parallel. solution fully our be if feel in is to those invest looks site. in the capacity side, With in we creates really good going want explore an like. opportunity we're greenfield for

of And share fresh one taking then the And nonfresh, the about share fresh secondly, perception, challenges has versus some sense it's right, is broad leadership. perception-wise, of right, from on specialty liners, I not quality. market talked all been know right? on product you, you operators this Maybe just the

getting So that your can talk hurdle grow. business that and how and over is where fast about share

John. Thanks, Yes.

things just getting what the on of And You our as and out. the my hit on think part remarks, one produce opening I really us. last of year opportunity was quality I is focus in mentioned we consistent took better for to in day big day a

pilot now anyone strong out as results. quite and as as of think have customer allowed going I significant as is we stand really, our that a that And to couple really enablement activation us there. to We technology good in have be that a put showing through we have process a started markets, behind in well has

actually plate. We in of center have slightly lower share in share higher slightly produce but

will really, So they business, business. product new there's a source and a relentless out, Customers, that of way on focus in really both quality. big produce opportunity and to if to day day huge but loyalty onboard on count a that grow getting high-quality is from can great benefit

front. very very progress feeling we've the made about good And -- so we're on that

from of Kelly next the question line Capital. comes Bania The from BMO

today that about the comfort I lot wondering happy early of highest should that can you this take forward leadership I'm to you investors leadership are route progress if in the execute and need the plan? comment, is Or plan just company? ask and it it this comment at changes. just wanted maybe Does support best there. new backing for but a to plan. be you're a a to the just long-range for Clearly, with February, long-range outlined aggressive? anything the sounds with the like more there Is broad level? can Just it's was

to Sure, Kelly, almost that come we question. took answer long-range felt together. plan it. iterative, very outside to a of COVID, waited The articulate I'll much an it's base Bob. a try year got plan. where we the But was bottoms-up of to comfortable it until impacts We

change, so rooted organization. markets going said and way flexible to all the it down Having to very we're the And remain adjust impact consequently, that, the through as it's the change. its as dynamics also

the the to radar fuel We've adjusted, adjust the that realities the us to exist were Dirk flexibility gives today, so on we'll of when of to and we built, the it's And As plan. the described continue that way we're weren't issues environment. building the it the comfortable they market adapt. the realities and

an As value to new as really of voices can influence in and on formation the an execution impact some that plan. have now the add we and the the have and boardroom well

the So plan and we're we the to very time the create are ones exactly agile this unfolds, the grow will pillars remain comfortable right as shareholder three believe fundamental of value. but we business that

any model, been in you Maybe examples, like been for to how sounds that tweaks bigger Any how standard The operating new maybe or help working? operating a just there gotten as over industry it now. you that's just if can feedback maybe the how on industry have way And along up. the just model compare does place working? that's follow understand to year norm? picture, that's us And new any is

answer question. in of ways. Yes, for I'd Kelly, a that the thanks I guess couple

how on The on the core chain in the that they a then they the understand field Bill's and been we've around pros, to the allowing And was document identify, well from adjustment mostly who both are create before And country. deploy way do supply the country excellence field practices really we implementing really the are to the what do these team in is us to it seasoned best first successfully this that organizations able as team. to as they -- not from commercial they near across new anywhere and operates. they made that model

call sellers' attention been good growth is market So where and market menu of in the growing of are big as why our we growth focus a is recipe, something that execution. example such the with seen in has the part really our that strong go us share their focused which allowing direct a after into area types around to and relentless we've those

the may Another supply side. talk good to example, Bill, you on about want chain did work we around the some of is

best Much to improvement the routing the side, that addressed. of that and over quick class our we've a their We about identify side. one expertise the that's in across was initiative identified led the XX% market function, redundancy, We it best-in-class teams. is built examples, this Yes. what ultimately for inside then operating at field in work. on that Two routing SKUs to market Kelly, field, chain assortment that you new these replicated in business. to execute reduced that more that behavior the the to spoilage. and supply we model, most identified organization. our with efficient reduction We easier that network. a try excellence our driving XX% replicate when that market assortment, efficient being to and makes network, the flipping by pull the you think is We specific And reduced you from get you

question the UBS. of comes next line Our from from Carden Mark

think like from with Or restaurants, So pent-up demand operate to desired of not at this just of have more factor having wanting to guys more get is softened? enough been disruption it capacities? Do that now is to still a labor sounds there's it inflation. consumers more date restrictions COVID out demand to due minimal simply you

No, Mark. the more it's the for I Thanks Andrew. think It's latter. than question, the former

back out aspects of life, what we're part is I of to a strong from desire to is and get their dining many that. think a big normal seeing in consumers

services? a benefit customer Could some follow-up, these of then impacting And consulting is coming for the how margins? accretive to materially current the Or from is as specialized demand be just your environment bigger loyalty?

probably customer side. on the loyalty It's both. more It's

quickly are our all what and of get to terms value industry-leading managing I support those them whether and running. recently, those. against think, going a our We The deploying big advantage abound, no is then something challenges most and in have facing hesitation our been terms both leverage. mentioned of identifying things to of in but up done, their part is It's also I I we've have of inflation, how the sort saying just that I Kitchens, the think, in examples quickly of we're market able of of, continue incredible some to over And whether course pandemic both the then it's it's work operators navigating the resources tools and CARES major the Act. around Ghost

comes Glass John question [Operator Stanley. line from of the Instructions] The next Morgan from

comments back My at operating look Is In to a ago performance among practices. a lower among there the regions questions they maybe -- regions brought you operating difference where is system, you them? opportunity are purchased when question best in about are And goes that words, are performance relative it still? that, when therefore or an of other sites? margins? be and SG&A and big up just the of inside there that about couple you can average? their to And they system And can talk to are

any see our large There's distribution, but is get I'll markets. differences that's in John. to standpoint. a not and so -- be systematic a better. pro quickly much there's commercial just we seen from -- Thanks, in to We've Sure. going opportunities group, touch what on

to the learn those the really performers, performing are as strongly. strong to differently So opportunity is not they're take those and markets that doing what deploy

So on that question.

them. well So their That current when in say, first or bit Group, business, margins line we performing Food so of environment. lower EBITDA were the it's the broad would a bought I the SGA little light than

we it's to recovery, and expect we expect to upon number share, markets, continue the or that west, those been go a that number And but has to two in predominantly to from little Food build So slower and been recover. northwest in one ahead. Group as we

is thing other a lot the talked think I we've about.

facility system is that done. That's from for our We've here million about, first completed we talked So $XX quarter. Synergies well. talked more in a our integration we achieved. track the about perspective last year. very the than last We going $XX on are million well

driving as share that us. that's think assets. gains, all an the we there driver So pleased with progress the macro be really continue is key to in, that recovery, increased going work going on for how team And continues through strategic to to value plus just

right pricing to maybe pricing differently, pricing is you trucking are customers was the where tool? required. this It activity-based depending on some that about labor sounded tool there that charge Where way think on is and could out? And implementation? And you are that how like such much this you rolling

John. Thanks,

on for good will next, starting year the with. into very early later this that So are us we're feeling provide deployment track and about capabilities and we

of Wolf The next from CL question from the comes line King. Andrew

pricing and earlier is? customers, call? that's the better with Why durable large and customers, Can others. you you large change think think this this you spoke terms how new presume about maybe said color now existing you more I in happening is around some provide the or

is Dirk. take This one. that I'll Sure.

the sort to so making tend with aligning it's a of we're the of as environment. number larger those geared specifically, the new of customers. some operating -- end a the to that of not their margins profitability that that sure at number more really we've current last So lower it's be is customers that really it And of comment really is so the about for quarters, talked

saves adjusting having -- a It we It of increases like with And them frequency. a pretty it's be things on closely which cases, be them. work own align also number working private it's our there's can can be so those with in delivery customers. And charge more money. it But can in them. of what complete brands, them

best capacity is they're ago. three the durable. that, environment around industry it really demand and sort is the case, of think a of of pretty doing was two between We customers think very is dynamics. The that success the the sort it it's collaboratively historically, different what about years had like teams for has or in than geared in both. could of each larger some the things four this we've and where few I relationships So built it's all And

work durable think it's I and customers that. continue So with to to expect on

in question it that. lot want in confident want I more I us to mix maybe adding that? or but to percent why contributed that it are check more my where of If it's right, from follow-up, I that different couple just some well, go that getting I normally it's think you math inflationary mix color X% also contribution in just a give see And the like to I an looks a actually mix. presume there's could could ask there's a is, an have But like some of did fancy restaurants And sales. you slight sense on a environment, though. items. -- interesting -- way. I other you inflationary environment,

trend. kind a confounding just it's of So

Yes.

last to similar we've what is quarters. this few in So seen the

X% demand his it is of real, it and and growth, Andrew outpace that our is trade a in the there, where we see one haven't right the yes, that either seen you as commented shows remain up really case answers faster point as lot that or that. are place his growing a had, the and robust. -- systemic comment market about we than see earlier we a on downs to prepared in with You're success had that's independent of continue we've it just to and business do proof

overall, driving I a And And what's of benefit. lot the environment. really the so feel good demand mix that's about yes,

questions There back Bob time. the now to call will turn I this are at Dutkowsky. no

operator. you, Thank

this a questions your points. interest couple would me morning. Thank you your let of summarize. for quickly I So and summarize on just

this plan. that's we're drive forward. the importantly, that strategy creation and shareholder validate what shareholder deliver But to with is announced. the quarter and We our about we to to first pleased really much more we're correct, we're on going long-range And actions believe The is our move excited just value. to focused as begins that our opportunity we quarter just are continue

So your in a large my great you morning. this time colleagues their thank thanks again to US work, Food for for and

conference This call. concludes today's

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