US Foods Holding (USFD) 16 Feb 232022 Q4 Earnings call transcript

Thank you for standing by. At this time, I would like to welcome everyone to the US Foods Q4 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Investor of Director Dabrowski, Relations. Adam

your You may begin conference.

and you, year Foods US Good fiscal everyone Cheryl. morning welcome fourth earnings to call. Thank XXXX quarter and full

Officer; have Speaking Locascio Dirk Officer. Flitman, today, the Financial Chief we on Chief Officer; call Chief Executive Andrew and Iacobucci, Transition Dave

We your question. our questions prepared provide conclude. Please one will name, yourself your to take your firm, after remarks and limit

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

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

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

financial will non-GAAP in Lastly, reconciliations measures that the during included appendices website release as we our most call, schedules are not slides to are as reconciliations today's certain providing on refer presentation therein. in on earnings posted measures. GAAP measures of the forward-looking as the we our press All comparable financial well to non-GAAP this indicated to financial

you your the US interest to Foods, in call and Thank Dave. for over I’ll now turn

year and executing team accomplishments forward this growth I its for as strong talented our to with significant us long-range joining you today. to team our in opportunity, great everyone, of last thrilled plan. I future thank CEO of look and our culture the upon new here from morning, to of build am associates. company reputation, Good working be strong Adam. US XX,XXX Thanks I Foods. because joined

the diving markets US much to understand and spent month and customers I thoroughly. more of larger associates our Foods our in my I've first in January, early deep the touring across country, distribution Since centers of to six joined business listening

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many of great Associates the I of am like Randy reasons are part company. this be to proud one

perspectives I at of certainly meeting begin to our and first early our forward point. opinions further starting many spend look to also more and expect opportunities analysts some views That to and about months, thoughts. three the my form I detail, plan strengths soon. which specific investors I after formulating said six-week to sharing I'm in my

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share X. me highlights of some page Let on progress that key

it plan optimized share has long-range gross been improved in focused operational US efficiencies. customer margins drove is and the each XXXX, in further team our We executing our Foods on intensely First our gains each shown market grew share, Throughout of results we types. and profitable quarter. target

expanded profit face significant challenging and turnover margins supply challenges. and durable and environment through staffing where chain We US a broader operating gross case, gains with managing industry Foods while gross in per very the

a by we a number we advanced environment, While critical have operating initiatives will areas the is highlight somewhat efficiency made shortly. of which progress pillar against challenging our and Dirk masked in macro Andrew

of year, thanks throughout the Second, work continued we great associates. to the drove our growth

adjusted clearly continued margin fourth and year-over-year results to expansion. Our accelerating growth attributable XX%, combination quarter EBITDA demonstrate with case strong a increasing of execution

Our immense in confidence, trajectory. progress me gives in our XXXX

Lastly, prudently our opportunistically target range, to remain pursuing continuing acquisitions. value focused our for tuck-in we share the to shareholders and on and business, accretive through shareholders repurchase by allocating program creating our in invest to reducing leverage capital capital returning

these progress in detail. some through of walk points will Andrew more

his trajectory Before over I to and the support for as last for get want XXXX, Interim I heading thank stepping I into year turn to to CEO the him leadership me, for as on business him, in call the he's onboard. a providing strong

going deliver year you're commitments. the you exactly did A what on do. of plan. a company say first Foods its mark long-range Essentially great its our is to US in to of that ability doing

the with the is we for will expectation strong momentum, our adjusted XXXX in three guidance, My to fourth exceeding and We EBITDA continue first quarter, XXXX. building build that on that XXXX. finished high-end achievements quarters of upon a in our

a to Andrew turn me the on bit more, With progress. our that, over share to let call

on me My with on let executive working forward to have team board. it on we is the as leadership in to our Dave XXXX. terrific continue I, and results to look how say colleagues him, strong And Dave. build Thanks

expansion in macro growth turning in-turn page fourth strong this challenging market I'll margin and the We Now, earnings strong through our results and X, off growth again quarter, highlights. to with environment. financial delivered quarter walk significant capping year share a

US grew as the in Year-over-year to our the positive Foods see and growth recovery to for XXXX. continues. period their QX, same compared from we as sales volume customers for which strengthened XX%, QX fourth a Net quarter

XX% grew EBITDA sequential growth an, quarter zero fourth in inflation for from representing the Adjusted QX rate despite essentially quarter. acceleration our the

adjusted Our we the prior also year, from increased leverage. points basis further EBITDA as XX operating gained margins

exceeded I EBITDA dedication. drive our cannot adjusted thank our long-range associates for high-end enough, guidance, XXXX incredible progress we A our ago billion thanks and deliver work against to $X.X out their of year to to in plan. we their the in set

Turning expanding target leveraged customer US CHEF'STORE, via strategy customer continuing strengthen and to capabilities our MOXē. profitable to we types differentiation in growth omnichannel addition, of by our and to share Direct gain usage in for our platform We customer further customer Foods Pronto customer experience, digital by our continue to core focus.

We supply our nearing QX, and driver turnover progress in continued QX saw also in warehouse turnover chain in operations we sustained the turnover pre-COVID made The trends fourth with on quarter. showing positive levels improvement.

We aren't are we results. actions continued yet evidence that we strong to where by are and but encouraged the want be, progress taking we the are yielding

piloted to-date employee of markets. with turnover, results. mentioned delivery reductions As expectations flexible our exceeded feedback we results have positive on in QX one employee in significant scheduling our The our improved key seven-day and and safety call

are location two pilot the additional QX. at in locations adding and that continuing are We

initiative to these expand significantly Assuming in portion of we this replicate we the in flexible markets, XXXX. outcomes expect these scheduling additional

results the quarters, strong resulting contributor continue and logistics financial significant collaboration. inbound strengthen and ahead we in in a As is well This improved done we third-party our few further to have to in results our past partner plan work capabilities, of XXXX.

Each of continue We detail will improve commitment allocate our to the to actions fourth these value, reinforce our structure being stewards and shareholder responsible which prudently Dirk shortly. capital capital of in more quarter. discuss during

exceeded we market progress made we the pillars three our XXXX. first significant market Turning with pillar, to our for to full are growth. have plan. the against share long-range our volume profitable page relative pleased the all goals year Starting with of We six,

market In roughly we while restaurant basis XXX of latest excluding market nearly exits, the provider increased showed a our volumes, our targeted decline fact, approximately outperformed from by as X.X%. points survey X%, third-party the by our

X.X%. within restaurants, case X.X%, estimates independent market our the Specifically the declined was while third-party by growth that

sizable serve and longer-term grows on EBITDA to create with Our dollars is types focus customer yielding margins. and expands allowing target on by growing focus our the customers effectively us more benefits This relationships. those customers right our

are XXX year. increase number We to least in the means and XXXX which the working of network will openings to of end at opened eight have a we six the CHEF'STORES by CHEF'STORES of in XXXX, robust nearly

gains pleased sales quite leverage and we market gains MOXē as platform with expect initiatives. industry-leading share our support our further are differentiated share our well in XXXX sales options, growth strategy other in our omnichannel as XXXX We as and

improve to margin the conditions. XXXX. number excellent implemented Those case pillar, gross of per in we initiatives optimization market regardless achieved to profit of results a Moving

have three contributors significant the results focus talked same been to are and I year. our key on Our areas the last about quarter

First, our in the very and deflation our earlier year managed team inflation later year procurement effectively the processes. significant pricing commodity some established and in through

margins challenging industry. customers of facing reflect a with optimized cost also environment number better We increasingly to the our

improve stretch approximately of anticipate achieved we spend in be to collaborating our our Second, an XX% goal and representing goods cost addressed additional XX% spend of of XXXX. of our vendors to with

with inbound all with economics ensure focused improved working our process the intensively third, vendors to aligned And year on logistics and team market.

which in synergies is to our our $XX previously million achieved stated Group million also XXXX target. above We Food acquisition, total $XX related of

XXXX. initiatives with expect performance we further in XXXX delivered These a profit strong along on and per gross case saw to others build together in number the we that of

environment. We made macro progress on very operational a challenging despite efficiencies

significant per reduction being despite lower XXXX. XXXX routing volume miles in optimization well and cases levels, Our case above resulted than drove mile

turnover engagement markets further in continued efforts work in the productivity and and of opportunities. productivity half. on We retention through targeted improved a and improvement in Our optimization select as we benefits combination yielded saw consequently also network-wide the second greatest initiatives with employee

and pillars drive is advancing critical continuing to we'll Foods enhancing all long-range foundation well into as against that initiatives three and as beyond. build operational execute and with experience the plan our on XXXX goal a customer of progress further our our US

XXXX. progress pleased in significant acknowledge half progress, and our while made here opportunity to we build on to second our remains momentum throughout much XXXX. with we are it's important that We've And expect

hand financial like over Dirk to performance Now, it over I'd go to detail. to in more our

everyone. morning good and Andrew Thanks

Let's turn to eight. page

the adjusted million. and XX% fourth accomplished grew how year with our and the from fourth We that to XXXX quarter what pleased fiscal $XXX during translating the in financial In are prior results. is into we EBITDA extremely quarter,

to In quarter, fourth XXXX. an addition diluted strong QX in per year. with increase prior the over to Adjusted EBITDA of EBITDA consistent Net year our sales prior fourth were quarter strong EPS and the over adjusted of the was dollars, $X.XX. case XX% billion increased $X.X remained XX%

inflation cost prior food Total increased case and X.X% X% nearly the was approximately case over volume X%. year. the from Independent was year prior growth

We the gross continued from no was essentially pleased our growth with the through strong quite in fourth quarter, profit there sequential inflation quarter. we're -- fourth quarter the as which

adjusted dollars a as adjusted Our XX% gross the gross profit case. profit from prior we per strong generated year increased and result,

remained OpEx elevated.

in results. signifying during continued impacts turnover from operations. other still chain the turnover improved in saw improvement fourth our we drove see quarter in and productivity from The improvement increased We However, significant initiatives opportunity supply QX further the quarter. our

an the For with of $XX billion. is X% XX%. sales inflation a XXXX, and increase of cost volume year increase were of full XX% net This

due quarter. of billion, more expanded EBITDA made guidance fourth per in share, the to diluted prior Adjusted XXXX and above basis over we plan XX%. $XXX XXXX. million, EPS about $X.X was achieve EBITDA XXXX. Adjusted increase in and over full a our prior good margin are progress per $X.XX of adjusted of a also XX points strong We above our year excited against case an increase the pillars EBITDA all our was XX% what Adjusted year can and than we increase was year an

Let's year healthcare quarter. Independent X%, and lower on Page grew chain X% volume the an which from last XX% X% look is Hospitality increased in X% by volume. offset at we grew acceleration reported prior QX, cases X. over the

quarter this consistent customers, what complex a the of and driven strategic more small exit chain of less profitable by shared in Our largely decline was number QX. we with

stronger and in QX Year-over-year have we year far customer types signs prior was continuing seen to QX. demand. So are see almost of softening all improvement XXXX, volume growth not across case in than over the

target types Additionally, quarter. we in customer share gains again delivered this

is types Our growth, profitably types on focus growing resulting customer margin opportunistically and customer profit these expansion. and keen EBITDA other strong profitable in growing gross

for For we all for X.Xx other. growing the full Xx our strategic of year, excluding case exceeded exits goal the and volume restaurants market by

to COVID relative hospitality care Fourth above QX of tailwinds, I XXXX. XXXX. as on moment below embedded cases was were was XXXX nearly quarter XXXX. focus recovery for independent a growth below will X% health still growth X% We case XX% have and

to discussed. For all primarily the related other, exits strategic decline the was

As longer we XXXX. move compare into XXXX, we against will results no

progress Moving XXXX. compared strengthen made to We XX. We leverage. and to fiscal reduce end further our in to Page the quarter and reduced continued our net quarter the structure both fourth third of leverage capital XXXX

ratio with was in fourth reduction a line year. two leverage X.Xx of this ago guidance, a year the quarter net was a Our reduction which the at X.X of turns our turn from and from QX end

strategy. we've am During progress this and net reduction of by an term of additional I deliver a our leverage prepaid area the we in made capital allocation with $XXX XXXX, to quarter, year Leverage remains on loan, we our our million. reduction. strengthen reduced million past the fourth fiscal happy further means priority $XXX focus capital which of debt approximately structure

time, the first announced and the XXXX. quarter $XX of we repurchase of and program $XXX same January share At Foods' shares fourth US million repurchased XXXX million for in

our Turning now guidance for to XXXX.

continued of three execution long-range the the efficiencies. expect increases and margins market improve earnings plan, share, expand operational volume our grow of to through We and in pillars

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

billion expect in to diluted $X.XX deliver to XXXX. $X.XX billion fiscal earnings EBITDA per also of adjusted to We adjusted $X.XX $X.XX and share

second lower half. improvement, range mild higher end solid The the slowdown EBITDA while continued volume of in the macro end a assumes assumes the demand

continued achieve total expansion margin and and We We're as turnover in improved also guidance also case XXXX on and CapEx. gross per above more profit OpEx increased we efficiency XXXX through interest EBITDA providing expense expect initiatives.

significantly repurchases. inclusive As share we XXXX, year-end, by times debt earnings any and below in three reduce to increase net total we to be continue debt leverage of expect

our our progress, capital summary plan and and US In adjusted allocation. against in XXXX very capital terms record strong EBITDA long-range advancing strengthening achieving Foods of made during capabilities, structure

in one of at US on XXXX on is large the Foods and progress the part us building to these our XXXX, was created thanks beginning. efforts. we Every just squarely is focused to date in momentum

value our best-in-class for customers on We and for creation shareholders. a focused are our associates creating experience significant and generating

With to I'll Dave for that, his it remarks. pass closing back

building long-range and made against the I closing, In look progress be couldn't to team be Dirk. forward Thanks, to I significantly our more excited has here, company's plan. on the

in working Our to profitable driving strategy gains year and will share and gross ahead. on we margins remain operational focused expanding is improving efficiencies the accelerate our progress

We are winning.

associates term. we of work I over build that long to company better am done to compounded work in the XXXX will continue our deliver we our the XXXX, to on position value accomplish serve proud in the the achieved customers expect and shareholder have results to great and

With that, Cheryl, up the please for questions. open call

ahead. is Please [Operator Instructions] go from Securities. of The question first Guggenheim Heinbockel John

line Your open. is

let So guys with me more start question. strategic maybe

right? So in running best this address in the the against places since warehouses, you're certain I XXXX, rate at capacity a independent if how the in need up capacity about that right? to think quarter couple years? maybe growth the much capacity I think that was grow case at with want I to either invest to sales one force, is there next grow you right of the think the

the more you can our customers in health have to start of capacity, the add same largely is focus I'll focus reason that using start your already because with, our just hospitality buildings, are But we think, on one have actually I the morning, SKUs Good is things out Dirk. question really on care is warehouse. and may from get the then much and of capacity independent in. this a capacity Andrew a John, reason you our your and

we And so don't from any that perspective, see issues there.

We Now going sales, add as year sort think, is types do and We I sellers. Sacramento a will there, this really sure And with facility continued why grow. customers But want time our to putting with that add other continue will capital. capacity. as New part And continue you we of far Andrew, customer Orleans. smart California, right to and the that of to we opened that's opportunistically when again, to in then make have in we be right the to to? we're continue want we're in warehouses.

John. Yeah. A couple of things on that,

On plan to the front, continue force. are with to absolutely of we They part sales important the incredibly our expand relationship customer. sales an the

selling as which be expansion. happy with I opportunities down to even of we've double expand our really been will We chefs present team-based in that was leverage we've growth specialists important been strong and the food-fanatic been on growth to in of on leverage areas part things particularly of those are an appropriate. to both will every also those should mention, the But and very able trajectory as we and those that way focusing the market one continue that -- have rocks perhaps of

team-based Yes. Dave. I I've Andrew we'll said, chefs restaurant Andrew And of markets to to in piggyback opportunity said. in as had to on our differentiator us that. I'll the operations that selling this continue our our believe approach witness for is that just and and what several consultants. a is invest food-fanatic real with

about as case growth then growth about quarter you to trying top on of the line maybe where right? XXXX, the contributors follow-up sort market. the you for think inflation X.X thoughts granularly, color times equal line top guide. maybe know And But the case more right? Just EBITDA Dirk, when versus exited Do XXXX? are I some right? you talked maybe fourth for the some and in inflation bridge color you a think And to

Sure.

of pretty customer momentum sets target case well the gain year. I up XXXX, from good did last as expect we volume of to comes more more come growth other volume the the so and But think we customer upon, our across then -- inflation. think really from types have some share wrap out healthy and think We that we types. us right continued again opportunistically touched Andrew expect case for with think as of we we So have the and we to continuing you types coming growth

good that. feel we So about

this as center continues of seeing the year-over-year, and deflation. we showing a from its quarter-to-quarter on remaining sequential the deflation. work inflation an still way In sticky. some plate down. some to perspective, quarter fourth Grocery quarter, modest saw saw think some sequentially you it a that's actually of inflation I We're quite sort have

So -- this that's I to not a next lot the inflation on course about of think focusing and initiatives the we really, counting driving is we're lot line that customers. really what a overall I've of past year we're on our kind other come the and year in over right of I'll control, what share top which is, talked really back can taking are

you. Okay. Thank

Jeffrey from is question Bernstein of ahead. Please Barclays. next Your go

Your line is open.

Great. Dave new Andrew, Thank congrats to during and on job you transition. much. very the the position, And great

Thanks a lot.

Thanks, Jeff.

then Sure. to opportunities share maybe hear The Dave, And a I the is one opportunity. penetrate about gain market guess We question, further M&A. lot further I new mentioned, as accounts. and one you follow-up. had accounts, on tuck-in question adding existing

follow-up. going large three gaining and market or of specifically to and small the would further see and had wondering your in terms one your opportunities, you peers? from those background share like relative even And focus opportunities then Just how I you seat perspective do forward that beyond among prioritize

highlight gain the I team the through that to would year Sure. continued share. last back half just of market sequentially And

really remarks, momentum. As in prepared we our we have said good

in seen those focused good I've we three I've independent the in, about, Our restaurants, momentum. customer and team in particularly focus, segments spoke field, the is laser as really visited hospitality And healthcare. that

I -- just have we we in profitable the growth. And think think have I volume that's and highlight right those segments. focus I would

for I case think growth. So organic there's tremendous opportunity

our portfolio in tuck-ins And our certain add about will To look incredibly course around opportunistic to through we'll something a we continue ability to organically. grow this us that about forward. the industry. perhaps M&A a continued to give your still or geographies going is excited or highly But that either product of but I'm question opportunistically be very advantage fragmented time for will

And Understood. to then just follow-up.

which sure peers. for you in margins has is continue a to think And mentioned been to your I'm heard. as of compared Dave, US focus largest around often you've already think I guidance. your key investors, Foods EBITDA I expand, probably I commentary area know XXXX

I'm years? you go it's past do margins popular whether a terms number healthy is specifically over long-term just it's a been just trying to because Thank topic get of versus unrealistic? think would could what wondering levels gauge just target you. short say of what in a realistic is EBITDA such or they the you conversation Just where of to

sense early the I've Yes the a question. It's me. I we that appreciate in. six of days I'm have. for focus weeks good got

think in tell areas. the I'll I it's XXX%. you right

team makes a all P&L focused in that focused that's differences need between this on to is way and that, the on efficiency Our a in of lot and competitors of for and sense in those how our There's our accelerating constructed expand our terms for results is business. customers. that our and we the the and but provides focus continuing us margins us

as growth look, tremendous on already, good we productivity in go but laser-focused upside I also business I am team tremendous it. momentum is and everywhere say We've talked to And there's me that got excited there's this our about and upside the momentum, heard opportunity about you efficiency. as

continued would time. I of the expansion expect of profitability through course

Great. you. Thank

you. Thank

of ahead. Carden go Your Please UBS. Mark next is question from

Your line is open.

a position. Thanks congrats questions. for new on And morning. Good my taking the lot Dave

still that's So joining Foods, on to relative in structured more it's to bit performance. of a organization a But start and early. an I centralized it's to fashion US know

opportunities of some backdrop. implementing the in So difference see strategies love you and your with the to and on given get just building challenges I'd take

the any But point Yes. out difference. organization hung up I'm that really to on structure. I not mean you're in particular right

place success and processes our comes executing I think to right extremely ultimately people in the down and well. having

and time. that I'm is any have changes. that about like on organization I'll all to of people Our making don't stuff and in sort on assessments things structure I say expect wholesale But clearly more Obviously, and team as I highlighted, that. focused

we've really momentum. think the good got I right focus and

organization You great distracted. don't build structure, momentum. tend continue efficiencies any We're that I to to sense here. of on to that. around a lose a and of start with internal do lot do and need going you got get navel-gazing playing to We've lot

That's solid then great. about the And the quarter, of some curious on just case independent the cadence. growth during

of noise great. bumps months service One your others? labor quarter competitors just take in underground the some to some would saw early some disruptions be terms Your largest of in the for overall see consistency that did in you relative

Yes. Andrew. question Thanks for the It's Mark.

continued we in pretty particularly bumpiness think above as pretty momentum Year, with But other were terms coming of way was I the independent year. line really little played holidays was we we've out much say had with into quarter strong of much in or a restaurants. we're to that forecast January. saw the We continued past see in exactly New concern. bit of I the this in we than anticipated indeed, And fell there what expected the where slightly wouldn't anything our that any there at momentum,

about So obviously to been very of signs to that we for close case look of line that. just really good softness. stability attention paying We've feel the

we've not And seen really so far that.

much. so Good Thanks Great. guys. luck,

Mark. you, Thank

go Please Alex Slagle question ahead. is Jefferies. of next from Your

Your open. line is

XXXX. wanted locations in could just on and it congrats, XXXX about CHEF'STORE Dirk all for moving accelerating added the forward. Hey, that's thanks. new I you to I in and just Dave. some quarters, success Welcome, ask and performing. how in perspective additional offer And team wondered you if things recent Andrew,

and you're it leverage synergistic out as to the with look gains curious two those power the the you heading relative the sales and see seeing same-store really that channels to of to kind future. And you Just rolls still like over markets customer additional combining if where XXXX? of allowing

to Alex. integrate. great Andrew. that good Thanks a Yes. the business. our feel acquisition The of as progress, to in we've us growth put CHEF'STORE's now is which about nearing drive It's will We integration completion system very continued basically of position really question, part the for

terms In out new played how between playing of top broadline they've store of of they're the exactly of and we terms in model sort as openings and that driving our synergy line stores, had anticipated. out

new significantly time great in those that have is good We through rate really out business. stead which as those a of they've to us to working stand in of look very busily way accelerate will builds. the made store more store quickly across some break openings to both also our even a we around team good place And progress in roll

good about the as So we're and last accelerate trying this generally, year to, eight year. about even had good continued talked more feeling I this feeling delivering to we synergies the from that six we planned also rollout think about quite year, to or

the kind allowances and go the to this how and quarter Kind degree, to at in room here then the relative to of in really the I done the and inbound think work you up and optimizing maybe seen carriers. picked still on income. what point? there's been low-hanging fruits all just the what want in benefit quarters you've curious, of fourth of previous most It's vendor to freight follow it's a much nice tailwind recent this you've and quarters,

Dirk. what this we to was in Good saw Sure. not morning, I than is call pretty QX similar Benefit a out. QX, in would different whole so lot

down a with. sort the and close ahead in market we're strong that the adjusting thing has our vendor nice done market the and sure that collaboration, really of being third-party that cost, rates addition job at are I they're that going as of staying making that, is up active think team to in to, line one very or

that do team year. The this to continues

said, P&L. ranging them, up lot or the continue embedded in already our of our a to that, gain expect them convert is there. and would to bigger I it's whether some picking to it's remains managing trucks So there with us opportunity own cases there But that

there, So some still lot the of but opportunity ahead expect a to benefit lot of gains and a those pretty durable. be

Thank you Great.

Thanks.

question Please ahead. go Ivankoe of next Your from John is JPMorgan.

line Your open. is

could come I SKU see kind wondering, a is has insight that opportunities. driver freight the made are you we opportunities level mean, making better. just of was warehouse lot the entire around supply company, at if significant But inbound I get just that's chain company level, your or chain manage so There Thank business. very assortment may the A to bit that you of more of Thanks. a be Dave, little ability efficient you as whether it supply major much. big category. what been Hi. And what much more buckets of a your drives the whatever conversation into that very your comments it's about obviously and

Yes, lot we opportunity on as I as for a But huge that absolutely, to and heard my comments, as company. efficiency in of John. chain. supply the see to we that. the continue in drive a highlighted Look, progress made appreciate productivity call, I I you've --

need have and possible lowest As what it about to we in I to owe We excellence supply driving. aimed possibly cost it is at to think certainly efficient be. the and we our shareholders, that's on-time owe as we be our owe the clearly, chain, to at company customers to predictable we that performance as ourselves, can

I would buckets. the work I I that's And going four put key about it in as kind guess, think of on

seven-day this the turnover most You've potential that to drive delivery heard to that across scheduling, tremendous a and morning. pilot of had This the Southeast, continue efficiency company. flexible us in we've the lot and reduce about help has

selectors. but visiting was that them anecdotal thought halls, town you had town when just not about opportunity In some and had. flex roundtable selector just the I scheduling drivers roundtables that give to -- I they we asking with market. I started fact, had, I I'll little In the the have little story, what one

has veteran, an had XX-year weekend to who been And take a working opted warehouse schedule. days, we

the do And and on well, help in why career and a gives so week would warehouse. my my you need more wife, we to I to lean out of in and my what this You're one folks the balance me that? help and the He said, needs personal the she said, catering do do chance the "Look business, and during her help senior front". wife has

our help here the scratching employees as and something the associates I that surface, also drive think as well So, are as company. will for efficiency we

standardizing pay still we've it anything our One momentum chain the through optimization, training in here company opportunity really in how work We is, there's we two the one, the how about I inbound that evening. and process dividends area being strong across do think that lot will second of of about course to our others, company. we is supply then, consistent term. great And approach a onboarding in associates, focus and long the logistics. talked warehouse from think have The

the some future the not I'll benefits. least the this throughout platform also point long-term Then some and about in of supply is heard to final the year, is will which opportunities execute this leading a to course software chain, -- of you've pay one, that going routing will

near-term long-term things. there's company. -- think certainly here opportunities There the I on some So, some about tremendous upside are I'm excited momentum, for the but

Thank you.

Thank you. Sure.

question next is go Capital ahead. of Your from Bania Markets. Please Kelly BMO

line Your open. is

questions. our taking for Thanks morning. good Hi,

Good morning.

the year. I to curious in you're a guess guidance. back just I on want the was I if the willing to just case all the and But guidance market. growth relative growth appreciate the color to range go the the outlook I embedded expected comment for to morning. at on Good specific

us softness what the the help understand second the comment thinking a single-digit, terms a strokes the you guidance just of well in kind second think the and help independent the slowdown were We customer between magnitude I maybe in but all half. types end about terms was half? there hospitality the be you that us can there low health you other, of of care potential if in embedding low of of think as as the in broad assumes might different Can

this is Dirk. Kelly, Hi Sure.

we we there when for the about think still last guidance similar out there to focused we some macro why year relative year how on will think compare the to uncertainty internally to just that's since really always the market. But I growth market. look is this the we

calling And is we you should expect single-digits external care to types just on third-party have in case come to health and low stronger that in to the space. remembering tailwinds see target the we built is good and our customer we've growth continue that I and expect sort momentum I hospitality that it's above growth then our again of what be for would of think that. we think focus when the data from

continued that's but we So, to not expect really growth. where exactly that's see an answer

the slowdown second point or call think -- I few a -- of part growth mild about talking in overall second to modest sort did of your rates. about do sort half the as it of we And some yes reduction embed it so recessions think in past you're

how at the have sort I so there team about part and internally range. modest what we focusing stays very looked and and on the of is we high can focusing a that's we stable, thought But few out ranges environment that. part end of important -- the the So, control are it's at delivering that if on that think we we the

just in things macro, piggyback XXX% are has that regardless times on to and on can we to year. think I control have of Dirk did and confidence couple And targeted a I will we share we take like of those last Yes. this that the a focused the said segments of just we continue lot

turnover you. levels? Thank get maybe follow-up figures figures normalized terms this have a any And you of to over expect to -- where back you and staffing, us are progress? maybe time, I measure metrics that you in of or And to just with share you when missed can broadly to any are that able on share kind just may

Sure.

staffed quarters. a is largely sort perspective this number for been So, From Kelly, Dirk we've again. a staffing of of

shape There's have staffing good sort to been challenge. always where and the challenge. we've But there be isn't in a really going of a you two there. that market So, or here

of it it If closer we've now about delivery gotten sort Andrew a was I when specific where shared to we think up said call much half its that compare driver And one XXXX. at worse. as -- of about to turnover although numbers times XXXX we is and in haven't sort

progress there. significant So,

almost were gap. On we've at we of closed the that half almost Xx and warehouse,

progress. good So,

And get think Andrew we'll talk some that make I continue things give and there. about the of continued us there. progress to We that confidence you've heard Dave

a I we Dave a can't key we that things really I a it's business part we both macro think use for help helps love is for the where the and as the business. the flexible our either environment. a relatively think the or unlock as help And customer the But spending when control and are the the it associates talked much labor tight business. remains about those associate still that that on

you. Thank

line next open. Please Harbour from Stanley. Morgan ahead, is is your Brian go question of Your

ask of Dave. Good Maybe -- you. customers. just you're drag that's past But the some to out do called always or process. know there's thank from do and guys you of drag more kind welcome on I of do kind kind still customer morning optimization side? work you think a just the most think that, you Yes, on from that exiting of to And constant the

good have In So, look to said of hygiene. morning want sort continue us is we said in that been any you We've that we're expect our of good this continuing exits to the remaining Brian, at sort is pretty Dirk. to we've think to that would thing base. that consistent With QX. to lap business be I going the

is up on to us sort it's gross by as it's and significant, share actually growing in any it's doing showing cleansing continuing up and focus make clearly we're in really the cetera customers. that's is that -- of, in showing and up hopefully our expect et see right what market profit showing opposed results. our you our and sure to about wouldn't what So, And

Okay. Great. debt side. Maybe just on Thanks. the

you that the XXXX? You leverage. a outlook? in expense Do is that growth similar obviously or pay And rates did what perhaps kind EBITDA factored of down expect to you have debt helps at higher interest into

continue pay to to expect do We down debt.

We haven't been specific.

and conditions, continued repurchase we'll things our a down are in be what with opportunistically price of And reduction we've pay on. to but level we continue leverage to depending contemplated those expect the market continue and shares. share would being the an And, also debt think is outlook. opportunistic on in we yes, will to that undervalued EPS So two focus

Okay. Thank you.

question of from ahead. Fargo. Kelly Your next Wells Edward Please is go

Your open. line is

and David, guys. Hi, welcome. morning Good

Thanks, Ed.

very sort you sort of, that $X.X about had the roll in and as for plan really you I hear. that's But Dave. is of I what probably alluded of, more Could the outsider think an additional bit opportunity. the see to into that has you you mean the billion you by And there's things own, support that, place obviously the how here And plan. about about your just that that? said Question to mean in been also perspective in you good you has goal then EBITDA as execution maybe company the when XXXX? accelerating a talk with that does

Yes.

part understanding XXXX of in and Ed part. I've I to and outlook Let and about and the first that haven't second come timing then the digging business process of I'll me for purely this but year. said take learning my first the me. the time for back that's an spending the target, question issue anything been

It's just I for early seen we're that anything XXXX. me reason off track haven't believe days. to gives

In fact it's just the opposite.

You've heard in about my in company. momentum the confidence the

first momentum. teams accelerate question, work I for well like and execute, to back your to so with to your of part And me execute

aimed on We the think, rightfully and in team I have them there's results. of going do one the the well really then view the on and help If can get to move the focus improving so thing, critical much at is and done company pieces I them it. on next all do

now. purely closely So working I team what the that's I'm that meant. around with

Let's movers, keep our the as well moving Dirk work ahead. right our on and as the as you needle ones help business say heard that associates

just follow-up then Dirk you. for And Okay. a

deflation. sequentially improving profit XXXX per little in bit XXXX, a versus also gross of case mentioned but implies you guidance Your

about things there's questions those. think, gains procurement investors I and like lapping been amongst

So year as next in the we're confidence your growing an seeing about drivers think this and bit a maybe case is more backdrop? of this talk inflation. that that per profit issue just I important you gross despite Can

morning, Sure. Ed. Good

it gross to about I been feel good share XXXX higher really those we're improvement and making even we per to comes pricing lion's think And operating has environment the profit about has reflecting done and that and team work case good we've operating initiatives in. that optimized profit do with our sure that XXXX. reflecting So continuing where case per is some improve above back gross talked that that what the we've of in our we're cost through the four-wall customers own our passing

expect to it that onetime we'll of some our team lapping. portions have procurement early we So durable. be Yes, the But kind the be of pretty year all in we'll gains through look as good and we profit we will a good we very good work that durable have feel done gross gross think year about profit to ahead. last strong it we've continuing be

Great. Thanks, guys.

Thanks, Ed.

Ed. Thanks,

Credit next go of is Your Please Silberman ahead. Suisse. question from Lauren

line is open. Your

XXXX. the still congrats, very echo of you bit is early a question of on this follow-up How know prior are my I little you kind thinking also plan? and to investments about to the the of, incremental your on I be level spin it's days. might Thank a look execute much that plan But as Dave. add a own, And then you and necessary

to right think really about you're Yes, premature be me Lauren. those for would investments. It

making is company investments. the I Now think the right

the that I CHEF'STORES doing XXXX the appropriate plan have we've there about next some be and and team here had. targeted XXXX us sales continue the the few beyond. opening to beyond the I what we're into we'll on heard going we And of excitement supply talk in think then that months requires over The assessing investments which investment. I'll think the You of it's around things level of most chain making take

to on quarter-to-date? Thank -- Thank understand some on any know improvement to seeing And just you. near-term, willing I you then just that. broadly what of is seeing underlying are for the trying color guys industry trends? you the some provide Omicron it's additional you're

is Lauren. Dirk. morning, This Good Sure.

really commented and early we've softening. seen the quite demand Andrew on quarter here of haven't part well the through overall that commented hold seen up signs comments in So I the prepared and of

the think overall enter momentum seeing I with year expected that to we that. we the are

to we optimism our on to year builds to than share lot other whole a beyond and what year. not we that through continue as enter the expect the really So deliver

you. Thank Congrats.

Thank you.

Thanks, Lauren.

go is of Truist Securities. question Bartlett ahead. Jake next Please Your from

Your line is open.

did the XXXX the was for Mine but follow-up you XXXX talking you're on was momentum. EPS, taking Thanks about guidance. the It question. EBITDA the higher accelerating maintained Great. hit for and a on end

like seems building spot. So a you to maybe started I'm guidance how conservative pressure? Just in Are more some that be? wondering XXXX better there's offset. whether trying understand macro might you It

think will and XXXX This in we're Sure. think -- again I pleased morning, we're momentum with with shows Jake. you our above very business. Dirk. a I way which good bit ended little the pleased when of the is Good guidance, the

out macro the I think but uncertainty that you play with in the more progress, then still us message of illustrates really is economy things if and the how it. continue order plays year a where good you slows potentially when out the you see the to would we'll of to we're XXXX magnitude I down. range feel pivot But should do. that we've good I update just we very out strength think to expect take quite to a And entering momentum. considered We knowing is think quick there out as do as continued reflect about not as tried recovery macro good there very

the that independent instance that up. you're I from might case of been traffic others new case Great. the putting high exclusively growth? really pricing that growth had by the And having -- of the to account for with -- driven driven down the heard are question drivers restaurants new Foods really is independent that growth We've just because case that take. be Is then the it's being really whereas, a accounts about individual case by account, US growth

accounts that on seems to expectation would was all that the accomplishing penetrate the ability new are more like to if It about growth. that get the would larger get players little wondering the then case, build I'm account market difficult And a that. -- -- be new My is that and firstly the And supply chains able dynamics think players to is driving answer smaller the service case as whether better. are really seat here? just the second eased catbird just those competitors accounts in what still the growth? competitive larger Maybe were you of and the other

it's Andrew. Thanks Yeah. Jake,

the to market energy concentrate a for growth balance We're driving looking systematic that taking the mix focusing as account in level good those the been greatest well wallet talked seeing as those opportunities of our a we've with of And seeing on a very focus as think with So focused on share a of approach great I&D part to boarded, growth. menu target deal new are of that's sort about accounts. on customers. a a we to then we're types expand pleased way. -- been last once spent we at penetrating quarter of very well, And in new as I our acquisitions, really those

I So, important both, say, both continue. and are would will

said the my that within we far are as mentioned As we that's customers in in pay those we're And for attention of seeing close early because this point. part. as remarks, a be looming something potential sign typically recovery most customers any I I themselves, what really seeing of very good slowdown. again, to, our as have an previously, it at will we And not seen sign that

the brand penetration. thing, accelerating the I'm penetrate our north there excited say, I'm brands, and that just about on of about momentum focus to I'll excited but continued independent is and able XX%, been exclusive And the portion team's that our of other we've

love the customers good, They're makes Our and it. it as sense them company. for really as well

it. appreciate I Great.

of Peter ahead. from go is question Please next Your Saleh BTIG.

line open. is Your

as this the just on it how to I you seven-day you flexible do taking rest benefit think a about well. elaborate for team pilot, question, And to of just to the the bit the ask echo can quickly scheduling. the the I the if prove cost of Can out in just congrats this Thanks does delivery out little system? and want you Great. initiative? my wanted pilot roll the to and

be thanks scheduling for which the And learned scheduling. we've learned a both things had of actually go actually flexible can get -- able and a couple a we days scheduling. in you to order pilot, measure -- We've everywhere benefits to will benefit. is a that other quite be to large the need different of we've flexible don't Pete, a something along way it Andrew. do to quickly much from Yes. does it seven flexible question. the from delivery elements pretty the In what to the It's seven-day is a words,

us. gives that and that the their selectors that stay willingness choice it with on impact has Just to given our

be onto little replicated delivery as to looking day in out markets do little promising a particularly And two their those that customers. markets, we those shift pilot serve capacity plays that testing the to more the pressure out, in work very on a weekend. we off takes in are to that days a and deliver see deliveries two because market, will look takes meaningful played we depending we're gives That of extra ones in it way additional where to that speak. more a has Seven that how that great markets, where constrained will benefit, the ability deal might

significant portion scheduling may looked opportunity this flex delivery in to a combination we both or to the roll and be, a the of and our more So, real being are out seven-day elsewhere. selective as at be see likely with separately number case markets year

costs, employee find like we it about relations, positive the schedules results. part increase that to have scheduling gives productivity. and of feedback improved when We've earlier, safety again, them, is, work that and reduces your hiring you for opportunity which it flexible And cost Dave what turnover, commented really the employee also as that employees positive seen, lower it lower really, that

sort So, benefit company. they help all reasons and those of good the associate are because things do they the it, to

you -- strategically? any And low-hanging lastly, Thanks. see just you're Great. focused XXXX that then other Dave, that fruit on for

the a on I lot Like fruit continuing low-hanging to things through but help opportunity see there the and and more needle. and outside be other I'll moving course to focus opportunities. of in well that with might focused I team accelerate that keeping No. see said if an of have that I matter to say earlier, here the the results, time, of execute

Great. Thank very much. you

Thank you.

next of Please Your is from question CL go King. Wolf Andrew ahead.

open. Your line is

and morning Dave. Good Hi. welcome,

morning. Good

you on for strategic acquisitions. Question

CEO company XXXX. transition value during of the one highlights think historically, launching industry shareholders. has creating of the plan timeout But of into in acquisitions this a the phase been is and for period through both kind the I

how sort acquisitions, conversations Just the you get stand likely to the straight to for something interview the us or either sense where just on with feel that? is about XXXX? you eventually Board could where it with eventually -- company give that plan ahead you back just of can a will or in Is it your is

M&A to as market, the geographies and But acquisitions highly that for fragmented, or Big for got that. Look we've on we'll pay invest M&A. where the sake. I opportunities plan. you three with having order allocation We'll for debt. think maybe that highly capital we'll still valuation. to on either opportunistic not do need we in There's And still portfolio to return in have growth of company. And the we'll and be We're is shareholders. the right value know make that I things reasons fragmented a be capital do XX% going We'll opportunistic M&A's down of we finally, the going this priority, to right in mean create sense inorganic through be still industry

way that. like outside -- type you rate would the either work for be who force acceleration. you And that? they industry a who Would kind book Thank little sales Are additions is Andrew, bringing competitors chefs Okay. business, them where this anything sales service be to or or it also that of quantify from can wanted great. are would color either folks they're or and of the you of do there the at of is you good ask food I you to sourcing any from? on like want other distribution about

question. Andrew. Yeah, Yeah. the for Thanks

this say thinking levels be doubling we're XXXX opportunities doing And as at markets I down end slightly targeting way by with is above the so. will about of particular we or be be think to growth the we year. the in in will I

well terms think Of hiring are mode our mix and with of typically anything coming as more still background with much We people growth with be hasn't dramatically. as we the in been culinary continue industry So big folks to people those that particularly sourcing worked toward our for experience. that high-quality is where from if talent industry. is probably reps success so. tilted And very And stead, little us really think will is really a that's opportunities. quite having we've late, in look changed standing in we and good we in from in sales attracting something good bit competition, markets mix have a from, that

thing is Andrew important think remember. I to an -- just it's

So growth but to will and said ads as and sort our more continuing the -- those will headcount been and been and are markets to an we've not earlier, to need. be is inhibitor Andrew we adding where that do the have opportunity hasn't be been outsized continue of growth, there's seller in

Appreciate that Thanks color. for it. Great.

to completed for Dave questions. time will for closing now have the I Flitman the remarks. We allotted over turn call

care. appreciate Thank time. incredibly for momentum We'll Take your and us to I excited you all soon. joining you here today. the company talk I'm all be that to the has.

Thank conference today's call. you participation. concludes for your This

disconnect. now You may