US Foods Holding (USFD) 15 Feb 242023 Q4 Earnings call transcript

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the US Foods Fourth Quarter 2023 Earnings Call. [Operator Instructions] I would now like to turn the call over to Mike Neese, Senior Vice President, Investor Relations. Please go ahead.

Eric. you Thank welcome Year and Foods Quarter Fourth Good XXXX to Earnings Full Fiscal Call. and morning, US On today's call, Dirk we have David Flitman, CFO. Locascio, our our CEO; and

We remarks our to questions question will limit one follow-up. Please yourself prepared one and take your conclude. after

this earlier page be Relations in today's our website at issued found release presentation the on earnings morning Our Investor of can ir.usfoods.com.

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

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

will release certain All to in today's well Lastly, included non-GAAP comparable financial we press during to the reconciliations slides the on measures call, earnings as measures. in our GAAP our are most website. the posted as presentation on financial schedules refer

are We to measures. financial non-GAAP forward-looking providing not reconciliations

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

joining Mike. for and morning, today. everyone, thank you Good Thanks, us

our turn strategy plan. agenda. I'll start against first year and by pillars Let's at US to and progress highlights from long-range Foods sharing today's my key

to Before well XXXX quarter financial hand as review results fiscal over I to and it Dirk as fourth our full year XXXX guidance.

of we many of and long-range and strategy accomplished our plan, share margins. goals, an was execution profitable our US year exciting company's underpins to XXXX enhancing including market transformation, Foods at which capturing our

as driven drive customers, expansion We profitable market adjusted health which growth, independent adjusted customer our record beginning am basis and with margin operational of more the independent EPS billion, we full EBITDA expansion in gain the key combined of deliver and strong implementation to the year's margin share year care improved ability This nearly by double-digit continue result X% restaurants, types. EBITDA past I $X.XX XX of year. to points a of XXXX of case target of with Following productivity, came even success, market and hospitality achieved initiatives growth including at was case growth. this adjusted gains share outlined confident with

platforms, performance of XXXX VITALS key and drivers proprietary are in were digital further line XXXX growth and top enablers our and MOXe of Our beyond. in

flow also operating We repurchased target deployed investing range, for within shares net tuck-in to while all $XXX business in our accretive is million strong X.Xx reduce cash which in leverage to completed the organic growth. approximately X acquisitions, continued and our

industry to by the adding digital constantly customers' new experience needs. and lead the to in customer continue innovating capabilities We meet our

built, drive and structural and momentum and Our XXXX position to tireless differentiated advantages delivering market the any enable we've improvements business confidence macro us our model, bring in dedicated The environment. who associates strong digital from us will we dedication to our made continued work day. competitive win expertise, from plan in sustainable long-range My to XX,XXX comes against their expertise every outperformance.

X. to Turning Slide

growth focused and made and we of how this ensure focus coming I these We're excited into accelerate areas line of and improvements pillars: service, the profit. to win bottom X operate growth. progress about guides strategy top Our comprises sustainable these right what year. each are service believe culture, the and we we've are and continued on to to

Slide to Moving X.

delivered our of X Let's key team in our XXXX accomplishments that under our take pillars. a look at some

number to reduce is associates strides the in pillar first culture. of our made our priority, and remains of Our associated we entries accidents our XXXX vehicle The across and #X facilities. significant safety

full our recent year by best results year history. fourth and and from Our improved rates XX%, in quarter were frequency injury importantly, accident safety prior XXXX the and our

by and new exceeding filling success, Additionally, of with is talent pipeline or XX% people key our leadership workplace open we our color, inclusive XX% a supportive our of to goal. and women diverse creating roles enhanced or

in absolute planet. target. responsible previous remain by our reported year, toward XXXX, also our the emissions reducing of during way Scope achieving XX% X X stewards of XX% XXXX We the And greenhouse and gas Scope

continue to and trucks. XX and progress support We natural XX design addition trucks of make X construction on yard electric to the delivery delivery tractors of in took compressed infrastructure vehicles electric and completing electric gas to

to disaster portfolio. million more many and equivalent label loads under of private We customers our we than also which the innovate for relief product food. as in products our roughly of donated on of hunger, Serve than million is $XX and fighting more drug X our part to which meals strategic In more of sustainable come partners, continue hunger XXXX, supplies and offer food focus Good XXX

Feeding Foods relief Foods US annual to As Since company-wide partner, This campaigns. more support hunger than product who by banks through engagement the their fight national million food XXX product country US our across XXXX, financial a provides has mission through work supported to a associates efforts. time pounds and America year-round resources hunger donations. donated of is and to volunteer

to pillar. our Turning service

to providing delivery focus best-in-class on continue a We experience.

in X the on-time year. levels are We taken back to are fourth company's markets in our mile in-full apply and pre-COVID early customer We prior third routing launch cases proud launched the away quarter, our pilot per have quarter best in now to learnings history to to fourth quarter, improving our in delivered national the over Decar record. service and the this report levels. again our We

the deliveries more in in than Dicard further enabled Our while with on platform. routing XXXX, effectiveness provided routing in also focusing initiative X% us by improvement improvements on-time

independent are we short, of anticipated enables chain earlier, by embedded with second up business manage it bills freeing that in efficiency easily and for accelerate national to mentioned now inventory and will pay through our platform our for growth. further teams I while customers XXXX. restaurant solutions full customers U.S. tremendous sales digital place puts approximately our is the half In also our deployment with our our both MOXe orders, XX% of the for customers. supply chain MOXe time business to experience which transforming hands our the generate of As customers and fees. fully our

digital an at XX% high all-time independent Our of is for restaurants. penetration

Score, to Our We distributors the industry make to easier we Net believe factor them differentiating Promoter our in the are MOXe. foodservice since business our for a help do want highest success. among us, launch digital top of to with is continues is key tools customers which in the them increase which succeed giving and it to

and our X.X% billion, restaurant increase growth case total volume, in independent gained let's X.Xx net health care restaurants volumes. an share goal volumes growth by of had pillar. have consecutive we hospitality the now X.X% We X.X% sales of volume XX for course In exceeded X.X% quarters. led in market independent over anticipate XXXX. by with in and market We a a our turn Now this driven increase $XX.X X.X% continue to XXXX, our to in will increase growth restaurant growth case

health were volume pricing VITALS staff care revenue reduce pipeline through and customers our for new hospitality Our converting largely facilities. flow living of acute staffing differentiated to This effective strategies, and patient and and improves and as training business planning. through allows platform more into platform both by gains labor menu our care and and our satisfaction senior customers bolsters driven innovation, operations costs. This model highly in such service increase

operation to ourselves savings differentiate our these product Chef's exclusive and to are Rice consultants, continue also our recently such innovations, and Scoop restaurant brand Kim our as Line through value. fresh, chefs selling Chi and grown labor that a unique our expert featuring have on-trend competitive of differentiators team-based launched Fried customers significant We model

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at manager customer has Pronto Pronto, in geographies. and our the are the our changes is Much that sellers. more current model growth and customer want that is in quarter, markets to remains teams that I We portion incentivizing differentiated and We in plan to in to have our last X markets service presence another on aligned compensation a compensation also truck made in growth it. were now? trends for growth. XXXX. XX flexible profitable opportunity our sales both wanted pandemia. it which to delivery markets machine model change small we where has pillar added territory dense accelerating our in sales We Pronto sellers for of case Today, launch the we've requires expanded our I plan. targeted aimed modifications we to working made. bit existing early that behind on Last restaurant Why had accelerated growth independent context continued been ensure sales a highlighted real growth for several and the great and provide service has profitable The effectively and our years addition markets. and revisions during new we improving our

variable penetration. on more A uncapped, with private and variable accelerating component label few our made now sellers We growth highlights. focused a compensation profitable of and

and working targets our our roll individual and together plan. market ensuring label company signed to targets that volume business have sellers growth achieve all goals. up are share private We profit higher-margin for we to

disciplined more to route are to splitting manageable. a Finally, we our sizes approach have territory implemented ensure

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for believe forward. the in US going to adding sales count right model low mid-single digits continue to the is Foods head We

Turning the agreement acquisitions this to we're expand IWC We're markets, to transaction Central And market. Tennessee the excited foodservice service. select signed XXX Food IWC footprint year, and allows to purchase acquisition of to executed of close the M&A. Service, than in area, tuck-in and markets excited approximately business Nashville US renting in targeting serves last country. the in $XXX important an that one million in their quarter. fills we've our local and half in the to IWC the welcome we to the and restaurant X growing More fastest-growing team second to Saladino's in our footprint which morning, has us This greater an independent announce annual gap associates associates Foods space. food the the To are bolster sales. is into

profit neutralize all our to target with growth move commodity cost proactively types let's volatility key pricing productivity managing sold enhancing to of customer optimization of our this goods to Finally, pillar. the are of volume help tenets healthy and our business margin, pillar, and Driving addressing margins. contributed

XX% further profit EBITDA XX% We while remaining by XX% addressed We vendors. adjusted to progress a improving additional $X.XX. of grew growing of adjusted our such As drove collaboratively expanding a EBITDA X.X% vendor as spend billion adjusted addressed. result working our approximately XX% for that yet record and last billion. of points record EBITDA to as by grew additional to in $X.XX not has basis we look year Adjusted on by deliver continue cost goods XXXX delivered gross XX EPS cost case, in COGS to with the initiatives per to savings X% been sold XXXX of $X.X we execution, and and margin over on

over penetration XX% private to focused We basis growing with also our XX brands label where are was on restaurants. points our independent up

gross than less grew in leverage. expenses operating resulting profit, operating Adjusted

and is continue receive Our initiative flexible our positive at locations, over we scheduling live half of feedback. to now

out appropriate will locations XXXX. remaining We the roll in

see of continue rate twice network, improvements approximately significant including across locations. our continued year-over-year pilots, is XX% in improvement in We productivity. in our reduction safety that versus and improvement other in our the turnover especially to improvement

in and chain warehouse of than our early we and productivity. see those to savings initiative last late in We year XXXX. improvement indirect As a more began expect result initiatives, to delivered spending our results delivery with X% supply both accelerate

target our X% a and permanently number work of in expenses. X% XXXX. We opportunities overall favorably operating important This will enabler an to have is of impact savings achieving to productivity annual which identified

to it like would hand over I Before our talented associates. Dirk, to highlight one I of

is against have awards. and Foods, leadership who Out efforts thousands pleased safety, productivity tremendous we Mike's our the benchmark profit Soon, associates leadership CEO associates in profitably. progress to one team The our US is quality appreciate profitability. associated I we quickly the to His service, significant influencing growth. improved improvements profitable during night as driving the X Mike am warehouse in within Talmadge, join of executing in nominations. within we Albany be will semifinalist nominated X of and our and have our pillars and and across customer associates. of we dedication us. XXXX long-range manager his which and of look hundreds of this strategy, our Day excellence at strive engagement, first-ever safety, hope gained company, service, level. driven will we who XX the celebrating our greatness each ignite our for for with a momentum, progress, forward of a Investor become sharing our Even the considering has you next June, of associates and ability our runway Mike long of plan in local excellence in has grow I our of company,

guidance. our quarter Dirk to to XXXX now results me Let our over the turn discuss and call fourth

with morning, this Thank you, good and X I'll morning. cover Dave, topics you everyone.

quarter results. year First, discuss our I'll fourth XXXX and full

an on deployment. XXXX I'll year Second, our capital And quarter finally, first and update provide I'll full guidance. discuss

Slide increased and walk double to growth quarter digits, margins. through EBITDA our sales year to increased XXXX X.X% continue to to our Turning as by we driven fourth margins X.X%. strong adjusted case $X.X full in Net a The I'll total our quarter grow of volume greater results finish was billion, you fourth X. detail.

from low target continued headwind including points each hospitality inflation in Healthcare care focused Volume was volume was independent drove was of growth of continue again quarter. growth expect and to by types basis expectations. remain part mix deliver growth, was customer was of our Health a in X.X% X.X% with in to store strong large flat, types this target in customer growth and line basis which We profitable growth, Chef increased and our while and acquisitions. cost business. XXX had points. our case November strong hospitality momentum that restaurants, new expanding Food for approximately X%. essentially net XX driven We December healthy within on in single-digit XXXX. volume

We XXXX. growth in continue expect to accelerated

have consistency. all data This with to and their to providers Carcano, made other in such are it We been thus, quarter, independence. with how we as be aligns periods formerly moved change MPD, Chef they consistent cases how up broadline known as longer report peers share included communicate All and store third-party this no better for market growth.

increased billion, During X% profit adjusted gross adjusted billion. X% the while $X.X fourth to increased quarter, $X.X to operating expenses

year. nearly grow faster than adjusted OpEx. margins $XXX adjusted expanded Our XX% continues basis adjusted X.X%. EBITDA growth gross by was to or Adjusted profit points million We from XX to the EBITDA prior

Finally, XX.X% EPS growth adjusted diluted than grew faster per EPS EBITDA. our of demonstrating continued share, to adjusted $X.XX

per Turning We emphasizes significant our basis believe we the to in which case progress X. on execution strategy. a Slide made of strong XXXX,

X%. while per profit per case X.X% our Our in adjusted expense adjusted XXXX, was gross case up increased operating

XX% Importantly, year. and our adjusted since up growth EBITDA rate XXXX. year-over-year full for X.X% per case the represents compound annual was $X.XX

at expect with operating maintain the leverage strong gross and to through than we expense in a operational P&L case, per profit rate XXXX per discipline beyond. have and demonstrated slower We that case growing

Moving to X. Slide

cash to deploy operating growth. creates to strategically strong Our flow capital flexibility enable

operating was with XXXX free cash invested of CapEx. in cash million. billion flow million flow over Our We $XXX cash $XXX $X.X

continue capacity on growth. and invest We to technology to organic in enable our to focus fleet expand [indiscernible] and

in will CapEx our cash is Our sales, ongoing approach. net disciplined and of we approximately remain X% target

in in million QX, to Following price for as [indiscernible] quarter to $XX $XX the X.X We the the purchase fourth of shares capital Saladino's in remain returning successful for we shareholders closing December we acquisition of closed repurchased committed million. million. a

share million $XXX our $XXX remaining program. have million repurchase on We

our reducing in X.Xx our at to X.X our ended which through versus paydowns, a disciplined leverage We year, to EBITDA year turn guidance, approach accomplished is in progress which we highlight steadfast on the in I moving lowering XXXX. Before last made the were and reduction XXXX. levered, growth. significant want we debt We leverage to

and X.X leverage target our expect remain range in XXXX. We net for to between Xx

sheet allocation is capital in framework. our which Our shape, informs balance solid

our business, to the given continue and shares current tuck-in opportunities. in will evaluate invest M&A the stock valuation We repurchase price of

XX. our guidance Slide discuss on Now I'll

slide. several there on Importantly, assumptions are this

full $XX.X of approximately we For increase sales X% company We to to year believe an cases X% billion. we and to $XX.X expect we of by expect X%, billion net X.X% X%. can grow X.X%. slight our total be to to total XXXX, inflation

Our M&A tuck-in from X year, with IWC last the add percentage combined our announcement points approximately to will growth. case

than our our overall growth. We case expect running higher to independent growth continue restaurant case

start, our February reaching efforts, of Foods with the being approach of a union on and and has result good the our before of agreements with the a offer barging expiration that at a our principal faith provided the the to From gratified faith December a fair union good US in after was represents took long-standing Investa drivers the X. XXth. union. As we and agreement contract record bill

across are reflects largely It highly offer. are increases provides aligned receive. agreement safety. offerings the builds The we others by to priority us in proposal our in was drivers have as wage increased the continuity upon high relations several the benefit also place business very X-year noted We issues competitive [indiscernible] that enhancements pleased that the serve customers. There and associate on well industry. weather-related been an outlined cost labor the country, that safety and as on our which agreed economics for to with includes currently

in labor driven confident we achieving adjusted year million. of EBITDA negative in issues a We will costs we in Even million result, to disruption the primarily disruptions. with adjusted first labor first and our we weather-related that by the the remain an guidance. $XXX incremental $XXX range January, the be the expect experienced full to EBITDA a believe million approximate for $XX impact As during quarter, quarter

$X.XX translates expect on This billion case $X.XX. from diluted billion adjusted growth EPS double-digit expansion combination adjusted margin be the EBITDA OpEx. to expect into line profitable to faster to to we grow and and profit the bottom per We be gross $X.XX as growth of than

XXXX strong potential XXXX the year. closing, us. momentum feel and was as a of generating in our we growth opportunity about very this front the In I guidance. outlined our in good are year,

pass I'll to now for closing Dave his back it remarks.

Dirk. Thanks,

into we maintain our creation continue shareholders. our to XXXX, deployment we drive value long-term capital execute disciplined for our to will and to move . approach As strategy

prospects. growth our Before into to like comment Q&A, we head would I long-term on

next target confident will high As the to I've EBITDA grow we to we and range will faster X. to EBITDA XXXX There's on company. said even our continue that adjusted share more for several Day continue grow And in EPS are years. growth adjusted we before, tuned. and our a repurchases. adjusted combination Stay at this ceiling of not double-digit is low to come single a through June the Investor earnings over

We well we in competitive excited in I have position believe a what advantages the are trust to continued for about to market we best, do Foods. make outperform into great never more US have today, your it you I been and do Thank we future day. our helping every the sustainable and confidence as continue future. customers our

With for that, Eric, line please up the open questions.

Instructions] of Lauren the line comes first Deutsche [Operator with Bank. question from Your Silberman

close debt in If cash talk it you about looks you'll It your or year. dividend? allocation Congrats with of thinking lot I with acquisitions, could free you're potential looks start even billion just capital pay not further get about target a on a Can allocation. this versus have the left to you quarter. flow to even just leverage, capital $X like buybacks down the over. for like cash how appetite

Dirk. This is

excited debt were debt we earnings to leverage, And down. cash growth earnings. well our out, as that within strong we we opposed more what to grow target expect but to you grow as flow. our range, on meaningfully do a in to in point more expect as is XXXX We reduction have already as yes, So as from much pay

and will addition be means M&A. business, in that that around investing share So opportunistic repurchases in the it to

would share over we very expect So amount increase we're this announcement to year course for repurchases. about and that excited of allocate the we the the IWC the morning,

for the case Great. is I And recently in noise could year? then called seeing some Very to on on idiosyncratic growth. you're in of what lot to of And you color Any if a as the normalize factors just X% XQ. things helpful. confidence in there's X% and began just more the case the ask whether out growth

for Thanks Yes. question, Lauren. the

for there from West the we've January. past other few last in you've little were the really, since were disruption on disruptions around week disruptions others, and As a as got get that time But back. will notwithstanding week. that the Coast a our out and we've strong seen before. That's really happened event, are going pleased what we across with events, actually And been northeastern doing and weather prepared country this a that no I those pleased recovery this seen. disruption. labor earlier came labor the heard surprise. industries, in the the well seen volume with as I've we work team's long We into very to I've tell labor you many ever plan go I've a with

And progress which in that fourth this basically the as get to see markets, pleased largely nonlabor we so and the very heard seen our you disrupted was those the trajectory to saw made strong, quarter. back morning. in we've we've volumes I'm

pleased that. a hear and really just the give can And read said, bit to good the MPD, [indiscernible] on you maintained that. data, formerly market about I little our So is was early we as color quite in Dirk feeling more January, I share

all, team's and in good growth. but work continue focus trajectory about feel all So to drive our do, to to our more really certainly that

from question with Brian line the Stanley. Harbour next Morgan of comes Your

be impactful in of did will different OpEx year, When you do that's than you productivity most kind you what 'XX? of this sort think about the and what opportunity think

the lean areas the I you largely, the trajectory was in last It's with really of us needle-moving really honing pleased deliver see kind to in half lot you will Well, the that focused a in I spent resulting the of improvements productivity look, half there's work back and whether of year do the all in in at there's with more suppliers think quoted. on, been optimization making focus we've halves lot in work of and we've Brian, to the year it's of saw pleased. continue to those but tale pricing pleased on And there. and activities us those COGS supply X that progress time routing, in productivity. areas, the the work year. we're our chain a our Really of first We the more and the the done that with do certainly on I

same. So largely the

spend. heard back started year my fourth of we about quarter. earlier that the in You the work to comments indirect piece about traction see of talk and to half that's back last started of in the half some a really really

was productivity first So see. in improvement as the well. and half up I that that significantly good ramp year of And very will there think we effort significant deliver this to

lot So a a and largely of few a the things. same lot new just to work, do more

rate, does drive low of to I increases Okay. that in flow-through case usually to it And sounds how do target the headcount, as should this a typical kind think about Or case like growth? growth? you to talk that mid-single-digit like have ex like you certain when through flow

Yes.

that I mix the on of in. you're depends bringing think it talent largely

should well in We right term, that. to people, the in our ramp-up than the And from the success sales think cases market coming way model. as that think count XX% there's and with industry fit long great that's of period really additions. head is in a able you to I talent for again, be that know. Brian, and our spend and But lot time We faster Others have competition. industry a had have about not understand grow a our sales to we strong XX% training directly all finding background foodservice experience

into mid should So that's over kind you what get a long low to as growth, we single -- mid-single-digit the the of run. expect to cycle of stable

of Your Bania with the next question line Kelly comes BMO Markets. Capital from

any can wanted about growth we channels still in 'XX, the outpace think the within pipelines maybe Just detail? ask, health are the It -- you're new there definitely care just X% maybe case independents target like help to X% there those care think Or But for for for left and about us planning seeing more growth as of talk in sounds organic channels? to outsized those you total. hospitality? health is you're about that hospitality, business what terms there to for

Yes.

maintain to most will It in plays It's For strengths our portfolio. sure, product focus in we independent segment to the sales terms profitable the the of space. our continue business. our and of

both with an perspective, So strong differentiated focus last strong for and year. care to question, or deliver Maybe drive care We've a in again we growth provided to those market that's in as recovery strong of is in health largely segments. will outsized recovery we hospitality things this but expect clearly year, just care, what that we And health a at and talked last tailwinds. to continue rate importantly, of largely the and about pipeline in that very front. intact, not last year, saw year, above expect very believe both technology your hospitality us. from we saw got health VITALS at the the industry which on given our some a we platform And have we we're some growth the other we

Great. I and of just the tweaks you compensation. the And some That -- also the us there. seeing across you're and ask you're a kind US other Foods broad the couple happiness others? kind in the across unique Is industry of change just kind of this a private of players? the from of normalized maybe Can is sounds like remind sales about just to change? helpful. growth? that across as -- Can what making we've It timing space Or this is

can't relative their to on really sales doing Yes. are comp. I what comment others

was growth at we what head decline. aggressive get as our made to our uncapping more they portion about plan pay, make future. that sellers folks things I our maintaining morning our on really couple keep want the company plan, and sales we their pandemic, accelerate largely back providing to the haven't the were this around great that largely of incentive of if compensation, where any some [indiscernible] company's think that really changes for in our means remarks my the talked growth sellers as we prepared variable those I this made to since to in our gave giving volumes are as they aimed significant for growth. in which shifting that color to much profitable need The count there as And tweaks possibly money things can to, tweaks and we needed

these this tweaks, comp saying last first that kind of your our it's received. So significant quarter went foreshadowed been plan, again, not the into here effect overhauls were question, Answer quarter. I in of all well and

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

Dave, how to to with business there about additions thrust out? strategic there? on shake your have you account folks, territorial investment specialists. new do -- then would facing when investment what's Where want I you curious managers, wallet to And impact in share, the Is do want think -- guys that the start right? wanted that you account versus

the adding John. growth. question, We're to to managers good drive point, focused have But your support to around on right them. to territory Yes, have continue we

and sometimes we and new specialists of partnership force, our management number makes we sure on And largely as new size sales parallel make grow the place to to then add district number got don't TMs. business in well. their districts with out in target leadership. make team and sense, to managers of right the got opportunities, in that our sure the own, we overload that And managers too, So when as the our continue scale go we've right right we've

obviously, slower all embedded pieces mid-single think are TMs. a really of than to digits, X% when is rules. in the at all comprehensive that that's growing But that growth low number, that some I about rate, So those those of

Okay. functionally as think So know that you in fruit, you then do -- June, And follow-up, don't right? maybe where right? biggest a that's if is about obviously, when lay this and out you'll low-hanging when but you the think about productivity. think I

per cases think stem mile? you further is can productivity day out And as the much You talked cart, miles. about There do roll you warehouse. how improve you in the

Yes.

the that year, about question, think part your this really existing we're progress. finishing first that of [indiscernible] largely we I feel our long the plan up good So believe

As that, the chain activity the we profit and first largely back lagged pillars with progress that the we couple was the pandemic. year. made in improvement previously, had think pillars pleased I has of and the of we of I the since the half commented supply outsized in growth

portion largely I the However, our lagged improvement other of X has that areas. think still

the card of despite see the across in And more cases efficiencies all There's routing That's so country productivity get with mile. do, spread a per last supply record I greatest so the year we we'll once our get some card largely the made of get flex the why that coming to benefit we've gains improvements and here. for about I a excited scheduling platform lot out lot chain. opportunity the

lot a So but John, those would all we're most is up one more I productivity say to work areas, aggressively. ramping the area do in

Jefferies. with line the of from comes Slagle question Alex next Your

go there a things levels [indiscernible] it could that and of safety that? back a over room good [indiscernible]. turnover go bit longer-term getting like same time I normalizing going accurate the of little along more of and around turnover where seems the I is but to to ask more kind more just time, half all Yes, whatnot? of consider lines, back like was beyond I you've guess, sort kind It levels on now, scheduling. automation productivity to mean before you be sort improvements of -- in just to lately just of flex the I other suggests and And levels all and mostly gotten could over and mean, just than levels sense generally opportunities of pre-COVID of bit

Yes.

generally, thinking Alex, right. you're about think it I

more I as prepared think scheduling runway pilot and there's flex improvement outsized the there in remarks I lot a seen and comments markets. my in our said as excited we've there, about am

time we've it new seen as we So we've pilot over to the time. It as expect yet team gotten our productivity and and of to there -- local right? it in haven't the continued the time, work the in across associates, even it the takes uplift half well that where markets, we expanded just expanded gains productivity takes operating -- our model

say, to of to to long-term of We lot the productivity about work. And excited have improvement going it in and targets say But a we're about for just in forward. right bullish suffice our working drive ability June. to areas the on the we're So we'll the focus lean more I'm to company productivity. think continue drive

of Your next question Saleh the BTIG. Peter comes line with from

sales and come strong Congrats back compensation I the want year. about talk on for to finish the the a force. to did

this sales any well from several You compensation. curious, you just into focused more you variable expecting place? compensation, as any mentioned and force the in cap are the label private Or I'm on I seen go changes Dave, into think has as XXXX mentioned also gone removing was you this place? attrition these variable have received. targets on attrition changes,

answer So is no. the gate

We haven't seen expect any. any nor do I

did positive, a for to very if you thoughtful you've even preparing rollout. team good a had our change time approach Any management think job this make it's that. process. I We a change got

that to communications. starts got and You've with robust through leave

nice that actually very the a in did early fall we job So year. last of starting very

see of actually we they our that old so their compensation like a the compensation. heads or plenty they take but only if and sales could new had had what So give the model. not in importantly, looks model what to of maintain differently kind to team and any, model their actions, understand increase time up, to

what see up money was we they got excited we more saw opportunity it what about date, to because that got further to here. lined closer the done make And so sellers and our with we've as

anything we I week, from all seen with this time, expect. expect I haven't every the would we closely don't at that yet as look do something to. nor expect So very attrition And you any

on XX% about on you're Are believe MOXe. post pretty Great. on platform? were the change now are you And national -- then behavior Can of this just have more how chains I these in implementation. we range of think chains understand as this step-up. trying sizable just XX% seeing you mentioned count? MOXe, of quarter, last Just change what talk and terms more behavior or to or how you somewhere seeing in I the case increased And

change more on and anything still little actually it's independents that sort in going in have significant national see customers pleased in the longer. bracing remember, buying of have that's think they are yet. to it I similar We We're We're is those have the the ramp-up time that They area, see the national independent of in would course benefits way a said to stick side liking we the same just independents. through to -- those it phase. early what on customers with restaurants. us stickier. the and in they're expect we are like And

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

inflation. first My was product cost on

] the [ of in fourth ] gave flat X.X the You X.X were guidance [ quarter. to

it I October back, if were Looking notes are my think you positive in was right. actually --

it looks decelerated. it So like

And I so a do my first Then the you start the Just just the expect out to question What follow-up. going you on have is help to inflation? cadence. Do with out expect? there? about quarter cadence deflation

Jake, this is Dirk.

think through of the of year through to modest that throughout our range and drive That's not inflation business. on. within year. saw last fourth of strong just of not us the period. see the expect assuming message couple different overall inflation within probably would inflation. some embedded sort more control quarter. more We've as little I most saw So years. we're our our conservative we goes that is in the likely We again, inflation increasing I the that levels But tried to the we Actually, January, results inflation in than be overall things of a

it. Got

guess, comment So I flat a whole. as for of year the the with,

profit your gross continuing per So another question to on just drive confidence on case 'XX. in

have and talking that if vendors hit gross forward? increase you in? be you about you're inflation. that what's you what your embedded could maybe think to 'XX kind And going case talk just of that expect of able of XX% much But still there's how per you're modest in to with some mentioned profit you You XX% drive

question. Sure. Maybe just to back your deflation

talked essentially So the reason flat. we about

it quarter. was think or points in so the XX inflation basis I of

positive important So but level, it was . very a very, importantly,

case So we're talk about the to increases. not per specifically going within

we really But as is if on though to that's the some board. we profit we a of X important thing drive about a you maturing the gross look the cost of at we've from lot the and as of additional in I a years, we there year, of things well an talked the to rest the come initiatives lot same of think last continue cost tail that that lot going goods, continued do through rate expect others coming will goods, thing doing. some this and to types. of rate growth versus to activities is get of our especially have In growth target with be the customer our that advantage of and the our are other with

sure win-win that vendors, So a customer we those -- can, some we again, great really we see. that get Dave more then as make on mitigate within we're have the it's indirect other we them with most of supply as with growth And through time, we're and in we efficiency, we our talked opportunity. types influence then whether think these cases bringing savings, priced in, going it's so partner they can the OpEx, that same And managed customers. on at inflation like We're cost logistics. of things striving continue the to chain our to about, fairly

GP to a So message combo flow profitable from growth from per continue growth margin through. to therefore, of case That expansion. EBITDA and the growth of expecting us coming

continue You're to to drum. and going that's We beat hear healthy time. think grow that to way that's to continue us important a over

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

about ask wanted M&A. you first Dave, to I

strategy is [indiscernible] ramping Your nicely.

run that pipeline 'XX? of about a look business the that Can like this as see M&A the you'll of margin standpoint? then moving in You'll over about from rate get think sort X talk in Is we 'XX. you how And you're a quality points the does forward? the from contribution case taking the placeholder on for of growth time? good And is

exactly right in majority and fits space, done business that which certainly from away deploy. in their on that Yes. want particular, as -- We're we've here serving coming the the our And morning M&A, are but about IWC. we're what is independent market. the one latest X in the of in this say we IWC other excited of today, type through distribution market Ed, we is we but And call, with didn't the X wheelhouse, to strategy about said, I talked hours the this probably centers we're

not we're there So very efficiently. getting

acquisitions, all drive to they've in business on to that solved and X of to platform. growth mix us continue of have right the So us problem the help that for

We are sense. part not on great when is predict. all of So And it. know opportunistic X market. been of We've with pleased to these. for to make accretive overpaying coming question, your last deals These and M&A acquisitions. We're are the to don't the we're these hard

to and to there's to these still But business We may just our out. but look think over play us will continue way do haul, We is how a be, there. for year I'd be predict that's may what drive of you're what hard-pressed tuck-ins not long rest or that opportunities makes for. the the in the absolute we'll continue seeing out sense

we what Great. been up I quarter well. quarter, was think of per 'XX, And the EBITDA how lot profit relationship for of guess, case like per kind less 'XX in to just about I'm as case I terms how just was of case then there actually could curious And talk think some OpEx year-end grow do think it's about as Dirk. that as the sort a year-end per little OpEx case. this year-over-year. per case that? you think in stuff. a this you versus of timing relationship GP down some of bit. per how than Maybe Dirk about are about Gross follow-up, you a And you

talked quarters that it fourth gross still this couple in profit, Well, quarters. pointed we've you're right, that been quarter, you're the a play the going out a different out cadence that you about for last surprise. We've last at the few for have as strong to not real stayed level of very Sure. things at

inflation doing are deflation. pleased, benefits the whether to again it's I also that from right. things And durability think demonstrates that coming the and we're we're the as or that and So opposed you're

year, and talked the of that over were then ago, the a over about there we a benefits year few we've years. fourth recognized course So quarter the this them in

really are number, as and come continuing we to beyond go after to think focused grow a year they're think comment continue on And to grow lot specific very durability, nothing do opportunity XXXX, the but year of my runway we still actions XXXX. back about profit and on right? the we that, we We driving through OpEx. we profit initiatives gross that year the believe from there of that after that than there's that let's we gross into new the over we or So less our a we're faster course have the

OpEx. So faster I'm expect not magnitude, to going to do that a we specific clearly, give grow than but you

Jeffrey Barclays. Your next of line the comes with question from Bernstein

Two Great. questions.

confidence you you or north single-digit But of you get it's range? upside whether in allow a if Whether biggest wondering consensus you into in several not mentioned follow-up. just think that little you'd of the that is or invested could from But would low to expectation. one, digit margin potential confidence double you know grow single then growth to one or to in range. put the X% I digit And June EBITDA Dave, that increasing low acceleration. years. little just Investor of first talk of bit ahead X% the that was Day. the maybe more EBITDA, driver double-digit our I sales you I have opportunity on teaser of gave or The the adjusted kind high about have the the next a to range greater

a all, in first well But all quite what about on lot leveraging the through P&L. Well, seen some up comments a June. you of very I that, Dirk the of from think particularly line and P&L. of We're that well good We've expenses. growth. I'll us more in our in we'll great was said you've say deliver, having say We're that our balance control heard quite that got top operating leveraging based XXXX

line growth, right line come. drive and productivity and we're to drive working to the time both I areas, a us. that top is for in continue the growth top think long quite And efficiency to excited our will well model in for about I'm business. so And investing continue that

in leverage think well just and So think the control. the as balance, equal expense top GP line of opportunity areas I as

But Understood. longer And in XXXX I I'm XX-plus just of, talked balanced? you chain well, steady just of opportunities prioritize drive margin XXXX. it in increases the perhaps Or just then of and should talked greatest what a if you follow-up. expansion. basis think lagging wondering assume to know is wanted margin expansion supply I the about factor. you I was EBITDA that could more theme strong in being about expansion the kind about that very said points it because EBITDA term, think I the we just lumpy?

for steadier Obviously, to I would the way one. about be a think [indiscernible] every years couple is right of that to to it better think the with we've a demonstrated a time. it. And drive versus mention post long leverage the aside quarter about same ability way pandemic winning is and

but still XX it for for think so basis plenty expansion. not we points, of margin year-after-year room there's the be And opportunity at may

line Mark Carden the of question comes from next with Your UBS.

year the independent majority a broadly inning initiative now a there? maturity? see when speaking, do lift X? add to much before then today. to just XX talked you guys start, market, is case more Do for you in you're in its capture think benefit the you what And the So you growth vast of waterfall expansion that of in bit and about guys your you're Pronto a markets of Pronto new

see particularly tool year. going in in with larger of those where capabilities the customers all We're mature we've say I with markets will it's need growth they more us about Great we've It make markets we're where not early. where those new additional new We dense dense our our trucks more opportunity there. Pronto, larger penetrate and tool remiss market We growth, plenty already yet, say question. excited particularly geographies with that to not are Pronto we've in continue in to independent this great kit we customers, uplift do hard deliveries. still with that particularly for fairly that. and may gives penetrated there. comes that there most than the frequent reiterate And X we're deliveries get to geography would right service we a or I add sense. plenty got see we have penetrated I'd to but be of where Pronto, not to the market to had success. and markets that

existing I market growth. So new well equal an for market as see probably as penetration balance

Got a how it. recent color you year some That's really And the helpful You then about in thinking labor are the about environment ahead? follow-up, the guys strike. helpful. gave as

Or or Your there well in you had as largest years. here? a it more any recent less Has of competitor underlying few do nice being issue? see of changes been just a these

largely had the as it We've represented they're labor associates, on not. an on I prepared of having see whether ourselves settled positive the said, We a across very well isolated forward for our we or the a offer at Yes. year. long that We and relations as pride issue. put a And in win-win country. strong this We of disruption. outcomes got our unions got with with reaching we're through few weeks last We end it. history

time. come and So go over things those

we them every to be for and year, new those of do we we were. number expect like and ready for need number, but negotiations that got planned year, happen, to well. we've We've you up to a it, are don't and just a You agreements expect got this go

comes line question of from Ivankoe John JPMorgan. the next Your with

think overall restaurant a fundamentals I are for still them speak to of to capital new is the debate kind actually in your but Maybe There quarter -- and results 'XX. fourth has this, of new some on about ground in get whether focus restaurants segment. your still but the a in independent let's underlying sense put industry discussion this the positive health independent in and and get for the of I of been mean, or as 'XX, to just just results the the 'XX we 'XX capital want to terms growing think ground

customer currently they you as this about opportunities there talk addressable managers, more serving? are seeing to So telling even set? Are sales important they relative to you're your out what you territory what

I'm it. it. about excited are They excited Yes. about

healthy the really think operator is I strong.

of recovery to ample flow, we since that our come I and robust terms health always very tell been think team, importantly, team-based units a But regardless industry, the restaurants. think the it's on going have thing share pandemic even new things or actual I opportunities on have with of the online there's it's what's let's nice control, now. in the right going model we our works. we the stay given back gain works, macro. can of ebb But our And model the selling that focused

And growth our stay ahead left right, think are services And focused We of runway working. plays running have let's just us. for great look a customers. on long we've our not and products that I let's of or got

CL question line from of Your Instructions] the Wolf comes Andrew with next [Operator King.

you other broadly, I why you of with the key between safety, enterprise have but cetera? emphasized more get to -- improved just mean is given experience, almost lead there worker productivity, safety a correlation was kind I'm Dave, kind you've just like mantra. bottom and consistently your of wondering of time, others, this to et on metrics not the workers. in industry a across I trying

excited about that focus I here, our is say for this people I'm have our we for the we the we matters. our that's safety, needed working it. reason our day, if company. every to XX% with didn't for accomplish safe actually keep I the it it's passionate then about Well, our nothing improvement can't and right the I so associates us to when team, felt last Andy, do on to time I'm And else year. all we're lead And thing why got and going I

to because the on it's thing. continue will We focus it right

your Yes. to that, said having Now question,

sense how used quality, indicator to have a you discipline performance to And years, good an look and that might of just I safety into a that you I remember. operation walk saw and productivity, think good kind safety top about with good a I for for think like you is worked I areas and And observe can housekeeping run to in able operating overall XX you bottom. was of operation customer. DuPont around. how the if behavior get be

and it. So focused we'll thing our on it's thing the the business, right and stay our right people. for for It's our for company

last compensation good a Okay. Appreciate on And follow-up color. That's changes. the just sales it.

You've an think managers? had Is more a advantage better you of recruitment Or compensation territory there can a bunch questions, to a... do of but or recruit untapped help having you that?

really folks that the will that's the the the them But salespeople, comp driver of That's I think it coming we outside from tell think in be. great not way and that is hungry it. are structured. I

and We made benefit. way want we the in for and I growth to our themselves that to think [indiscernible] that will be much the drive just a thought can sense. real folks profitable as right as they company, for

go for the turn ahead. Flitman closing back Dave over to now call will Please remarks. I

joining all for and Thank thank you you, us today.

look then. the we'll have business. of X, We're strong talk rest our very in momentum the about all Have week. seeing June a of to great you before We We excited forward on future.

call. concludes that all for joining, gentlemen, Thank disconnect and you Ladies today's lines. you now and your may