US Foods Holding (USFD) 9 May 242024 Q1 Earnings call transcript

Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the US Foods First Quarter 2024 Earnings Conference Call. [Operator Instructions] Thank you. I will now turn the conference over to Mike Neese, Senior Vice President of Investor Relations. Mike, you may begin.

Krista. you, Thank and Fiscal everyone, the Foods US Good Earnings welcome Call. Quarter XXXX First morning, to On we Locascio, our today's and CFO. CEO; call, have Dave our Flitman, Dirk

Instructions] our We remarks questions take after will conclude. your [Operator prepared

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

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

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

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

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

host to on excited in June we're headquarters our our Rosemont. Finally, at X Day Investor

in please reach Relations. us Investor in you're attending, If out to interested

to the I'd like turn you. call Dave. over Thank to

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

financial over and to Dirk the up executing by we've start Let's on and strong to our agenda. year fiscal achievements results a quarter first for our then key sharing progress it our to will the today's turn quarter, hand I'll which us XXXX strategy several guidance. from made set I first ahead. review

$XXX long-range of representing due in and growth. plan expected. disruptions, first came our the strategy Following as EBITDA in X% a adjusted approximately labor slower execution continued quarter start to of resulted adverse and year million, weather to The earnings our

during headwinds to February, million negatively was increased Of labor incremental expense approximately $XX adjusted support January. the operating business from in million volume disruption labor impact, our serve impacted disruption. highlighted million the approximately from by customers weather-related and in the was and we issues As cost to $XX EBITDA $XX

achieving year EBITDA and impact, This the full and our demonstrates in our our associates environment. performance was Excluding this XX,XXX hard-working model, confident approximately adjusted of our XX%, ability underlying win guidance. any to business negative of commitment strength growth in we remain our the

growth for continuing gains case in with was X.X%. customer independent grew quarter and the our volume Total X.X% case share types, target

In fact, for quarter share first accelerated share quarter as for the gains independent the we grew restaurants, quarter. consecutive the from our XXth to fourth

acquisition and In early to April, have announced we are Service, we on closed of Food them excited previously our team. our IWC on

we our capital not first deploying purchase a did number shares a of strategy, M&A of As quarter. result significant tuck-in the towards in

balance lean However, we through this repurchases more the aggressively do plan to of share on in year.

the volume a their as decrease of underscoring foot in distribution restaurant Despite year-over-year resilience within by traffic, slight Circana, increased the overall channel, measured industry. our foodservice broadliners

profitable with remain on types market can Our the outcomes customer controlling profitability share control. our target focused we team and improved captured as we that

expense savings run an Furthermore, have in and to we million specifically, expected more administrative for and identify we More cost rate. XXXX date cost actions to processes than $XX on generate are including streamlining taken annualized savings, costs. to continue million $XX

growth We operating I the goods our beyond. have drive confidence additional and cost into to further to in ability savings and are future. of pursuing actions XXXX drive in profitability expense and well

control can We shareholder generate we to what controlling are long-term value.

Turning to Slide X.

I team's each slides. our on our pillars, strategic and discuss of guided next reminder, work will As by them few the over progress a X is

injuries. key safe Slide and our Despite is And X, Keeping during were accident for our culture. first X part goal improvement significant our importantly, our to best since there And year. success, a prior our XX% room rates to is reach the associates than our recent is results the first injury XXXX. Moving quarter, of better of culture. pillar these our still were

excited and products new our high-quality, products to are our help menus. Spring on Scoop customers innovative about offer XX We labor-saving launched we where our

As more than part Line products as Scoop, of including gluten-free X,XXX clean Purple delicious, of Organic Blend. XX within plant-forward, such and of and this portfolio we labels, You, new a Quinoa our products introduced Chef's Rice Serve

Importantly, popular introduction today. have nearly still our the launched of are XX% been products years XX Scoop since of the program sold ago, that

to Finally, giving we education community relief, are increasing disaster strategic X and relief. culinary hunger our areas: commitment

million. Helping increased $XX investment serve provides of Our we is the investment million and nourishment opportunity our than which Communities Make $X program, our XXXX part XXXX more It communities and of in of to on builds

our and improvement. technology Turning first We off. high-quality quarter with Providing the our sequential pleased year-over-year we pay customers our and customers, to on platforms levels investments overall on-time growth delivery service we continue The are exited success. that both modernizing making is to essential show to rigor service. operational quite our our second which continued progress Slide best-in-class a to delivery and in and to pillar, X, made service the to experience and

initiative in resulted work Score and deliver $XXX also working points we annualized levels recently processes standardized in capital XX-month our operating customers. yielding percentage our to Net as use while This by $XX in Promoter delivered best-in-class million improved technology an expense improving We ordered service completed X the reduction. million we savings and our as program This replenishment organization. and in strive to

improvement the we efficiency build deliveries. and continue focused gains further driving routing remain We that delivered we on in XXXX, on-time on to in

the quarter X-year and per a delivered mile of were compared quarter improvement of per stack our March. cases X% fact, a our In February company XX%. Furthermore, to in during improvement in initiative routing a in first record cases XXXX mile the

important on and customers making US work focus for this for our a Foods. team's is difference Our

further routing further, compounding [ are are we our markets deployed. late quarter, extended last markets where additional year X work we in deployment ] routing the the a bookings markets fully the our live, that this step X upon building Taking to Descartes is now first In during Descartes we piloted effectiveness.

incremental seeing an cases mile, already produce markets, to we in per in accelerate. we X% will example, For which expect improvement continue deployed this technology are

implement We by right have technology we to the are mid-XXXX. place this across successfully in confident company that the plan

And to customer experience MOXe digital differentiated with solutions independent we MOXe further our continue our has restaurant embedded through fully been business. platform. transform our

customers As with more profitable MOXe, and are they more, XX% longer. move stick buy us to

We have the the feature, over migrated enhancing has XX% of anticipated half translation MOXe XXXX. in chain second also Spanish national our with experience. further deployment user full of a new business

road MOXe excited and to Investor digital the during this growth are our Day. We share platform for plans upcoming map

customer with focused X. Let's now turn Slide on on profitable gaining our growth types. pillar target our remain to and We accelerating market growth share

X.Xx on our for restaurants to for with track market by growth achieve growth driven goal full the are independents. year, We faster

fourth case Our market quarter, of marking growth consecutive an quarter gains of from again, share acceleration X.X% gains. independent the our share XXth resulted in

platform, to with delivery, XXXX. Our At expect and the end of plenty on the our quarter, significant which to of in annualized this Pronto this ahead. year deliver competitors. small truck track markets traction sales customers. in local with to million additional specialty competitive true service first to Through markets continues approximately gain of runway compete are to $XXX delivery with flexibility customers offer differentiator is and X live allows our is able we add Pronto were XX us and we a of including benefits,

share the markets, our expected will offering for which, we customer on service recently launched independent to the calling further what fully is Once extends to our with X Penetration customers ] able implemented, to increase [ Pronto in also Pronto this time, order of are non-routed be first existing We existing who days. new base. wallet

update an on plan. provided Last our with quarter, sales I you compensation

the are meaningful recall, components now you'll As sellers. our of variable plan for more our

sellers their that of and growth. higher targets While quarter, designed. X exceeding compensation profitable been working it's as are plan only is for our receiving Many our

target the they For Carolina sellers are exceeded example, believe fast we And our XX% new and will the with XX% growing quarter, increase. who than compensation rebound faster one in for quarters in earned our those cases a ahead. of not as targets, fourth grew his South

to with we our further addressed of billion. into the $XXX to profit cost has the vendors. in million Turning progress of $X.X total, savings Adjusted nearly collaborating our months. additional goods as initiatives which drove translated have in We XX on X% over by XX% approximately Slide past grew X, first such COGS, profit gross In sold quarter pillar.

have year. this We spend initiated our the of work the address remaining XX% to

US continuing margins. are points on innovative competitive basis while We to also customer growing restaurant to year-over-year believe private add also for ] value We can private our label make our we our Increasing products Foods. increased price which a a at independent improving high-quality opportunity through and progress label significant XX%. XX penetration remains [ over brands,

productivity continue X% standardization. gains offset delivery reduction, through in our This improvement reduction the over and prior Finally, to is line our delivery our scheduling improved of overall about is annual operating chain year, to inflation. The we improve productivity to X% productivity I wage supply flexible earlier. expense additive goal process and the productivity X% spoke with to X% turnover

Data Dirk, our in ], over last Supervisor Mark our of CEO supply operations Pennsylvania. I winners to like equipment years Allentown, Warehouse celebrated injury-free recent awards: ], acknowledge [ culinary distribution I first-ever [ would to Gephart it and ] Warehouse at Timothy hand Schuster This business Before XX of center [ X year. Manager; and

top approximately doubled took nearly outstanding and improving XX%. that leadership. by safety. made that Tim and team the huddles training and for Mark a they personal for while Tim, for priority team regular time, accountability to During shipped entire the cases ensure Thanks, programs safety your Mark productivity

veterans country tribute Day, On the freedom our Day, we have Memorial the we our have privilege approach we Memorial including those sacrifice. to and have our for who enjoy to great our As service. because their want service, fearless to who our pay all made of thank served this ultimate their of I associates day, country. Each served

country ones holiday, time loved in spend on with who gave and you heroes courageously please their lives remembering our me our your join the As freedom. for for this

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

Thank morning, Dave, and good you, everyone.

as the highlighting well for on we our strong despite the what financial with control. performance to year, challenging our was staying the consistent Our focused first expectations discipline executed quarter start and we can

on Starting XX. Slide

Independent First and of restaurant quarter and XX X.X%. basis food X.X% total growth $X.X billion, nearly case increased of points. net headwind X.X% inflation cost by Mix X.X% a volume was volume overall to organic. increased sales driven of X.X%

and care to remains than respectively. same-store softer due Health X.X% grew versus we Health compare tougher a a and growth prior was hospitality year. and sales strong less growth care X.X%, expected hospitality while strong

and expect through second to of new We year second as the customers. we half hospitality onboard the quarter accelerate this

expense solid the disruption. our a guidance, serve growth, million. Adjusted profitable January of our margin the end $XXX unchanged gross Adjusted X% to X.X% profit year the gains customers prior This to and volume headwind at driven during EBITDA despite high from of costs grew of management. above the slightly labor by was combination EBITDA largely remained strong incremental

Absent been labor approximately and these rate totaled increased would million, that plus headwinds we weather, EBITDA from would over and basis year the have which the approximately approximately our prior points. costs, $XX volume adjusted growth margin XX have EBITDA estimate XX% adjusted altogether

Turning related We costs incremental again labor $X.XX this EBITDA increased case gross million higher result and disciplined Adjusted On over in annualized goods our initiative profit. quarter by to per cost adjusted strong Slide $XXX this continued prior improvement per incremental basis, in than more an at disruption. to gross case sold XX. year, a growth the profit of driven despite would improvement incurring pricing.

Adjusted increased $X.XX labor year. per than disruption. more expenses operating Adjusted to was with the incremental the case from per EBITDA up related from case prior $X.XX, $X.XX expense $X.XX

per improvement costs, year. incremental over the adjusted prior Excluding case $X.XX would been a EBITDA have

on driving on adjusted continuing case focused further EBITDA execute initiatives improvement that within growing are our We and to per are leverage operating by control.

optimization steady are with spend increased administrative productivity in savings noted, deployed. work, of making cost indirect progress chain this supply as are and as and processes our well as area as management headcount, streamlining sold Dave goods We initiatives improving more

Moving on XX. Slide to

which quarter operating flow cash profitability. by effective earnings working flow was and generate driven million, Operating the We strong by was management. $XXX continue strong capital cash driven for to

the year than had impact, capital Absent lower was above extending quarter we prior capital prior the in flow payables working from as working modestly was suppliers. year. cash benefit with first of operating this XXXX However, more certain

inventory and improvements drive manage actively targeted capital in to to continue in XXXX expect initiatives We further from and payables. working

cash We operating the XXXX full for growth year. flow expect over

growth of opportunistically for buybacks priorities to capital continue on M&A. via and tuck-in the will net focused to We invest share business maintain our in pursue accretive return leverage X.X our Xx, capital and within target remain to shareholders to allocation range

Repurchases welcome quarter. US first of IWC the acquiring team during shares to Foods. in the muted of were the million as $XX repurchased We to We're were process IWC. we excited

] $XXX acquisition million, we through in [ on funded which of priced April, it's was cash As closed the flow. operating approximately

XX. XXXX. margins In repriced with quarter a our versus same Slide by to is X.Xx, period ended due consistent with of the We and reduction the we ended year XX X.Xx Turning and last the February, rate net loan XXXX leverage points. term interest we successfully basis where reduced which

we maturities XXXX. As any not debt do have a reminder, until

Slide Now turning to XX. guidance on

Given our and performance the fiscal the for year, of the are reaffirming year outlook balance first we quarter for XXXX our guidance.

and adjusted expect of between EPS adjusted diluted range to continue $X.XX EBITDA to $X.XX We the billion in be to $X billion and $X.XX.

channel. we distribution continue many the anticipated remains outpace going But The you into growing Dave, heard the as macro a we broadline from to softer year. than little and

Foods for drive strategy is share growth with resilient, differentiation, diverse US base positioned above-market well to our gains. industry and customer and customer-focused Our is

we result, range a year X%. to full case to continue our volume our X% of within As be to expect growth guidance

continued In administrative the growth, and productivity to in routing, and driving improved spend and streamlining place such goods process addition gross indirect volume margins initiatives of management. are OpEx through we cost management right as expanding strategies through have

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

Thanks, Dirk.

ahead, to our capital maintain drive executing intensely approach focused deployment we'll disciplined strategy, value. to Looking our shareholder we long-term remain and on

and we of opportunities our as tremendous see on focus We to can ahead operating regardless on deliver environment. we what control the commitments continue

highly over confident long to to growth our line. term effectively to to promising, and the ability continue growth and Our future industry that is outpace the bottom leverage am I in

you believe are we execute plan to and right plan. excited where have via long-range X, about Investor we at or on headquarters associates strategy business our June Finally, the company here upcoming us the we the our hope join that best the share and will Day new We we why webcast. targets our can in

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

the line Slagle next with Your Jefferies. Instructions] from question [Operator comes of Alex

guess the a growth the of because cover companies question some teams softer macro, traffic mean segments, just more environment. in I management on expectations their down level. high the we I of ratcheted

mean, to to degree? allow figure And the this your talk certain internal impacted you trying has Just to outlook? that out, seeing of that you your a maybe incremental some targets reiterate you're I offsets could to

Yes.

continue we have But industry. so say I it's traffic documented I well you focus foot we team in to to all on control been challenges to say like gaining think there to our and look, some profitable much continue So market internally, the the that can as I things have opportunity to share.

And couldn't for top On the the was team quarter. disruption of the share labor outperformed on we our lasted first well-documented of situation that more gains. I of weather pleased proud had the market, Obviously, in be the a of or that, the And there. still, look, accelerated majority out we month performance January.

to outpace ability me going in the that to world continue on gives the around our regardless of confidence what's so us. market is in And what growth

you this me January, will had focused And so this ability Dirk and we gives out momentum the our continue. here we that, morning team's and going both lot with and heard confidence stay in all great on. there's productivity talked put continued a that self-help, our distraction me about about work numbers then the secondly, again, morning to just that around of much from And that

pipeline continuing a focused. and heard, strong have We of as you stay to we're initiatives,

progress. Congrats on the

a Thanks Alex. lot,

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

know growth, and are you strike. composition-wise? that lot was on the all you growth right? from that start first by out. think for X.X% X%? with line So trend impacted is right? noise -- the to organic wherever noise, weather we're Do independent of account has was So think right, of where we coming amount that everybody, of case of X% it And kind Is to unusual is? penetration the of are, stalled piece, kind we Where new quarter. a want right, I I do in there's

were John, Yes, a trajectory. the I flattish had then team given year-over-year, you kind it thought there. the mid-single-digit think it accelerated from which I probably we in and win right We in that is challenges range, for framed relatively the was as that of January

into second par we flipped on we roughly the first exited it's quarter, the way As quarter. with the

have the to opportunity for a piece foot us, also generate but we better so, is a a hasn't of foot traffic been challenge to Penetration but to problem job an yes, And business, with is ability opportunity but which there. challenge, the key to our business there's traffic shore is it, do always up lost our new success. a just

net of can. accounts the new focused between and where is we shoring combination that penetration for continue generation, obviously, every and, to opportunity So stays difference that loss team account look new up our

the penetration new You to excited talk we our take we We're mean up Pronto that's heard front customer good as this the on me that Penetration That's going morning And things company. opportunity. about for existing that ramp us. to offering the base. think about to across it

John, think, have. shows the customers -- faster of that I mix first case and in it results quarter sort our others, X.X% through that diverse of organic was industry the is we growth, highlights the think I really thing which than is other our total

smart, profitable And target it's growth. types that customer so our about in overall

$XXX And follow-up, XX% the for you've through million you the savings. -- of that maybe time the the I right, first the base product of sized think maybe gone

basis, go next do $XXX over may first than think? be more so So in there million aggregate, as then you and which you go no, around to XX%, back I when the a a about go-forward and about not you'll when again, wrong, period the multiyear on that's think assume XX%, lot or you productive a think is as

right, is large going XX% likely you're it to around to the XX% bit do a -- is, little had back, And be John. at to comes lot X and Investor just June think you, thinking I cycling the side. over on forward. about horizon. there'll than and talk you more where look, beauty be won't as to Well, there that I think all existing in for contribution X-year from month, momentum that the size existing a time as But point, your our lay the Day about on for out it we've next going And the this we're a

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

talk this month, just of source but the we'll kind sure your too, next savings of cost about additional mentioned that Dave? I'm what's in some comments, the of you opportunities

X that Well, an work one, other been $XX I'd million yield didn't. work. of point I commented ongoing to: we've on replenishment one, expense I the done reduction. around piece the But That's and is of

think ramp come up likely more of as that I technology there still in business. we there's part the to

achieve excited about. numbers And that. so worked the team to I about we're hard that has The spoke

importantly, the But of P&L bit responsibility and years. over given focus you've a the has year the and over field to company of owners also, the that of the into the about Brian, talk me been number course resource our over our unwinding centralization heard back last the shifting a done

that need move going field back the it's whether efficiency P&L are that value firm adding they that the folks I'm with a comes own And gains. believer whether not. or determine to headcount, to the the

as on from that journey months, here, X there's more over work the to initially particularly the well. come done out some seen of last and You've we've that that pop likely

Okay.

care the Is into on the up case Or growth of sort for think outlook do a do hospitality on business this of sort of to your factor pick the and can some pieces care you do health pace side, quickly How still? year? health new too, expect sustain? side? outsized you hospitality similar Just those how

Yes.

We're little I hospitality hospitality over-indexed mix think let first. me lodging. take in our around a

sales I traffic. see. that think same-store the that in was we challenged normally see a and you didn't spring Even bit with foot break, uplift

that's more going on. out coming prior happened that this spring break there's things versus years like probably I think travel of some and COVID international

care here. and But we what about sight the just hospitality, really we're that's in ramping up not confidence very second here quarter look, but shared to earlier in And pipeline expect good also the we've second momentum, momentum question our I here, the and the point the of quarter. the to that pipeline in line in strong business of independent progress, lots and to a in process that continuing when business, of health convert in got strong I beyond and

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

environment. tough Nice quarter a in

Thank you.

wanted mix and And a I looking inflation talk which slightly profit out spread the OpEx a for that between obviously talking case I'm you've is QX, for per there bit spread a interested you then the about maybe was ] really coming you Maybe realistic And how of is and the you that just target a back. year? of uncharacteristic case, [ negative in ahead, issue. per ton performance about to benefits, strike more. there's what Can you in gross see ask obviously evolving? is QX tease self-help about, been what's remainder

Ed, this is Dirk.

So a we give we number, growth going continue spread have of to -- I'm balanced do our to do to but part healthy that strategy. overall, as expect specific not

inflation, for quarter. overall it's although modest the pretty at think X.X% the picked up still first it's some, I

key you of overall when it's not hear growth. you've times, the going a number going about the driving us be So me to it's it's to contributor, that, a talk like be heard say but as small thing

And to a we doing walls I each expect initiatives. But that the really of do GP, the in to different from we're to and improvement within continued X continue continue those productivity expect to increase. EBITDA inflation. portion on offset come per good expect activities adjusted case of impacts continued things our

X% comes ask that's M&A M&A. from in had the looks the IWC But in ramp. guess in, X.X% includes I benefit quick. I It like wanted so from a I to you real benefit about follow-up. guidance, you to Maybe QX, M&A. a just a going quick think, about quarter

how maybe that's could just you about layering in? talk So

how a like done a you are standpoint, few pipeline deals. -- And then you've from

M&A outlook that kind you I So list did I looks slide, note from is priority repo share here? on the like thinking it on below how that the of about are think.

the why start Sure. overall Well, just M&A. don't with Ed, I

so will later off have so come months Renzi of of And yes, in IWC second the but couple will overlap, roll in, a we'll quarter.

Saladino's be one most will really of off rest the it of on, through then year. the over and the one So period

I overall, So we that feel our expect we and Dave think I be past similar. about on so we're and some volume the challenges the to of it guidance And that's with case of our organic things about talked our pipeline, we pretty reiterating January good some getting growth, as think talked about -- our in why outlook.

Yes. on M&A. here little Day up more at the X. points I always that June And on bit around give color it Ed, of couple pipeline, Investor just on that strong. a will We'll I've But reinforce remains coming said a

but all, at of do to I time, right add don't the an accretive teams the we think can to right First any it the need be for of deals the with management business them. right

we're anything, going in force And to overpay we've deals the that so to we're going not done. haven't and we X not and

repurchases, we've of XX X in some to us. integration We've here your deals around share done point work ahead And less months. got than look,

said breath progresses, the see in harder us bit little here year lean the a repurchases we as M&A share likely around script. as a You'll and take for in to

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

My the first growth channels them. is on within the and organic

then case what strong meaningfully. on the do a pretty hospitality pretty that chain how But organic. chain? independent in acceleration? driving growth is growth accelerated And and it's that, impact case I follow-up. If care, acquisitions not overall health building acquisitions, have given Then you've So

from significant primarily, perspective. as before, did So health that's to care impact and the either chain a acquisitions a those rate of much have and the have had more discussions may business. our base you from which growth very hospitality, Chains stronger Saladino's of had a remember impact, little around

about chain was overall growth, organic but X%. down talked we So X.X% around

to Box there. not indicated what the for so different trend Black from So first a too really quarter, very similar

Okay.

maybe X%, was said So that? just you down organic repeat

was X%, down which for is Black much ] line chain right Box in [ pretty the data the The quarter. where was

other X Great. I the your about your largest it. your peers. And growing sales of than force sales then my just Got And was you're question believe force. slower size

just gains been much wondering gains how share impact their sales so thoughts investments headwind sales competitors, force How as of are you believe, forward? adding the larger to on that driven I a And become in share going by force? your that what your do think quicker? And are might could your your has

first sales So of we take last believe no, think don't I'll of be again, all, I'll your reiterated all, part will the it call at it say We second headwind and I and time our an the number. to and a Jake. question, addition on built algorithm mid-single-digit is to ramp. low- to force hires basis our new ongoing it productivity into that got the that right We've takes around the

things maybe others. I think couple relative I'd point of to a to

gains that, helping our it force have business problems. importantly, sales our them the that that on customer the and our our the solve penetrating all, products platform focus and, enables great and for and allows efficiency of digital selling to customers First in

sales productivity and So for advent our I would point a force. as of that real the help to MOXe

affords our in other consultants and part and operation support And the at to parcel been team-based help our how selling, which the to And specialists efficiency market. because day-to-day time, a that's longer the a of from for is long restaurant And than territory they others. that get on we and we've the gains go also one of very managers front customer. with the that basis

think I to it. good really all we ability in there algorithm. our our at headwind any feel drive about be will So on don't growth based

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

Congrats on quarter a good here.

Thank you.

here on some you interesting. were of figures the Just that gave to wanted ask, Pronto the initiatives

my here, Correct P&L? Is the low- I'm and can little share that this that assuming impacting if talk increased that's working, is new With independents? you the to lift there. of But mid-single-digit accounts, more you for initiative impacts really a kind math numbers wrong driving a that's just I'm disclosed that how independents. wallet if how bit about

Yes.

over Pronto last months. up first been XX So ramping of the all, to XX we've

and that's we've so $XXX progressively disclose to the it this felt year. and time we of million business total, benefit importance And quantified to was like the increased that we anticipate our gotten why

that I me let only our customer attracting we until base all deployed distinction, had bugs to the in were be existing on was knew focused we model. not confident until that We in had to the model make that we But customers. tried worked that and now, new out clear, Kelly, and up Pronto

offering that routed we We go to to reason customers think needs And less accounts, met. are to and their specialty to will that Pronto those we days. penetrate Penetration, now their suppliers go our existing give to to enable nonstandard get continue on other when so us to customers

the new we're So through customers continue excited attract further. existing ability not Pronto, but about our only now customers penetrating to importantly, to

So it's more and that, really where we're the it. about so what we can and but take come on model excited to meant far

Great. like I level in Can add of contracts. wins can And what more? expect just magnitude maybe I missed the year? on Just it, but what terms those of of just on us those over I incorporate for the if profitability the coming the understand just contracts, looks new the the hospitality, competition one of help apologize, course you you also

comes know coming. really then onboard year. started have lot that and more we more overall, hospitality so of customers already of the -- here back second the that that to accelerate we half to are some sort and to from quarter the visibility the QX a in meaningfully Kelly, of in that expect in And

we as And numbers so those show over will time. go up

key and And that valuable it's customers about also customers a all are those is health reason are keep lot -- but attractive, talking profitable. independents, our profitable, hospitality that we core care, other, the highly

up. differentiation Our shows

And types are target and going opportunistically then in in QX so like market's a to stronger types customer and to growth I our and those customer-type in than we're other to really, than X the overall perspective. resulted from continue target key overall stronger thoughtful. that rates growth growth, be said, And

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

it's do at just like year. start about the incremental industry wondering than There's the and first is be how what hurting the menu all a consumer than the more picture, restaurant lots of industry, But outsized seems talked pressure. the chance look slowdown? macro of I'm changed lower-end My pricing you broader big feeling just be about talk expected at may question, attribute little a been on Dave, restaurant to segments. may the get independents. softer we've you to It

Just based what follow-up. would attribute one then had view, And XX,XXX-foot on the your you I slowdown?

is This I'll for sure. not perspective, I'm why a you Jeff, economist, give Yes. an but

they has, their I over the disposable few that more the given happened inflation about they're how the past income. thoughtful around challenges what's consumer and years, spend around think it's

we've And so persist. a our of period seen. challenges really think same time, and traffic that's of lot foot Certainly, I have inflation the challenges those driving the experienced over customers

long-term a root it I this the I and trend at continue. will believe think is of -- think really I consumer issue. do

in their line independents will for. win is model is have I culinary independents desires the just think the that more the consumer that reflecting the they experiential don't I I think foot not challenges, traffic but the and with think over dining is chains. do, looking just same, big And that, certainly

the the to in And independents whatever long bumps may think be, short-term So they're bullish term. there road we're going we on over win.

And XX% roughly I'm think relative to at think doors you restaurants number industry, follow-up of relative the the stand people you do through or that least wondering, where of feel closed. them Understood. do you just pandemic, on is are like broader that? now just in today many talked And we about having Do reduction? pre-COVID? buy the my into just peak XX% I America. where to then the we that losing

Yes.

think is or versus minus, in the and count attract restaurants, down total which from folks from still quite thereof. bit customers [ industry that challenged roughly was probably while very But competitive do ] increasingly it there's obviously keeps I it's pandemic the to and been think pre-pandemic obviously, into down but strong rebound, -- pre-pandemic things increased the still there's still little a line, a still a in think levels. the I plus has levels, but maybe I number bit,

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

demand I of on lower the to this the much backdrop? guys just performing is seen some you end? current start, the CHEF'STORE. touch on wanted pressure Have How given pick To macro up business in

have Mark, seen to been case has return so we which encouraging. growth, CHEF'STORE

the some with is about and and that fill-ins. encouraged talked the are if the that that with challenges for say, year. well in the And overall, focus base year, market we as continue back overall time. us, does it business by you're niche remember, over talking for growth would fact to through our you of this a about so accelerate stores work and related as X I customer As ERP last And growing, is especially that from to we that. we're continuing play stores add planned to

California for caused then shift helpful. And just wage the labor $XX from to That's QSR minimum And just state? given really, seeing pressure that wage in guys are Great. workers? related have the any on the impact you the might the backdrop,

it's may pretty really. from well our customer really say so overall paid that broadly. I'd tell what Most and our associates of limited to about talk No, that, pretty are a more do impact perspective. from volume, above not much overall an demand early to

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

year? quarter? good on just little And drove I to penetration. attributable what in you did earlier change that a Can I is increase sales you this the to compensation think quarter. about of force want bit guess, private the that in how about a ask label the Congrats indicated, much you this talk the that

Yes.

one us compensation of for I think, being forward. that be combination one think factors, the meaningful a going it's Peter, I will a

to increase. for see I'm out we said, But of pandemic, us. So very the products supply those were that manufacturers as to the challenged excited coming

fourth that we of lean any brands. really the like for than sales quarter. And to had up over the couple continue over And momentum it's the first the gotten and feel last been years. of few Excited really I've to go products build penetration over I in will said into don't And the force quarters -- quarter. those good the before, we've XX% they past our confidence ceiling near-term that, in the to see more aggressively as have exclusive see back I us on performance just our a

I behavior on others. I customers believe, buying, of But been more? the a have have kind indicated that you platform XX% just that buying then are going been XX% forward? the they on suspect of more. are you on your longer, customers What's it customers some to longer And have use good -- that the than is that MOXe, figure Or is

going terms think -- onto into customers sales And force. goal both productivity customer I once if is our in that's to our the customer new for platform get things the that we've use sooner, get Yes, account all the immediately, our benefits the of good not figure because that about to the a and roughly here forward. for we talked of of

why figure. that's And so we that disclosed

think that's think about to a going solid I forward. one

with next your from And question comes King. CL Andrew Wolf

point start Just Dirk, flat you a clarification. wanted -- that said in with maybe Dave, or it think January. to was of cases were I

to? the about January wanted was to to compare reference make when is sure, cases? the what we Just or to reference think independent Just flat point that cases with organic total when

was more did to That the see comment growth independents. some to comment. but quarter, geared was specific Overall, through independents, just broadly case that we stronger that

your typical it. an it's like thing, not more distribution impacted center by So organic

the had sales? Okay. actions Or labor And all weather? was effect did January also of any on it an

Yes.

of we X had combination disruptions kind month said, the about labor net That a challenges the we of impact in overlapping weeks both. experienced. the weather where was it As the was of that of January the month everyone for

thought I I -- sure. it Because just wasn't was Okay.

Okay.

it impact. So sales and impact both monetary the was

the and it Okay. doing help marketing, let's it sort are cost purely Dave, -- influenced out logistics? thing and can marketing new and sort their falls sales per it that cases own do say, the and not sales metric, it purely Or to increase of mile be customer is you're density from down? in people this in to other does the going what drive getting logistical ways? on of Or logistics logistical, by is

Yes. to efficiency But helping the because when in take The root products impact get to of ourselves customers, importantly, of it positive distribution from the and has customer. time miles requested customer likely getting as products is the we're we there a of centers terms very show our we're is more our up of customer out the it. system to be on to the

-- there. there's that So double a benefit

So much it a in customer the impacts positive way. very

excited work. And continuing that so we're about

next Wightman Research. [Operator line Instructions] And with question Wolfe comes of Fred the from your

June. for you if and April March and what numbers. May last look from some year, wanted growth to just go XQ about come we the back I a softer back to improvement And and disclosed sequential independent case guys talked at and then in you

of think from some I'm headwinds XQ. impact we So of about should how these just net the wondering

but So the on weather on some facing then touched basis and the just off, labor rolling of tougher quarter. you monthly those a later that compares in also the

us. out, Fred, the labor weather the I and think as you pointed are behind that largely

have fully those of recovered that laser-focused are that lost customers, getting as a minority. We on that's impacted haven't labor teams And markets a few the back. as but far

being overall, say, Dave April about he pretty talked comment specifically where to not would beyond I'm volume I going what similar did to March.

back and the Our we take that share. the we've to without independent continue cetera, growth get focus without for as pace weather, et this on labor, environment normalized to get is generated strong to

down we slow in heard and to you share said, on Dave our ahead. continuing charge we gains to don't versus QX, expect As accelerated that

Great. contribution Is there bigger, market on made Pronto, line Pronto Pronto top And comment line currently. sort that of think with potential you million the way guys the then Penetration? the to I that's a for a Is smaller, $XXX in a core that size offering?

that, to just really the We'll through about days. we're -- early have started with time. getting We're Fred. It's more of that say course

but it. there. a very about is excited potential, it we're days so think We it's early And got large

line And question Rahul from of JPMorgan. your the next Kro comes with

flexibility? operators many the window here did ability whatnot. to Pronto you compete It's because mostly because succeed of also specialty Like And again. and guys produce of against local. meats, the the on delivery that that saw Is and mention ethnic we

you more adding considering with you assortment? to are current So or offering the can the SKUs compete

customers the versus actually falls the got we've per more a gives couple top on of on product maybe line great deliveries our in that think deliveries I specialty to line timely fashion to this us, What ability or of standard get product that the right suppliers. week. Rahul, the is

the the tight more urban customer into that on it We day some vehicle Pronto at delivering areas the now smaller a gets can needs us challenging those larger into. deliver products it. are of more every And trucks with obviously, take frequency to whatever

allows able think there So to us we compete been to and a good upside that in Pronto. to there's haven't way I prior

comparable it That's these very in of different what you deliveries the profit helpful. there have? gross in how sense Or -- being Is per is is case? on Understood. per this very a case profit from

margins. It's independent comparable to overall

this mitigates premium the flexibility, cost. delivery a willing are slight of slightly increased in pay case, customers our a which -- because the So there's to

with Dave So when larger right it's our pair truck it the as the said, customer. really And attractive. this up service, service you it's profitable, for delivery allows right

to with Instructions] [Operator Dave to closing I back now for additional call the questions, or further would any remarks. Mr. turn no Flitman And like

to XX,XXX has Thank week. continuing lot. about that momentum. at and the associates Investor June Have of you, forward excited the Day. X certainly We're a great that Thanks Krista, and thanks us our for a seeing today. joining our you many business We momentum the underlying to drive on of focus look

this call, thank you concludes your participation. today's gentlemen, and ladies for and And we

You disconnect. may now