US Foods Holding (USFD) 8 Aug 242024 Q2 Earnings call transcript

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

Locascio, Good Second Carrie. today's and to and welcome we Thank Fiscal morning, Year Foods Dirk CEO; our Quarter Dave On CFO. XXXX U.S. have you, Flitman, everyone, our Earnings call, Call.

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

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

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

In historical call certain made are statements considered addition information, to during forward-looking today's statements.

our Please XX-K our review the those statements. risk factors potential from could materially a in the discussion cause factors differ that Form of detailed to results actual for

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

I'll financial providing not are We Dave. you. reconciliations call forward-looking non-GAAP over to measures. Thank turn to the

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

to story, were our Before our to second profitable, undisputed industry, a I thank fastest to the great digital like the It our growing, quarter and in in who we most ambition leading joined event, to we our become would the everyone Investor our was and results, share work. Day place to future best turn goals June. excited best the the safest, and

diluted by annually. increasing XX XX% growing CAGR, EBITDA points out XX% at at laid at algorithm Importantly, we margin growing year CAGR, adjusted and basis which XXXX our financial adjusted least EBITDA adjusted per expanding sales XXXX, EPS for a X% through includes a

share capital same than We approximately also repurchases. ahead. $X and more towards remain will that billion deploy anticipate We be about excited path over deployed to our that of half of period expect

year strategic our initiatives several pillars. I each of call, today's share on X key second our financial will will second results guidance. review across update our and the our you accomplishments quarter of XXXX Then fiscal from Dirk During quarter and

Turning driven our of to our line expansion second expenses. grew In than faster we quarter, combination margin growth a as record and EBITDA, X. significantly top operating the gross Slide delivered profit by

team's this operating our further model strength EPS Our of our record profit the cost balance the adjusted margin to productivity, emphasizes and line control led adjusted This quarter significant success growth, controllables. of to expansion of growth, ability and top and X%. EBITDA with along EBITDA a gross

underpinned our capital are results these by strong Importantly, structure.

capital deployment. We also continue disciplined approach to our

our detail. back buying billion to status announced our repurchases do in Board Day, our $X the our in As of over will shares program this authorized We share Dirk year. we balance a Investor more be expect a at repurchase June. more early of provide aggressive

Restaurant and industry profitable traffic approximately Despite during of broader headwinds remained our we the playbook. captured turn trends share the team Let's on types, as our was down second target pressured focused the to foot facing X%. markets. customer industry, executing and health our our quarter market current and

the XXth month the share and consecutive increased each quarter, gains independent our Specifically, for improved second restaurant sequentially throughout share our quarter.

exceeding is and strategy Our evidenced volume share by our gains. as growth

of pillars. guided slides. work them will strategic our remains team's X on progress the And I our discuss Our by few each next over

Turning X. to Slide

our Keeping Our paramount. safe culture. associates is pillar first is

injuries. achieve and on rates we were focused remain best XX% During since strive prior XXXX. the than our second our safety quarter, our zero were year better results injury to the performance and accident improving as We

associates. people more And the impact a our we than positive We report people important published quarter, make in second on the our component products, our lives sustainability planet. none focus in highlighting progress our key seek areas: XXXX of as X is to and

development accelerated For inception, XXX refer which this in its our example, in Since we and program, leaders. we associates program. program, leadership, excellence participated for leadership to supply operations about chain, we fundamentals Lead. have have Through as the our

tremendous I journey would on exciting encourage and you and to made the to progress see our future our our on have we sustainability our read initiatives report goals. website

second Turning We in service service the to Slide strive delivery both to progress X and customers, and pillar, we provide experience second delivery quarter made on year-over-year levels. our on-time best full service. to our the and and during

We distribution also again this quarter. productivity improved

to expect improvement an approximately XX% routing XX the quarter. to our benefits in Descartes market-led markets additional initiative per new cases additional and This in our By X great year-end, is work, of routed delivered technology now markets. Our roll with on combined live from routing mile Descartes. we have X.X% out miles a during

and standardization process productivity. Additionally, our turnover to implementation flexible help overall improve continue scheduling reduction,

Finally, highlighted industry. our U.S. JT a digital position holds foodservice at leadership Foods Investor commerce the in as Day, in

artificial we intelligence. While where and about continued that's VITALS am exciting. our I taking more are technology investments enthusiastic even MOXe of through use and

and our continue one recently our feature user customers MOXe to experiences our value Truck bring digital truck artificial tracking highlight we to our to delivery by utilizing better function, delivery within for time. through And intelligence will My ambition, enhancement, Where's platform. we additional track Driven customers optimized their and functionality to the

a by improved as seen window those And service markets customer past XX%. our reduction the of the few in all we've experience. markets implemented solution the [indiscernible] delivery-related the pilot Over of accuracy year. months end delivery result our significant in will in be customer in This we've a calls markets, by

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

restaurants highly driven was we growth recent will our X.Xx and of Our remain for from X.X% full independent the our confident ] combination market growth for exceed We goal acquisitions. growth that new accountants by a year. [ case

markets. urban service service later traction is caters high-density next-day Our Pronto in truck to requirements. hard times XX and with delivery small to Pronto continues gain and live customers areas in cutoff to delivery

in wallet. this our we year, fills a that X nonroutine launched launched results are and successfully newly the much early stronger delivery growth. independent for which pilot with expands Pronto customers, case Our independent differentiator days Earlier short is positive, markets, existing penetration further service

year. additional million for planned And is annualized later to this on track markets X nearly now of have We year. sales $XXX this generate Pronto

X, Turning profit to pillar. our Slide

Our profit proven the excellence by work X% increased team-based merchandising $X.X adjusted and playbook, quarter selling in approach, gross to second operational billion.

We to to grew private penetration also continue make with points growing than basis independent in label which year-over-year brands, XX% our progress XXX customers. approximately more

for efficient, become driving portion label continuously on reinvesting constantly to those for looking companies US our adapting focus continued pathway customers profitable are products private These of our while future Our and competitive Foods. growth. to pricing margins. Great a growth enable improving and productivity a innovative high-quality also represents penetration more savings ways to for fuel

underscore our streamline and As additional interactions, this and ways continue annualized achieving These annual run savings customers. effectively to took serving commitment while changes quarter. and $XXX $XX now our expense expect X% We million we identify XXXX in we our X% cost our become to take steps rate. more on actions an efficient million to to in to corporate productivity target to achieve more

announced we from would the our benefit as CHE'STORE under of we ownership. investment synergies, believe lack Finally, given focused Day, new during Investor

Throughout strategic are the still the our will alternatives and associates appropriate. process the our We as CHE'STORE supporting updates exploring to of fully business, and process, customers. committed in we remain provide

Before one works who acknowledge [ center. Jason hand of Buck in our would ], Knoxville drivers, over I it to distribution to our I like Dirk,

driver role Foods that beliefs weekly Year joined cultural also is and this our our US named He runs been of with new and team. safety and excellence every Foods on a the a belief XXXX lead One deliver Driver all day. twice. skills drivers local embodies US plays Jason in Jason has our of course

contributed card platform. Importantly, Jason's the to center the service exceeding during its efforts metrics of deployment distribution our routing on-time

for service customers, to he safe a environment excellent deliver does I to our our and for all thank ensure Knoxville associates. work Jason

hard thank we As I relentless to customer safety want work, great their to also associates Labor our work. US their on to culture making Day, focus superior all our place service and Foods a their commitment approach for providing for

the turn more over our now call to in and second our to XXXX me Dirk detail guidance. quarter Let results discuss

morning, everyone. Good Dave. you, Thank

consistent delivered were drive record growth through despite growth environment. further the and line our results operating expectations and softer EBITDA top with to top approach our balanced quarter continued expansion, margin with this record largely adjusted bottom profitability adjusted We Second margin. leading to and line EBITDA

Starting XX. on Slide

growth net sales share of quarter share Second X.X% and while with XX XXth driven volume the basis cost case by independent in including gains our of gains X.X% and food market mix inflation quarter captured increased of restaurants. X.X%, case points. drove total the second growth to headwind market $X.X billion, of consecutive faster than quarter, We a was

X.X%, Our XXX including independent acquisitions. restaurant basis grew points volume from

from grew EBITDA gains volume to [ we a strong profit $XXX year business. quarterly hospitality combination and as gross at Adjusted expense prior XX.X% strong new X%, improved Healthcare successfully of growth a from profitable remained record million disciplined ] to onboarded management. X.X% the growth growth,

In our all-time to XXX over dollar XX points strong as than to margin of addition expanded adjusted OpEx EBITDA an by dollars high grew EBITDA points gross adjusted dollars. adjusted basis basis profit growth, X% faster

increased EPS adjusted Finally, XX.X% to $X.XX.

our continue, grow EBITDA deploying at of adjusted to strong faster EPS cash to continue that adjusted trend more expect flow repurchases. We while our and to a than rate

X% case case We Slide profit faster in per year, per $X.XX improvement. our in and cost further And delivered driven expect first again by expense profit adjusted initiatives for or months. disciplined year, full gross X primarily of expanded XX. we case, resulting by Turning grew $XX prior gross million the $XX once nearly per to EBITDA The sold over than the per operating million pricing. adjusted case adjusted initiatives COGS goods approximately savings. for Adjusted

to million management well operating from over the by reduction $X.XX process less administrative Adjusted year $XXX case end and efficiency our savings costs. partially through productivity increased routing on as from costs, gains, to increased by strategic per from distribution than this as well turnover driven or processes improvement track standardization, X%, primarily of are continued streamline vendor COGS achieve We expense XXXX actions work. in offset labor and

X.Xx case our adjusted X.X% prior year. case, from to a case or per record the of up $X.XX, per OpEx than per faster $X.XX led GP our Growing EBITDA

drive leverage We continued strong throughout profitable a expense continue volume initiatives. P&L growth gross and of the with combination on and margin operating to progress

per while our initiatives execute consistently our EBITDA customers' case adjusted we continued as expect expansion also We needs. meeting

Moving on to XX. Slide

flow cash flow, strong cash operating million and and management. cash year-to-date, by $XXX $XXX We have generated of increased driven free capital disciplined working of profitability million including flow

of as had in more this Investor optimization prior half initiative lower Bill discussed from the the first benefit replenishment that working inventory Hancock was the capital However, Day. we the than XXXX benefits due to year during our reduction

prior modestly Excluding impacts, year. working operating flow capital the was above cash the

focused maintenance Board repurchased mainly of our we business million. of cash support the billion distribution this the months, durable We CapEx well return new repurchased invest date, information capital equipment on authorization, million in approximately new Our property facilities. the growth repurchase to $XXX million August as to and in have and through authorized On to products a in In XXXX, us technology, stream including to third shareholders. we first cash as June for flow the XXXX. enables $XX invested program. X, quarter $XX June Under X, share $X X

approximately remaining We authorization. $XXX in million have the

repurchased Since have million $XXX Rounding we the capital inception deployment. of cost our million. of total for buyback out shares program a in XXXX, November XX

acquisitions opportunistic the pursuing in We tuck-in and be months over X continue past M&A. accretive have completed XX to will selectively

acquisitions focused remainder currently lean share are We the integrating repurchase in of for we'll on these more XXXX. and on

second funded target and levered, positive both includes a our the to our well which which the related with IWC X year. we for Turning flow. from XX. This million Xx in X.X pleased to million last through to the leverage a within were at reduction strong $XX credit quarter, We're report X as turn same net ended is share period also X.Xx $XXX ratings. for balance Slide operating paying quarter to remain cash developments sheet We repurchases

Investor S&P metric our the corporate plan BAX further credit the of by long-range our initiatives rating will credit revised Foods reflecting continued notch at that to improvement. outlook to each growth and Our expectation outlined and upgraded earnings their US Day Moody's was X drive execution positive, and on

guidance to on turning Now Slide XX.

XXXX first net strong the we guidance. for our Given and of adjusted are the remainder of fiscal EBITDA year adjusted year reiterating diluted half outlook sales, and XXXX, our EPS

to Moving assumptions. modeling

of X%. total For continue case expect to to growth X% XXXX, we

our X%. We line to sales to operating we deploy range share, our inflation to flow the our Despite expand priorities. are cash free grow environment, our continue against X% updating assumption top of and a capital gain margins allocation strong

our to long-range plan. remain positioned well XXXX are deliver We targets our on financial committed and new X-year to

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

Dirk. Thanks,

gain strategy, X%, in growth margin types. EBITDA of gaining delivered adjusted customer while our highest our share continue record improve adjusted We execute market to margin share double-digit and profitability. EBITDA We and

independent care the the fastest strategic combined and business model the restaurants, in our most customer among our to our profitable are types in of strong undisputed growing serving best hospitality, Our the health which execution ambition initiatives, industry, supports and with foodservice industry. be

And profitable We of a the including XXXX we on of deployment growth us, And have for remain executing CAGR. runway growth while laser-focused which questions. our Carrie, delivering line to includes growth please up the capital growth improving generate EBITDA algorithm, adjusted in a long priorities. front XXXX open business profitable with that, our to XX%

from with Wells [Operator Instructions] Your Kelly come first Fargo. question Edward will

July? how organic the the of even maybe are bit you feeling kind the customer -- the need X% about saw And what hoping maybe half. case of how what for was more do from of evolved? back part about in quarter you you're I'm I quarter. start, Nice think type. then you bit specifically end talk as or just curious elaborate standpoint, to maybe volume a year? seeing target an the I And acceleration could a in by demand you little X% just then

take that of part last that Ed. question, I'll Well,

X% First, just in think to the for case outlined. I full that we're guidance and as year, growth reiterated Dirk our confident X%

is in going is which always into very than your control macro, I despite that. what year. into also top to expected point, us but drive out, the our line, to going growth confident little we're controllables do we're control well, what's what as ability on July, But So to We do. the a can't we the macro you think do coming which in continue is macro. can't the to on quarter the But we we and in seen second say point the you've control the we softer

and ebb as the And and this our possibly make things as completely around is macro initiatives our thing to ability strong flow can within will be, control. drive our it

X% And as quarter. down in the seen traffic, foot so lower we've out, pointed second we

I think into than kind the that half, was slower trend and back a July. half of first the of quarter little continued the

care remains strong. very Health

hospitality, new we said a onboarding there. quarter, saw robust as growth You In last business. we were

You've up tick seen our us there. growth in case

expect into third will and the We quarter that into continue the back half.

and the the see said it. kind we're to And counting going market in achieve, achieve our helping playbook. half were we'll of that's execute us we not we on we continue So how back to what to

Just adjustments Dave, and you side, as just a I if there about action on are follow-up, this can talked you some any in but controlling you're backdrop. business you to a that like ask incremental. any I Curious what control, the you there's that make a making today, tick was fine cost that know backdrop? can on tuning selling the you

there? Just any color additional

Yes.

out. year. We're think I progress we how going playing TM into and that's modified plan the there the making we're pleased our compensation with

of our more more label to also and drive private incented grow aggressive growth to them variabilize incent recall, we you to that sellers brands. As our

heard, with we were points independent up with As our basis brands. year-over-year you restaurants XXX

and the the bring the through XX driving ability and I that plan half at been were to continued first And we those in I the marketplace side, productivity I drive is aggressively changes. to got we've up really course products of of think to great been ramping we've and months, this last root to supplemented the the since that said X% here, your year. going of that our expense with on point day the compensation innovation

with we're also And with do. in. that fits said we're fits environment I the operating think that It to we going what

can to I the sales think mid-single we're of macro. on you And the So digits in to to growing expect on more going to low committed point those the continuing same. be sales in and I'd what's side, adjustments, our headcount despite

and types, And management. execution see continued results Ed, customer continued our what you focus our profit especially and cost continue growth, from target to expansion in gross the really on line is top

feel continue across to So expect and those all the X what that have generate. balance and to is results it's we really good makes that of about us

come will question next Jeffrey Your Bernstein Barclays. with from

about XX about, up Great. I actually your share said Dave, second I know just comments think follow share market consecutive you of guess, wanted the talked I the quarters improved gains and quarter. your to gains. each on I you've month

Just if wondering you if could some could provide that you color data. behind

how aggressively peers vulnerable wondering I you their know are and whether you're maybe Just salespeople. measure think growth? largest you that. slowing independent compensating more all hiring sales at your to

forward just going aggressive? I about little had market that more follow-up. a And getting growth how independent I'm wondering the gains bit X case again, you with, competition share then think

we've use data the market share industry. a for that while, to as third-party is across looks data, independent sarcana judge [ ] stating we Well, that NPD been the Yes. the data formerly our

it's So our data. not

on can in supported accelerated I saying So gaining when tell you we're control. I to we the what keep that's going by we're control data. sarkanda that through And the the share quarter, as and

can't though foot just traffic that month macro. was say that sequentially each the in I We we expect you control share the throughout us quarter. quarter, gains heard the And that even continue. up will ramped down our

by And new laser while our to is foot driving on ability challenge in down, be inhibited the macro. traffic team accounts penetration generate is what's not a has when going may at Our all on focused growth.

still me of the like guys And And a market have lot, relatively out heard X our a restaurants. cases time, position [indiscernible] team share as I [indiscernible]. all we X small say you with every

place about drive on growth. we that's do. to what going our macro, So continue the that don't And worry and

our those run confident to So continue. regardless and we'll that of there, gains will Jeff, on share place, what's be taking going I'm

to basis now know the XX%. up pushing I that then of them, increased see cost being label And us. more to more demand, independent guess Do now. whether seemingly, that, lower it's you're XXX I whether private customers about the are you Understood. points customers margin to or asking of you just mentioned higher don't

So independent a competitors some not I'm like be wondering you with really a it big how incentivize opportunity platform that will smaller would seem of your that. having that like

of your you you to do accelerate and that how benefit So customers? type environment

of A better process, on for product we been our the but bring great we've of now. we products, innovation our years a to which way ourselves more line with brands, the and Scoop pride big exclusive part broadly, combination doing our dozen

a believe do great quality what in be for leader the that that's market to it's foot looking customers bring time some great And products as inflation we to position. help in absorbed is given so lower traffic efficient products we're at innovation. we of they're need have these great kitchens. we been more And And the cost bit that our challenges their a the in

with the I've I see play to with that that near-term year the that TM to plan couple ceiling to any growth we made you're drive incent more. brand penetrate our brands. And to them out. said our market exclusive see You don't starting I changes the before, to to this ability incentive the And think as

seen really in couple expect said, last with you've increased quarters, again that that and of the Like And you're quarters Dave we've a growth. where about the stabilized, supply not Jeff, of seeing a that to form growth. since now our come this heard to has sellers of been we've has fruition us the vendor we couple talk continue. lot focus

with Carden Your UBS. will from come next question Mark

do well? question have some sense? traffic, sort compensation active this the just if any sales been essentially to and on double-edged in weather headwinds does a more given start, what able variable trending, you the quite to in just shift to not, the How controlling softening Or the another controllables. of force to So

Yes.

we TMs. great onboarding do think of I job new a

talk our We talent. In great [indiscernible]. fact, Tuesday the latest finding a with this opportunity get I to in the asked we what we had sales lot going class on have on week, to marketplace, challenges an had what's

that sales I'm why the not we've committed low as full That's We mid-single-digit hit we'll for to having problems great talent. year. growth continue finding to confident are to headcount that

of our onboard important. we We they how very couple business give business How this we sellers talent. about sales some and of with is a them really that years ongoing ] from. new and it's these a splitting It's can It's and through route and here. ago. we an grow see outlined that And first street We portion throughout them of go quarters And training let not their put won we have the also them find training intense way. throw and [ them a couple their done. program on not take

on We continue sales nurture them. before, it depends as said we comes talent that to where from. really And

helping who experience competitive on like book need, business are they they various hire We make And sure the our in our hire operators, we are reps. training, they or cohorts markets. quickly the industry a come with what all it what productivity. whether But to us intense of and how the suppliers people the in ramp depends that hire strong including bring going from in We some is, with sales which look those their that really up not support pretty their outside in know background. helpful exactly terms local classes deliver them give they we product of

great up force. a challenge. plan. continuing got we're to we've ramp our is not And sales Retention a So

broader some business second. how of you are year? I that's being then How process growth for macro, a X But when about know the in think those do dynamics? balance have the been the Great. of to in hospitality the you you you think of onboarded. about back onboarded thinking guys turning hospitality the And half new just

Mark, it's Dirk.

you the broader think it's macro headwinds same to restaurants of that your of the point, are facing. some when facing think I

in and planning net to continue of have want However, of we're we pipeline the to a business of onboard. port we strong and new business the back control to that point the controllables, bought the we expecting

think able is it. that, growth We've so in a our hospitality. differentiation growth of be lot and we there continued the of we'll the with to expectation that So strengthening health rate, care accelerate got hospitality, and

Bank. come Silberman will question from next Deutsche Lauren with Your

Congrats, guys.

the wanted So environment. promotional to ask I about

are sort market there that promotional are concerns guys new seeing any in I site And increase more distributors promotional usually segments, that how as challenging acquisition. you we're your you an some customer out of in key in activity seeing for case gains are play increase growth, Obviously, in does economic activity? think seeing strong backdrops?

Yes.

that, increased any uncommon year-end I the activity, point. various have which and just our drive of at promotional Lauren, but probably intense companies not given when But a is cycles point macro would I more the to bit all the I given think seen our is little have that results. to terms different backdrop. we again, their impacted don't in think ability that's growth.

know own ability I immune to there. We activity need time to we we so don't And intensity see the market to But execute time. our not have that promotional we to out we're times. market those for our navigate bring it's that that, and way. from any -- done get what to inhibiting in how to

the very a obviously, related And Can specific the case, being you that as the per follow-up think you growth unpack through the versus inflation? kind company profit much risk or thoughts How back half year? gross from somewhat activity with a of promotional and Great. strong. any drivers? it headwind increasing, of is on benefits And a of

things small logistics that drives that smart small initiatives. up, gain. each a of will it of take goods, So almost Cost we again, level is of our those are very, very gain. management, but that historical did all still company Inflation but it's effective it. from contributed to very within pricing, that a all But specific tick still

as goods $XX about, we in think cost work. from of year I we our million talked of gains

So continue grow and than it so to why and we case expect OpEx that grow case. faster we believe why profit to is gross per profit durable continue continue to really per grow we gross that's

feel we about and that. the of durability good So strength the

Heinbockel next from Guggenheim Your John question come Securities. with will

to this address in of bit, end [indiscernible]. the by I I rollout of a you seem to card you journey? does -- out are start here. with, there's -- a the you day know in play sweet cadence and of get that almost roll that Descartes we lot be this when 'XX. X% to going as gains. out be but Humos did a productivity And 'XX, that -- Dave, want about We'd out us rolling to you the XX% year, like going can spot in of where think little And X%

Is X-ish before We for of fair? period a back that to are closer down. time settling

Good Yes. questions.

by ]% find ways to led process the to routing historical drive card mile. we'll expect per that up implemented fully the at done will system year. rolled and first would time we've QX, X new great with part we late the out likely with work that year, XX% [ to fully next across ramp more the [indiscernible] We improvement the this as combined of QX We next about And year that continue that continue the new have end probably be that, card of to the company this gains. to further

that part going standardization the process is -- on across remarks, the and prepared work as that I'm confident got my MOXe company. of in we've

would year, to that. make process next We middle out sense And being so year next will rolled rollout, learning have each in second that of broadly that standardization. half in for thoughtful of we're about

it it's doing doing that burden cost sure and things time right a in that drive adding more we're with not being out as consistently, point -- that we're inefficiencies the those you're part about it's process X% up. out driving go we thoughtful So tweaking system right a cost but this improvement forward. first process making to to of just But is taking standardization X% not this productivity and

So believe destiny about this pour X% fully it. We there view. we're we excited and can to in X% is

follow-up. And as maybe a

you the is or Xs, right even that? if early a maybe thought those in about are front-loading the proceeds debt leverage think on the front-loading no? You undervalued. What low or within think your of Board's thought your these shares buyback taking on before is timing right? that what comes are incredibly on in philosophically, I -- buy that of idea as Just buying CHE'STORE down funding or with in front-loading, like front year, maybe ratio thought some the all

our certainly believe shares We are undervalued.

size leaning that. are $X We share Board late a in why repurchases. say bit in the gave authorization to billion the more That's QX, we're and accelerated ]. you've ramp-up this as that -- started XXXX the you supported and back twice that we heard [ of already also heavily in I little on Dirk excited on that see And of morning, color

our So the we're course we undervalued. We're through that ramp up buy of to believe appropriately or back going time. shares

Markets. Bania will question next Kelly Capital come Your from BMO with

Kelly Bania from This BMO. is

case contribution sales like unpack just And we I could is the Just color you're competitors the you geographic and wondering what just what Any differences. private force growth you growth, versus reps, of sales difference? maybe that on accelerating across vary, front? helpful. maybe seeing think, that's appreciate you Are a headcount, investment industry any the But a widely obviously there, would little public bit. that competitors with -- are know be historically? what of that, seen it account the to seeing you're I And the terms you have but across in penetration the also any could seeing that and bit if on little the from tag to I'd independent drivers new seeing new

Sure.

Overwhelmingly, new question your of been quite our coming from unpacking growth. it and now part some there, growth for around as of kind generation first growth. has the is time Kelly, So customer account was

our continue, quickly to that And foot we within again, a slower traffic environment. believe expect that's We control. especially in

lines they're challenges traffic you but same little The lines, see As of are a the those is volume their foot on less as earlier, still number challenged. cases in bit penetration. I buying as customers buying where first referenced

drive extent where ability generation certainly to play to focused. we're the And strength. out that account where that seen on having number loss and and haven't our hold Really areas fullest challenges or that's so seen now, business felt it. and anything greater our to we've But new squarely drive we're geographically, of

one, we're additions their headcount And the question ramp and sales little dependent new to maybe productivity mentioned your great upon growth varies opportunity. we market those force, the penetration underrepresented. those And of targeted And where as earlier, a background. on I believe, have there's we greatly sellers

headcount added by haven't. where then versus really probably driven last geographic So question any here. there that we've seen we we've more is change And where part

don't all private attract growth think competitors. I going that's on the to the no on seen on impact I any them or with got we've anything ability change. Really our based think sellers private. I on

a the openings about little heard or growth also cohorts you're restaurant up. maybe what I restaurant in That can I different We sounds consistent there? new just well down helpful. was wondering talked with what traffic But the and we've what about restaurant of talk just seeing pace seeing you're if X%. That's you restaurants bit as follow others. as of in types could from more

I Yes. -- end. traffic about say see at the particularly lot foot hear we challenges, the a the lower challenges, or wouldn't lot a consumer

than been some week I casual, higher others, reported have the of or challenged some think a the broadly that foot the fast higher little better been to but challenges maybe up some bit is those that's think spoken of have challenges most in holding even of little QSR, this I a have pretty in the of bit. cohorts spread end traffic across

I So strength going based any significant area to on on. more point or challenged what's of really wouldn't

with will Slagle next Alex come question from Jefferies. Your

jump, but see views little the was and OpEx that's what just to Couldn't case your per big reduction that changed a and where from? talked I flattening pretty out, dig spend you really the more last from indirect outlook, forecast, in which growth into coming I the think, wanted a about

Alex, this is Dirk.

costs. quarters, last not you're about assuming And non-people-related it simplifying a combination $XX not those. talking different the heard million savings. some and getting really I'm That's we're some of us what of the of few functional increase So is the a the value you've talk about or of than cases, the function. to interactions use of of efficiencies, between in reducing technology, if resources And redeploying combination and in field we're [indiscernible] people continuing

fits other that really all on it balance then top so highlighted growth, and And one of productivity. questions about earlier manage line reduction expansion to I GP this the into cost

more continues further this progress online update attack and billion-plus initiatives $X of As good there. pool reach concretely we we'll by generate to the continue [indiscernible] come see savings, spend saving to into million far to but $XX as XXXX. here, to We're and as move more give continuing we specifically, an

you're get the you of routing kind in -- just even benefits enhancements there doing the I on new terms with improvement. I this of I Okay. process And you're existing doing technology. of seemed mean, work guess, just process just in what the systems good from coming in separate the with additional routing, before initial it are the place guess the existing follow-up to a in like see the system and means deployment

the system there come is trying all changes come more to of of on benefit understand, that to the that, and here the have we'll like, new Just rollout. top process of will

little Just that. on more a

Yes.

technology the until we've it driven new Alex, the level. to the to think, you're was we think now And in at changes to what of here overlaying the better process that we the and is gotten and of by out, large about I is part, going card largely as better that pointing part we've routing we're years. initiated that for a delivering rollout, system improvements new next couple last improvements take way that. believe And been the

sure continue and is fuels get through think to technology process this we'll we we I'm I technology routing we the I'm confident with as going to new this really more the about learn -- that be overlay improvements the future fully optimize what go deployed. So and once productivity but

to couple few improvement. And Dave what additional is optimize a a It to add to Descartes, executed it what that. think, not a some expect But routing the put And get last week and it think each is come point there's of place, further continue more on quarters then place, I that a I technology we on is from in against. we see and on thing to we the about for when in talked it of process. it's Alex, been standardized the month the years, being and each once with Dave's opportunities other markets the pleased driver is we've done. it you piece as ago, you get on as

of think for as which, case, we So saying, customer a results this long typically further of plenty experience a there's savings, well. still in better opportunity way in

Morgan Harbour next question come Brian with Stanley. Your from will

your the -- Do down you any product second XQ. that expect you above just I of it there just you're And mix outlook, affect you give come that. Dirk, do kind in more bit half, little inflation don't that? in on a kind to on dynamics of color a bit could are therefore, that know if

talk could you about If that.

Sure.

of also as well. there So impact the when inflation, in we the about think we mix consider

see, but consider. a in into the one -- biggest moderation the see that's gotten seen piece haven't the more quarter, that second did did as quarter, thing past the you've second were so that to And in more continue. We little you proteins inflationary turned

inflation any not board. So of is seeing across significant we're overall, levels what seeing the not we're

And I little it good through about feel a that that. our t that is able X very modest we'll what X think or that very is up whether hedge manageable, we is above results effectively be ends at to way below

Okay.

more you pull Sounds a impactful operating that anything drove that expenses. bit forward, was performance of operating pretty in anything quarter good. in was expense. We've there kind of the think good second But your the talked kind you about

cost with combined we supply good the out. actions the it months specific taken significant reference call so, this productivity X that would is on of portion Nothing A different today. or past that over we've call that chain I

hurting So we teams not all we're not to X% doing eye, just we're this to business. say we how how or on, it about productivity, we're while holding operating and and to the Dave X% not smartly talked focusing accountable think -- or when while do when I keeping be damaging that's the an talked able it's earlier

further continued margin expansion. that and So growth

BTIG. question next Peter from will Your come Saleh with

guys customers Great. then adoption or quarter, using label the X.X it -- And seeing in lastly if app? as said on MOXe ask about just sell And any maybe I undate count you're private could do helping to And growth cases you an the of still more more congrats suggestive wanted I the give platform. to drive incremental guys. ticket through us on that MOXe, think from the customer. previously, on a of is per case you as that, penetration you nice the growth MOXe if

you. excited Thank Peter. very about yes, we're Yes. Great question, MOXe. And

restaurants. we As in across business. up We've continued our XXX% ramp chain in national chain mentioned, previously It's now we're XX% to of that our hold out independent our business.

in that the to we ramp Investor said the Day, up your on average, are XX% to year. expect And between customers point, end of buying and yes, now We more. as and

within algorithms great And we have MOXe.

sell our to is product our label and private ability recommendations. those brands of One make

and is with incent all focus that, that of will believe we of in the the brands the coupled we have working force, relative some that yes, things that together our we we on I earlier talked about. so commented our to support that that that way And growth sales

if indirect to as or $XX Great. by And that it, ramp did the the least I XXXX million rate for then up at that know figure Dirk, missed just, you guys don't but I you XXXX. cost -- provide you have run the

as concrete our and way make we didn't more as [indiscernible] progress continuing, get real savings I we'll I No, specifics are more color toward with give well year. some -- on target. to and further commentary, our we was into But the

will question Associates. & next come from King CL with Your Andrew Wolf

on you Or wins? in are are want focus -- the independent particularly, with -- in just any is by stock almost team new sales lines net On customer market, I that? really new it all the or outperformance restaurants, gaining wins? per to penetration the customer the any -- all gaining mainly driven additional

It's wins, traffic. is foot being some overridden penetration important I new customer algorithm. Andy, that as with currently the is said, overwhelmingly, but part And our an of of

hard customers. penetration to to on handle our hard that with exactly, we're get of drive but a certainly, kind working So

said Got Dirk, the and COGS $XX think year. the million are $XX it. million. for you And savings I year-to-date

being initiatives? than is going first it's a what So $XX less like little like increment with thing a Or on just a million Is timing half. that back that the on half?

new you Day, equally. It about from million is. our a It doesn't probably Investor But is. for we plan. as long-range hit talked $XXX-plus the It remember

continuing not we that in even expand clearly now. lot this gross we on to which I is So grow. work environment drive continue value continuing important to a are come. something of profit right a have productivity, and going that lot to expect and And lot doing We're companies think is of a we're continuing to the thing that are of to

Okay. And just X last thing.

these make what's -- there the is or that's what this Like deliveries Like is I customers what accuracy to just some get on-time not going Is MOXe behavior in changed is the the up, Like wanting improvement. being just the Or that's changing internal delivery through dramatic test the Or on? you to said filled it markets by are here You customers? tracking for drivers mentioned tracking? out window XX%. was think a drivers? better? quite

of what is. kind that So just curious

Sure.

customer. So with the is the this our ability when driver to route the customer. predict This the do to of to get to anything hasn't [indiscernible] will the

truck that And will using customer applied to increased intelligence, so machine allowing the and learning us are think more be that significantly to get capabilities when to artificial some those predict to enhanced capabilities their able we've telling that stops. inaccurate we in be

our It's of practical do And real plenty good that places on real those coming of results. capability. gets we we're to of our will it increase used a the places, it really using using things to example continue is that there's be to work in concrete this for where a So a but lot lot quarters. just improve

Instructions] [Operator

Research. Your will Wolf next with question Wightman come Fred from

Pronto. It came talked about contribution meaningfully you expected pretty before. what on touch to wanted like versus up looks I the

if So maybe could that the opportunity? seeing where most and you're into just dig you I'm wondering

Pronto. about excited We're

with at Day, with out independent said new because a point, to which we As Investor only Pronto. we've started sought at customers, this recently largely we've opportunity business existing just roll is that non-cap

our that We've of for of customers. proven And our there. more to here. out root so for on the the customers, existing at line we've roll I that think And is new top all importantly, the started acceleration but aggressively now model

can't business us. for reason we're $X So a excited it. don't midterm, see be that billion-plus over about I any the why

came changed thinking just bit then the And Perfect. number sales sales the case was in a about dollar guidance and little unchanged. out total

So bit talk pressure little of did July. wondering is. you offset a maybe the Dave, what into continued about I'm

how the lower is maybe prior case should the we trajectory or the range end towards think So of about that?

million a a a of change, foot does primary play if you small at little is it's that bit. look dollars in The couple So traffic hundred savings. of

year. you really the ultimately, it the have range of have, doesn't we change sales broad for outlook So for we that when think the that

[Operator will Bartlett final question Truist from Jake come with Securities. Instructions] Your

I wanted again throughout cadence the to ask about quarter. the

You gains share restaurant but decelerating. mentioned market also your improving traffic

doesn't the throughout So case at the that X% how levels the it was organic get middle your when It acceleration trend growth case to growth, -- imply I did towards of or look Also, you did quarter? it guidance, independent the guidance. from going in X% the the for quarter. to second

is should give what you recent can So year. and maybe on and of the hopefully trends your or half the how us of comment the back in towards then kind that cadence question confidence not acceleration

Yes.

but and growth have slowed, I guidance. that Those traffic, foot what growth case we commented, lot was importantly, quarter drove in generally our the to outsized up say with share gains. trends drive continue July. case of happening would traffic confidence with And continued into we So in follow growth we a as foot

the that help the highlighted work we've here, business generate that to gave should hit and to As both our of we Dirk to going for that on drive terms in you full to year. guidance and new got share gains that outcome, us ability continue

is terms driver pipeline case the least all I the then half? last what quarters. another about And just like in have follow-up. much does from then at It growth. of in the X look there? And expect back the on What that more chunk Or haven't that negative in was should X we talked we call, other

is, all school, it expect, it's a can the you'd et So cetera. be as government other retail, some

today simpler we're we're way and we the business. in that thoughtful So pursue

from expect We'll areas main coming to that's and -- independent we it. overall So a be and our will those. not be hospitality again, opportunistic The key growth care to grow in opportunistic how we health in area. our that drive be

the a then year, think that the cleanup talked I kind made about of impact, the prior just ahead was and impact And guidance, you it. acquisitions M&A on Got question. you've of since. that But last, you're running

the from impact acquisition 'XX? So we what in growth expect case should on

Sure.

we continue sort had, estimate expect continue coming growth X% Our X%. the And that said to update to M&A from overall. back to Dave X% of to as the at earlier, we cap in X% overall

conference Q&A any Dave now remarks. our concludes That Mr. back turn over I'll to closing -- the Flitman opening for session.

Thank much. for the very morning. Thanks joining you call this

Have a control day. control. to new the and confident lot. algorithm. our a great continue our in long-term also we in We're We we're confident outcomes future, Thanks

for conference. Thank your does participation. you conclude today's This

now disconnect. may You