US Foods Holding (USFD) 7 Nov 242024 Q3 Earnings call transcript

Thank you for standing by. My name is Rochelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the US Foods Holding Corp.

Third Quarter 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Mike Neese, Senior Vice President of Investor Relations. ahead. go Please

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

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

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

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

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

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

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

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

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

Before Southeast. communities by across Helene are of Milton, with we catastrophic and caused have the impacted which each parts Hurricane customers associates, of begin, devastation our our thoughts and all

of and are associates hours to property. damage our efforts volunteering commitment local but of and and difficult homes We grateful during Thankfully, community teams safe, recovery all countless our donations unwavering to many continuing the their aiding to for their through to time. are serve suffered this

salesman and US a local helped He Josh, Thank the volunteers Foods, He page during businesses, delivery and gathered XX Hope efforts support. have a to Boon Funding to time. $XXX,XXX areas. one to than truckloads have incredible XX Foods difference customers North challenging communities more relief of I'll and and this these wide of gone donations purchase that gathered Carolina your for food of a local briefly grassroots above our all make who Josh our and of coordinated provide associates raised of times. donations others is trying to to Go to variety beyond highlight support in help our County. during continue you, organized for the for those organizations with of including impacted and and who associates impacted, deployed generators US and

our to results I our turn to passing will core the guidance. on it before and provide pillars our let's quarter. update results to fiscal you Dirk Now to of our year then financial third X from initiatives an across XXXX update strategic each review

and Turning to industry macro team's deploy Slide we X. control delivered execution adjusted We and XX% focus, execute unforeseen a to environment adjusted proven strong volumes. controllables. EPS as operational to EBITDA testament is EBITDA of growth, initiatives. real a adjusted and results case our expansion our impacts, the another and playbook ability despite pressured growth which delivered our strategic XX% quarter solid This We challenging margin weather-related continue to our our

independent of captured of quarter and XXth volume our in share grew while health our restaurants, our hospitality. market resulted grew which X.X%, gains. cases types drove consecutive restaurant target growth and volume share customer Total X.X%, We in market care independent

with were share million. quarter, deployment. to Moving capital We aggressive $XXX prudently repurchases totaling this

buyback of good believe deployment. average continue repurchased an at We stewards of our shares over Since to program have to late billion our remain we of $XX.XX $X.X as buybacks we undervalued. will capital our be XXXX, execute and in continue price initiating will shares

the Let's macro our on focus and types. turn our to broader customer target

second XXX impacted Southeast third our in restaurant our several quarter on growth. the the got organic organic foot where but Southeast, basis traffic that case volume And The modestly past slower growth. down growth point market was nearly from once to the improvement, acceleration the quarter. rate. storms part seen adversely large point In excluding quarter the our quarter, Monthly storm an translated addition XXX headwind improved the fourth impact than we for independent share. to independent we was early approximately a of volume we growth environment, sequentially And the macro were throughout softer approximately business in to Southeast further higher independent the there the which in third growth has over-index was basis have X.X% our independent impacts quarter,

seeing also are improvement volume. similar a our in We chain same-store

independent playbook factors innovation come outlined, just operational enable and with and us And our market grow both the digital faster in quite Our share rate sequentially quarter. no combined we were profitable did I've selling, matter go-to-market capture share despite way. quarter, including third to our market strategy, we at team-based external what in to year-over-year than pleased second a the challenges the

on now pillars. Slide I'll each, move starting our strategic X. with progress Let's to discuss our X

is Our first culture. pillar

priority the are of top our and focus associates. always Our safety

our quarter, XX% accident the injury prior better the During than rates and were year.

we we we rest our to While make injuries each have not progress X incremental for will continue quarter, until associates.

the This to Red of Cross year, a with support donation disaster and Hurricanes relief including $XXX,XXX we American Milton. Helene efforts supported

product relief impacted Our the to Foods teams sent footprint. of US organizations also disaster thousands of cases across

to $XXX,XXX partnership or insecurity. food mission made military of a with national MFAN, contribution. a who organization's amplify and Family the Network, announced Military this face July the Advisory is understand connected This and needs families we Additionally,

move. group disproportionately collaboration transferred Relief military partnership pantry will in families, get new The typically start supporting impacted a per restock items boxes contribution to distribute our help MFAN designed homes MFAN Hunger during with is National essential insecurity. by food Our month, their military first families XXX discarded the

we in year-over-year Slide second service. this with time delivered pillar, levels. X, our to Again, quarter, Turning service and improvement on full

through markets. approximately an our focused XX% now is XX expect year-end, and Descartes remain distribution in routed markets delivering remain miles on of track also We Descartes. additional we technology, our to of routing on productivity live improved By which launch XX on

per to place produce continue orders, cases enhance manage in technology which proprietary user we pay to customers to our leading MOXe, incremental mile. seamlessly of platform, improvement track see experience deliveries, inventory. digital enables the bills and And our We continue this

the and we This portion significant position. customers further introduced customers, solution food cost food providing and inventory feature the selection. food all MOXe. manages tracks with to US calculator represents our tool innovative prices, that a new cost with available total valuable Foods digital for help their costs them of in Given embedded time, This our to menu insights and customers product leadership enhances over is

steam these markets. this We're pillar cutoff live now to geographies. delivery hard-to-service reach opportunity rapidly times. for is and XX excited smaller truck our Now Pronto, its customers on frequent later customers X. let's service Foods in growing untapped growth, turn about Pronto our small more deliveries previously Slide growth US to to dense with gain provides continues and ability in and

we builds these deliver in US This share are our an markets. service X restaurant markets, pilot to seeing nonroutine independent in Earlier further existing Pronto this uplift approximate penetration million We while Foods. confidence wallet sales date pilot delivery $XXX year, learnings volumes a for from In we for launched customers, leading launch case or pilot The XX% to penetration to remain successful showing X. track on expand us to of Pronto frequency. broadline cannibalization year. no this annualized nearly X for delivery Pronto gave and markets early size in

sales. national to Moving

more $XXX care new drove in in sales hospitality. during wins the and than quarter, business we targeted and development million Our annualized activity onboarded health

Finally, we in Beyond. and our Scoop to team September, Grill launched Barn

our private expertise, experience Our experts, and leverage natural port, development bag is at brands. Day you label is and prepackaged fall Investor tastes industry amazing a Scoop customers of XX product wealth products case. our June. of action who this highlights and US the My designed lineup culinary favorite labor to in in new a new fall Chef's insights the by on-trend XX bring of Foods saw saves which approximately last per to Many product Line minutes innovation data-driven smoke from boiling

Turning profit Slide X, to our pillar.

gross This We EBITDA case gross by margin grew basis to $X.X improved go-to-market XX strategy than increase primarily faster basis adjusted a XXX strong adjusted expansion. driving and cost adjusted execution point of profit X% operating was drove Our profit and expense billion. sold. driven goods adjusted in growth volume total of points a

progress through complete. than $XX vendor more of year-to-date. expect savings goods efforts, million We to our more long-range in to now strategic made in our realizing We deliver additional XXXX management is current goods also of nearly XXXX cost cost which than on $XXX million plan,

annual the On warehouse X% line front, offset improvement wage to productivity in gains with productivity productivity goal we in inflation. our X% to delivered of X.X%

Regarding CHEF'STORE, quick update. a

continue and for As we remain actively fully discussions our are through the buyers. make a business, exploring And business we process. to several progress. will our keep to supporting committed have this informed reminder, this strategic associates further We potential begun you we alternatives with customers as recently and

majority said, previously the proceeds sale, the in we of deploy would As repurchasing event expect the a of have shares. we to to

from Before I over length in service honor foodservice want Hall coveted Fame the a With record September, XX Fort into to Mill, our top U.S. both Distributors veterans the Forces US years that drivers Association just the South whom highlight facility. Driver XX the have Foods exceptional hand I around Hall and honor truck Veterans more inducted at US serve recognizes the Truck Foodservice Fame. are our it X of safety than of Day of It's industry's its for Foods. hail International with of This in drivers of Armed drivers, highly of industry. Dirk, to Carolina drivers that in service, and each corner,

XX Orlando is who years US at first has Smith, of The Foods. service

a decades Boyer, bravery in company, for not great been especially Larry nation. is service driver thank and but our to only second XX who The them their for for for courage I and has serving both the us our of protecting years.

freedom. can you also a of who debt I of thank veterans repaid. be owe U.S. all our huge outside Foods, and our never gratitude protected that have We country within Finally, and served all

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

everyone. Dave, and you, good Thank morning,

capture margins. growth and the execution result consistent Our our to of is double-digit market of share adjusted EBITDA strategy expand

XX. Slide on Starting

net and sales billion, of each total Third drove and share increased our food inflation captured of to X%. We growth by case in cost $X.X and driven mix customer solid gains case quarter growth X.X% target volume of types. X.X% impact

growth X.X%. and care from XX.X% we as hospitality the adjusted points onboarded Health $XXX growth X.X%, million, business. XX remained including year Our accelerated independent to EBITDA strong EBITDA from volume by to to restaurant points basis X% Adjusted expanded basis further and XXX new prior we X.X%, at acquisitions. grew grew margin

to drive margin proactively manage operating expenses, we profitable our these and continue see expansion. execute we strategy margin gross As growth actions and

savings goods During the more the and of strategic than to vendor management this from made further million end through our third quarter, on XXXX achieve progress we year. of expect as Dave in $XXX work mentioned, now cost

also to highlighted realize that on We of savings deliver operating the track this more $XXX million $XX that on last quarter. we from annualized we indirect track discussed. million spend the year in remain than savings to previously work expense we are And

macro ability the This to highlights initiatives environment. our execute of regardless team's strong

levers We are rate pulling expense appropriate operating drive and grow productivity. the gross to sustainably profit

reminder, volume a to expense portion provide market to a structured significant match As as operating us variable our costs scenarios. in are different of flexibility to

adjusted $X.XX, adjusted ability XX.X% faster demonstrating grow Finally, EPS meaningfully diluted EPS EBITDA. increased diluted to than to adjusted our

our which more this as deploy towards expect shortly. free We share strong repurchases, continue about flow cash we talk I'll to

chain quarter. on management or expense profit with per prior private expense by control, initiatives continued portion improving progress the operating case prior Adjusted EBITDA a X% was processes XX. from grew realizing per work Slide than label growth including penetration. increased all productivity, X.X% spend per indirect offsetting case administrative operating by per or $X.XX focus to gross made our procurement costs of productivity, cost versus and or case to and Adjusted than our including $X.XX, savings. gross faster $X.XX This up executing within supply X%. growing streamlining in $X.XX led of than year. We're This adjusted year. operating more significant less inflation adjusted case Moving per and vendor We this adjusted driven significant again strategic case primarily profit

continued initiatives. case per expect We execute adjusted growth as EBITDA we our

to on XX. Slide Moving

disciplined $XXX million Our was generated driven free by profitability cash cash and flow and working management. $XXX strong increased capital operating this we've cash evident generation again flow, million of flow Year-to-date, quarter. of

well technology, to as shareholders capital Our to in for distribution and maintenance repurchases. the on deploy as to invest equipment in We cash the robust strategically, financial focused creates growth projects enabling first CapEx information cash capital share for flexibility X million support of including $XXX business property and months, us to facilities. return mainly flow growth, via invested our

line and significantly we quarter, total our the we to share of purchased November XX.X shares. a During date, of X, fourth $XXX last the of shares quarter in In commentary for million pace repurchased $XXX additional million. million accelerated through quarter with repurchases the an

of our We $XXX $X authorized share remaining billion have repurchase million funds under program.

We continued investment share will our to tuck-in program and growth in for organic the addition repurchase business continuing execute disciplined in remain to in M&A. opportunistic

We of the X.XX% maturity XXXX We and loan the Slide Net to our leverage structure. net share Xx Turning used in ended term in quarter. issued a from next the at target to $XXX to to repurchases leverage, net on debt within range. X.Xx this XX. is the year-end, even with significant million at leverage our due Xx quarter end, our senior Subsequent unchanged quarter we facilities. repay proceeds portion addressed notes

the our both margin term extended of of loan basis the adjustment XX due the to XXXX, XXXX. of by the facility eliminated of term balance credit on loan on XXXX our spread basis the also due points interest XX and lowered maturity rate We facilities remaining points

of we approximately $X a annualized interest this, savings. As million capture in result

we strong, XXXX. and no debt until debt long-term have structure Our is maturities

now XXXX for our that, Slide XX. on outlook With updated me turn let to

to of Given in our the $XX.X We're now the $XX XXXX performance outlook of expect sales be our end our EBITDA billion the to $X.XX of year adjusted remainder and to range year-to-date we're We billion. to the for range bottom guidance. year, billion. net fiscal increasing $X.XX billion updating

$X.XX to adjusted our Finally, $X.XX. to we're EPS range diluted tightening

assumptions. modeling to Moving

to X.X%. case than also million given For continued We're environment impacts, expense to soft of million. to now $XXX be of expect of the previous in the to to forecast and and be unanticipated X.X%. mix assumption, Interest lower projected $XXX which sales total hurricane a we X% the macro expected growth our is now X% XXXX, updating inflation to range range is our includes

million. partially at softer higher due is in grow confident of continue end now execution $XXX to strengthen Finally, to we of range, our million the the share and Despite depreciation in be with projected volume, and $XXX remain and backdrop, our M&A ability to is our target range gain amortization the to to positioned long-range I macro And return to and start financial this our achieve to balanced capital remain to and I'm our for shareholders. long-range XXXX our plan progress XXXX. types, pleased increase off profitability to next profitable strong driven as year current with we've strong getting plan growth. forward beginning We targets. a in well look customer

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

Thanks, Dirk. only win market us position well to but Not as any sustainable leader we a demonstrating. have environment, we significant that advantages are in we are competitive

service pure-play, We scale. U.S.-only are only food the with distributor national

types to is industry, volume and the focus grow in restaurants, health the independent value and share customer gain care hospitality. Our with highest

innings which these the a long comprehends deployment early of delivering We of Many growth. are in focused long-range plan, initiatives. from have our self-help profitable and of runway executing of on new significant the are our outcomes upside and

leader and digital plan. built achieving have confident maintain. XXXX advantage will innovation industry long-range in competitive that are a the And in strong we we XXXX our are We to

our expansion of billion As points Investor against period, algorithm capital CAGR. growth margin least back X-year buying X% capital adjusted a CAGR, half adjusted least priorities a introduced This EBITDA approximately of our includes our growth growth over allocation the Day at at stock. to XX% generate growth $X reminder, adjusted a and EBITDA basis EPS towards will diluted deploy including XX% CAGR, sales XX at annual June

adjusted my growth third conviction strong place increase sales EPS a basis strategies And XX% we're do XX and the that have in about XX% of is results and to right say affirmed next years. achieve of XXX% adjusted ability team X our plan. and exactly EBITDA to future long-range margin growth, in aligned our deliver going we the next Our growth a we point X.X%, quarter EBITDA net over excited our to what adjusted

best of to to and to well industry. dedication ambition the our associates Finally, as in executing thank pursue continue the I to each serving customers undisputed our sincerely our become their for we XX,XXX

open that, with And questions. for line please Rochelle, the up

Harbour the [Operator of Instructions] first Brian from Stanley. Morgan question with Your comes line

bit that's private to where label Can side? you little see penetration, what well tracking independent there talk more as you a and the on sort continue of just about

guys, Brian. our had our Yes. externally no We're label to you time near-term team particularly see I We're to excited XX%. that. restaurants. there, increasing all And independent continued brands, about the we've private in increase barrier to penetration with and running our roughly there's no ceiling. as I say

very those launch. here leading little bit morning innovation, strong Scoop about We're our all this adoption I talked in a in products. new

We across our portfolio the momentum. types, great and in really take products all to those customer got continue of we've

about was that of seen Maybe Okay. Great. health next sort year? and the just into recently customer? sort talk of could similar that And of sounded but quarter understood some chains, well, independents correctly, It how you expect through like and the you right? uplift after independent you've talk I if early as do trend about impact the weather for this

by of Yes, seen. just we've challenges the little what year. we're And are really beginning context, encouraged documented foot well a the quarter this second in traffic

decelerated traffic quarter. in the Importantly, foot third

You gains actually heard market morning accelerated. our me this that share say

growth, and more cleared momentum that last early in one that, hurricane We very mentioned, all our October. restaurants independent September. of another had also a by you with had once we've both, encouraged case acceleration week point We XXX basis as in I'm we than And chains. seen, the in

XXXX. And the I for year going our this about and have we're share to way strong. of couldn't that took what our the finish means again Both excited very and remain be portfolio very more pipelines. we where in importantly, hospitality, care quarter differentiated and And those strong health

the Silberman Bank. next Deutsche of line comes with from Your Lauren question

guidance, the end on end the the guiding you're year guide. EBITDA full guide, case the lower First growth high of of to

it to expectations. P&L seems outperforming So initial your the like within you're relative

about you coming forward any initiatives? just that's you talk can where pulled So from? Have

we No, haven't really anything pulled Lauren. forward,

we've a that of initiatives continuing P&L, of gross the span profit from that expansion. to now, top we to line spectrum entire doing -- As we're for time which long execute portfolio initiative just been really have, the

morning this productivity. expense comment momentum that continued Dirk on we're heard and You operating our gaining on

confidence what All and of new very in the of that that innings me plan. gives continue. great like feel long-range of that's a excitement we're will lot for I early work, the and

what fruition this is controllable I continue balance see control we've come you the had. of that to to think, the focus Lauren,

growth. line not So care solid independents, health been see and growth, is we're very very quarters. top for is get us our thing, In we've hospitality overall growth. now down only And margin But XX% you strong, and expansion quarter, leveraged and that able to saw in this growth EBITDA XX% but that growth and has pleased EPS being important, XX%. EBITDA -- to with and multiple to one EPS then you from

with pleased So that.

on Southeast, that you're Just improvements are traffic Great. you growth independent you are And of trends? running just a seeing understand, follow-up to in currently to also communicating the trend. organic? the that X% case Outside trying underlying close

things the little No, gaining us for talked bit, I'd XXXX. higher very now. and quarter bit I'm confidence across We've I We means independent actually the in country a last you I yes, behind see growth, pucker some acceleration And case that election. factor, Lauren. of that, a say consumer think good will, than we're encouraged. the we've really that presidential seen about I running got the if think given and

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

to recent growth are And is growth can so? now, of all what case all new I productivity Do cohorts right, the sales expansion coming think about shoots talk still, -- force Dave, maybe size? about you're talking any and your green accounts? then or or running regard X% -- you with of from of there to you drop

We how for strong you, I incoming in as the several sales Tuesday, in ability talent. training had sales along just expected finishes been here, that tell all we're here classes. Yes, about of running actually excited as year. here an increase John, I for over high-quality will We'll sales and one I've as our another talked that see in since with the been bringing competitive mid-single-digit we months. the But talent past very to I'm year. to were we in bring new I've to our sellers, new

excited really that. So about

our yes, in with Well, be, challenge and been, penetration to of growth will has about foot great yet. I the lifeblood has a loss. We're we've the traffic. been new any seen excited think we're say but wouldn't continue account I that, managing the And generation. acceleration also penetration

shoots Although overall green the I we have begun case that some has here over weeks, accelerate. seen to last the X growth mentioned

going I the consumer is more think So to confidence. gain

and foot strengthen just I those think here to continue we'll get past challenges traffic that soon momentum.

where are you're And rollout X.X%. Is to regard And in warehouse the same said range? I we is that you right? with productivity seeing up what on know then of don't productivity. I the sort know driven miles

to that's back Yes, quite we're there big a I quarter not mentioned we in what the in basically terms see productivity. turnover we're an from that productivity of with remarks. productivity. to that. how warehouse, out morning very with and translating the did encouraged the in seeing stabilization levels quarter yet improved that's the in We're why back enabler warehouse one and that but pre-COVID called acceleration Very, my in both reduction last That's to I third prepared And second delivery quarter. in this

your John, Specific, question. to

we've more. X got so markets, XX in we're So

foundation So we're roll in that that results is the through a with in continue we're of the things will that be lot and pretty seeing continues supply chain. It for pleased that. to to Continue out driving XXXX. other the really

of operating in a the company. and driving consistent in across effect standardizing practices productivity desired uplift terms And having exactly the those

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

little a well. It about to like quite go initiatives. bit the initiative that ask continues just to sounds COGS wanted I

working in vendors to But next plan. I over about the last you in could as with how to think that reacting little X how you your maybe and plan years? and coming years, this there more just are on just volume-dependent savings XXXX. the the exceeded slightly bit the be And can just talk X-year strategy a confidence detail there you the for your there look goals you

Yes.

for company. said us a deliver And the X long It's a been long-range we we question. gains this going what vendors. plan, as and we've most $XXX $XXX Very to was work the time We is manner And at care we up years. the of importantly, previously, hospitality. thanks confident but heard important it the wrapping also the year outpace with this new independent piece which just doing a with long restaurants, I've over very the saying commented piece, for a do been So of not would ability health in We've win-win terms with our which is Kelly, highly market in and really market million. in million we're collaborative share just a for our time. to approach that deliver inside the

they're They want organizations. to more this and both Everybody that a that willing sense makes in way is than growth. engage do volume that for for looking growth, and us with

last vendor just a weeks, we annual coming of our our the fact, had of In future. excitement best out vendor and lot probably ever in about community our forum attended the of couple

feel So great we about it.

new business, that quarter. mentioned the $XXX helpful. [indiscernible] health you the million, during came That guess, on care is I Great.

the those to next the care, accounts. on Just can you years particular, health you of and of kinds in take in that? the couple elaborate over on capacity have that And pipeline

Dirk. it's Kelly, Sure,

So with we're pleased that.

both across service model So can of the have Health a and largely also about, that economic we because well care we've value. value the care, from I leadership pipeline there as bring have both always and health talked as familiar, strong think the partnership, our pretty as we you're hospitality. customers the position

that share to confident at those I'm market that's So very types. we grow and each in gain can above customer and of rate healthy continue a

and the in at see on health is buying with versus, when typically, almost same X% same is growing I health The say, customers is they think thing hospitality distribution you're grow. already to care are with your care, good the products is have on, that you continue over-indexing those bringing we you the change about that facilities.

bringing and chain So more on independent lot they're a effective of optimizing and with [indiscernible] hospitality care And over-indexing us focus on to that's around. and why you far than being continue thoughtful health see business.

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

start I want So Descartes. to off with

now some any that of out How incremental to markets? from rolling And your latest your impactful markets. gone expectations? more rollout has to relative You're learnings your that batch

Yes, It's the why about lot we a pilot how very this there out that. of Mark. that's well, in early extremely markets, on were time a around amount going we of and those And thoughtful we spent company. learnings across roll and are tremendous

exactly of out the going to delivery we're And and we this we're new with before actually as that need and a a And markets and doing more as your recall around say confident that we've actually space. our right, to deliver getting work customers, going them gotten into windows rolled engaging window enabled do And they lot that a just now all it's when there, you a in the ahead without technology the can't that dialogue Descartes work customers, really bring that. we've we done great deliver. of great job to

the why And up our we're miles of next have confident end out so that's by rolling as here aggressively year about card the and the we'll it finish this and on now are year. we thing as half

it. So we're excited about

wins. Great. you've And some nice on from benefiting business new been then hospitality,

your demand business hospitality How with shake is customer for seeing see relative XQ market to industry how out Did And you existing are did You overall guys base? your much guys expectations? share. your hurricane there? impact

Dirk. it's Mark,

demand impacts traffic pretty underlying in sort storms similar So the It is the I'd from of say, out very see foot as shook quarter, what the hospitality we in it restaurant overall to expected. often outside you of for from impacts Foot the similar third traffic. the and underlying weather, had largely the space.

as So is and we seen well. in Dave then talked to improvement and saw similar quarter about, hospitality and pressures have the that show chain the start independence and the same up

encouraged. we're So

working just feel I team ability to as think again, our new as as take share pipeline at for there grow in be to active the same business the on very and net well continues I answered good our time, and the question health care. previous

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

Great. Two questions.

an one, total But was case now the you full growth currently tempered weather running you X% clearly said I reduction. to the growth. X%. something earlier year is what in maybe X.X% the The component. hoping know to X% just trying I was X% clarifying prioritize think case from the a could first greater for than to question, drove was clarify I

So just than in like was improvement at all XQ, to sounds get XQ x directionally, trying least XQ, further the weather. better

you specifics to wondering third quarter. in through numbers quarter provide into of seen you've of the Just fourth that could if terms any reacceleration kind the support

Dirk. given it's quarter toward on the combination the weather, Southeast, of the to size start adjustment end us. quarter. had impact which out, and our third as Jeff, then you a pointed was Really, the an a And the the fourth of it in

recent mentioned, -- saw second the as some traffic stayed positive those longer, although third quarter more coming we were we the said, show in storm out see the in that we signs environment again quarter the up The for And overall piece as Dave before we've softer seen is signs. did of weeks.

the which is during is environment and it's the sort and losing care share. macro the that the combination again storms of each quarter think it those guidepost us period, in that even of independent share in sort a So our I we hospitality, of gained versus But is things. health part important

in XXXX. the thing our up what sets we think is us I deliver it to be to for it does confident committed other ability

health or know care that accounts Great. you gains and of whether I new year on in maybe looking the you've up terms into is And highlighted encouraging. wondering with hospitality, changes new there's big given any maybe then the I'm restaurants wins, of going very or business. pipeline terms in next how

always I a being Well, independents constant small, pipeline. mean, that's

constantly that win we're Dave and more new winning net lot so that. and to And talks you when lose accounts, a seeking than about you're

is an now well, environment from that we industry to the doing a take so our grow perspective. us traffic are that share teams And that given tells continue and in

business continue I is and think chain our a very from head Pipeline XXXX. expectation into robust. onboard remains to new we to we've perspective, as some onboarded

good pipelines on And the thoughtful focus we're head next the care are very into remain feel about as but for very, strong. We health business, I pipeline in there hospitality we year. chain what

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

Nice quarter. EBIT the you, little was like, if weather, above look still a but obviously, you macro-related growth because right, of volume ask quarter, to I like algo. at wanted delivered growth you like this stuff, that's soft

looking not the about opportunity in XX, on you 'XX. per go in for XX, profit think and I'm saw case but we does As and gross look 'XX per like guidance what forward what OpEx in the versus the the like case

the that ask outlook. about says of get to quarter, seems have better next you question to potential composition of what potential because numbers the certainly this P&L volume And it better. just want industry clearly kind like in the the it I like curious year. have volumes deliver the I'm to

third that about Great Yes. delivered fact the entering part still well-documented devastating algorithm. what And many early fourth we new in me of point. excitement so that's and that XXXX. weather challenges the industry The quarter, impacted people and the gives our

gives up great is and ramping that Just importantly team confidence encouragement the our activities. right me

your said, in early the OpEx work. case, this GP case per per and on To as point of the we're I innings

to these continue initiatives way the by focused up roughly quarter you and year to can did expect ramping build. on And goes it. is this momentum work that continue just the our each and as team to we that it because think deliver, I continues we're

in confidence more and including parts of all the the topline. going them. And in way pieces very executing gets of into we're team encouraged these P&L, the I'm XXXX work Our

just the a share quick And repo. on follow-up Great.

going You've about then billion repo, more the of half mean, that [indiscernible] of ] you QX. buying talked and [ stock in $X the back quarter, but you're I XX this did

loaded. think I about Day? up you And -- we seems to more the front-end level still you the ratio like end How talked Investor do it of targeting the cadence like it [indiscernible]? take certainly are leverage that at about the to being down may mean much be

Yes. Well, question. thanks for the

shares. given repurchases. 'XX, our there above First exactly generate $X half we told 'XX said next is we algorithm. what into [indiscernible] -- terms the which generate with is roughly expect and And of repurchases, half share we of between billion the significant year impact bought share in we doesn't in just we lean we we if is you back quarter of okay? million in would deploy flow, the what and of what what capital to cash doing to what us during go we're all, back But do, undervaluation believe we the we importantly, did delivered

we've we talk in stock confidence that significantly about we M&A things the momentum heard strong. when opportunity, dependent think And the line share pipeline. also ought to really as business, and algo to going we're you toggle the repurchases, that we and lean can't If undervalued. all that we'll me be of of and dictate XXXX, you in. But And we upon the have time in pipeline said, we'll where still said, the undervalued, the as M&A are remains those pop between deliver about out the as

what we're said to add confident we algorithm doing to in Dirk, anything continue forward we outcome. what there? to put and So that We're the going do. drive we're

No.

toggle to so what things the that's repurchase we up much -- reiterate is share ability particular the may to in where on of the quarter Just M&A to one about of that given to depending said a more as value like significant have comes you portion And you share be made the what but expect repurchase to it -- less repurchases, in a on we pleased they've or future. relative that. the said that we're

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

just term a in make want trend near the clarification. first I of cadence. right and to just sure the I have My terms was the

independent was So case in quarter, the third organic X.X. books

roughly the so to You're the you're hurricanes. basically have X.X points without of right that, Is that X.X would that, about? impact saying October? way the basis trend in running that been XXX improved think the since Has

Jake, it's Dirk.

past is with first October weeks higher the got of X.X of Now after QX. than points basis in been had we what couple what XXX it the we of instead means the storm it's impacts,

mid-Xs back range. So that to

Sorry.

So October basis XQ? stronger XXX than points is

X so. yes, last The -- last or weeks

to expecting improve. we Once And to we're that continue the lap storms.

Got Okay. it.

you helpful. make looked kind I it in of understood like storms to third were just the want sure from benefiting because That's trajectory Just quarter. lapping the the

question other great. your efficiencies, productivity X.X%, is is cost which your and about My operating improved just by

long-term X% is Your to guidance X%.

So XX, middle more we to my towards? question Is increased gains? is momentum some the of see path expect that path the And the on X% X% end something in -- might productivity gains, working higher the even increased that or your that of maybe in the What's visibility range. productivity you're to side? on towards on trajectory

Jake, it's Dirk.

it, X what's really good the XXXX, And specifics So on supply that talked to indirect we It's within is have visibility, we is. but savings. -- all I'm it that spans to chain, and what our And goal on visibility not people across across our Investor things X across going give driving about it's at the nonpeople. and Day. June admin, spend we

So things initiatives we will to the productivity. each of drive expect that drive those will

believe we things next that at sustainable of to gross expansion XX-plus so X flow we is the healthy that again, and And is lot it that market Our have a that talked a for basis we strong through it that comes the we've goal or continue inflation very the of is offset profit that we've years. grow back points we rate so about the faced that we why about. form the the generate largely doing to are to concrete to offset in talked gains

Peter comes with The next from BTIG. question Saleh

Congrats ask the Great. to sales I quarter. force a compensation. strong about wanted on

any let's the I or that structure think if year, other this it's made And to about changes you quarters Can been been, you changes guys just compensation since XXXX. X far? talk it, that's so received so some earlier change. in call how you're contemplating

It's received Great Yes. well. very question. been

very our sales They was happen the of terms understand exactly of we performance, pieces the And again, directionally to modified them. force their of increase They're were line to think more But excited. to those in between expect relatively we've what changes variabilize very, key what hungry. minor. pay linkage is I think there. in that being I with

to exclusive brands. lean more our aggressively secondly, in And on

just made change So I as tweaks, algorithm We happen tweaks didn't going what here with to have these structure. the our expect always in to some fundamentally and growth forward. align cash we we

behavior It's The the having expected changes there. are [indiscernible].

Our line things sales going the growing is And going are and happen here excited on forward. to force it. good top we're

costs. Understood. the And on then indirect just, quick Dirk, real

the you to on I rate savings of at run think still million Day? track $XX of you highlighted mentioned Investor $XX the, the I XXXX that maybe you or million savings achieve Are at least by guys rate. run think,

are. yes, Peter, we

come this with million I $XX have it of have the We've about on quarters. plus. underway. and savings pleased work XXXX. to this well that to the $XX talked in sort on for start number And the early it of fruition actual are We projects for that. million track achieve come the for to have talked -- about the been has we year in, And a as our yes, way And

Andrew from next Wolf with The question comes Instructions] CL [Operator King.

I just wanted to little. business into ask a you to the Pronto drill

and much $XXX could mature rate. out sure incremental, given figure so us still we year, in but Could growth budget a on, Obviously, year. to of your you if growing it's for speak sense million maybe less rate is and it Also annualized a give it's run maturing. expectations was of how existence So this want you to I'm so last going the forward? that

start I'll Dirk. that. It's on

to complement piece moved, is I'd for it from sort billion or So XX% pretty up of opportunity And that it's we've that in existing. of It incremental. an say the But $X tell around $X so just about penetration -- a or markets. X about, that moved contemplated talked mentioned, to X is there. that has that markets really as we've conservatively to you, is our billion. talked Dave is being I'll

think there, there. of lot So I there's of billion with $X potentially we're positive probably the a early seeing runway, results north

a the to we that of come. plus to opportunity lot to business think, customers, a opportunity existing more and that access So number new our of continue of for has for years growth customers

But in compete opens And not more delivery, urban deliveries our the service the suppliers. specialty today, penetration, distribution in today. great Pronto Andy, all to smaller model didn't with as more got again, frequent And the it up products a have market that against those our areas. broadline inside before that those we able we're business those we've Pronto really really said part being centers before, of [indiscernible]

about cannibalizing our we that got because commented we've way. broadline core point business want to were we now did weren't in we that so And any at piloting this why thoughtful that that's I the on sure, we and and work be

we're there. that's and and And we're excited why not now X we've proven to that from pilots ramping X up

couldn't pronto. be progress the the excited making I with with we're pleased more So we're

Great. And on clarify just to penetration. want I

different specialty customer. broadline And existing fill-in Pronto like product, a product, it's a your a It's not customer. really not like need something. or kind catch-up it's of secondly, a So like we more

in it's year, this Well, new Pronto. on -- existing first broadline now. And go it we was had model a years exclusively our to after this did all, lean until allow for customers of to customers. few not We

when a about products. meat, those -- suppliers, again, the they a out produce, we it got Now we're think about about of are. think item, to we're specialty to product, Contour we've going and that's not throw run customer on specialty against to happy But yes, think core And there. all And competing think if that pure got be specialty the we've suppliers. truck about going seafood, you

So that gain with existing it's growth going our customers. able incrementally open to to weren't volume additional some up really we

Okay.

governors more it real be the to route have the economically or So make within less to viable?

viable. customers they're or Andy, profile margin business. for in used that premium we've It's that above bought said again, service. And before, suppliers, as the was And broadline we've got the economically from who our paying at Pronto XXX% to a specialty

profitability concerned all there. not I'm at So about

with take question JPMorgan. Ivankoe from final John the We'll

X%, volumes, words, outperforming to kind I which level, case revisit of would a was other market of wanted base. thought to that on local guys I do think you X% in underlying X% the assumption the and you

X% still ask potentially factors macro the week, to about growth? do really we learned return to that what wanted should are important what that this good X%, I at look So questions. could drive you couple of a local a especially for we've One, feel that

of focus of Or baseline And we X% to next market the as regardless over we type about our the think we about of your the the couple outperformance assumption? is to back as years? that on growth, own Xx should think to X.X assumptions does happen X% just getting

There's thanks question. lot a the John, unpack it. Yes, for to

Let me my try to best. do

that been. that back in the a core market in over time, time. period of was X-year what thought And quarter growth had again, a about of any year, yes, or June, So that's the X% historically, any over wasn't base we we assumption reasonable growth particular has market but about assumption any because,

yes, couple in of we're things point year. about do I'm the so in that. all confident confident even a to little I'm And in that bit X% ability to And a our as the soft. is confident I'm X% we've market to growth, X% talked If if I'd X% and market of range. that range to

over the years. are all, is of us. a to rates inflation down. lot First starting of the several Interest election consumers had come past behind The

think see return normal consumer future. as going activity kind the we're to we of I into to go continued

that I'd other just with underscores the thing my confidence. And that wrap

second on. we're or the okay? still range, this I at to the gained XXX% first of and what our that hit If of the to by were our additions enthusiasm first XXXX. quarter. in a January. X% third impacted over the XX been of we traffic last quarter foot X a quarters of year. lot a targeted the noise XXXX, We first I'm challenges. By our traffic storms forget, above top the strike couple encouraged by significant We on of pretty XXXX, DCs all range look more am confident encouraged sales the than entered in in quarter, in quarter in with quarters. We impact in way, to weather had we you quarter in I'm X% of force. Don't got we the working foot XXXX in The worse. had the share

Dave turn the the concludes That I Q&A conference will over our for closing back remarks. now Flitman session. to

about deliver of excited our the what years. joining the today. and great what I Thanks, us. we the ability that macro, you in regardless underscores weather the we're joining do that all couldn't X are, us to momentum impacts quarter Have our more to the the for of for be team going another Rochelle. have momentum delivering Thank Thanks Look, company this is regardless say we week. a over next was

for Thank Ladies and gentlemen, that concludes you today's call. joining. all

may You disconnect. now