US Foods Q3 Earnings Gets A Push From Case Volume Growth: Details

US Foods Holding Corp USFD reported third-quarter FY23 sales growth of 2.1% year-on-year to $9.106 billion, marginally missing the analyst consensus estimate of $9.107 billion.

Total case volume rose 4%, and independent restaurant case volume grew 5.8%. Gross profit increased 5.6% Y/Y to $1.5 billion with a profit margin of 16.9%.

Operating expenses rose 5.3% Y/Y to $1.3 billion. The operating margin was 2.5%, and the operating income was $230 million.

Adjusted EPS was $0.70, beating the $0.69 estimate.

The company held $346 million in cash and equivalents as of September 30, 2023. Net cash provided by operating activities for nine months amounted to $935 million.

Net debt at the end of the third quarter of fiscal 2023 was $4.3 billion. The ratio of Net Debt to Adjusted EBITDA was 2.9x at the end of Q3 versus 3.7x last year. 

Adjusted EBITDA of $402 million increased 15% Y/Y and the adjusted EBITDA margin expanded 48 basis points to 4.4%.

The company has approximately $257 million in remaining funds authorized under its $500 million share repurchase program.

Subsequent to quarter-end, the company has signed a definitive agreement to buy Saladino's Foodservice, an independently owned broadline distributor based in central California, with approximately $600 million in annual revenue and more than 4,000 customers.

Outlook: US Foods raised FY23 adjusted EPS outlook to $2.60 - $2.70 from $2.55 - $2.65 versus an estimate of $2.62.

USFD raised adjusted EBITDA guidance to $1.54 billion - $1.56 billion (previously $1.51 billion - $1.54 billion).

Price Action: USFD shares are trading higher by 0.65% at $41.35 on the last check Thursday.