US Foods' Q1 Growth Beats Estimates, Outlook Remains Appetizing

US Foods Holding Corp USFD shares are trading higher after the company reported first-quarter FY24 sales growth of 4.8% year-on-year to $8.95 billion, beating the analyst consensus estimate of $8.91 billion.

Total case volume rose 4.2%, and independent restaurant case volume grew 4.6%. Gross profit increased 4.9% Y/Y to $1.5 billion with a profit margin of 16.7%.

Operating expenses rose 7.4% Y/Y to $1.3 billion. The operating margin was 1.8%, and the operating income declined to $165 million.

Adjusted EPS was $0.54, beating the consensus estimate of $0.53.

Adjusted EBITDA of $356 million increased 5.6% Y/Y. Adjusted EBITDA margin was 4.0%, an increase of 3 basis points compared to the prior year. 

The company has approximately $179 million in remaining funds authorized under its $500 million share repurchase program.

The company held $267 million in cash and equivalents as of March 30. Net cash provided by operating activities for three months declined to $139 million.

Net debt at the end of the first quarter of fiscal 2024 was $4.4 billion. The ratio of Net Debt to Adjusted EBITDA was 2.8x at the end of first-quarter versus 3.2x last year. 

Subsequent to quarter-end, the company closed on its previously announced acquisition of IWC Food Service, a broadline distributor that serves the greater Nashville area, for a purchase price of approximately $220 million.

Outlook Reaffirmed: US Foods sees FY24 adjusted EPS of $3.00 – $3.20 versus an estimate of $3.10.

USFD expects FY24 revenue of $37.5 billion – $38.5 billion versus an estimate of $37.82 billion. Adjusted EBITDA is expected to be $1.69 billion – $1.74 billion.

Price Action: USFD shares are trading higher by 4.98% at $54.99 at last check Thursday.