01—Abstract
Summary
Summary of the 10-Q filed August 8, 2024. Cited figures are marked; the original filing is the authoritative source.
US Foods Holding Corp. reported net sales of $9,709 milliona for the 13 weeks ended June 29, 2024, up from $9,013 million, with total case volume increasing 5.2% and organic case volume increasing 1.9%.
Operating income rose to $353 millionb from $322 million, and net income was $198 million versus $182 million in the prior-year quarter. Adjusted EBITDA was $489 million, or 5.0% of net sales, compared with $432 million, or 4.8%, a year earlier. For the 26 weeks, net sales were $18,658 million and net income was $280 million, while operating cash flow was $621 million compared with $653 million.
The balance sheet shows total debt of $4,707 millionc and cash and cash equivalents of $405 million at June 29, 2024. The company had approximately $2.1 billion in cash and available liquidity, including $1,738 million of remaining capacity under its ABL Facility. Shareholders' equity rose to $5,011 million.
Capital expenditures for the 26 weeks were $156 milliond, and the company expects fiscal 2024 cash capital expenditures of $325 million to $375 million. During the quarter, the company completed the IWC Food Service acquisition for a net purchase price of $214 million and announced on June 5, 2024 a new $1 billion share repurchase authorization, with approximately $979 million remaining at June 29, 2024. The company also said it intends to explore a potential sale of its CHEF'STORE wholesale restaurant supply business, though it was in the early stages of that exploration as of the filing date.
02—Key points
Key Highlights
- Net sales rose 7.7% to $9,709 million in the 13 weeks ended June 29, 2024, driven by a 5.2% increase in total case volume and food cost inflation of 2.9%.
- Operating income increased $31 million to $353 million, and net income increased $16 million to $198 million for the quarter.
- Adjusted EBITDA increased $57 million, or 13.2%, to $489 million, with the margin rising to 5.0% of net sales from 4.8%.
- Gross profit as a percentage of net sales was 17.6% in the quarter, and operating expenses were 13.9% of net sales compared with 14.1% a year earlier.
- The company completed the IWC Food Service acquisition in Tennessee for a net purchase price of $214 million, funded with cash from operations.
- A new $1 billion share repurchase authorization was announced on June 5, 2024, with approximately $979 million remaining as of June 29, 2024; 749,387 shares were repurchased in the quarter.
- The company announced it intends to explore a potential sale of its CHEF'STORE wholesale restaurant supply business, and was in the early stages of that exploration as of June 29, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, US Foods Holding kept $0.02.
- Revenue$9.71B100.0%
- Cost of revenue−$8.00B82.4%
- Gross profit$1.71B17.6%
- Operating costs−$1.35B13.9%
- Operating income$353.0M3.6%
- Interest, other & tax−$155.0M1.6%
- Net income$198.0M2.0%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 8, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $9.71B$8.54B | +13.7% |
| Cost of Revenue | $8.00B$7.12B | +12.4% |
| Gross Profit | $1.71B$1.43B | +19.7% |
| SG&A Expenses | $1.35B$1.24B | +9.4% |
| Operating Expenses | $1.35B$1.24B | +9.3% |
| Operating Income | $353.00M$187.00M | +88.8% |
| Net Income | $198.00M$82.00M | +141.5% |
| EPS (Basic) | $0.81$0.33 | +145.5% |
| EPS (Diluted) | $0.80$0.32 | +150.0% |
| Shares Outstanding (Basic) | 246.00M226.00M | +8.8% |
| Shares Outstanding (Diluted) | 248.00M252.00M | −1.6% |
05—Questions
Frequently Asked Questions
How did US Foods perform in the second quarter of 2024?
Net sales grew 7.7% to $9,709 million, operating income rose to $353 million from $322 million, and net income reached $198 million compared with $182 million in the prior-year quarter. Adjusted EBITDA increased 13.2% to $489 million.
What is the company's debt and liquidity position?
Total indebtedness was $4,707 million net of $29 million of unamortized deferred financing costs as of June 29, 2024. The company had no outstanding ABL Facility borrowings, $562 million of letters of credit issued, and $1,738 million of remaining ABL capacity. Management described approximately $2.1 billion in cash and available liquidity.
How much cash did operations generate, and what are the capital spending plans?
Net cash provided by operating activities was $621 million for the 26 weeks ended June 29, 2024, compared with $653 million a year earlier, reflecting less working capital benefit. Capital expenditures were $156 million for the 26 weeks, and the company expects fiscal 2024 cash capital expenditures between $325 million and $375 million.
What share repurchase activity occurred and what remains available?
For the 26 weeks ended June 29, 2024, the company repurchased 1,033,375 shares for approximately $54 million. After a new $1 billion authorization approved June 1, 2024 and announced June 5, 2024, approximately $979 million remained as of June 29, 2024, and about $918 million remained as of August 7, 2024.
What strategic actions were disclosed?
The company completed the IWC Food Service acquisition in April 2024 for a net purchase price of $214 million, adding goodwill of $81 million and intangibles of $82 million. It also announced it intends to explore a potential sale of its CHEF'STORE wholesale restaurant supply business to focus entirely on delivered broadline operations, though the exploration was in early stages.
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