01—Abstract
Summary
Summary of the 8-K filed August 8, 2024. Cited figures are marked; the original filing is the authoritative source.
US Foods Holding Corp. (NYSE: USFD) reported results for its fiscal second quarter ended June 29, 2024, in a press release attached as Exhibit 99.1 to this Form 8-K filed August 8, 2024.
Net sales rose 7.7% to $9.7 billiona, gross profit rose 7.2% to $1.7 billion, and net income increased 8.8% to $198 million. Adjusted EBITDA increased 13.2% to a record $489 million, with an Adjusted EBITDA margin of 5.0%. Diluted EPS was $0.80 and Adjusted Diluted EPS was $0.93, up 17.7%.
Total case volume grew 5.2%, and independent restaurant case volume grew 5.7%. The company reduced Net Debt to $4.3 billionb, bringing its net leverage ratio to 2.6x, down from 2.8x at fiscal year-end 2023 and 3.0x a year earlier. During the quarter it repurchased $41 million of shares and closed the IWC Food Service acquisition for approximately $220 million.
Since the Board authorized a new program of up to $1 billionc on June 1, 2024, the company has repurchased about $61 million through August 7, 2024, with approximately $918 million remaining. Management reiterated its fiscal 2024 guidance of net sales of $37.5 to $38.5 billion, Adjusted EBITDA of $1.69 to $1.74 billion, and Adjusted Diluted EPS of $3.00 to $3.20. The release also referenced a June 5 investor day at which the company outlined a 2025 through 2027 plan calling for 5% sales CAGR, 10% Adjusted EBITDA CAGR, and 20% Adjusted Diluted EPS CAGR.
02—Key points
Key Highlights
- Net sales grew 7.7% to $9.7 billion, driven by total case volume growth of 5.2% and food cost inflation of 2.9%.
- Record Adjusted EBITDA of $489 million, up 13.2%, with Adjusted EBITDA margin of 5.0%, up 25 basis points.
- Net income rose 8.8% to $198 million; Diluted EPS of $0.80 and Adjusted Diluted EPS of $0.93 (up 17.7%).
- Net leverage declined to 2.6x from 2.8x at fiscal year-end 2023 and 3.0x a year earlier; Net Debt was $4.3 billion.
- Acquired IWC Food Service, a Nashville-area broadline distributor, for about $220 million, funded with cash from operations.
- New $1 billion share repurchase authorization approved June 1, 2024; about $918 million remains after roughly $61 million repurchased through August 7, 2024.
- Fiscal 2024 guidance reiterated: net sales of $37.5 to $38.5 billion, Adjusted EBITDA of $1.69 to $1.74 billion, and Adjusted Diluted EPS of $3.00 to $3.20.
03—Questions
Frequently Asked Questions
How did US Foods perform in the second quarter of fiscal 2024?
Net sales rose 7.7% to $9.7 billion, gross profit increased 7.2% to $1.7 billion, and net income grew 8.8% to $198 million. Adjusted EBITDA reached a record $489 million, up 13.2%.
Did the company change its full-year fiscal 2024 outlook?
No. The company reiterated its fiscal 2024 guidance for net sales of $37.5 to $38.5 billion, Adjusted EBITDA of $1.69 to $1.74 billion, and Adjusted Diluted EPS of $3.00 to $3.20.
How is the company's balance sheet and leverage trending?
Net Debt was $4.3 billion at the end of the second quarter, and the net leverage ratio fell to 2.6x, compared with 2.8x at fiscal year-end 2023 and 3.0x at the end of the second quarter of fiscal 2023.
What capital deployment actions did the company take?
The company repurchased $41 million of common stock in the quarter and closed the IWC Food Service acquisition for about $220 million. Under the new $1 billion repurchase program, about $61 million was repurchased through August 7, 2024, leaving approximately $918 million authorized.
What long-term targets did the company set?
At its June 5 investor day, the company outlined a plan for 2025 through 2027 targeting net sales growth at a 5% CAGR, Adjusted EBITDA growth at a 10% CAGR, EBITDA margin expansion of at least 20 basis points per year, and Adjusted Diluted EPS growth at a 20% CAGR.
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