US Foods Holding Corp. (NYSE:USFD) reported third-quarter adjusted earnings per share of 85 cents, beating the street view of 83 cents. Quarterly sales of $9.728 billion (+6.8%) outpaced the analyst consensus estimate of $9.718 billion, driven by total case volume growth and food cost inflation of 3.2%.
“We delivered strong results in the third quarter despite the softer macro environment and weather-related challenges which pressured industry case volumes,” said Dave Flitman, CEO.
In its latest quarterly earnings, US Foods reported a 3.8% increase in total case volume, with independent restaurant case volume rising by 4.1%. The company’s gross profit grew by 8.1%, reaching $1.7 billion.
Net income for the quarter was $148 million, while adjusted EBITDA increased 13.2% to $455 million.
Adjusted gross profit was $1.7 billion, an increase of 7.0% from the prior year. Adjusted gross profit as a percentage of net sales was 17.4%.
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Net debt at the end of the third quarter of fiscal year 2024 was $4.7 billion. The company exited the quarter with cash and equivalents worth $81 million. Long-term debt as of quarter-end totaled $4.671 billion.
At the end of the third quarter, the company had approximately $398 million in remaining funds authorized under its $1 billion share repurchase program.
“In the face of the softer macro backdrop, we continue to grow sales, expand margins and deploy our strong free cash flow,” said Dirk Locascio, CFO. “Additionally, we allocated $580 million of capital during the quarter toward share repurchases while maintaining a strong balance sheet.”
Outlook: US Foods Holding tightened its FY24 net sales outlook to $37.7 billion – $38.0 billion, compared to the prior view of $37.5 billion – $38.5 billion and the analyst estimate of $37.84 billion.
The company also projects adjusted diluted earnings per share of $3.05 – $3.15, narrower than the prior view of $3.00 – $3.20, compared with the $3.08 estimate.
Price Action: USFD shares are trading higher by 0.36% to $66.04 at last check Thursday.
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