US Foods Holding Corp. USFD reported solid fourth-quarter fiscal 2024 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.

Management highlighted that the current momentum gives confidence in achieving a 5% sales CAGR, 10% adjusted EBITDA CAGR and 20% adjusted EPS CAGR through 2027. The company remains focused on long-term value creation and margin expansion through strategic initiatives.

USFD’s Quarterly Performance: Key Metrics and Insights

US Foods adjusted quarterly earnings of 84 cents per share beat the Zacks Consensus Estimate of 80 cents. The metric also increased 31.3% from 64 cents in the prior-year period.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The company reported consolidated net sales of $9,491 million, which beat the Zacks Consensus Estimate of $9,474 million. The metric increased 6.2% from $8,936 million posted in the year-ago period. This year-over-year growth was driven by case volume growth and 2.9% food-cost inflation.

Total case volume grew 3.5% year over year, driven by a 3.2% increase in independent restaurant volume, 4.7% growth in healthcare, 2.4% growth in hospitality and a 2.6% rise in chain volume. Organic case volume increased 1.4%, including 1.8% growth in organic independent restaurant volume.

US Foods’ adjusted gross profit increased 7.2% year over year to $1,659 million. The adjusted gross margin expanded 20 basis points (bps) to 17.5% compared with 17.3% in the fourth quarter of fiscal 2023.

Adjusted operating expenses rose 4.8% year over year to $1,217 million in the quarter. However, as a percentage of net sales, adjusted operating expenses decreased 20 bps year over year to 12.8%. 

Adjusted EBITDA increased 13.7% year over year to $441 million, driven by profitable volume growth, gross profit gains and improved operating expense productivity. Adjusted EBITDA margin was 4.6%, an increase of 30 bps compared with the prior year.

USFD’s Financial Health Snapshot

US Foods exited the quarter with cash and cash equivalents of $59 million, long-term debt of $4,819 million and total shareholders’ equity of $4,528 million. 

For the year ended Dec. 28, 2024, cash flow provided by operating activities was $1,174 million. Capital expenditures totaled $341 million allocated to investments in information technology, property and equipment, and distribution facility maintenance.

In the fourth quarter of fiscal 2024, the company repurchased 5 million shares of common stock for a total of $323 million.

What to Expect From USFD in 2025

For 2025, management expects net sales growth of 4% to 6%, driven by total case growth of 2% to 4%, with independent restaurant case growth anticipated at 4% to 7%. USFD anticipates adjusted EBITDA growth of 8% to 12%. The company anticipates adjusted earnings growth of 17% to 23%, driven by profitable volume growth, margin expansion and adjusted gross profit per case outpacing adjusted operating expense growth.

This Zacks Rank #2 (Buy) stock has rallied 9% in the past three months against the industry’s decline of 4.5%.

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Three Other Food Stocks to Consider

United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for United Natural Foods’ current financial-year sales and earnings implies growth of 0.3% and 442.9%, respectively, from the year-ago period’s reported figure. UNFI delivered a trailing four-quarter earnings surprise of 553.1%, on average.

Freshpet Inc. FRPT manufactures, distributes and markets natural fresh meals and treats for dogs and cats. It currently has a Zacks Rank #2. FRPT delivered a trailing four-quarter earnings surprise of 144.5%, on average.

The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings indicates growth of 27.2% and 227.1%, respectively, from the prior-year reported levels. 

Post Holdings, Inc. POST operates as a consumer-packaged goods holding company in the United States and internationally. It currently carries a Zacks Rank #2. POST delivered a trailing four-quarter earnings surprise of 22.3%, on average.

The Zacks Consensus Estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 0.3% and 2.2%, respectively, from the prior-year reported levels.

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