USFD - US Foods gains after lifting full-year profit guidance

2023-08-10 07:47:29 ET

US Foods Holding Corp. ( NYSE: USFD ) traded higher in early action on Thursday after the food service distributor posted a mixed Q2 earnings report.

Sales were up 2.1% during the quarter to $9.0B, driven by case volume growth partially offset by food cost deflation of 0.3%. Total case volume increased 2.7% from a year ago, driven by a 4.8% increase in independent restaurant case volume, a 6.9% increase in hospitality volume, and a 6.6% increase in healthcare volume, offset by a 4.5% decrease in chain volume. Independent restaurant case growth was negatively impacted by approximately 0.7% from slower growth in Chef'Store primarily due to system conversion challenges. Broadline independent restaurant customer case growth was 5.5% during the quarter.

Adjusted gross profit was up 8.8% to $1.6B.

USFD's net debt at the end of the quarter was $4.4B. The ratio of net debt to adjusted EBITDA was 3.0X at the end of the quarter, compared to 4.2X a year ago and 3.5X at the beginning of the fiscal year.

US Foods ( USFD ) lifted FY23 EPS guidance to a range of $2.55 to $2.65 vs. the prior range of $2.45 to $2.65 and consensus mark of $2.59. USFD said that due its strong financial results and continued effective execution of strategy, the company raised full-year adjusted EBITDA guidance to a range of $1.51B to $1.54B. The food supplier said it is targeting a net debt to adjusted EBITDA leverage ratio of below 3.0X by end of FY23.

Shares of US Foods ( USFD ) gained 1.44% on light volume in premarket action on Thursday.

More on US Foods:

• US Foods Holding: Risky Until Proven Otherwise
• Valuation metrics on US Foods
• Relative strength index and moving averages
• Seeking Alpha's Quant Rating for US Foods

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