- US Foods is seeing a strong recovery in case volumes as restaurants reopen their dining rooms, and strong food inflation is creating some spread leverage opportunities.
- Operating costs and distribution costs, in particular, remain a key issue and one of my biggest concerns, as success in distribution is so often tied to low-cost operating models.
- Cash-and-carry is a good, margin-accretive growth opportunity, and one worth ongoing reinvestment to support.
- Mid-single-digit revenue and double-digit FCF growth can support an attractive return, but COVID-19 is a near-term threat and stubborn distribution costs are a longer-term threat.
For further details see:
US Foods Leveraged To Reopening, But Self-Help Is Key