The Chefs' Warehouse (CHEF) Q4 2024 earnings summary

Executive summary

• Achieved first-ever $1 billion-plus revenue quarter in Q4 2024, with net sales up 8.7% year-over-year and all growth organic, driven by strong demand from upscale and high-end dining customers.

• Adjusted EBITDA rose 15.6% year-over-year to $68.2 million, reflecting operational improvements and digital adoption among specialty customers reaching 56%.

• Free cash flow reached $104 million in 2024, a significant turnaround from negative cumulative FCF in 2022-23.

• Consistent market share gains, robust new customer acquisition, and unique item placement growth year-over-year.

Financial highlights

• Net sales grew 8.7% year-over-year to $1.034 billion in Q4 2024; gross profit increased 9.8% to $251 million, with gross margin up 23 basis points to 24.3%.

• Operating income was $46.5 million, up from $38.2 million in Q4 2023.

• GAAP net income was $23.9 million ($0.55 per diluted share), compared to $16 million ($0.38) last year.

• Adjusted EBITDA margin improved to 5.8% in 2024 from 5.6% in 2023.

• SG&A expenses increased 8.9% to $206.8 million, mainly due to higher depreciation, compensation, and facility costs.

Outlook and guidance

• 2025 net sales guidance: $3.94–$4.04 billion; gross profit: $951–$976 million; Adjusted EBITDA: $233–$246 million.

• 2028 financial goals target adjusted EBITDA of $300–$350 million and margin of 6.5–7.0%.

• Fully diluted share count expected at 46.3–47 million due to convertible notes.

• Targeting incremental 20–30 basis points annual EBITDA margin improvement over the next four years, with Texas integration expected to drive margin gains.

• Net debt leverage expected to remain between 2.5x–2.8x in the near future.