US Foods (USFD) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 results with net sales up 7.7% to $9.7B, Adjusted EBITDA up 13.2% to $489M, and Adjusted EPS up 17.7% to $0.93, driven by strong case volume growth and margin expansion.

• Gained market share in independent restaurants for the 13th consecutive quarter, with independent restaurant case volume up 5.7%.

• Maintained disciplined capital deployment, including a new $1B share repurchase program and the acquisition of IWC Food Service.

• Strong performance in Healthcare and Hospitality segments, with healthcare volume up 6% and hospitality up 2.1%.

• Exploring strategic alternatives for CHEF'STORE to focus on core operations.

Financial highlights

• Q2 2024 net sales rose 7.7% to $9.7B, driven by 5.2% case volume growth and 2.9% food cost inflation.

• Adjusted EBITDA grew 13.2% to $489M, with margin expanding 25 bps to 5.0%.

• Adjusted EPS rose 17.7% to $0.93; diluted EPS increased 9.6% to $0.80.

• Gross profit for Q2: $1.7B (+7.2%); gross margin 17.6% of net sales.

• Free cash flow for Q2: $414M; year-to-date operating cash flow $621M.

Outlook and guidance

• Fiscal 2024 guidance reiterated: Net sales $37.5–$38.5B, Adjusted EBITDA $1.69–$1.74B, Adjusted Diluted EPS $3.00–$3.20.

• Expects total case growth of 4%-6% and sales inflation of 1%-2% for 2024.

• Long-range plan targets 5% sales CAGR, 10% Adjusted EBITDA CAGR, and 20% Adjusted Diluted EPS CAGR through 2027.