US Foods (USFD) Q4 2023 earnings summary

Executive summary

• FY2023 Adjusted EBITDA reached a record $1.559B, up 19.0% YoY; adjusted EBITDA margin expanded 53 bps to 4.4%.

• FY total case volume rose 4.4%; disciplined capital deployment supported debt reduction, share repurchases and tuck-in acquisitions.

Financial highlights

• Q4 net sales rose 4.9% to $8.936B; gross profit increased 9.4% to $1.6B, reported net income was $147M, and GAAP diluted EPS was $0.59.

• Q4 Adjusted EBITDA increased 10.9% to $388M; adjusted EBITDA margin was 4.3%, up 23 bps, and Adjusted Diluted EPS was $0.64.

• FY net sales rose 4.5% to $35.597B; gross profit increased 11.9% to $6.1B, reported net income was $506M, and net income available to common shareholders was $499M.

• FY GAAP diluted EPS was $2.02, up 100.0%; adjusted net income was $658M vs. $538M and Adjusted Diluted EPS rose 22.9% to $2.63.

Outlook and guidance

• FY2024 guidance: net sales $37.5B-$38.5B, Adjusted EBITDA $1.69B-$1.74B and Adjusted Diluted EPS $3.00-$3.20.

• Q1 2024 Adjusted EBITDA guidance: $340M-$355M.

• FY2024 assumptions: case growth 4%-6%, including ~2 percentage points from M&A; sales inflation 0.5%-1.5%; D&A $400M-$440M; interest expense $320M-$335M; tax rate 26%; cash CapEx $325M-$375M.

• Forward non-GAAP guidance is not reconciled because restructuring, impairment, share-based compensation, LIFO and other items cannot be predicted with reasonable certainty.