US Foods Q4 Earnings Surpass Estimates, Sales Increase Y/Y

Core Insights - US Foods Holding Corp. (USFD) reported strong fourth-quarter fiscal 2024 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][2][3] - Management is optimistic about achieving a 5% sales CAGR, 10% adjusted EBITDA CAGR, and 20% adjusted EPS CAGR through 2027, focusing on long-term value creation and margin expansion [1] Financial Performance - Adjusted earnings per share for the quarter were 84 cents, surpassing the Zacks Consensus Estimate of 80 cents, and reflecting a 31.3% increase from 64 cents in the prior-year period [2] - Consolidated net sales reached $9,491 million, exceeding the Zacks Consensus Estimate of $9,474 million, and marking a 6.2% increase from $8,936 million in the previous year [3] - Total case volume grew by 3.5% year over year, with independent restaurant volume increasing by 3.2%, healthcare by 4.7%, hospitality by 2.4%, and chain volume by 2.6% [4] - Adjusted gross profit rose 7.2% year over year to $1,659 million, with an adjusted gross margin of 17.5%, up from 17.3% in the fourth quarter of fiscal 2023 [4] Operating Expenses and EBITDA - Adjusted operating expenses increased by 4.8% year over year to $1,217 million, but as a percentage of net sales, they decreased by 20 basis points to 12.8% [5] - Adjusted EBITDA grew 13.7% year over year to $441 million, with an adjusted EBITDA margin of 4.6%, an increase of 30 basis points compared to the prior year [5] Financial Health - At the end of the quarter, US Foods had cash and cash equivalents of $59 million, long-term debt of $4,819 million, and total shareholders' equity of $4,528 million [6] - For the year ended December 28, 2024, cash flow from operating activities was $1,174 million, with capital expenditures totaling $341 million [6] Share Repurchase and Future Outlook - In the fourth quarter of fiscal 2024, the company repurchased 5 million shares of common stock for a total of $323 million [7] - For 2025, management anticipates net sales growth of 4% to 6%, with adjusted EBITDA growth of 8% to 12%, and adjusted earnings growth of 17% to 23% [8] Stock Performance - USFD has seen a 9% increase in stock price over the past three months, contrasting with a 4.5% decline in the industry [9]