Financial Data and Key Metrics Changes - For the year 2025, adjusted EBITDA grew 11% to over $1.9 billion, with an EBITDA margin expansion of 30 basis points to a record 4.9% [7][25] - Adjusted earnings per share (EPS) reached a record of $3.98, reflecting a 26% growth, which was more than double the adjusted EBITDA growth rate [7][25] - Fourth quarter net sales increased 3.3% to $9.8 billion, driven by total case volume growth of 0.8% and food cost inflation and mix impact of 2.5% [23][24] Business Line Data and Key Metrics Changes - Independent restaurant case volume grew 4.1%, marking the strongest net new independent account growth of the year at approximately 4.7% [10][23] - Healthcare and hospitality segments grew 2.9% and 3.1%, respectively, in the fourth quarter, with the company achieving its 21st consecutive quarter of share gains in healthcare [10][24] - Chain restaurant volume was down 3.4%, primarily due to slower industry traffic and strategic exits [24] Market Data and Key Metrics Changes - Chain restaurant foot traffic was down 2.8% for the fourth quarter, decelerating 230 basis points from the third quarter [9] - Despite challenges, the company remains confident in capturing profitable market share in a highly fragmented industry [9] Company Strategy and Development Direction - The company is focused on executing its long-range plan from 2025 to 2027, emphasizing operational excellence and productivity initiatives [5][8] - The company aims to enhance its technology leadership through new AI capabilities and improve customer service experiences [12][14] - A new 100% variable compensation structure for the sales force is being implemented to drive long-term growth [17][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 financial targets despite weather-related disruptions in early 2026 [32][33] - The company anticipates a lower inflationary environment compared to 2025, projecting adjusted EBITDA growth of 9%-13% and adjusted diluted EPS growth of 18%-24% for 2026 [31] - Management remains optimistic about the underlying momentum of the business and the ability to drive profitable growth [41][75] Other Important Information - The company repurchased approximately $930 million of its shares and completed two tuck-in acquisitions for over $130 million in 2025 [8][29] - The corporate credit rating was upgraded by Moody's to Ba1, reflecting solid operating performance and credit metric improvement [30] Q&A Session Summary Question: Can you provide more color on quarter-to-date volumes and underlying momentum? - Management noted strong momentum in early January, rebounding from weather-related disruptions, and highlighted the strongest organic independent case growth in two years [41][42] Question: What are your expectations regarding inflation and its impact on gross profit per case? - Management indicated that self-help initiatives are the primary drivers of gross profits, and while disinflation had a slight negative impact, strong results were still achieved [46] Question: How do you view the maturation of the sales force and its impact on case growth? - Management expects productivity from the sales force to ramp up significantly in the latter half of 2026, contributing to growth acceleration [50][52] Question: Is the net new business growth driven more by headcount growth or existing salespeople? - Management stated that net new business growth is driven by both existing sales force productivity and consistent hiring over the past three years [61] Question: What is the expected impact of the new compensation structure on case growth? - Management believes the new compensation structure will unlock sales force potential over time, enhancing overall growth [76]