US Foods Holding Corp. (NYSE:USFD) Q1 2024 Earnings Call Transcript May 9, 2024

US Foods Holding Corp. misses on earnings expectations. Reported EPS is $0.3306 EPS, expectations were $0.53. US Foods Holding Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the US Foods First Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I will now turn the conference over to Mike Neese, Senior Vice President of Investor Relations. Mike, you may begin.

Michael Neese: Thank you, Krista. Good morning, everyone, and welcome to the US Foods first quarter fiscal 2024 earnings call. On today's call, we have Dave Flitman, our CEO; and Dirk Locascio, our CFO. We will take your questions after our prepared remarks conclude. [Operator Instructions]. Our earnings release issued earlier this morning in today's presentation can be found on the Investor Relations page of our website at ir.usfoods.com. During today's call, unless otherwise stated, we're comparing our first quarter 2024 to the same period in our first quarter fiscal year 2023. In addition to historical information, certain statements made during today's call are considered forward-looking statements. Please review the risk factors in our Form 10-K for a detailed discussion of the potential factors that could cause our actual results to differ materially from those anticipated in those statements.

During today's call, we will refer to certain non-GAAP financial measures. All reconciliations to the most comparable GAAP financial measures are included in the schedules on our earnings press release, as well as in the presentation slides posted on our website. We are not providing reconciliations to forward-looking non-GAAP financial measures. Finally, we're excited to host our Investor Day on June 5 at our headquarters in Rosemont. If you're interested in attending, please reach out to us in Investor Relations. Thank you. And I'd like to turn the call over to Dave.

Dave Flitman: Thanks, Mike. Good morning, everyone, and thank you for joining us. Let's turn to today's agenda. I will start by sharing the progress we made executing our strategy and several key achievements from the first quarter which set us up for a strong year ahead. I will then hand it over to Dirk to review our first quarter financial results and our fiscal 2024 guidance. Following a slower start to the year due to adverse weather and labor disruptions, our first quarter earnings came in as expected. The continued execution of our strategy and long-range plan resulted in adjusted EBITDA of $356 million, representing approximately 6% growth. As we highlighted in February, adjusted EBITDA was negatively impacted by approximately $20 million from increased cost to serve our customers and volume headwinds from labor disruption and weather-related issues in January.

Of the $20 million impact, approximately $15 million was incremental operating expense to support the business during the labor disruption. Excluding this negative impact, our underlying adjusted EBITDA growth was approximately 12%, and we remain confident in achieving our full year guidance. This performance demonstrates the strength of our business model, the commitment of our 30,000 hard-working associates and our ability to win in any environment. Total case growth was 4.2% for the quarter, with share gains continuing in target customer types, and our independent case volume grew 4.6%. In fact, for independent restaurants, our share gains accelerated from the fourth quarter to the first quarter as we grew share for the 12th consecutive quarter.

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