| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-----------------------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Third Quarter 2024 | | | | | | | | | | | | | | | | | | | | | | | | | | Earnings Presentation | | | | | | | | | | | | | | | | | | | | | | ...

Financial Data and Key Metrics Changes - Net sales for Q3 2024 increased approximately 5.6% to $931.5 million from $881.8 million in Q3 2023 [18] - Gross profit increased 8.2% to $224.7 million for Q3 2024 compared to $207.7 million for Q3 2023 [19] - GAAP net income was $14.1 million or $0.34 per diluted share for Q3 2024, compared to net income of $7.3 million or $0.19 per diluted share for Q3 2023 [23] - Adjusted EBITDA for Q3 2024 was $54.5 million compared to $50.3 million for Q3 2023 [23] - Gross profit margins increased approximately 58 basis points to 24.1% [20] Business Line Data and Key Metrics Changes - Specialty sales were up 7.5% organically over the prior year, driven by unique customer growth of approximately 4.7% and placement growth of 10.8% [10] - Organic pounds in center-of-the-plate were approximately 1% higher than the prior year [10] - Gross margin in the specialty category increased approximately 50 basis points compared to Q3 2023 [11] Market Data and Key Metrics Changes - Net inflation was 3.2% in Q3 2024, with 4.3% inflation in the specialty category and 1.4% in the center-of-the-plate category [19] - The company experienced a slight softening in demand during July, attributed to seasonal factors and Hurricane Beryl, which impacted revenue growth by approximately 1% [18][32] Company Strategy and Development Direction - The company is focused on achieving targeted financial goals by year-end 2028, with a growth and capital allocation plan in place [12] - Ongoing integration of specialty produce and protein businesses in Texas aims to improve operational efficiency and cross-selling opportunities [16] - The company has engaged a global consulting firm to assist in driving top-line and bottom-line improvements [12][58] Management's Comments on Operating Environment and Future Outlook - Management noted that customer activity accelerated into the latter half of Q3 and continued into October, indicating positive momentum [9] - The company is adapting to a new environment where customers tend to book last minute, impacting holiday planning [60] - Management expressed confidence in the ability to take market share despite a competitive environment and ongoing inflationary pressures [40][72] Other Important Information - Total liquidity at the end of Q3 was $221.3 million, comprised of $50.7 million in cash and $170.6 million available under the ABL facility [24] - The company has repurchased $10 million of its outstanding common shares year-to-date, resulting in a reduction of approximately 264,000 shares outstanding [26] Q&A Session Summary Question: Trends in customer traffic and softness in Q3 - Management acknowledged a slight dip in July but noted strong gross profit dollar growth and market share gains in the latter half of the quarter [31][32] Question: Salesperson hiring environment - The company continues to hire and build a strong sales team, emphasizing the importance of training and relationship management [33] Question: Impact of Hardee's on EBITDA margin - Hardee's is expected to dilute overall EBITDA margins by about 20 to 25 basis points, with improvements anticipated as integration progresses [37] Question: Churn levels and customer acquisition - Management reported that new customer acquisition is helping offset some softness, with core customers performing well [39] Question: Cadence of sales growth in September and October - Management indicated that trends improved through the quarter, with positive momentum continuing into October [42] Question: Customer usage in mature vs. new markets - In mature markets, customers utilize a broader range of products, while new markets are still developing their offerings [66] Question: Margin expansion and acquisitions - The margin expansion targets are based on organic growth, with acquisitions not modeled into the financials [68]

Chefs' Warehouse (CHEF) came out with quarterly earnings of $0.36 per share, beating the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 2.86%. A quarter ago, it was expected that this distributor of specialty food products would post earnings of $0.36 per share when it actually produced earnings of $0.40, delivering a surprise of 11.11%. Over the ...

Financial Performance - Net sales for the thirteen weeks ended September 27, 2024, were $931.5 million, a 5.6% increase from $881.8 million in the prior year[78]. - Gross profit for the same period was $224.7 million, reflecting an 8.2% increase from $207.7 million, with a gross profit margin of 24.1%[79]. - For the thirty-nine weeks ended September 27, 2024, net sales reached $2.76 billion, an 11.2% increase from $2.48 billion, with organic growth contributing $175.8 million[84]. - Gross profit for the thirty-nine weeks was $663.2 million, a 13.2% increase from $585.9 million, with a gross profit margin of 24.0%[86]. Expenses and Income - Selling, general and administrative expenses increased by 7.4% to $192.9 million, representing 20.7% of net sales, up from 20.4%[80]. - Interest expense for the thirteen weeks ended September 27, 2024, was $11.7 million, a 3.2% increase from $11.4 million[82]. - The provision for income tax expense for the thirty-nine weeks was $13.5 million, a 25.1% increase from $10.8 million, with an effective tax rate of 30.0%[90]. Cash Flow and Investments - Net cash provided by operating activities was $80.1 million for the thirty-nine weeks ended September 27, 2024, significantly up from $20.0 million for the same period in the previous year, driven by sales growth and lower inventory purchases[98]. - Net cash used in investing activities totaled $41.4 million, primarily due to capital expenditures of $41.1 million during the same period[99]. - Net cash used in financing activities was $37.8 million, which included $18.5 million in debt payments and $10.0 million for stock repurchases[100]. Debt and Capital Management - The company made voluntary principal prepayments of $12.0 million towards its senior secured term loan during the thirty-nine weeks ended September 27, 2024[93]. - The company made a scheduled principal payment of $5.0 million towards the unsecured note related to the GreenLeaf acquisition during the thirty-nine weeks ended September 27, 2024[94]. - As of September 27, 2024, the company had aggregate indebtedness of $369.6 million, with a potential after-tax earnings decrease of approximately $2.6 million per annum for a 100 basis point increase in market interest rates[103]. Shareholder Returns - A two-year share repurchase program was announced in November 2023, with a target of up to $100.0 million, and 264,076 shares were repurchased at an average price of $37.86 per share, leaving $90.0 million remaining in authorization as of September 27, 2024[95]. Acquisitions - The company acquired Oakville Produce Partners for $88.2 million and Hardie's Fresh Foods for approximately $41.4 million in 2023[74][75]. Operational Capacity - The company expects capital expenditures for fiscal 2024 to be approximately $45.0 million to $50.0 million, indicating a focus on maintaining operational capacity[97]. - Cash and cash equivalents increased to $50.7 million as of September 27, 2024, compared to $49.9 million as of December 29, 2023, while working capital, excluding cash, rose to $312.5 million from $295.3 million[97]. Customer Base - The company serves over 44,000 core customer locations, primarily independent restaurants and fine dining establishments[73].

RIDGEFIELD, Conn., Oct. 16, 2024 (GLOBE NEWSWIRE) -- The Chefs' Warehouse, Inc. (NASDAQ: CHEF) today announced that the Company intends to release its financial results for the third quarter ended September 27, 2024 before the opening of the stock market on Wednesday, October 30, 2024 and host a conference call at 8:30 a.m. ET on Wednesday, October 30, 2024 to review those results. The conference call will be webcast live from the Company's investor relations website at http://investors.chefswarehouse.com/. ...

The Consumer Staples group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Chefs' Warehouse (CHEF) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Staples sector should help us answer this question. Chefs' Warehouse is a member of the Consumer Staples sector. This group includes 184 individual stocks and currently holds a Zacks Sector Rank of #11. The Zack ...

Market Overview - The U.S. stock market has been on a 21-month rally with no signs of weakening, despite September historically being the worst-performing month [1] - Major indexes are currently trading positively with only five trading days left in September, although volatility may arise from weak economic data or geopolitical conflicts [1] Food Industry Insights - Defensive stocks from the food industry are recommended to safeguard portfolios during potential market pauses [2] - The food sector has faced inflationary pressures affecting input costs and consumer purchasing power, but strong brand presence and strategic pricing have helped companies navigate these challenges [2][4] Recommended Food Stocks - Four food stocks are highlighted for their strong price upside potential: The Chefs' Warehouse Inc. (CHEF), Nomad Foods Ltd. (NOMD), Lifeway Foods Inc. (LWAY), and Laird Superfood Inc. (LSF) [3][7] - Each of these stocks carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [3] Company-Specific Highlights The Chefs' Warehouse Inc. (CHEF) - CHEF focuses on specialty food distribution for chefs and has a product portfolio that includes artisan charcuterie and specialty cheeses [8][9] - Expected revenue and earnings growth rates are 9.7% and 12.6%, respectively, with a 22.5% short-term price upside potential from an average target price of $49 [10] Nomad Foods Ltd. (NOMD) - NOMD manufactures and distributes frozen foods across several European countries, with brands like Birds Eye and Iglo [11] - Expected revenue and earnings growth rates are 4.3% and 12.6%, respectively, with a 27.3% short-term price upside potential from an average target price of $24.17 [12] Lifeway Foods Inc. (LWAY) - LWAY produces probiotic-based products, primarily drinkable kefir, and has a diverse product range including soft cheeses and yogurt [13][14] - Expected revenue and earnings growth rates are 24.7% and 32%, respectively, with a 23.3% short-term price upside potential from an average target price of $26.50 [15] Laird Superfood Inc. (LSF) - LSF specializes in plant-based natural foods and offers a variety of products through e-commerce and third-party platforms [16][17] - Expected revenue and earnings growth rates are 21.6% and 85.9%, respectively, with a 14.5% short-term price upside potential from an average target price of $4.75 [18]

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Eve ...

Core Insights - Kimberly-Clark Corporation (KMB) has seen a significant stock price increase of 20.3% year-to-date, outperforming the Zacks Consumer Products - Staples industry's growth of 4.2% [1] - The company's strategic shift towards a volume-and-mix growth model, focusing on advanced technologies and innovative products, has been a key driver of its success [2] Financial Performance - KMB's stock closed at $146.25, approaching its 52-week high of $149.31 reached on September 5, 2024 [3] - The company achieved positive volume-plus-mix growth for the third consecutive quarter in Q2 2024, indicating strong market performance [5] Operational Strategy - Kimberly-Clark is undergoing a transformation to enhance growth and operational efficiency, including exiting non-core markets and reengineering its organizational structure [7] - The company has divested its Personal Protective Equipment business and plans to exit operations in Nigeria and Bolivia, while also closing two facilities in the U.K. [7] Cost Management and Innovation - KMB generated approximately $250 million in gross supply chain productivity in the first half of 2024, which is being reinvested to improve supply chain capabilities and product quality [9] - The company is focused on optimizing its margin structure and managing input costs to achieve neutral-to-positive Price Net of Cost (PNOC) inflation [8] Future Outlook - Kimberly-Clark plans to significantly increase investments in the latter half of the year to advance product innovations and strengthen its global market position [10] - The company is well-positioned for sustained growth despite challenges such as inflation and currency fluctuations, with a Zacks Rank of 3 (Hold) [13] Market Challenges - KMB faces a challenging operating environment characterized by shifting consumer behaviors, volatile retail conditions, and rising inflation impacting profitability [11] - The strengthening U.S. dollar has negatively affected sales by nearly 5% in Q2 2024, with currency headwinds expected to reduce net sales by about 400 basis points for the year [12]

For those looking to find strong Consumer Staples stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Chefs' Warehouse (CHEF) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Staples sector should help us answer this question. Chefs' Warehouse is one of 184 companies in the Consumer Staples group. The Consumer Staples group currently sits at #12 within the Zacks Sector Rank. The Zac ...