US Foods Holding Corp., one of the largest foodservice distributors in the United States, announced preliminary first quarter fiscal year 2022 results. The company will announce full results for the first quarter on May 12, 2022.
Highlights:
- Total case volume increased 4% versus the same period in fiscal year 2021; independent restaurant case volume increased 9% versus the same period in fiscal year 2021.
- Net sales increased 24% to $7.8 billion.
- Gross profit increased 19% to $1.2 billion.
- Net loss available to common shareholders improved to $16 million.
- Adjusted EBITDA increased 40% to $241 million.
- Diluted EPS loss was $0.07; adjusted diluted EPS2 was $0.36.
“We drove strong results in the first quarter, reflecting the momentum we are building through continued execution of the initiatives that support our balanced long-range plan,” said CEO Pietro Satriano. “We continued to accelerate profitable market share growth, gross margin expansion and cost reduction to deliver one of our strongest quarters since the pandemic began, despite continuing to endure COVID-19 impacts and industry-wide supply chain challenges. Our strong performance, coupled with ongoing progress we are advancing across our initiatives, underscores our confidence in the 2022 outlook, as well as our long-range plan.”
Preliminary first-quarter fiscal 2022 results
Total case volume increased 4% from the prior year driven by a 3% increase in total restaurant volume, a 64% increase in hospitality volume and a 1% increase in healthcare volume. Total restaurant volume growth was driven by a 9% increase in independent restaurant case volume and the successful onboarding of profitable chain business acquired over the last year. Net sales were $7.8 billion for the quarter, an increase of 24% from the prior year, driven by higher total case volume and food cost inflation of 17% compared to the same quarter a year ago.
Gross profit was $1.2 billion, an increase of 19% from the prior year. Key drivers included an increase in total case volume, optimized pricing and increased freight income from improved inbound logistics. Food cost inflation in multiple product categories also contributed to increased gross profit. The increase in gross profit was partially offset by an unfavorable year-over-year LIFO adjustment. Gross profit as a percentage of net sales was 15%. Adjusted gross profit was $1.3 billion, a 24% increase from the prior year. Adjusted gross profit as a percentage of net sales was 16%. Adjusted gross profit per case in the first quarter of 2022 continued at record levels due to the aforementioned factors.
Operating expenses of $1.2 billion increased $186 million, or 19% from the prior year. Operating expenses increased primarily due to greater volume and higher distribution costs, in part due to higher temporary labor costs and higher than normal wage inflation. These increases were partially offset by cost savings initiatives outlined in the long-range plan, including: (1) routing improvements that expanded from a pilot to enterprise-wide implementation, (2) continued deployment of new warehouse selection technology that is expected to be completed in the beginning of Q3, and (3) the rollout of new warehouse process enhancements tested in 2021. Operating expenses as a percent of net sales were 15%. Adjusted operating expenses for the quarter were $1 billion, an increase of $173 million, or 20% from the prior year due to the aforementioned factors. Adjusted operating expenses as a percent of net sales were 13%.
Adjusted EBITDA was $241 million, an increase of $69 million, or 40%, compared to the prior year. Adjusted EBITDA margin was 3.1%, an increase of 40 basis points compared to the prior year and reflecting the operating leverage from adjusted gross profit increasing greater than adjusted operating expenses. Net loss available to common shareholders was $16 million, an improvement of $23 million compared to the prior year. Diluted EPS loss was $0.07. Adjusted diluted EPS was $0.36.
