US Foods Q3 revenue misses estimates; trims FY sales view

By Reuters News


Overview

  • US foodservice distributor's Q3 revenue rose 2.1% but missed analyst expectations

  • Adjusted EPS for Q3 rose 17.8% and beat analyst expectations

  • Company repurchased $191 mln of shares in Q3


Outlook

  • US Foods now sees full-yr net sales growth of 4% to 5%, down from 4% to 6%

  • Company expects full-yr adjusted EBITDA growth of 9% to 11%, down from 9% to 13%

  • US Foods sees full-yr adjusted diluted EPS growth of 18% to 20%, down from 18% to 24%


Result Drivers

  • CASE VOLUME GROWTH - Co said higher independent restaurant, healthcare and hospitality case volumes drove overall sales growth

  • GROSS PROFIT IMPROVEMENT - Co attributed higher gross profit to increased case volume, improved cost of goods sold and favorable LIFO adjustment

  • TECHNOLOGY INITIATIVES - Co said digital and AI initiatives contributed to topline growth, productivity gains and margin expansion


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Sales

Miss

$10.40 bln

$10.59 bln (11 Analysts)

Q3 Adjusted EPS

Beat

$1.26

$1.24 (10 Analysts)

Q3 Net Income

$218 mln

Q3 Gross Profit

$1.90 bln

Q3 Operating Income

$371 mln

Q3 Pretax Profit

$293 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the food retail & distribution peer group is "buy"

  • Wall Street's median 12-month price target for US Foods Holding Corp. is $120.00, about 9.2% above its November 4 closing price of $109.93

  • The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 20 three months ago


Reuters Recommended Reads

  • Nov 3 - Food distributor Sysco says cyclosporiasis outbreak hit Q1 sales

  • Nov 4 - Performance Food beats Q1 profit estimates on higher prices, cases sold

  • Nov 4 - McDonald's Q3 revenue misses estimates on weaker US comparable sales


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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