John Heinbockel • Guggenheim Partners

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CEO George Holm stated that adding salespeople helps free up experienced reps to focus on penetration, which is a key challenge, while also enabling them to call on new accounts. For the Convenience segment, COO Scott McPherson highlighted that PFG proactively invested in two new facilities ahead of recent major wins, which was critical to securing the business. Holm and CFO Patrick Hatcher reiterated that PFG will continue to invest in CapEx for compelling, high-return projects across all segments.

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CEO George Holm attributed the dynamic to a significant decline in cases per order during the weather-impacted month of February. COO Scott McPherson confirmed that growth is currently driven by new accounts and more lines per order, with drop sizes remaining relatively flat. Regarding Convenience foodservice, Scott McPherson described it as being in the 'second or third inning' with a long runway, consistently delivering mid-single to low double-digit growth.

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CEO George Holm and COO Scott McPherson confirmed that new customer acquisition is currently the main driver of growth, with strong penetration in existing accounts positioning them well for a market recovery. McPherson highlighted the compelling combined foodservice and convenience offering, expressing confidence in their ability to win a significant share of future RFPs in the convenience space.

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CEO George Holm clarified that the plan involves 10 major projects, not 10 entirely new buildings, including additions, one replacement, and a new Core-Mark distribution center in Houston. CFO Patrick Hatcher added there is also a Vistar expansion. Holm stated that the new business pipeline is strong, especially for Core-Mark's foodservice offerings, but the company's primary focus in the Foodservice segment remains on independent customers.

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CEO Dave Flitman reaffirmed plans for mid-single-digit (4-6%) sales force growth and noted that while wallet penetration is an industry challenge, US Foods saw slight improvement from Q1 to Q2, with the Pronto program being a key future driver. Flitman explained that while the Descartes rollout has been prioritized, the UMOS system is now deployed in 37 markets and is on track for over 60 by year-end, contributing to long-term productivity and quality.

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CEO Dave Flitman explained that growth is primarily driven by new account generation, while penetration (cases per line) has been challenged by soft industry foot traffic. He stated that the return to a 5-8% case growth rate, more in line with sales force expansion, is contingent on the macro environment normalizing to historical foot traffic levels of around 2% growth.

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CEO David Flitman confirmed that cases per line has been the primary challenge due to foot traffic, while lines per account have been relatively stable. CFO Dirk Locascio added that the Descartes rollout is expected to be complete by year-end 2025, with the productivity impact expected to be similar to the prior year as new rollouts are offset by the lapping of older ones.

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CEO David Flitman confirmed sales force growth is in the mid-single-digits and expressed high confidence in the quality of new talent. He affirmed that new account generation remains the primary growth driver, although he noted some recent "green shoots" in penetration with existing customers. CFO Dirk Locascio added that the routing technology rollout continues on schedule.

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CEO Colleen Keating explained that growth opportunities exist in both suburban areas and through testing smaller club footprints in infill and rural locations. Regarding marketing, she confirmed the new campaign is resonating and that the strategy will remain a balance of national brand-building and local efforts, with a goal to aggregate national spend more efficiently.

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CEO Colleen Keating explained that the company will wait to make a decision on a Black Card price change until after the anniversary of the classic card increase. She noted that historically, Planet Fitness has adjusted Black Card prices every few years, viewing it as having more price elasticity than the classic tier. She also confirmed there was no significant difference in member reaction between the $27.99 and $29.99 tests, and the company is now only testing the $29.99 price point.

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CEO Colleen Keating identified top-line growth via marketing and branding, and accelerated unit growth via development, as two key priorities. She noted new CMO Brian Povinelli will have an opportunity to shape future marketing strategy. Regarding Perks, she highlighted over $10 million in member redemptions in 2024, viewing it as a key tool for value and app engagement. CFO Jay Stasz added that focusing on attrition is as important as member joins.

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CEO Colleen Keating explained the brand is evolving to meet a broader consumer base that is more educated on fitness, and that format optimizations like adding strength equipment are building capacity. CFO Tom Fitzgerald added that member visit frequency is up, but average members per club is still well below capacity limits, with most clubs not exceeding 75% capacity even in the peak month of March.

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President and CEO Jason Potter confirmed the comp lift in the Oakland test store was broad-based across many categories and was achieved without incremental marketing or price reductions. He attributed the success to making stores easier to shop, which increased both customer count and basket size. Regarding ownership, Potter affirmed his belief in the IO model and stated he has no current plans for a program to open a significant number of corporate-owned stores.

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CEO Jason Potter stated that both are critical. Tightening everyday KPIs is essential for value perception, while the real-time order guide is unlocking the treasure hunt opportunity by improving visibility for IOs. Regarding the field organization, he noted it was early but that he would consider any investments that improve support for stores.

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Chairman Eric Lindberg acknowledged they have work to do on the basket size and are analyzing the issue. Regarding UGO, he stated there is no hard date for the IO conversion, emphasizing the benefit of using the company-operated model to test and learn. An unnamed executive added that the focus is on store refreshes, expanding product assortment, and driving sales before a broader integration, including the IO model, over time.

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Interim President and CEO Eric Lindberg confirmed he is not a candidate for the permanent role and outlined the search for a leader with public company experience, a proven track record of scaling a retail model, and a cultural fit. Interim CFO Lindsay Gray clarified that the 6% adjusted EBITDA margin is a full-year 2025 target that the company will be 'building towards' as it works through lingering systems costs from 2024.

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Founder, Chairman, and CEO Bahram Akradi stated the real estate team maintains a pipeline of 85-100 deals, providing flexibility to accelerate growth when conditions are favorable. He reaffirmed the strategy of deliberately managing initial membership intake at new clubs to ensure a high-quality member experience and prevent overcrowding as new members acclimate.

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Bahram Akradi, Founder, Chairman and CEO, explained that waitlists are a strategic tool used to protect the member experience at clubs nearing optimal capacity, prioritizing full-dues-paying members. He confirmed that while the company has the operational capacity to build more than 10-12 clubs in 2026, the current plan is intentionally methodical to maintain a strong balance sheet and navigate economic uncertainty, ensuring they can capitalize on opportunities in any environment.

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CEO Bahram Akradi emphasized the role of AI in improving both operational efficiency and customer experience, allowing for growth without adding excessive layers of management. He stated the company is seeing record numbers in dynamic personal training, a key reason for the raised guidance. Executive Erik Weaver added that comparable revenue from personal training nearly tripled in Q4 year-over-year.

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Founder, Chairman and CEO Bahram Akradi suggested a blended half-and-half mix of ground-ups versus other formats over a three-year period, with capacity to expand beyond 10-12 openings annually in the future. To grow in-center revenue, he highlighted improving performance at underperforming clubs in DPT, Cafe, and Spa, and noted the long-term, asset-light potential of new initiatives like MIORA health services and the LTH supplement brand.

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CEO Jack Sinclair stated that share of wallet can grow as consumers shift to healthier, attribute-based products and as Sprouts enhances categories like prepared foods and vitamins. Regarding store capacity, he confirmed they will not build bigger stores but will focus on operational efficiency. He views potential cannibalization as a future opportunity to relieve pressure on high-performing stores.

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President and COO Nick Konat, supported by CEO Jack Sinclair, explained that many initiatives target this opportunity, including placing attribute-driven meat at the front of new stores to drive center-of-plate purchases. He confirmed the loyalty program is crucial for personalizing offers to gain a larger share of wallet. For program enhancements, Konat highlighted the short-term goal of streamlining the omnichannel experience and the long-term focus on using data to help customers discover new and unique products.

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CEO Jack Sinclair acknowledged a significant opportunity to increase share of wallet with target customers but maintained a considered approach to guidance. CFO Curtis Valentine noted the challenge of lapping strong double-digit comps later in the year. Regarding the supply chain, Sinclair confirmed the immediate focus is on fresh meat and seafood, with potential for other categories but no plans for commissary operations.

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CEO John Lai stated that the marketing strategy is a blend of awareness campaigns and targeted offers, with early tests proving successful enough to warrant a measured increase in spend. Lai confirmed that competitors are showing more pricing rationality and are engaging in less promotional activity, which he views as a positive development.

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CFO Jedidiah Gold stated that visitation frequency is consistent across all tiers at about 3-3.2 times per month and has been stable for the last 4-5 years. CEO John Lai explained the price increase is a phased rollout for training purposes. After a 30-day notice, the revenue lift is realized over the subsequent 30-60 days as member billing cycles renew, with the full impact starting in May.

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CEO John Lai confirmed that after successful testing, the company will implement base price increases in select, underpriced markets during 2025. He also stated that marketing investments are expected to triple in 2025 following encouraging Q4 test results. Regarding growth, Lai explained that while the 30-35 greenfield target is prudent, the company remains opportunistic and disciplined for potential M&A, emphasizing their strength in post-acquisition integration.

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Executive John Lai explained that the company plans to increase ad spend in Q4 and 2025, experimenting with new channels like digital out-of-home while avoiding aggressive discounting. Executive Jedidiah Gold noted that retail sales declined in the mid-to-high single-digit range in Q3, which was an improvement from prior quarters, driven by higher revenue per customer from the Titanium offering.

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CEO Kevin Hourican stated that Sysco plans to add approximately 4% to its sales headcount in fiscal 2026. He explained that as new hires mature and the company laps a period of high customer loss, local case volume is expected to inflect to positive and profitable growth. CFO Kenny Cheung noted that long-term, the goal is for headcount growth to align with volume growth, driving operating leverage.

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CEO Kevin Hourican identified two main drivers for increased industry churn. First, customers are more 'value seeking' due to their own cost pressures, a behavior enabled by increased online price transparency. Second, post-COVID supply chain resiliency concerns have led customers to use multiple distributors more frequently. He stated Sysco's scale is an advantage in this environment and mentioned a future initiative to focus on retaining its most profitable customers, which he expects to be a tailwind in fiscal 2026.

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CEO Kevin Hourican confirmed that new sales cohorts are being tracked and are performing on their expected maturity curve. He noted a second wave of growth is anticipated in fiscal 2026 as non-compete agreements expire. While expressing confidence in showing sequential progress, he did not commit to a specific quarter for when local case growth would turn positive.

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CEO Kevin Hourican reported that new sales cohorts are progressing up the productivity curve as expected, driving an increase in net new customers. He identified the successful 'proof point' geographies as metro markets where Sysco has historically been under-indexed and is now adding headcount to capture share. Regarding the specialty opportunity, he confirmed it is substantial, stating that the percentage of customers not yet buying specialty products is 'north of' 20%.

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Interim CEO & Chairman Ronald Sargent defined 'core' assets as those dedicated to serving customers, including stores and e-commerce. EVP & CFO David Kennerly explained that new store projects typically offer higher returns than the company average, while remodels are in the middle. On cost optimization, Mr. Kennerly noted that as new leaders, they bring a 'fresh set of eyes' and will target direct costs, indirect costs, and G&A, while also focusing on process improvements and technology to 'work smarter'.

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Interim CEO & Chairman Ronald Sargent defined 'core' assets as those dedicated to serving customers, including stores and e-commerce. EVP & CFO David Kennerly explained that new stores typically offer higher returns than the company average, while remodels are in the middle. On cost optimization, Mr. Kennerly stated that as new leaders, they bring a 'fresh set of eyes' to find efficiencies in direct costs, indirect costs, and corporate expenses, with a new focus on process improvement and technology.

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Interim CFO Todd Foley expects continued digital improvement in 2025, driven by incremental gains across all areas rather than a single factor. He stated that reaccelerating shed openings is not imminent and is contingent on achieving target profitability levels and ensuring new sheds can launch with sufficient volume to be scalable.

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Chairman and CEO Rodney McMullen stated that they expect to achieve a double-digit percentage reduction in cost-per-order over the next two to three years. He explained that the rollout is ongoing, starting with the highest-volume locations first, and that the underlying technology has potential applications in other parts of the business. The ultimate goal is to make the cost indifferent between online and in-store shopping.

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CEO Steven Lawrence expects the Jordan assortment to continue growing into more categories and stores, viewing it as a multi-year growth platform that is already bringing in new, higher-income customers. He affirmed that the company has maintained liquidity to chase inventory trends if opportunities arise, citing the strategic Q1 inventory build as an example of their flexible and opportunistic approach to inventory management.

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CFO Carl Ford stated there is no trepidation about achieving the 100 basis points of leverage from supply chain improvements outlined in the long-range plan. He noted the new supply chain head, Rob Howell, is identifying further opportunities beyond the WMS implementation, such as creating more efficient multi-stop truck delivery routes. The next DC conversion is now targeted for early 2026 to incorporate learnings from the recent Georgia implementation.

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President & CFO Giorgio Matteo Tarditi acknowledged a potential short-term "speed bump" for the lean rollout due to the incident but affirmed the underlying momentum remains strong. He noted that fresh inventory was prioritized to manage shrink. Tarditi expressed confidence in sustaining long-term productivity gains from lean management, driven by improved throughput, network-wide expansion, and the future addition of value stream mapping.

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CEO James Alexander Douglas explained that the realignment centers on providing specialized product expertise—innovation for Natural products and promotional focus for Conventional products—across all customer types. He identified developing professional and digital services for historically underserved customers as the most promising incremental opportunity, highlighting the importance of participating in retail media networks.

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CEO Sandy Douglas explained that decentralized procurement aims to improve fill rates and reduce inventory, similar to their shrink reduction efforts, and that compensation is always being reviewed to align with outcomes. President & CFO Matteo Tarditi added that the goal is mid-to-high single-digit productivity gains from Lean and automation, with a 6-12 month rollout framework to achieve their multi-year cost-out targets.

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CEO Sandy Douglas explained that the company's product portfolio aims to meet all customer needs, with both conventional and natural products remaining material, while network rationalization focuses on efficiency. President & CFO Matteo Tarditi added that the goal is for productivity improvements from lean initiatives to more than offset wage inflation pressures.

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CEO Winnie Park stated that closeouts remain a very important and amplified part of their strategy. She noted that while this year's inventory flow is unusual due to tariffs, they are ordering ahead and focusing on diversifying sourcing to countries like India and domestic vendors to gain agility. COO Ken Bull confirmed they have ample distribution capacity to handle accelerated shipments.

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CEO Winnie Park expressed confidence in the summer product assortments, which focus on value, outdoor play, and chasing trends like exclusive beauty items. Regarding marketing, she stated the immediate goal is to optimize the existing budget with the new CMO, focusing on efficiency and better connecting with customers through social media and digital channels to drive store traffic.

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Interim CEO Ken Bull stated the focus is on achieving consistent performance across all 'worlds' with trend-right, high-quality products at extreme value for kids. He confirmed a meaningful SKU reduction is planned for mid-next year and that $1-$3 price points are being emphasized. Executive Chairman Tom Vellios added there is a significant opportunity to reset certain product areas, reduce SKUs to drive newness, and place a greater emphasis on the core 'Five Below' price range while being highly selective with 'Five Beyond' items.

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Interim President and CEO Kenneth Bull responded that a merchandising organization transformation is already underway to regain speed. He noted that customer surveys indicated a demand for more "value," which Five Below defines as the intersection of trend, quality, and price. Bull stated that marketing efforts to re-engage customers would follow once the product assortment is improved to drive better conversion.

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CEO Michael Creedon stated that freezer/cooler expansion is a key part of the multi-price strategy, with the mix of price points tailored to store demographics. Regarding pricing, he sees an opportunity for 'zone pricing' on the edges, using assortment to cater to regional differences in perceived value (e.g., California vs. Kansas), while maintaining the brand's core consistency.

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CEO Mike Creedon emphasized that holidays and seasonal categories are the core drivers of the Dollar Tree business, focusing on the 'wow' factor of discovery. While acknowledging the recent mix shift to consumables to meet customer needs, he stressed that discretionary products are the 'DNA of Dollar Tree.' He expressed excitement about fueling the discretionary business with the expanded assortment as the multi-price strategy matures.

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CEO Michael Creedon emphasized that seasonal and holiday items are the core of Dollar Tree's DNA and a primary focus for driving customer discovery. While acknowledging the need to meet demand for consumables, he stated that the real power of multi-price is unlocking discretionary growth, as demonstrated in Q4. The strategy is to maintain a balance, providing necessities while focusing on 'wowing' customers with discretionary products.

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Interim CEO Mike Creedon explained that the comp gap narrowed because the base chain's performance improved, partly due to refreshes of existing Dollar Tree Plus stores. He stated the rollout was intentionally slowed to prioritize execution quality, introducing new management sign-offs, and to manage organizational capacity, which was strained by the rapid conversion of the 99 Cents Only stores in Q3.

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COO Mike Creedon stated that multi-price penetration will reach about 15% of SKUs in converted stores and affirmed that the company is still gaining both unit and dollar market share. He explained the rollout pace was deliberately moderated to ensure stores are fully prepared for conversion, a key learning from early phases. CFO Jeff Davis added that at Family Dollar, the decline in discretionary sales has also flattened, indicating positive results from assortment resets.

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COO Mike Creedon stated that multi-price penetration will reach about 15% in converted stores this year and asserted that the company is still gaining both unit and dollar market share. He clarified that the rollout pace was intentionally moderated to ensure stores are fully prepared for conversion, a key learning from early phases, rather than 'muscling through' and compromising results. CFO Jeff Davis added that the decline in discretionary sales at Family Dollar was also flattening.

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CEO Todd Vasos identified the DoorDash partnership and the new home delivery initiative as key drivers attracting new, diverse customers. He also highlighted the DG Media Network as a tool to reach beyond the core customer base. Regarding merchandising, Vasos reaffirmed a strong commitment to smaller pack sizes, stating they are essential for the core customer's budget, especially in the current economic climate, and that CPG partners now recognize their importance.

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CEO Todd Vasos acknowledged the organic nature of the trade-in but highlighted the DoorDash partnership and the DG Media Network as key initiatives for attracting new and diverse customers. He reaffirmed the company's commitment to smaller pack sizes, stating they are essential for their customer's budget, especially in the current economic climate, and that CPG partners are supportive of this strategy.

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CEO Todd Vasos affirmed that promotions are the best use of margin, historically leading to a 'stickier consumer' and a strong return. Regarding expenses, he noted that while labor rates are higher than expected, initiatives like the rolltainer sort are aimed at improving the customer experience, not stripping out labor. He suggested they are working on other SG&A levers to help modify expenses moving forward.

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CFO Gary Millerchip noted that while the depot network is highly efficient, optimizing it for scale continues to offer incremental leverage, with e-commerce logistics being a key area for profit improvement. CEO Ron Vachris explained that buyers are empowered to make purchasing decisions 6-8 months out, using strategies like shifting to domestic production or pulling orders forward to mitigate tariff risks. He also mentioned leveraging Costco's global footprint to move tariff-impacted goods to non-U.S. markets.

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Executive VP & CFO Gary Millerchip noted that while the depot network is already highly efficient, optimizing it for growing scale remains a focus. He highlighted e-commerce logistics as a key area for continued efficiency gains. President, CEO & Director Ron Vachris added that buyers are actively developing short, mid, and long-term strategies to navigate tariffs, including making buying decisions 6-8 months out, sourcing domestically where possible, and leveraging non-U.S. regions to move tariff-impacted goods.

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Executive Ron Vachris identified non-foods as the greatest opportunity for KS expansion, citing successes like motor oil and golf balls. He emphasized that KS development is strategic and item-focused, not a race to add SKUs. While the success rate is high, he stressed that KS items are held to the same performance standards as national brands and are removed if they don't perform.

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Executive Gary Millerchip explained that the company views reinvestment holistically, aiming to deliver more value than the membership fee costs through a combination of lower prices, mitigating inflation, improving the member experience, investing in employees, and innovating with Kirkland Signature. Executive Ron Vachris added that the company sees a realistic path to opening around 30 warehouses annually for the next few years, with a significant portion outside the U.S., citing opportunities in Canada, Mexico, Europe, and Asia.

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Gary Millerchip, an executive, detailed that within core-on-core margins, food and sundries were slightly negative, fresh was slightly positive, and nonfood was the strongest. Ron Vachris, an executive, added that Kirkland Signature penetration is in the high 20s and growing, with a commitment to investing in price to drive volume. Gary Millerchip also noted that while margins on KS items are capped, the growing mix creates an overall margin tailwind for the company.

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