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US Foods Holding Corp. (USFD)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue rose 6.2% to $9.49B, adjusted EBITDA grew 13.7% to $441M with margin expanding to 4.6%; GAAP EPS fell to $0.28 due to a $124M non‑recurring pension settlement, while adjusted EPS increased 31.3% to $0.84 .
  • Volume outperformed industry: total cases +3.5%, independents +3.2%, with healthcare +4.7% and hospitality +2.4% despite storms, election and holiday timing that created a 150–200 bps headwind to independent/hospitality case growth .
  • 2025 guidance: Net sales growth 4–6%, adjusted EBITDA growth 8–12%, adjusted diluted EPS growth 17–23%; company targets ~$4B cash generation 2025–2027 and plans to deploy ~half to repurchases .
  • Strategic execution themes: private label penetration nearing 53% with independents, MOXe e‑commerce at 77% for independents/87% total, routing technology driving productivity; Pronto small‑truck service exited 2024 at ~$730M run‑rate with 20% case uplift in pilot markets .

What Went Well and What Went Wrong

What Went Well

  • Adjusted profitability leverage: “Adjusted gross profit dollars grew 240 bps faster than adjusted operating expense dollars” in Q4; adjusted EPS grew 31.3% YoY to $0.84 as buybacks amplified EPS growth vs EBITDA .
  • Share gains in target segments: “Our 15th consecutive quarter of share gains with independent restaurants” and 17th consecutive quarter in healthcare; total case growth +3.5% despite macro noise .
  • Digital/brand execution: MOXe penetration reached 77% of independents (87% total), and Serve Good private label surpassed $1B; management sees “no near‑term ceiling” on private label penetration .

What Went Wrong

  • GAAP EPS impact: Recognition of net actuarial loss for pension settlement ($124M) lowered GAAP EPS to $0.28 despite strong operational performance .
  • External headwinds: Hurricanes, election timing, and holiday calendar shifts reduced foot traffic, creating an estimated 150–200 bps headwind to independent and hospitality case growth in Q4 .
  • LIFO headwind: Unfavorable YoY LIFO adjustment reduced reported gross profit; adjusted gross profit rose 7.2% YoY vs GAAP gross profit +4.8% .

Financial Results

Quarterly financial comparison (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Net Sales ($USD Billions)$9.709 $9.728 $9.491
Gross Profit ($USD Billions)$1.706 $1.667 $1.666
Operating Income ($USD Millions)$353 $279 $302
Net Income ($USD Millions)$198 $148 $66
Diluted EPS ($USD)$0.80 $0.61 $0.28
Adjusted Diluted EPS ($USD)$0.93 $0.85 $0.84
Adjusted EBITDA ($USD Millions)$489 $455 $441
Adjusted EBITDA Margin (%)5.0% 4.7% 4.6%

Q4 YoY comparison (GAAP and non‑GAAP)

MetricQ4 2023Q4 2024
Net Sales ($USD Billions)$8.936 $9.491
Gross Profit ($USD Billions)$1.590 $1.666
Adjusted Gross Profit ($USD Billions)$1.547 $1.659
Operating Expenses ($USD Billions)$1.312 $1.364
Adjusted Operating Expenses ($USD Billions)$1.161 $1.217
Adjusted EBITDA ($USD Millions)$388 $441
Adjusted EBITDA Margin (%)4.3% 4.6%
Net Income ($USD Millions)$147 $66
Diluted EPS ($USD)$0.59 $0.28
Adjusted Diluted EPS ($USD)$0.64 $0.84

Case volume growth by customer type

Customer TypeQ2 2024Q3 2024Q4 2024
Independent Restaurants+5.7% +4.1% +3.2%
Healthcare+6.0% +5.7% +4.7%
Hospitality+2.1% +3.0% +2.4%
Chain+4.2% +2.4% +2.6%

KPIs and productivity

KPIQ2 2024Q3 2024Q4 2024
Adjusted Gross Profit per Case Growth ($ / %)+$0.22 / ~3% +$0.24 / >3% +$0.28 / 3.6%
Adjusted OpEx per Case Growth ($ / %)+$0.04 / <1% +$0.04 / <1% +$0.08 / 1.4%
Adjusted EBITDA per Case ($)$2.27 (up $0.16, 7.6%) $2.12 (up $0.17, 8.7%) $2.12 (up $0.19)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Billions)FY 2024$37.5–$38.5 (Aug 8, 2024) $37.7–$38.0 (Nov 7, 2024) Tightened range; raised bottom end
Adjusted EBITDA ($USD Billions)FY 2024$1.69–$1.74 (Aug 8, 2024) $1.72–$1.74 (Nov 7, 2024) Raised bottom end
Adjusted Diluted EPS ($USD)FY 2024$3.00–$3.20 (Aug 8, 2024) $3.05–$3.15 (Nov 7, 2024) Tightened range
FY 2024 GuidanceFY 2024—Reaffirmed Jan 13, 2025 Maintained
Net Sales GrowthFY 2025—4%–6% New LR plan kickoff
Adjusted EBITDA GrowthFY 2025—8%–12% New LR plan kickoff
Adjusted Diluted EPS GrowthFY 2025—17%–23% New LR plan kickoff

FY 2024 modeling assumptions (as communicated Nov 7, 2024)

AssumptionValue
Total Case Growth4%–4.5%
Sales Inflation & Mix Impact2%–2.5%
Interest Expense$310–$320M
Depreciation & Amortization$435–$445M

Earnings Call Themes & Trends

TopicQ2 2024 (prior)Q3 2024 (prior)Q4 2024 (current)Trend
Technology & e‑commerceMOXe enhancements; AI “Where’s My Truck” improved window accuracy by 40%; routing tech in 8 markets Routing in 18 markets; productivity gains; MOXe leadership reiterated E‑commerce penetration 77% independents/87% total; Descartes rollout to ~50% routed miles; continued MOXe expansion Expanding scale and measured productivity gains
Supply chain productivityCases per mile +3.7%; 3–5% productivity goal; indirect spend savings underway Warehouse productivity improving; leverage through P&L; operating discipline Adjusted GP/case +$0.28; OpEx/case +$0.08; EBITDA/case up $0.19; stable operating leverage Sustained leverage despite macro
Tariffs/macroFoot traffic down ~3%; mix inflation manageable; pass‑through pricing Storms in Southeast; election; sequential traffic improvement late Q3/early Q4 Low to mid single‑digit import exposure; tariff pressures viewed as inflation; pass‑through nature reiterated Macro headwinds moderating; resilient model
Private label penetration+100 bps YoY; >52% with independents; seller incentives supportive Continued momentum, Scoop innovation Nearing 53% exit rate; Serve Good >$1B sales Strengthening adoption
Pronto small‑truck service~40 markets; ~$700M run rate; initial penetration pilots Penetration pilots expand; incremental volume, no cannibalization ~$730M run rate; 20% case uplift in pilot markets; plan to add 15–20 markets in 2025 Expanding footprint; incremental growth driver
Healthcare & hospitalityStrong pipelines; onboarding new wins Healthcare +5.7%, hospitality +3.0% Healthcare +4.7%, hospitality +2.4% within guidance range Consistent growth and share gains
M&A & portfolio actionsClosed IWC ($220M) Debt refinanced; leverage 2.8x; continued tuck‑in pipeline Acquired Jake’s Finer Foods ($92M); exploring CHEF’STORE sale; repurchased $958M in 2024 Active, disciplined capital allocation

Management Commentary

  • CEO: “We delivered another strong quarter… record 2024 full year earnings of $1.74 billion… expanding adjusted EBITDA margin by 22 bps… confident in achieving a 5% sales CAGR, 10% adjusted EBITDA CAGR and 20% adjusted diluted EPS CAGR through 2027” .
  • CFO: “Fourth quarter adjusted EBITDA grew 13.7%… adjusted EBITDA margin expansion to 4.6%… adjusted diluted EPS increased 31.3% to $0.84. We expect EPS to grow faster than EBITDA as we execute our share repurchase plan” .
  • CEO on share gains and macro: “Our ability to outperform the market was again demonstrated… 3.2% increase in total independent case volume… 15th consecutive quarter of share gains… despite storms, election and calendar impacts” .

Q&A Highlights

  • Independent case growth cadence and visibility: Management reframed the 5–8% case growth target as assuming +2% industry foot traffic; December new accounts were the highest of the year, with strengthening in January despite California fires .
  • Tariff exposure and pass‑through: Imports are low–mid single‑digit; most customer agreements are pass‑through; company helps operators manage inflation via private label and operational consulting .
  • CapEx and productivity: 2025 CapEx guided to $375–$425M to support fleet/IT/capacity; productivity expected similar to 2024 as Descartes routing completes rollout in 2025 .
  • Private label & MOXe: Private label penetration about equal import exposure vs branded; MOXe continues to add ~1.5 cases per order on average .
  • Pronto penetration economics: 20% case uplift in pilot markets; pricing/service economics comparable to broadline; focus on avoiding cannibalization .

Estimates Context

  • S&P Global Wall Street consensus estimates were unavailable at the time of this analysis due to a data access limitation. As a result, we cannot assess Q4 2024 beats/misses versus consensus, nor provide estimate revisions context at this time. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

  • Margin expansion with disciplined execution: Adjusted EBITDA up 13.7% and margin +30 bps YoY in Q4 despite macro headwinds; adjusted EPS up 31.3% YoY to $0.84 .
  • GAAP/adjusted divergence: One‑time $124M pension settlement and unfavorable LIFO masked strong underlying performance; adjusted metrics better reflect core trajectory .
  • Structural growth drivers intact: Private label penetration nearing 53%, MOXe deepening digital moat (77% independents), routing tech rollout supporting 3–5% productivity goal .
  • Pronto expansion is incremental: ~$730M run rate with measured penetration to existing customers yielding ~20% case uplift without broadline cannibalization .
  • 2025 setup: Guidance implies continued balanced growth—net sales +4–6%, adjusted EBITDA +8–12%, EPS +17–23%—with buybacks likely to sustain EPS outperformance vs EBITDA .
  • Capital allocation: $958M repurchases in 2024; tuck‑in M&A (Jake’s $92M) and potential CHEF’STORE divestiture could serve as catalysts for additional buybacks .
  • Trading lens: Monitor independent traffic improvements, private label momentum, and operational KPIs (GP/case vs OpEx/case) for near‑term upside catalysts amid macro normalization .