US Foods Reports Sales Growth, Lower Net Income
ROSEMONT, IL - US Foods has announced its second quarter financial report for 2019, and the results are somewhat mixed. While sales overall were up, thanks to the changing foodservice landscape, the company’s net income was down $10 million from the previous year. But US Foods’ leadership decided to focus on the company’s growth, rather than its losses.
“Our business performance continued to improve with second quarter Adjusted EBITDA growth of 6.7%, double-digit Adjusted Diluted EPS growth of 12.3%, and continued expansion of operating leverage per case,” commented Chairman and CEO Pietro Satriano. “Total case growth also improved, thanks to strong performance with independent restaurants and improved growth with healthcare and hospitality customers. Our service platform continues to get stronger and we are confident in achieving our financial guidance for the year."
Some of the report’s highlights include:
- Total case volume increased 1.7%; independent restaurant case volume increased 4.8%
- Net sales increased 4.6% to $6.4 billion
- Gross profit increased 2.5% to $1.1 billion
- Income before income taxes decreased $7 million to $154 million
- Net income decreased $10 million to $116 million
- Adjusted EBITDA increased 6.7% to $320 million
- Diluted EPS decreased 8.6% to $0.53; Adjusted Diluted EPS increased 12.3% to $0.64
According to the report, case volume and net sales were both up, partly due to the increase in case volume and year-over-year inflation in multiple product categories, including produce, grocery, and poultry. While gross profits were up, thanks to margin expansion initiatives and an increase in case volume, operating expenses were also higher than last year, which was attributed to higher wage costs, acquisition-related costs and depreciation expense. Overall, the company’s net income was down, reportedly driven by an unfavorable year-over-year change in the LIFO reserve and higher Operating expenses.
To read the report in its entirety, click here.
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