Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to The Chefs' Warehouse Second Quarter 2023 Earnings Conference Call.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Alex Aldous, General Counsel, Corporate Secretary and Chief Government Relations Officer. Please go ahead, sir.

Alex Aldous

Thank you, operator. everyone. morning, Good today's CEO; on Chris Founder, Pappas, With Jim call Leddy, and and our Chairman me are CFO.

earnings at and can By and per in reconciliations well adjusted now XXXX be Relations used It release. press quarter financial this presenting These measures EBITDA measurements conference including, and our to adjusted be estimated to the calculated and call, net companies. in both of measures share. are found section. as not financial financial also measures we'll Throughout you appear should estimated earnings among non-GAAP their accordance as have may press in Quantitative others, income non-GAAP adjusted by access other financial and www.chefswarehouse.com EBITDA GAAP most today's Investor with our GAAP under historical similarly non-GAAP directly be calculated second differently measures release. historical titled comparable

our I our that we estimated Before regarding are remind Such will our financial statements discussion not everyone of performance. and part forward-looking from remarks, forward-looking future including that of today results not therefore, statements you begin risks reliance include cause statements, guarantees need undue them. could statements what materially we and, are expect. to to numerous put differ These actual subject performance on should uncertainties to

on over report in available Some update and of are business XX-K Form on quarter and going our annual SEC are these XX-Q, to second results quarterly we our which are risks are on a in mentioned Others in website. today's go detail. discussed provide reports Form Today, release. the

disclosed on Investor Chefs' a open this this Presentation. time illustration will titled morning, Quarter Relations only. Warehouse note XXX slides few our purposes for website of slides will for we portion are questions. we the these discussion refer that the a Please Then Second up at Earnings section call under to The posted For

Pappas. call will over turn Chris? that, to the I With Chris

Chris Pappas

our joining call. second for all you thank and earnings quarter Alex, you, Thank XXXX

As the during provides first year-over-year the earnings second our to quarter pandemic report, out snapback a quarter variant of the the Omicron second noted COVID-XX of strong coming XXXX. XXXX comparison the we of of difficult in demand quarter in

anticipated, pandemic, onset quarter first since business the As activity second time we more COVID-XX trends. normal the returned of the for to had seasonal

May as While impact April months some we of in from experience issues severe and many across came the from and quality air strong wildfires were Canadian and in our did the extreme markets. expected, heat weather and June

profit pressure. addition, certain dollar In in volatility resulted protein moderate gross in categories

net delivered as include and second few growth Overall, the to was year-over-year unique the in the growth acquisitions placement quarter, from second performed XX%. adjusted growth revenue XX.X% compared approximately by team of sales. strong X.X%, of and growth organic sales organically EBITDA quarter of Specialty year, of the A driven growth organic our for over our were quarter X.X% which and prior up XX.X% recent customer highlights case well. XXXX specialty

margins to XXX on points basis the the second XXXX margins margin in second decreased Gross Gross specialty decreased points XX Organic than the profit Jim will while provide profit quarter were in more as in center-of-the-plate category approximately year-over-year. compared prior higher gross pounds quarter. basis X.X% basis profit of the category gross XX and margins approximately moments. decreased year a points. detail few in center-of-the-plate

as all well and on geographical parties to growth. to www.chefswarehouse.com. our our goal infrastructure, XXXX would section addition as website the quarter leveraging strategic the Relations X-year significant in posted Investor it we update and our refer suppliers shareholders, team the thought at share we slides helpful to investments results capacity expansion, have of to been the making Please acquisitions to and interested members, customers the guidance, In our providing be with

Slide refer The This Warehouse Please is Chefs' today. to X.

We updated fleet $X.X we our for estimated of centers the U.S., raised billion $X.X grown plus operate and based XXXX. guidance today plus approximately East. to revenue have distribution X,XXX now on an grown we in the and truck have to out we Canada billion XXXX across Along XX in Middle from the the way, and

and In despite COVID; few key market years past of product continued the to category talent. in new entrance, facility the impact invest we expansion, importantly, growth most

our leverage to part profitable goals of investments expect We beyond. X-year as into growth and these

Please refer Slide X. to

high on markets. creating focused Our capital allocation capacity in value is primarily expansion

expect incremental and and of customer-facing and growth, via in process easier operating efficiency improvement enhanced development improvements operational drive an customer organic experience digital drive to technology leverage investments continual in platforms. We to through ongoing our

We the projects from with XX% create XXXX XX next from the growth combined in capacity months infrastructure in the coming capacity. deployed to to-date approximately to expect the over growth XX online capital

well Southern These include underway York Northern projects the our as serve Jersey New and completed as United well in Mid-Atlantic. Emirates, region the our Texas recent as in Florida as U.S. Northwest, projects in the California, Southern optimize distribution Philadelphia New footprint and to Arab to California the

to billion $XXX-plus scale, million adjusted EBITDA in see investments revenue of as over the in grow these six the we five and we expect benefits we years. next As in to target $X

X% of to to time. from X.X% to Additionally, moves revenue down anticipate strengthening cash X.X% X% as we CapEx free allocated flow range to over percentage range a gradually

to implies year term. are this, half despite our first these Slide adjusted XX% period with cost have we rate. over certain year-over-year important approximately similar of the X, EBITDA note growth carrying is associated refer XXXX It If that of XXXX guidance increases a and the delivered you full same in to growth investments we in near

away years, and achievement grow As food from scale, with The the The execute this along of these over acquisitions deliver ability home expect to gains primary Chefs' the growth five EBITDA economies our industry. model of to depend these improving in the over investments three to pillars future continue goals unique we will on on time. market in of Warehouse the next leverage continued share scale adjusted we margins of gradually

leverage The the with combined integration continue to and EBITDA operating the time as remain and regions the developing, on into and various in acquired operational the acquired companies, of last time; levels the few have capacity add higher organically brands expertise adding of we strategy to culinary invested employ focused to We operational and our have significant grow expect generating creation and cross-selling drive the to across years synergies we markets. in added margin adjusted we talent over continue and we industry. we over markets; talent add key promoting best

grow technology business on model to with growth our of our The forward. Chefs' pillars investments be a our providing support the enhance one teams products The shared combined Warehouse team Focused and superior the are provide with world's three service. to delivering we them to right finest dedicated partner number vision the making food ingredients, for platform best-in-breed specialty and and chefs, and with

more it Jim to discuss the financial and Jim? over turn on I'll for that, to quarter With update detailed an liquidity. information our

Jim Leddy

morning, Thank you, Chris, everyone. good and

comparison current balance I'll versus update now provide quarter results and year prior liquidity. provide operating a the quarter our our sheet of an and on

in of to sales Our from million of as approximately sales sales million of XX.X% XX, The increased in quarter acquisitions, which increase XX% was approximately net growth net result the a the $XXX.X for in approximately an XXXX quarter for sales as sales well X.X% quarter. organic XXXX. of added ended second from the to growth $XXX.X June the contribution

the quarter in for inflation of to inflation quarter center-of-the-plate XX.X% Net in of versus year consisting second increased XX.X%. X.X% of versus was profit million specialty X.X% our of the profit our the second million the $XXX.X category approximately XXXX margins inflation second $XXX Gross XX Gross to prior X.X% for basis in points decreased and category XXXX. quarter. quarter

due mix Selling, the XX.X% $XXX business XXXX. year-over-year increase certain quarter general June XXXX million primarily versus administrative second from in of Gross for sharp hospitality prior for decline prices quarter million impacted combined partially in and protein during the with profit margins dollar increased expenses to changes, category and second growth the of approximately to XXXX. were a quarter year by the product $XXX.X of related

the and depreciation amortization higher higher drivers with an The adjusted expenses and volume associated compensation versus On operating growth and costs impact expenses acquisitions. operating primary percentage XXXX second and XX.X% and second of quarter distribution net were for quarter adjusted for the a higher the and XXXX. year-over-year costs, as benefit sales, second higher of XX.X% of of year's facility increased basis, expenses quarter the compared were prior of to XX.X%

of Operating The XXXX. compared including for the million second operating amortization income gross million operating higher quarter $X.X profit. quarter and associated income in was by and XXXX XXXX. for million of compared higher expense $X.X decrease partially $XX.X acquisitions XXXX offset of cost the higher the compensation second tax was was expense primarily for second Income to the driven with to costs, depreciation million quarter quarter of stock for second by $XX.X

second for million for of $X.XX the diluted compared per we million a quarter of of million million prior $X.XX year GAAP adjusted non-GAAP the $XX.X XXXX share net or Our to income to diluted $XX.X the XXXX. was $X.X basis, On net quarter. XXXX for or quarter second per $XX.X share the income of second had compared EBITDA second quarter for of

quarter. Adjusted per year net the compared was XXXX for second diluted $XX.X $X.XX $XX.X for the $X.XX income share million second share million per or diluted of or to quarter prior

Turning our to the balance sheet on and an update liquidity.

sixth recently facility amendment the million. the in our July X, filed on from the to disclosed ABL credit million we line increasing completed XXXX $XXX As to $XXX facility X-K,

to in of cash component, terms comprised end of $XXX.X prior quarter availability unchanged. a upsize, total million our At the of fixed the had million $XX.X $XX.X Other liquidity facility. slight increase we and under second July ABL than the ABL coupon materially the in of remained million

inclusive and debt was cash of $XXX.X XX, XXXX approximately June of As million, all cash equivalents. net

gross be trends year our to business, between as our providing to million of of guidance $X.XX for Based the XXXX. million. billion, million the in year current we the that billion EBITDA XXXX range full adjusted and sales to profit for and and $X.XX be we follows: to on full net between million the $XXX in be $XXX guidance full $XXX year are $XXX will Turning estimate

guidance, make million updated $XX.X of interest be per of our to purposes. the We approximately Regarding quarter modeling the expect average. currently note for please XXXX for on two remaining following quarters expense

depreciation same Similarly, the per we to and over average million period. expect $XX approximately quarter amortization

share diluted approximately count shares. estimated year full XX.X is million Our

notes we to shares accordingly, the currently For conversion of that the purposes, issued count. notes year full fully expect be be upon senior in could unsecured share the our dilutive reporting for included and diluted are those convertible

open you. Thank up this questions. point, we to at it will And Operator?

Operator

question go Slagle Instructions] [Operator from Alex comes from we The ahead. Jefferies. Please first have

Alex Slagle

that ask range. back EBITDA with the seasonality the and to I year this margin quarter margins cadence into and guidance falling second sort of of normal on wanted and right the to

ahead As the look about a X% seen in XQ margin get to EBITDA typical and think past I X%, guide. we've big to the to XQ suggests the pretty the

on So any with seasonality perhaps U.S. if different I East just that Middle the into also mix? a guess the having thoughts business, that? some plays just than And the part

Chris Pappas

that Yes, acquisitions would as have companies of big Alex, that East the as large we think thanks an impact are Middle we those two for question. on quarter. completed Chefs' during the anticipate three I seasonality the the the quarter combined, third well would

built So second range. not number in X% expectations. coming off quarter was We too where guidance it low one, kind second on our of the in think the in of I was, coming quarter the our far

couple about bit about strong the off but overall basis basis We in of talked things margins, missed that take froth of that by came a quarter. to We a little points, XX impacts together of very of XX June a points.

in -- the a third half the little little bit of a think we back of those quarter a the will be year is I past. versus to have three up would seen the So acquisitions normal what going cadence, more bring but quarter third the

Alex Slagle

dynamics? you And the you some or little incremental in and activity noted by of change of of trade a did any in demand that was sense. June see waves impacted makes heat and the smoke the That Outside a down pullback signs in that, Okay. different regions.

Chris Pappas

June, of really certain mean and growth, growth the sales on sudden X% I categories I that bit decline was quarter, strong impact just think organic margin. little our kind had a took revenue couple of organic year-over-year we think a really impact biggest I moderate inflation. and No. protein in a volume was an of weeks It in very the volume

and some impacted you those had in OpEx. overhead we We to -- together revenue And came obviously carrying created June. some that the little leverage we're on compared was about impacted by the quarter on a things just talked last an kind difference the bit year that of mostly EBITDA expenses outsized of percent the operating gives margin

Operator

ahead. we King. have next Please The Andrew CL Wolf from you. go comes from question Thank

Andrew Wolf

Could what's on diversified something in the with prime on you that's give know you that I think you the choppiness into protein. usually but track of the prime beef, to types a protein changed other all, little color in hard the I markets? beef outside with

Chris Pappas

It is is high the was quarter the the sales. coming higher at abnormal not at go system -- next and that for there's you for look a the animals When will cattle years. the in we through what very Prices to protein outlook few amount of enough remain system. and continue look

that last few think about the I we've calls. been in talking

but and caught It other surprise whole was and there where not that's reason, way some what this Andy, bit whatever pretty compression. for And us market, blip our of time went said, has just happened, by did us of it's Jim and market by a margins. the first Again, compressed little expectations. margin of the our we surprise track much catch a cost to the protein the it that kind as it

a of And had we all we of was over customer and coming business were as placements, sales, cafes an great lost I days outdoor had massive all quarter coming pretty Canada, the heatwaves it the July few with crazy growth. had the between good kind a odd had mean closed. smoke into We with great from well organic we quarter. we

much great possible. business job team So did as a grabbing as

customer customers think I their spending. is overall, our

travel, quarter. I reports, we've travel. past of right, to read I of this mean You've XXX% lot overseas, got think a up

a of up traveling locked customers are our lot wealthy a few So the of with clientele after being for COVID. years

that, bumps. it with a all beef pretty I good So few a quarter mean damn market at was looking that causing

Jim Leddy

year, the full really of also in strong incredible first in and put incredible an prices year's compared just was that the our the profitability QX the year operating half didn't leverage. context QX Last context year. we the then of year guidance. construct on of quarter rising really delivering did Andy, last guidance add quarter the that We have demand, I'd you to to last combined the second of and confluence extreme and

of kind range we in came quarter the right the in So expected. that

XX% first very X months year-over-year If it similar our combine year of of -- growth basis. of growth the with year-over-year the the first organic EBITDA you guidance the context half half to for XX% the adjusted year within that's full what first implies year, the full and and year on a

that bit So I comparison came think really it's first as confusion of just caused the year. a of the little of the half unevenness we the into

Andrew Wolf

the helpful. That's but a use beef Okay. smoke metaphor, the market I'm cleared in analogy really outdoor the tortured going to has or cafes? on

Chris Pappas

is beef firm continues. in chilly hope beautiful it here to so odd weather up. and We're Connecticut and so really the are Actually starting we too prices

see increases. to starting You're price

Andrew Wolf

guys more budget. from trying what Is disruption that some a all So better you drove -- beef it going so below is completely - demand in little than way just kind sounds a opposite weather? I'm like of the market to expectations your

Chris Pappas

would I say true. Yes, that's

in year. points We So built XX come points expected EBITDA us We we to delivered million was our couple better had adjusted last off guidance. come did didn't X%. there in basis models to a -- to the of full not consensus to in of than expect That XX the about close in we expect of year margin so basis dollars. context

Andrew Wolf

guidance. mean I having Alex question, even want good to about I certainly follow-up back about was I good the That's year's are some sales of asking just what kind of completely the quarter to disruption ask last doing understandable at the was half with things one I back given June versus look other second how was. a expected.

to thinking me of Would look know -- guidance, going on it that -- sort the to to it's the right to I'm I more margin. improved want kind or be a going be structure? at So the hiccup think because the improve but be to in second your more between more balance to you get gross the going what's the halves, it the short had is a gross sense. in of be margin and a margin going to sighted little between quarter cost it to Is balance

Chris Pappas

Andy. in quarter, second Yes, adjusted guide I balance, don't a change it's the about seasonality our to the margin due just quarter. slightly by going large third comments than the be We quarter would be the three but EBITDA mentioned to lower acquisitions. Normally

bit normal. on second will we be fact undershot quarter, will it I little a be that more the think -- the cadence the

holds expect have stronger food demand will implies quarter, you'd haven't In do. and the The that like we guidance terms we fourth what and fourth of distributors a good it changed up most half be to the it. assuming be really quarter second

Operator

go comes next The question you. Saleh Peter from from ahead. BTIG. we have Thank Please

Peter Saleh

I I wanted one maybe hotels that serve, they -- now you of to recovered. on reopen I customers latest to first have service in labor to your guess And and industry What seeing the you that are business. maybe has there? more and seeing is to are quickly post ask how more the hospitality COVID. that be understand have was really that recover do the segments you Just business? know the this trying

Chris Pappas

the recovering, It country I back say it's depends which wouldn't it's to what like Vegas. but cities and of the think part I XXX%. part of or

What our customers' maybe have customers. for we're year think it's travel from when customers more and opened overseas normality I last more everything that up, period after you is now. hearing right crazy much too

was everybody traveling overseas think that Miami last were opposite and and year of Beach, places. year other obviously coming this people one -- and years open few only happening So the like take the places are was you the last I

think a it's labor. struggling. still are back chance build in they giving So them to I a way

hearing are have meet they're prices certain they We still the keeping think pretty the labor that that seen strategy we've force And demand. part to I is from customers XXX% don't of high.

for So maybe to weekends there is normally be still profitable. willing enough customers big high to Napa line for keeping pay there's still rates tourism Valley. mean see there's the for especially they them looks end. like high seat, than the last are when bottom in rates it's prices Monday, And that's they're I strategy crowd. a up get that from a through posting Valley quieter the make from Tuesday, my expensive Wednesday Thursday, the Napa it they're kind I they not that were in Monday mean really what very their They of sure. I say and to year

So at it what spread more I of of XX% much and getting shot we are lot out. think my seeing a areas the areas We're other seeing expected of is XXX% the do best from dollars what do customers And but amount charts, hear is doing our people expectations. leaving off they're is still not back is the for we the business of airport that normal. to coming in of people amount we're

Peter Saleh

Great. here the the drive to you to some less, you you the out talk you'll If us trying either adjusted expect X%. to or end? EBITDA, will just to more be at mean you or And target? would laid If maybe of at you that factors about understand the on factors closer can high targets that end of acquisitions, make margin on some the be the of X.XX% that closer end in the the come then do low EBITDA that end? guys it'll low Just the X-year whether X- high the you determine

Chris Pappas

much expectation. call margin that call of core we end Our at we our the higher what pretty what always organic business, to the growth tracks expectation our of

much typical takes and So we've absolutely margin usually companies of really that a Warehouse years a right. acquired who than are lower few the depends us [indiscernible] Chefs' it It to lot acquire and you're it. we

margin little say great we at And could in tends growth, if but buy still a companies probably higher always still more bought but we mode. but our lower be margin. be fixing; will be that a fix EBITDA, will expectation, be volume bigger I higher than So be we're might margin because it to will we we're which less, because less, more organic be

Operator

next we you. from BMO Thank from comes question The go Kelly ahead. have Bania Markets. Capital Please

Kelly Bania

little just relative bit for if expenses wonder how your talk could quarter, I the that to plan. about we came in a

suggest help come to buckets would that half the I item think think for Maybe need quarters? that next dollars the through just what just be several that would guidance down back expense and us line in. curious

Chris Pappas

of Kelly, the we once a of leverage. amount the in there's because there. in comparison QX couple things portion of QX. of a comparison. the and year-over-year the created we outperformed kind good of of I unevenness, the It's in in operating good terms difference of mean That's again leverage really a operating opposite in because QX year-over-year

quarter fully at the acquisitions, quarter, end company with second We somewhat very operating quarter expenses. the was of the a percentage that completed two one of and the of second large produce so and in in come the first one higher companies beginning produce

XX difference So or basis there. basis right of or that so was points XX points that

are a couple next organically goes online XX% in two, into discussion three, capacity had We're adding that we grow -- carrying will we over five coming anymore. we that that OpEx leverage. we're And had large years. fully will that not back so That's that to the Florida four and just our impacting now we overhead XX% a facility that right the and to then we creating of

X.XX% getting Peter's to be coming that's X% Going a to question, going over of that of to years. driver to kind us the big

-- those year. down. three expect second main quarter sorry, that expect Currently that the back of the it the in So come we in are I'm that and of we components half will the

Kelly Bania

had acquisitions beyond stronger than had a and two we was M&A contribution Those other the just the clear, there Okay. That's Hardie's thought. that helpful. I And are were be last to Greenleaf? any lot

what that through just to think to either item? maybe driving that walk we how about what's contributing So can or is line

Chris Pappas

year. since of all last the completed the it's the second third acquisitions to You quarter that or have we understand quarter since

company. have So quarter a last East, Middle acquisitions; didn't Chefs' is which Middle we of then Hardie's, that did dollar multi-hundred acquisitions over Chefs' big the and three couple smaller did a million Greenleaf; we We time. East,

the the fold-in a Wainer Sid in Mike West in we Canada. to which England business did last acquisition on did December Hudson out Coast, our did fold-in the We and New our We small is business. into fold-in the produce

acquisitions been that So year-over-year to of there in contributed some as well contribution. that smaller have terms the

Jim Leddy

Yes. But really the the line, organic growth top Kelly. driving is really

Kelly Bania

just maybe way. ask guess I I'll another

So of organic of the respect changed on, to adjusted acquisitions has the kind announced had that we've releases outlook for with EBITDA your anything year?

Jim Leddy

No.

I We think Greenleaf we went QX into the as based reporting the when were reflect growth. Hardie's from year well with on our we to original QX. organic the guidance acquisitions our guidance adjusted and upside as

so changed in no, our terms of materially growth. organic And really nothing's

Kelly Bania

What's higher driving And follow-up. just one last D&A outlook? the

Jim Leddy

That's acquired growth.

the of and acquisition and higher fund are to stock the rates with to also is is Greenleaf, interest with impacting And Hardie's adjustment the but associated added of those higher level acquisitions; higher those primarily So and the EPS depreciation not which acquisitions. acquisitions. that debt compensation higher in D&A amortization large D&A, we then

Kelly Bania

Okay. maybe the have you for about has little think and just about new color you're finding Helpful. you're in seeing maybe locations of capacity longer-term out exactly you that us help question changed there of a facilities? or more need terms And landscape of some there the just us these maybe help and are what kind cost of costs how just the adding, new on just what ask a

Chris Pappas

buildings the basically. a pre-COVID in been hopper while, Kelly, Well, these I for mean have

we Richmond, I which running was up mean that. pre-COVID. in and a pre-COVID not yet in cost we think I building think California, negotiated on the I negotiated is that's L.A. it was building that The So

are pre-COVID. think now, that coming I well was as Florida buildings online the So

-- So is expensive. gotten market is actually strong I'll it's market strong. back. the for very warehousing. mean that very The I take It's

close As Amazon of double softness. the late, little call we're a of of Amazon's lot really I effect the cities. to always price it hearing warehousing drove buildings. a subleasing to

So the to these buildings they really were rate but rent them. prenegotiated for basic were they expensive, just

chains the because were went COVID, costs the starting them, some during the costs build higher little we're up down. normalization all supply to To as which see a come

L.A. where open moved outside got got open Jersey open, South open next we've Richmond and Florida will we we're is finishing building. Pennsylvania year halfway right So now we now, and that in of

exciting the to of We're able adding do creative very capacity fold-ins. be that's lot to a organic to part. accelerate growth So and

Operator

The Company. go ahead. comes Instructions] [Operator Brooks Todd The Please from we have from next question Benchmark

Todd Brooks

follow-up Just here. you that Chris, of it's is how a last maybe a facility and a fast of quick California time facility the look on the up more if the line that's since One couple questions Southern been at Florida little running, questioning. or you from those sized how service grow new opportunities those these had as is facilities unlock if just a revenue what up to opening to the get facilities revenue on, are meaningful sense the ability in I'm quick markets? customers? trying come to more

Chris Pappas

because the they're they their Well, I growing of on constrained size were building. most other businesses unlocked very mean than our so revenue is the faster of

for living said expectation, could sales because an and would we're they're of of the the I've I very accretive low right? overhead, fold-ins. a we're years able our really really think say it's they're taking is that to what and the opportunity most would every XX a increased fold-in I really because to if team lot and sales day, very growing risk do accretive do get the past of rid the I fixed to pace at So up quick I

can out They're combining money, the a the that by GP day, we're old to facilities, more more dollars that's and bottom able on that truck fall dollars a go to way right? lot every routes the The we make of synergize routes line.

Florida four, might So five triple years. to my the over expectation really double quadruple. is will next L.A.

on ROI expectation that's great a So a and buildings. think I that that's great out building those

Todd Brooks

and either opportunities, versus look on fold-ins how does maybe Are if a firms always your as far platforms of some And you to and markets coming these new in more type verticals pipeline decent or there of these generational that being amount of there goal on? Chris, sell out you're as new mix out entry? are different COVID of move and with market just for in just at bolt-ons changes shots M&A of or that working on ready

Chris Pappas

mean I last had busy on. year of was because expect, of of buildup we As COVID negotiated businesses extraordinarily that the we all

that too priority. frothy. growth top was Right a is think more I think So Todd. surgical, little Organic we're now I our being

a We the new added for to of we've Florida talent. building, I streets. have ready in Gearing would to reps up the sales XX-plus invested say hit get lot

profitable So negotiating to the opportunities team this prudent we're made growth investment is and trying to It down point. really grow the being in really there's bolt-on comes them. always patient know we price I build which at a is we big to most up organically, and think and always

markets, I we're We're Carolinas, not in mean the map, to we're finish always Colorado. New in not Georgia, our looking right? in

those into far L.A. I trying because now. great, as have and as always where more and opportunistic. really something we've importance. EBITDA I think to what flow-through list that driving right there's is business that's into wherever been be driving the really more do But Florida if right Texas business the secondary and we're will we the the at for top of mean capacity is are facilities now, biggest

Todd Brooks

the in for Jim, you jump queue. and back then one one quick I'll

for and thinking we or second us year the an share the year? kind guess in, inflationary guidance. inflation, initial think verticals inflation half inflation both contemplating of about we've quarter. that outlook surprises We're was plus any tracked on in revenue can standpoint when were you deflation you I entering the continued the year-to-date quarters about the outlook of where anything I with two in second minus from you're this X% saw across

Jim Leddy

we the this expectations. the would the out so on pretty that to the I of calls We base would we multiple of in of expected moderate effect that of I mean the in Yes, disinflation commodities I quarter. was primarily the of extreme that our trend some starting offset similar said the given kind forward out. mix would and most saw throughout drive seen that before crazy kind reported inflation. looking think went it's X.X% played expect inflation XXXX disinflation 'XX play to mean kind larger some 'XX of that see we've just I continue. kind obviously product to earlier that I in in That of and by impact deflation you've expect you're

we aggregate. decline normal year-over-year months. have overall prices sequential sharp low sequentially the of April strong cause deflation to of in We were from Sequentially QX, deflationary prices sequentially QX kind and saw June, and inflation, slight kind moderate deflationary low specialty more to a saw be did inflation didn't of but weeks the but because single-digit single-digit in flattish. in it more center-of-the-plate kind kind couple in of we So May to in of quarter

and So going of been we way the that's continue expect it's would out out play kind playing to to way. that that it's

Operator

comes from LakeStreet Markets. go Klieve The question from Thank Ben we you. Capital have final ahead. Please

Ben Klieve

for Just a ones me. quick of couple

came really few second businesses, these on there over of any the was guys the more the the that major of with of made that you quarters acquired First surprised anything all you've light that have on particularly kind margin to quarter? from past been acquisitions in side

Jim Leddy

that surprise really really large acquisition, margin say months we perspective terms I No, that Middle of acquisitions had margin came we and an in did from now, produce well the few lower than slightly they about which we call East we just our were average And average. months in our because anything for the us. But in was that dilutive nine not two we've line expectations. EBITDA a on slightly two ago, they seen almost has a performed added, that with companies haven't at the for QX talked full really. big year would

Chris Pappas

prices obviously pricing and are and I not now five high and great mean I sound is by behaved. protein the enough the market caught you mean weeks of tight really blip and a then everybody where whole industry margin all four where there's surprise has how markets a real sudden the the big you have you inventory is blip. or a and in dip that cattle had surprise a of had the was only

that's we kind caught thing that expectations. of I be we think really close track the by blip our only to I what the surprise caught everybody protein the So really the only by margins in us kind and expected mean quarter was of big that that that pretty surprise. hurt to surprise

Ben Klieve

on of going quarter surprise I and, these of Got if effect frankly, the and you. a of to ask not within wondering been you big I'm from not kind the a is helpful. or That's time results? the around what categories wanted it. much you has have touched I third to this contained can just come do perceive up into about you think long mean short-term bleed kind to next which quarter the spikes degree to protein this time second for And Chris, to in protein. time you

Chris Pappas

in goes cards of I commodity mean if It's your was eventually up sitting turn should does so point prices It's I it way. start I and the we certain margin. that I'd exceed mean I honest should the a for good, be you. turn. our on turn go should hard. table, markets with historically, mean you're it expectations and at and playing you. like just around I mean margin to come Bermuda be the optimistically, it at the to

The being for we've answer Do a opening? is thing yes. we business the Are be important and patient. fighting quite gaining to business now is my while, customers? is we in is The business learned, seat are for most gaining new yes. I answer continue The strong. we're win is So to we yes. from mean answer placements? new this The when

that get some know our see in to we're I are there when the obviously rewarded know that at point So I performing, and road team going we bumps sometimes.

market, speak great surprising I And overall when job. think you sometimes very team could protein to it the the be a the So packers. did

and expensive just because have seems think very the the want Right I overall are back there's So farmers go now to up animals not animals. it prices enough to own they like that they're now the in to to are to up for go for up they street. animals get prices prices go start more waiting back back to for killing right waiting packers before than paid kill and to maturity bring them

of and cat So a it's mouse game. kind

Operator

Thank you.

Pappas reached our go session. Please was would back that gentlemen, for to now closing and have of final. the we Chris remarks. turn the our sir. ahead, to I question-and-answer So like over call Ladies end

Chris Pappas

joining optimistic And the kind the across thank call. earnings for proud phenomenal very again Middle job a East. great geared next and everybody team CW a really making and very and job did We're and gaining our is of team in the you. customers investments years. really many over gaining Canada we we perform we the built of and that really U.S. to the did placements But They once we Thank and are the many, of all think a squirrelly quarter. we're

us forward we So joining we you next to thank you joining on call. look again our for and

Operator

Thank us. you, conference. concludes joining Thank and that today's sir. for gentlemen, Ladies you

You your disconnect lines. may now

The Chefs' Warehouse, Inc. (CHEF) 2 Aug 232023 Q2 Earnings call transcript