The Chefs' Warehouse Inc (CHEF, Financial) released its 8-K filing on July 31, 2024, detailing its financial results for the second quarter ended June 28, 2024. The company, a premier distributor of specialty food products in the United States, the Middle East, and Canada, reported significant growth in both revenue and net income, surpassing analyst estimates.
Company Overview
The Chefs' Warehouse Inc is a specialty food distributor serving metropolitan areas across the United States and Canada. The company's product portfolio includes imported and local specialty food products such as cheese, cooking oils, chocolates, dried food, baking products, meats, and other food products. The Chefs' Warehouse operates via one reporting segment called Food Product Distribution, focusing on restaurants, clubs, hotels, caterers, schools, bakeries, casinos, and specialty food stores.
Q2 2024 Financial Highlights
For the second quarter of 2024, The Chefs' Warehouse Inc reported:
- Net sales increased by 8.3% to $954.7 million, up from $881.8 million in Q2 2023.
- GAAP net income of $15.5 million, or $0.37 per diluted share, compared to $9.9 million, or $0.25 per diluted share, in Q2 2023.
- Adjusted net income per share of $0.40, up from $0.35 in Q2 2023.
- Adjusted EBITDA of $56.2 million, compared to $51.1 million in Q2 2023.
Performance Analysis
The Chefs' Warehouse Inc's performance in Q2 2024 was driven by a combination of organic sales growth and contributions from acquisitions. Organic sales increased by approximately 7.2%, while acquisitions added around 1.1% to sales growth. The company saw a 4.7% increase in organic case count in its specialty category, with unique customers and placement increases of 8.2% and 11.3%, respectively. Additionally, organic pounds sold in the center-of-the-plate category rose by 2.9% compared to Q2 2023.
Financial Achievements
The company's gross profit increased by 9.9% to $229.0 million, up from $208.4 million in Q2 2023, primarily due to increased sales and price inflation. Gross profit margins improved by approximately 35 basis points to 24.0%. However, selling, general, and administrative expenses also rose by 8.8% to $194.8 million, driven by higher depreciation and amortization, compensation and benefits, and facility and distribution costs to support sales growth.
Income Statement and Balance Sheet Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $954.7 million | $881.8 million |
| Gross Profit | $229.0 million | $208.4 million |
| Operating Income | $33.9 million | $25.3 million |
| Net Income | $15.5 million | $9.9 million |
| Adjusted EBITDA | $56.2 million | $51.1 million |
Commentary
"Second quarter customer demand and pricing displayed typical seasonality as revenue and profitability continued to build as expected - moving from a solid first quarter into the seasonally stronger second quarter months. Our operating divisions across domestic and international markets delivered strong unique customer and item placement growth and managed pricing effectively while providing our customers with high-quality product and high-value service," said Christopher Pappas, Chairman and Chief Executive of the Company.
Conclusion
The Chefs' Warehouse Inc's strong financial performance in Q2 2024, marked by significant revenue growth and improved profitability, underscores its effective management and strategic initiatives. The company's ability to navigate challenges and capitalize on opportunities in the specialty food distribution market positions it well for continued success. For more detailed insights and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from The Chefs' Warehouse Inc for further details.
