Chefs’ Warehouse Experiences Rise in Q2 Sales and Margin Growth

The Chefs’ Warehouse, a leading distributor of specialty food products, has announced impressive growth in net sales and gross profit margins for the second quarter of 2024. The company reported an 8.3% increase in net sales, totaling $954.7 million, with organic sales climbing by 7.2%. Additionally, gross profit margins improved to 24%, marking a rise of 35 basis points.

With a strategic focus on investments in infrastructure, sales, and acquisitions, The Chefs’ Warehouse remains on track to achieve its long-term objectives. The company aims to generate revenues between $4.6 billion and $5 billion, alongside an adjusted EBITDA of $300 million to $350 million by 2028.

For the full year of 2024, The Chefs’ Warehouse projects net sales between $3.665 billion and $3.785 billion, with adjusted EBITDA anticipated to fall between $208 million and $219 million.

### Key Takeaways
– The company experienced a 7.5% increase in specialty sales and a 2.9% rise in organic pounds for center-of-the-plate products.
– Its five-year targets include reaching up to $5 billion in revenue and $350 million in adjusted EBITDA by 2028.
– The total net debt is approximately $661 million, resulting in a net debt to adjusted EBITDA ratio of 3.2 times.
– Expected fully diluted share count for the fourth quarter and full year 2024 is around 45 million shares.
– Investments in hybrid sales, enhanced sales teams, and expanded warehouse capacity are vital to driving organic case growth.
– The company has seen nearly 10% new customer acquisition in the first half of the year.
– A distribution facility is expanding in an international market, with anticipated benefits in 2025 and 2026.
– Despite some regional softness, new restaurant openings and industry adaptation to consumer preferences are expected to persist.

### Company Outlook
– The Chefs’ Warehouse expects 2024 net sales to range between $3.665 billion and $3.785 billion.
– Gross profit is projected to be between $874 million and $902 million for the year.
– Adjusted EBITDA for 2024 is forecasted to be in the range of $208 million to $219 million.

### Challenges
– A moderate deceleration in organic revenue growth is anticipated in the latter half of the year due to more rigorous comparisons.
– Some market softness has been observed, particularly affecting certain sectors and regions.

### Opportunities
– Strong organic case growth is supported by strategic investments in sales and infrastructure.
– Continued demand for beef and specialty products is expected, alongside innovative solutions to maintain profitability.

### Recent Discussions
During a recent earnings call, CEO Chris Pappas highlighted the surge in new restaurant openings and customer acquisitions following the pandemic. He emphasized the company’s investments in sales teams and digital tools to drive growth, anticipating significant improvements in operational efficiency later in the year.

The Chefs’ Warehouse indicated optimism for the future and expressed gratitude towards participants, looking forward to further growth in the upcoming quarters.

This report on The Chefs’ Warehouse encapsulates its robust financial performance and strategic direction, aiming for ongoing success in the specialty food distribution market.