US Foods Holding announced results for second quarter fiscal 2018.
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Total case volume decreased 0.9% from the prior year with organic case volume declining 1.5%. Independent restaurant case volume increased 3.8%, of which 2.7% was organic growth.
The decrease in total case volume was driven primarily by the previously discussed exits of select chain customers.
Net sales of $6.2 billion were flat compared to the prior year. Inflation in the grocery and dairy categories was offset by deflation in pork and poultry combined with a decline in case volume.
Sales from acquisitions completed during the last four fiscal quarters increased Net sales by approximately 0.7%.
Gross profit of $1.1 billion increased $60 million, or 5.7% from the prior year, driven by margin expansion initiatives, a year-over-year gain in the LIFO reserve and acquisitions which were partially offset by a decline in case volume.
Gross profit as a percentage of Net sales was 18.1%. Adjusted Gross profit was $1.1 billion, a 1.8% increase from prior year, driven by margin expansion initiatives. Adjusted Gross profit as a percentage of Net sales was 17.9%.
Operating expenses were $908 million, a decrease of 2.0% from the prior year. Operating expenses benefited from lower amortization expense resulting from the full amortization of an intangible asset as well as ongoing efforts to reduce operating expenses.
Adjusted Operating expenses for the quarter were $806 million, a 1.0% increase from the prior year, primarily driven by higher wage and benefit costs.
Income before income taxes was $161 million, a $76 million increase from the prior year.
Net income for the quarter was $126 million, up $61 million from $65 million in the prior year, as a result of the Gross profit and Operating expense factors discussed above.
Adjusted EBITDA of $300 million increased $14 million, or 4.9% compared to prior year. Diluted EPS was $0.58 and Adjusted Diluted EPS was $0.57. ■