The Chefs' Warehouse Reports Third Quarter 2016 Financial Results

RIDGEFIELD, Conn., Nov. 02, 2016 (GLOBE NEWSWIRE) -- The Chefs' Warehouse, Inc. (NASDAQ:CHEF), a premier distributor of specialty food products in the United States and Canada, today reported financial results for its third quarter ended September 23, 2016.

Financial highlights for the third quarter of 2016 compared to the third quarter of 2015:
  • Net sales increased 7.8% to $297.9 million for the third quarter of 2016 from $276.3 million for the third quarter of 2015.
  • GAAP net income was $1.3 million or $0.05 per diluted share, for the third quarter of 2016 compared to $5.2 million, or $0.20 per diluted share, in the third quarter of 2015.
  • Modified pro forma earnings per diluted share [1] was $0.07 for the third quarter of 2016 compared to $0.21 for the third quarter of 2015.
  • Adjusted EBITDA 1 was $14.6 million for the third quarter of 2016 compared to $17.6 million for the third quarter of 2015.

"We are pleased with our third quarter results which came in slightly ahead of our expectations, despite the continued soft industry backdrop and deflationary trend in food costs.  Our business model continues to demonstrate our ability to take share.  Organic case growth in our specialty division remained strong at 7.5%, which was muted by sequentially higher deflation.  We are also pleased with our progress at Del Monte during the third quarter, as gross margins improved sequentially from the second quarter," said Chris Pappas, chairman and chief executive officer of The Chefs' Warehouse, Inc.  "The team made tremendous progress getting back on track after transitioning onto the new ERP platform.  With much of the heavy lifting behind us, our team is getting back to playing offense and executing our strategy."

Third Quarter Fiscal 2016 ResultsNet sales for the quarter ended September 23, 2016 increased 7.8% to $297.9 million from $276.3 million for the quarter ended September 25, 2015.  Organic growth contributed $6.0 million, or 2.2% to sales growth in the quarter.  The remaining sales growth of $15.6 million, or 5.7% resulted from the acquisition of M.T. Food Service, Inc. on June 27, 2016. Compared to the third quarter of 2015, the Company's case count grew approximately 7.5%, while the number of unique customers and placements grew 5.2% and 5.6%, respectively, in the core specialty business in the third quarter of 2016.  Pounds sold in the Company's protein division decreased 1.8% for the third quarter of 2016 compared to the prior year quarter.  Deflation was approximately 2.2% during the quarter, consisting of 1.6% deflation in the specialty division and deflation of 3.2% in the protein division.

Gross profit increased approximately 6.0% to $74.4 million for the third quarter of 2016 from $70.2 million for the third quarter of 2015. Gross profit margin decreased approximately 43 basis points to 25.0% from 25.4%.  Gross profit margins increased approximately 11 basis points in the Company's specialty division.  Gross profit margins decreased approximately 191 basis points in the protein division due to challenges in passing through beef prices as well as continued integration challenges at Del Monte.

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