US Foods reports record earnings in 2023, acquires IWC

A US Foods distribution facility.

Foodservice distributor US Foods reported record earnings and profit and sales increases in fiscal year 2023, at the same time it announced the acquisition of broadline foodservice distributor IWC Food Service. 

US Foods reported its net sales increased 4.5 percent to USD 35.6 billion (EUR 33 billion) in 2023, while gross profit increased 11.9 percent to USD 6.1 billion (EUR 5.6 billion). Its FY 2023 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) hit a record USD 1.56 billion (EUR 1.4 billion), up 19 percent, driven by strong case growth with its independent restaurant, healthcare, and hospitality customers, CEO David Flitman said.

“Through execution of our strategy and long-range plan, we captured profitable market share and enhanced margins,” Flitman said.

The year was capped off by a Q4 that saw US Foods’ net sales increase by 4.9 percent to USD 8.9 billion (EUR 8.2 billion), as total case volume increased by 5.6 percent and independent restaurant case volume increased 7.3 percent. The company’s adjusted EBITDA during the period reached USD 388 million (EUR 359 million), up 10.9 percent, and it achieved a gross profit of USD 1.6 billion (EUR 1.5 billion), up 9.4 percent. 

Operating expenses in Q4 2023 were up 4.3 percent. Or USD 54 million (EUR 50 million) from the prior year, reaching USD 1.3 billion (EUR 1.2 billion), which US Foods attributed to increased case volume and higher seller compensation costs. Those costs were offset by lower distribution cost per case, which US Foods said was thanks to cost savings initiatives including “routing improvements and focused efforts positively impacting labor turnover and productivity” as well as lower fuel costs. 

“I am confident that our 2023 financial performance and our healthy balance sheet will enable us to execute our capital allocation priorities in 2024,” US Foods CFO Dirk Locascio said in a release.

At roughly the same time as it reported its FY 2023 and Q4 2023 results, it announced its acquisition of Cookeville, Tennessee, U.S.A.-based IWC Food Service for an undisclosed amount. 

“The transaction is part of the companys tuck-in acquisition strategy and will allow US Foods to further expand its reach into the central Tennessee region, where the company does not currently have a distribution center,” US Foods said in a press release.

IWC was founded

Photo courtesy of US Foods

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