Chefs’ Warehouse (NASDAQ:CHEF) Announces Quarterly Earnings Results

Chefs’ Warehouse (NASDAQ:CHEF) released its quarterly earnings results on Wednesday. The company reported $0.40 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.23 by $0.17, Zacks reports. Chefs’ Warehouse had a net margin of 1.87% and a return on equity of 15.54%. The business had revenue of $1.06 billion for the quarter, compared to analyst estimates of $1.01 billion. During the same period in the previous year, the company earned $0.25 earnings per share. The business’s revenue for the quarter was up 11.4% on a year-over-year basis.

Here are the key takeaways from Chefs’ Warehouse’s conference call:

• The company delivered a strong Q1 with net sales up ~11.4% to $1.059 billion, organic sales +10.4%, gross profit +13.9%, and adjusted EBITDA rising to $60.1 million from $47.5 million, while gross margin expanded ~53 basis points.
• Performance was driven by North America (over 90% of revenue) and momentum continued into April with management reporting double‑digit top‑line growth and keeping full‑year guidance intact with upside possible if the Middle East situation normalizes.
• The conflict in the Middle East trimmed roughly 50 basis points off Q1 organic growth and recent operations there have been running at about 75% of prior‑year levels, creating a short‑term demand/occupancy risk for a region that is under 10% of sales.
• Liquidity and capital allocation remain solid with total liquidity of $278.3 million, net debt of ~$522 million (~1.9x net debt/adjusted EBITDA), a $5 million term‑loan prepayment, and $10 million of share repurchases while keeping capacity for opportunistic M&A.
• Management says it is effectively managing inflation (net inflation ~4.1%; specialty 1.5%, center‑of‑plate 8.2% — ~4.5% adjusted) through procurement, pricing and operational maturity, contributing to a ~110 bp YoY improvement in center‑of‑plate gross margin and overall margin tailwinds.

Chefs’ Warehouse Stock Performance

Chefs’ Warehouse stock traded up $0.95 during midday trading on Friday, hitting $78.55. 153,792 shares of the company were exchanged, compared to its average volume of 469,337. The business has a fifty day simple moving average of $64.18 and a two-hundred day simple moving average of $62.82. The company has a debt-to-equity ratio of 1.18, a quick ratio of 1.23 and a current ratio of 2.18. The firm has a market capitalization of $3.20 billion, a PE ratio of 43.63 and a beta of 1.34. Chefs’ Warehouse has a fifty-two week low of $53.20 and a fifty-two week high of $79.40.

Wall Street Analysts Forecast Growth

Several equities analysts recently commented on the stock. Morgan Stanley reaffirmed an “overweight” rating and issued a $83.00 price objective on shares of Chefs’ Warehouse in a research report on Thursday. BTIG Research boosted their target price on shares of Chefs’ Warehouse from $74.00 to $82.00 and gave the stock a “buy” rating in a research report on Thursday. Wolfe Research set a $84.00 price target on shares of Chefs’ Warehouse in a research note on Thursday, February 12th. Weiss Ratings raised shares of Chefs’ Warehouse from a “hold (c+)” rating to a “buy (b-)” rating in a report on Monday, April 13th. Finally, Zacks Research raised shares of Chefs’ Warehouse from a “strong sell” rating to a “hold” rating in a report on Monday, April 13th. Five investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. According to data from MarketBeat, Chefs’ Warehouse has an average rating of “Moderate Buy” and a consensus target price of $80.83.

Insider Activity

In other news, General Counsel Alexandros Aldous sold 29,500 shares of the stock in a transaction dated Friday, February 27th. The shares were sold at an average price of $71.22, for a total transaction of $2,100,990.00. Following the sale, the general counsel directly owned 72,017 shares of the company’s stock, valued at $5,129,050.74. This represents a 29.06% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, CAO Tim Mccauley sold 7,500 shares of the firm’s stock in a transaction that occurred on Wednesday, February 18th. The shares were sold at an average price of $70.00, for a total value of $525,000.00. Following the completion of the sale, the chief accounting officer directly owned 44,662 shares in the company, valued at approximately $3,126,340. The trade was a 14.38% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 139,309 shares of company stock valued at $9,060,197. 11.10% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Chefs’ Warehouse

A number of hedge funds have recently modified their holdings of CHEF. Wellington Management Group LLP boosted its holdings in shares of Chefs’ Warehouse by 12.2% during the 4th quarter. Wellington Management Group LLP now owns 2,930,463 shares of the company’s stock worth $182,656,000 after purchasing an additional 318,942 shares during the last quarter. Ameriprise Financial Inc. boosted its stake in Chefs’ Warehouse by 2.7% during the second quarter. Ameriprise Financial Inc. now owns 2,129,189 shares of the company’s stock worth $135,864,000 after buying an additional 55,850 shares during the last quarter. Victory Capital Management Inc. grew its holdings in Chefs’ Warehouse by 3.2% in the 4th quarter. Victory Capital Management Inc. now owns 1,428,184 shares of the company’s stock valued at $89,019,000 after buying an additional 44,323 shares in the last quarter. State Street Corp increased its stake in shares of Chefs’ Warehouse by 0.4% in the 4th quarter. State Street Corp now owns 1,383,974 shares of the company’s stock worth $86,263,000 after acquiring an additional 5,813 shares during the last quarter. Finally, Alliancebernstein L.P. raised its holdings in shares of Chefs’ Warehouse by 6.5% during the 2nd quarter. Alliancebernstein L.P. now owns 1,149,252 shares of the company’s stock worth $73,334,000 after acquiring an additional 70,318 shares during the period. 91.55% of the stock is currently owned by institutional investors and hedge funds.

About Chefs’ Warehouse

Chefs’ Warehouse, Inc is a specialty food distributor that supplies a broad range of high‐end ingredients and culinary products to professional chefs, restaurants, hotels, and other foodservice operators. Headquartered in Maspeth, New York, the company sources its portfolio from local artisans, boutique producers and leading global suppliers. Its core offerings include fresh and frozen proteins, specialty cuts of meat and seafood, handcrafted cheeses and charcuterie, seasonal produce, value‐added preparations, pantry staples and premium desserts and beverages.

The company operates a network of distribution centers strategically located in major metropolitan markets across North America.