Chefs' Warehouse, a premier distributor of specialty foods in the United States, the Middle East, and Canada, has recently released its 10-Q report. The company's product portfolio includes over 70,000 stock-keeping units, ranging from high-quality specialty foods and ingredients to basic ingredients and staples, as well as center-of-the-plate proteins. Chefs' Warehouse serves more than 44,000 core customer locations, primarily independent restaurants and fine dining establishments, and also sells certain products directly to consumers through its Allen Brothers retail channel.
In the 10-Q report, Chefs' Warehouse highlighted its recent acquisitions. The company acquired substantially all of the equity interests of Oakville Produce Partners, LLC ("GreenLeaf") for a final purchase price of $88.2 million, and also acquired substantially all of the assets of Hardie’s F&V, LLC ("Hardie’s Fresh Foods") for a final purchase price of approximately $41.4 million.
In terms of financial performance, for the thirteen weeks ended March 29, 2024, Chefs' Warehouse reported net sales of $874.5 million, representing a 21.5% increase compared to the same period in 2023. The company attributed $63.3 million, or 8.8%, of the sales growth to organic growth, while the remaining $91.5 million, or 12.7%, resulted from acquisitions. The gross profit for the same period was $209.4 million, a 23.4% increase compared to 2023, primarily driven by increased sales and price inflation.
The selling, general, and administrative expenses for the thirteen weeks ended March 29, 2024, were $190.3 million, representing a 21.9% increase compared to the same period in 2023. The increase was primarily due to higher depreciation and amortization driven by acquisitions and facility investments, as well as higher costs associated with compensation and benefits, facilities, and distribution to support sales growth.
Chefs' Warehouse reported an interest expense of $13.2 million for the thirteen weeks ended March 29, 2024, representing a 32.4% increase compared to the same period in 2023. The company attributed the increase to higher principal amounts of outstanding debt and higher interest rates charged on the variable rate portion of its outstanding debt.
The company's provision for income tax expense for the same period was $828,000, representing a 68.3% increase compared to 2023. The higher effective tax rate was primarily driven by the non-deductibility of certain compensation related items.
In terms of liquidity and capital resources, as of March 29, 2024, Chefs' Warehouse had cash and cash equivalents of $42.3 million and working capital, excluding cash and cash equivalents, of $290.6 million. The company also had availability under its asset-based loan facility of $162.1 million.
Chefs' Warehouse expects its capital expenditures, excluding cash paid for acquisitions, for fiscal 2024 to be approximately $35.0 million to $45.0 million. The company believes its existing balances of cash and cash equivalents, working capital, and availability under its asset-based loan facility are sufficient to satisfy its working capital needs, capital expenditures, debt service, and other liquidity requirements associated with its current operations over the next twelve months. Following these announcements, the company's shares moved 7.5%, and are now trading at a price of $35.56. For the full picture, make sure to review Chefs' Warehouse's 10-Q report.
