Chefs' Warehouse (NASDAQ:CHEF) Announces Quarterly Earnings Results, Beats Estimates By $0.17 EPS

Key Points

• Chefs' Warehouse reported a strong quarter with $0.40 EPS vs. $0.23 expected, revenue of $1.059 billion (up 11.4% YoY), and adjusted EBITDA rising to $60.1 million alongside ~53 bps of gross margin expansion.
• Liquidity and capital allocation remain healthy with $278.3 million total liquidity, ~$522 million net debt (~1.9x net debt/adjusted EBITDA), a $5 million term‑loan prepayment and $10 million of share repurchases while preserving capacity for opportunistic M&A.
• The conflict in the Middle East shaved roughly 50 basis points off Q1 organic growth and operations there are running at about 75% of prior‑year levels, posing a short‑term demand/occupancy risk for a region that is under 10% of sales.

Chefs' Warehouse (NASDAQ:CHEF - Get Free Report) announced its quarterly earnings results on Wednesday. The company reported $0.40 earnings per share for the quarter, beating the consensus estimate of $0.23 by $0.17, Zacks reports. The company had revenue of $1.06 billion during the quarter, compared to analysts' expectations of $1.01 billion. Chefs' Warehouse had a return on equity of 14.75% and a net margin of 1.74%.Chefs' Warehouse's quarterly revenue was up 11.4% on a year-over-year basis. During the same period last year, the business earned $0.25 earnings per share.

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 Price Performance

CHEF traded up $9.12 during trading on Wednesday, hitting $73.36. The company's stock had a trading volume of 632,881 shares, compared to its average volume of 459,665. The company has a current ratio of 2.05, a quick ratio of 1.23 and a debt-to-equity ratio of 1.19. Chefs' Warehouse has a twelve month low of $53.20 and a twelve month high of $73.94. The business's fifty day simple moving average is $63.89 and its 200 day simple moving average is $62.63. The firm has a market capitalization of $2.99 billion, a price-to-earnings ratio of 44.45 and a beta of 1.34.

Insiders Place Their Bets

In other Chefs' Warehouse news, insider Christina Polychroni sold 3,317 shares of the firm's stock in a transaction that occurred on Monday, March 2nd. The stock was sold at an average price of $65.45, for a total value of $217,097.65. Following the sale, the insider directly owned 30,141 shares of the company's stock, valued at approximately $1,972,728.45. This trade represents a 9.91% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Christopher Pappas sold 95,908 shares of the firm's stock in a transaction that occurred on Tuesday, March 3rd. The shares were sold at an average price of $62.53, for a total value of $5,997,127.24. Following the completion of the sale, the chief executive officer directly owned 2,398,522 shares in the company, valued at approximately $149,979,580.66. The trade was a 3.84% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 139,309 shares of company stock valued at $9,060,197 in the last three months. 11.10% of the stock is currently owned by company insiders.

Institutional Trading of Chefs' Warehouse

Institutional investors have recently made changes to their positions in the company. Global Retirement Partners LLC acquired a new stake in shares of Chefs' Warehouse in the fourth quarter worth approximately $31,000. Caitong International Asset Management Co. Ltd boosted its stake in shares of Chefs' Warehouse by 515.3% in the third quarter. Caitong International Asset Management Co. Ltd now owns 523 shares of the company's stock worth $31,000 after acquiring an additional 438 shares during the last quarter. Osaic Holdings Inc. boosted its stake in shares of Chefs' Warehouse by 30.7% in the second quarter. Osaic Holdings Inc. now owns 800 shares of the company's stock worth $51,000 after acquiring an additional 188 shares during the last quarter. Vestcor Inc acquired a new stake in shares of Chefs' Warehouse in the third quarter worth approximately $57,000. Finally, Kemnay Advisory Services Inc. acquired a new stake in shares of Chefs' Warehouse in the fourth quarter worth approximately $63,000. 91.55% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several research analysts recently weighed in on the company. BTIG Research reiterated a "buy" rating and set a $74.00 price target on shares of Chefs' Warehouse in a research report on Wednesday, April 15th. Benchmark reiterated a "buy" rating on shares of Chefs' Warehouse in a research report on Thursday, February 12th. Zacks Research upgraded Chefs' Warehouse from a "strong sell" rating to a "hold" rating in a research report on Monday, April 13th. Wolfe Research set a $84.00 price target on Chefs' Warehouse in a research report on Thursday, February 12th. Finally, Weiss Ratings upgraded Chefs' Warehouse from a "hold (c+)" rating to a "buy (b-)" rating in a research 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 stock. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $77.17.

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.

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