Jeffrey Bernstein: Understood. Thank you.
George Holm: Thanks.
Operator: And we have our next question from Andrew Wolf with CL King.
Andrew Wolf: Thanks. Good morning. I want to follow up on what Jeff was asking about in a slightly different way. So, can you differentiate or give us the breakdown between how much cases are down at same independent, your entire independent group, how cases are down versus being offset by the — obviously the increased SKUs and lines.
George Holm: They’re not. The cases are up 7.6 and accounts are up 7.5, so it’s not that they’re down, but they’re very flat.
Andrew Wolf: I’m sorry, George. I meant that same at — just at your existing customer base, right? Your cases per drop are flat. I think if that’s — if I’m thinking about this right. So that would mean that the independent, the average independent is down on cases and you’re getting to the flat drop per stop on existing customer base through increased lines. I was just wondering if you’d say, our cases down this and the offset is this. If you could give us how much the cases per drop or down. Obviously overall you’re up because of the new customers.
George Holm: Yeah. Our cases per drop are up, but very, very slightly. I mean, not even…
Andrew Wolf: Okay. All right. Okay. All right. The second thing I wanted to ask is on the labor productivity variance between Core-Mark and Foodservice. As you analyze that, is there’s something structural between how those businesses are just geographic or any other reason? Or is that something that with best practices and management changes or improvement, can be addressed more quickly?
George Holm: They operate so much. There’s just such a difference in how they operate and in a Core-Mark, in our fulfillment facilities, a high percentage of the business is pick and pack. It’s not full cases. So you have a much wider market of people that desire to do that kind of work or are capable of doing that kind of work. And I think it’s probably just simply that and it is just going to take a little bit longer from a productivity standpoint in Foodservice, but we’ll get there.
Andrew Wolf: Got it. And the last thing is, did I hear this right? Do you expect the national chain business to improve going forward? And if so, is that kind of new what either expansion of opportunities with existing customers or?
George Holm: It’s new business. Yes. Some of which has already started. Some starts the first of the calendar year. And unless, which I don’t think would happen unless we saw some real drop off in existing business, that will put us in positive case growth.
Andrew Wolf: Thank you.
Operator: And our next question comes from Lauren Silberman with Deutsche Bank.
Lauren Silberman: Thank you. Congrats on the quarter. I wanted to ask about capital allocation. So you guys bought back $60 million year-to-date, stock trading at a pretty big discount to history, even with really strong fundamentals. Can you just expand on your willingness to further lean in to buybacks and how you’re thinking about capital deployment and allocation of buybacks versus M&A?
Patrick Hatcher: Yeah. Lauren, thank you for that question. I’ll — when we think about our capital allocation strategy and, and yes, we did obviously purchase shares in the last quarter and then we also shared with you our purchases in October. And when you think about the overall allocation strategy, as we’ve always said, our number one priority is around capital and building capacity. As you can see, we continue to grow. We’re really happy with the growth that we’ve seen in the independent cases and some of the other segments. So we’ll continue to invest there. We’re also going to continue to look real closely at reducing leverage and then also M&A, which we talked about. We are looking at M&A and the final thing is the share repurchase.
And we started purchasing shares in Q4 and then we bought them again in Q1. And then again, you can see that we’re buying in this quarter. We have a methodology out there. We have a framework out there and we think it’s working really well. You mentioned, a couple key points and that’s why we think it was important to share with you what we did in October because we think that framework is working exactly how we designed it.
Lauren Silberman: Okay. Thank you for that. And as you think about M&A, can you just talk about your appetite for foodservice acquisitions relative to more than C-store?
George Holm: Our appetite for Foodservice is much greater. We don’t see ourselves in the near future buying a traditional Convenience store distributor. Our focus is more on Foodservice and of course, the Foodservice part of Convenience, but that’s where our focus is today from an M&A standpoint.
Lauren Silberman: Okay. Great. And final one from me is just the Vistar and Convenience. Can you just break down what you saw with installation in those two segments in this quarter?
Patrick Hatcher: Yeah. I mean, what — as we’ve said, I mean it is largely doing exactly what we’ve been seeing. They’re in the mid single digits. They’ve — where at one point Convenience was running a little faster down than Vistar. They’ve kind of caught up and they’re almost exactly a parody, but they’re right in that mid single digit area, just a little higher.
Lauren Silberman: Great. Thank you very much.
Operator: And we have our next question from Joshua Long with Stephens Inc.
Josh Long: Great. Thank you for taking the question. George, your commentary around kind of the breakfast and coffee dynamics in the Convenience trends or the Convenience segment were helpful. Curious if you could talk a little bit more about the office coffee business and kind of how that has performed as the return to off — return to office trend has continued to play out.
George Holm: Yeah. That’s returned quicker actually than it has in Convenience. And we’re seeing good growth right now over the previous year. We are not back quite to 2019 pre-COVID levels, but we’re close. Office coffee’s doing very well. And I think that’s just a function of more people doing the coffee for free and wanting to get people back to work and once again, kind of an enticement.
