US Foods Holding Corp. (NYSE:USFD) Q4 2022 Earnings Call Transcript

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Grocery still showing some modest inflation sequentially quarter-to-quarter and that’s remaining quite sticky. So I think that’s — we’re not counting on a lot of inflation over the course of next year and really, I’ll kind of come back to what I’ve talked a lot about this past year is, we’re really focusing on what we can control, which is taking share and really the other initiatives that are driving our overall top line in the right customers.

John Heinbockel: Okay. Thank you.

Operator: Your next question is from Jeffrey Bernstein of Barclays. Please go ahead. Your line is open.

Jeffrey Bernstein: Great. Thank you very much. And congrats to Dave on the new position, and Andrew, great job during the transition.

Dave Flitman: Thanks a lot.

Andrew Iacobucci: Thanks, Jeff.

Jeffrey Bernstein: Sure. I had one question and then one follow-up. The question, Dave, I guess is on the market share gain opportunity. We hear a lot about opportunities to further penetrate existing accounts, adding new accounts. And as you mentioned, maybe further tuck-in M&A. Just wondering from your seat and your perspective and background like how would you prioritize the focus going forward among those three opportunities, or do you see even further opportunities beyond that in terms of specifically gaining market share relative to large and small peers? And then I had one follow-up.

Dave Flitman: Sure. And I would just highlight that the team sequentially through the back half of last year continued to gain market share. As we said in our prepared remarks, we have really good momentum. Our team is focused in, particularly in those three customer segments that we spoke about, the independent restaurants, hospitality and healthcare. And I’ve seen laser focus, as I’ve visited in the field, really good momentum. I think we have — and I would just highlight that’s profitable volume growth. And I think we have the right focus in those segments. So I think there’s tremendous opportunity for organic case growth. To your question around M&A this is still a very highly fragmented industry. And we will through the course of time look opportunistically for tuck-ins that will either give us a continued advantage in certain geographies or perhaps add product or something to our portfolio but we’ll be opportunistic about that going forward.

But I’m incredibly excited about our ability to continue to grow organically.

Jeffrey Bernstein: Understood. And then just to follow-up. I think you mentioned in your commentary around 2023 guidance. EBITDA margins continue to expand, which I think has been a key area of focus for investors, as Dave, I’m sure you’ve already probably heard. And I know US Foods is often compared to your largest peers. I’m just wondering what do you think is a realistic target whether it’s short or long-term in terms of specifically EBITDA margins where they could go to healthy levels versus what would you say is just unrealistic? Just trying to get a gauge just because it’s been such a popular topic of conversation over the past number of years? Thank you.

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