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The Chefs' Warehouse Inc (CHEF)
:CHEF
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The Chefs' Warehouse
(NASDAQ:CHEF)75Outperform
Positive Factors
Debt Management
Leverage levels fell significantly as CHEF improved margins and increased volume through consolidated distribution facilities, leading to materially positive free cash flow.
Earnings
CHEF reported better than expected performance across each operating metric, with revenues eclipsing consensus and strong demand trends leading to significant growth.
Negative Factors
Convertible Notes
Convertible notes structure represents a significant critique due to potential share dilution.
The Chefs' Warehouse (CHEF) vs. S&P 500 (SPY)
Market Cap
$2.38B
Dividend YieldN/A
Average Volume (3M)597.94K
Price to Earnings (P/E)43.6
Beta (1Y)2.08
Revenue Growth10.50%
EPS Growth59.18%
CountryUS
Employees4,873
SectorConsumer Cyclical
Sector Strength53
IndustryRetailers - Staples
Share Statistics
EPS (TTM)1.30
Shares Outstanding40,267,950
10 Day Avg. Volume576,065
30 Day Avg. Volume597,942
Financial Highlights & Ratios
PEG Ratio0.74
Price to Book (P/B)N/A
Price to Sales (P/S)0.63
Price to Cash Flow (P/CF)8.10
P/FCF Ratio7.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$68.00Price Target Upside19.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
The Chefs' Warehouse Business Overview & Revenue Model
Company DescriptionThe Chefs' Warehouse (CHEF) is a premier distributor of specialty food products in the United States and Canada, serving the culinary industry. The company specializes in providing high-quality ingredients, including gourmet, artisanal, and specialty products, to professional chefs and restaurants. The Chefs' Warehouse focuses on segments such as fine dining, hotels, caterers, and independent restaurants, offering a wide range of products from dairy and protein to pantry items and desserts.
How the Company Makes MoneyThe Chefs' Warehouse generates revenue primarily through the wholesale distribution of specialty food products to the foodservice industry. The company's key revenue streams include sales of premium ingredients, such as meats, cheeses, oils, and condiments, to restaurants and culinary establishments. Additionally, The Chefs' Warehouse benefits from strategic partnerships with artisanal and specialty food producers, enhancing its product offerings and appeal to high-end culinary clients. The company also leverages its logistics and distribution network to ensure timely delivery of products, contributing to its revenue growth and customer retention.
The Chefs' Warehouse Financial Statement Overview
Summary
The Chefs' Warehouse has shown strong revenue growth and improved profitability with a notable increase in net profit margin. The balance sheet reflects moderate leverage, while cash flow is robust with significant improvements. However, there are areas for cost management enhancement.Income Statement
The Chefs' Warehouse has demonstrated strong revenue growth with a 10.5% increase in total revenue from 2023 to 2024. Gross profit margin stands at 24.1%, and net profit margin has improved to 1.46%, indicating enhanced profitability. The EBIT margin is 3.38%, showing operational efficiency. However, EBITDA margin has decreased from the previous year, highlighting potential areas for improvement in cost management.85
Very Positive
Balance Sheet
The balance sheet shows a healthy equity base with a debt-to-equity ratio of 0.42, indicating moderate leverage. Return on equity has improved to 10.32%, showcasing effective use of equity. However, the equity ratio is 28.9%, suggesting that a significant portion of assets is financed by liabilities, which could pose risk if not managed carefully.70
Positive
Cash Flow
The company exhibits strong free cash flow growth, with an impressive improvement of over 2,356% from 2023 to 2024. The operating cash flow to net income ratio is 2.76, indicating healthy cash generation relative to profits. Nonetheless, the free cash flow to net income ratio stands at 1.87, reflecting efficient management of cash flow relative to income, yet highlighting potential areas for enhanced investment in capital expenditures.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.79B | 3.43B | 2.61B | 1.75B | 1.11B | Gross Profit |
| 914.15M | 814.47M | 618.64M | 390.49M | 248.15M | EBIT |
| 128.21M | 100.94M | 85.74M | 10.81M | -102.66M | EBITDA |
| 128.21M | 156.55M | 85.74M | 10.81M | -68.69M | Net Income Common Stockholders |
| 55.48M | 34.59M | 27.75M | -4.92M | -82.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 114.66M | 49.88M | 158.80M | 115.16M | 193.28M | Total Assets |
| 1.86B | 1.71B | 1.51B | 1.07B | 974.33M | Total Debt |
| 227.08M | 926.27M | 832.77M | 542.48M | 530.48M | Net Debt |
| 112.43M | 876.39M | 673.97M | 427.32M | 337.20M | Total Liabilities |
| 1.32B | 1.25B | 1.10B | 723.58M | 629.74M | Stockholders Equity |
| 537.65M | 454.67M | 401.51M | 350.21M | 344.59M |
| Cash Flow | Free Cash Flow | |||
| 103.56M | 4.21M | -22.71M | -58.70M | 35.84M | Operating Cash Flow |
| 153.06M | 61.64M | 23.13M | -19.90M | 42.88M | Investing Cash Flow |
| -49.82M | -179.31M | -232.02M | -48.99M | -67.97M | Financing Cash Flow |
| -38.48M | 9.01M | 253.22M | -9.22M | 78.06M |
The Chefs' Warehouse Technical Analysis
Neutral
56.68
Price Trends
55.80
Positive
49.65
Positive
44.77
Positive
Market Momentum
1.27
Positive
40.21
Neutral
17.75
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHEF, the sentiment is Neutral. The current price of 56.68 is below the 20-day moving average (MA) of 61.46, above the 50-day MA of 55.80, and above the 200-day MA of 44.77, indicating a neutral trend. The MACD of 1.27 indicates Positive momentum. The RSI at 40.21 is Neutral, neither overbought nor oversold. The STOCH value of 17.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CHEF.
The Chefs' Warehouse Risk Analysis
The Chefs' Warehouse disclosed 31 risk factors in its most recent earnings report. The Chefs' Warehouse reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
The Chefs' Warehouse Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $15.93B | 33.15 | 10.65% | ― | 6.41% | -2.01% | |
76 Outperform | $12.30B | 31.41 | 9.54% | ― | 3.85% | -9.74% | |
75 Outperform | $2.38B | 43.63 | 11.18% | ― | 10.50% | 59.18% | |
75 Outperform | $36.42B | 19.12 | 87.49% | 2.70% | 3.95% | -5.04% | |
66 Neutral | $1.68B | ― | -5.66% | ― | 3.32% | -13.76% | |
63 Neutral | $659.43M | 2,244.83 | 0.01% | 4.45% | -2.66% | 8.18% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
CHEF
The Chefs' Warehouse
56.68
20.10
54.95%
SPTN
SpartanNash Co
20.26
0.81
4.16%
SYY
Sysco
76.55
-1.33
-1.71%
UNFI
United Natural Foods
26.91
14.99
125.76%
PFGC
Performance Food Group
77.93
2.86
3.81%
USFD
US Foods Holding
65.62
13.05
24.82%
The Chefs' Warehouse Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 4.04% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance for Chefs' Warehouse, characterized by significant revenue growth, improved gross profit margins, and successful digital adoption. However, challenges persist with specific category margin pressures and increased operational costs. The company's outlook remains positive, focusing on continued growth and operational improvements.Highlights
Record Revenue Achievement
Chefs' Warehouse achieved its first $1 billion plus revenue quarter, marking a significant milestone in the company's history.
Strong Sales and Growth Metrics
Net sales grew 8.7% year-over-year with specialty sales up 11.5%. Unique customer growth was approximately 4.5%, item placement growth was 12.3%, and specialty case growth was 6.1%.
Improvement in Gross Profit Margins
Gross profit increased 9.8% to $251 million with gross profit margins improving by 23 basis points to 24.3%.
Digital Platform Adoption
56% of domestic specialty customers are now ordering online, up from 48% in 2023, indicating strong adoption of digital ordering.
Financial Health and Debt Reduction
Net debt to adjusted EBITDA reduced to approximately 2.5x from 3.4x at year-end 2023, showing improved financial leverage.
Guidance for Continued Growth
The company provided a positive outlook for 2025 with expected net sales between $3.94 billion and $4.04 billion and adjusted EBITDA between $233 million and $246 million.
Lowlights
Margin Pressure in Center-of-the-Plate Category
Gross margins in the center-of-the-plate category decreased by approximately seven basis points year-over-year.
Impact of Commodity Inflation
Elevated prices in categories such as chocolate and eggs, driven by external factors like avian flu, posed challenges.
Ongoing Challenges with Labor and Costs
Higher selling, general, and administrative expenses increased by 8.9% due to facility investments and compensation costs.
Company Guidance
During The Chefs' Warehouse Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for the fiscal year 2025, projecting net sales between $3.94 billion and $4.04 billion, gross profit ranging from $951 million to $976 million, and adjusted EBITDA between $233 million and $246 million. The call highlighted several key metrics from the fourth quarter of 2024, including an 8.7% increase in net sales to $1.034 billion, specialty sales growth of 11.5%, and a 23 basis point increase in gross profit margins. The company also reported a 13% increase in adjusted EBITDA per employee compared to 2023 and significant growth in digital platform adoption, with 56% of customers ordering online by the end of 2024. The call underscored a strategy focused on continued market expansion and leveraging digital investments to drive sustained gross profit and adjusted EBITDA growth over the next four years.The Chefs' Warehouse Corporate Events
Financial Disclosures
The Chefs’ Warehouse Announces 2025 Financial Guidance
Neutral
Jan 13, 2025
The Chefs’ Warehouse has announced its preliminary financial guidance for fiscal year 2025, anticipating net sales between $3.94 billion and $4.04 billion, gross profit ranging from $951 million to $976 million, and adjusted EBITDA between $233 million and $246 million. The company will host an Investor Day on March 13, 2025, to engage further with stakeholders. These projections suggest a stable outlook for the company, despite potential risks and uncertainties outlined in their report, possibly impacting its operations and market positioning.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.