Chefs' Warehouse, Inc. Q3 FY2026 earnings call

• Strong Organic Growth: Revenue trends showed typical seasonal cadence with strong year-over-year growth. Organic net sales grew 10.3%, driven by unique placement growth (7.2%), specialty case growth (6.1%), and price inflation.
• Customer Expansion: Unique customers grew 4.4% overall; excluding Middle East conflict impacts, growth was approximately 5.7%.
• Margin Expansion: Gross profit margins expanded by ~84 basis points to 25%. This was supported by higher gross profit per route and improved efficiency.
• Middle East Operations: Despite geopolitical challenges, operations in UAE, Qatar, and Oman are executing well, delivering high EBITDA margins. Recent revenue has been ~100% of prior year levels, supported by returning expatriates.
• Operational Efficiency: Continued improvements in adjusted EBITDA per employee and gross profit per route were noted.
• Sales Force Execution: The team is executing against long-term plans, taking market share and growing new categories/territories. Hiring remains robust despite difficulty finding specialized talent.

The transcript does not provide a breakdown of financial performance by specific product segments (e.g., Specialty vs. Center of the Plate) in terms of absolute revenue contribution percentages for each segment. However, it notes that organic net sales grew 10.3%, with organic specialty sales up 8.4% and center-of-the-plate pounds up 6.6%. Gross profit margins increased by approximately 84 basis points to 25%, with specialty category margins up ~63 basis points and center-of-the-plate margins up ~137 basis year-over-year.

• Full Year 2026 Net Sales: Raised to $4.56 billion - $4.61 billion.
• Full Year 2026 Gross Profit: Raised to $1.13 billion - $1.14 billion.
• Full Year 2026 Adjusted EBITDA: Raised to $317 million - $321 million.
• Q4 2026 Interest Expense: Expected between $15.5 million and $17.5 million (including ~$2.7 million one-time refinancing costs).
• Share Count: Fully diluted share count expected to be 43.0 - 43.5 million for Q4 2026, and 42.0 - 43.0 million for full year 2027.
• Balance Sheet Targets: Net debt expected to range from $550 million to $600 million by year-end 2026, with net debt to adjusted EBITDA between 1.7x and 2.0x.

• Geopolitical Instability: Ongoing conflict in the Middle East impacts reported unique customer growth and creates an uncertain operating environment, though current operations remain stable.
• Inflationary Pressures: Rising fuel and freight costs impact operating expenses; while partially passed through to customers, they create margin pressure dynamics.
• Market Volatility: Protein prices can be volatile ('tricky'), swinging from high to low year-over-year.
• Execution Risk: Dependence on continuous execution of sales teams and technology integration to maintain growth and margin expansion targets.

Q: Analyst asked if double-digit growth is driven by market share gains or consumer strength, and if there are pockets of weakness. / A: CEO stated growth is 'Goldilocks,' coming from multiple sources including market share gains, new category/territory growth, and strong consumer demand. He emphasized excellent team execution as the primary driver and noted no significant pockets of weakness.