Oct 28, 2026 earnings call — Strong organic growth and margin expansion
Organic net sales grew 10.3% this quarter to $1.14 billion, with gross profit rising to $284 million and adjusted EBITDA of $82.2 million.
Revenue $1.1B (est $1.1B) · EPS $0.66 (est $0.59)
Key quotes
"A few highlights from the third quarter include organic net sales grew 10.3%, Organic specialty sales were up 8.4% over the prior year, which was driven primarily by unique placement growth of 7.2% specialty case growth of 6.1%, and price inflation."
"So as our as smaller markets and high growth markets start to get scale and generate the benefits of that scale on the procurement side that flows into pricing."
"During the third quarter, we priced and allocated a new $75 million 7-year term loan and subsequently issued a redemption notice to the holders of our 2028 convertible notes."
Analyst Q&A 6
why sales grew; any weak areas
Q (Mark Carden · UBS): The analyst asked if double-digit organic sales growth comes from taking share from competitors or from stronger higher-income consumers, and whether any parts of the portfolio are relatively weak.
A: Management said growth is coming from several sources: market share gains, new categories and territories, and strong consumer demand. For Q4 they said the guide still implies consistent year-over-year revenue growth but noted lapping the Atalco acquisition (about 50 to 80 basis points), some conservatism for the Middle East in December, and a tougher ~1% comp.
"I think it is it is coming from a little bit from everywhere." — Christopher Pappas (CEO·CHAIR)
margin expansion and fuel inflation
Q (Hilary Lee · Morgan Stanley): The analyst asked what drove the margin expansion and whether it is sustainable into Q4 and 2027, and also asked about inflation and rising diesel/fuel costs.
A: They said the Q4 guide implies an EBITDA margin above 7% and full-year guidance gets them to 7%, the company's 2028 target. On fuel, they said fuel prices rose sharply since March and fuel is the main driver of the operating leverage gap: gross profit carried most of the benefit while adjusted OpEx was relatively flat, and they are passing most but not all of the fuel cost on.
"I think, you know, our guidance implies a very consistent kind of above 7% type of EBITDA margin in Q4 Our full year guidance implies getting to 7%, which was our 2028 target." — James F. Leddy (CFO)
freight pass-through and outlook to 2030
Q (Alex Slagle · Jefferies): The analyst asked how inbound freight challenges are being passed through to customers and for any initial high-level thoughts on 2027 to 2030 gross profit and EBITDA.
A: They said procurement and pricing teams have managed higher fuel and freight costs well, they are leveraging their digital platform and passing on a good portion of fuel cost, and gross profit dollars grew strongly year over year. Management also said their model assumes the higher-cost environment into 2030, noted protein price volatility, and said specialty inflation was only about 2–2.5%, which is built into the forecast.
"I think we only reported, you know, in specialty, only about 2%." — Christopher Pappas (CEO·CHAIR)
drivers of gross margin and hiring update
Q (Peter Saleh · BTIG): The analyst asked what is driving the recent gross margin gains and how sustainable they are, and also asked about salesforce growth and current hiring trends.
A: Management said gross margin gains come from product mix, procurement scale, pricing, and digital/AI improvements, with fuel moving the OpEx line and juicing gross profit. They also said hiring remains hard: they recruit carefully, invest years in training, face turnover, and currently cannot hire fast enough to meet demand.
"But we are hiring still as fast as possible where we find really good people because we still cannot meet the demand that is coming at us." — Christopher Pappas (CEO·CHAIR)
holiday demand and AI savings
Q (Kelly Bania · BMO): The analyst asked about any domestic slowdown or seasonality and what visibility the company has into holiday bookings, and then asked for an update on potential AI savings and salesforce feedback.
A: They said October continued the strong double-digit trends and the top end of the guide implies consistent year-over-year organic growth, with some conservatism for December in the Middle East. On bookings, they reported strong demand for private events even where conferences are slightly smaller. On AI, management said they are "all in" on digital and AI investment, but their forecast is conservative and not built on big AI surprises; any incremental margin from AI would be upside.
"we are gonna be conservative and say that, you know, what our forecast that we gave you know, is not built with any big a-has" — Christopher Pappas (CEO·CHAIR)
inflation in guidance and facility plans
Q (Todd Brooks · Stonex): The analyst asked what inflation outlook is embedded in Q4 guidance for specialty and center-of-the-plate, and asked for an update on new facility plans and any progress finding a second New York facility.
A: They said price inflation is assumed near the upper end of a normal 2 to 4% range; aggregate inflation this quarter was closer to 3.5% and specialty about 2.5%. For facilities they said they will add distribution capacity and consolidate in markets over the next 2–3 years (Dallas/Texas, New England, Las Vegas expansion, some Midwest markets) and they are working on New York with multiple scenarios but have nothing to announce.
"You know, price inflation throughout the year has been pretty consistently you know, kind of at the upper end of what we would consider the normal range of 2 to 4%." — James F. Leddy (CFO)