US Foods Holding Corp.

as well as in the presentation slides posted on our website. We are not providing reconciliations to poor-looking non-GAAP financial measures. Now I'd like to turn the call over to Dave.

Thanks, Mike. Good morning, everyone, and thank you for joining us. Before we begin, our thoughts are with all of our associates, customers, and communities impacted by Hurricanes Helene and Milton, which have each caused catastrophic devastation across parts of the Southeast. We are grateful to our local teams for their unwavering commitment to aiding recovery efforts and continuing to serve the community through countless hours of volunteering and donations during this difficult time. Thankfully, all of our associates are safe, but many suffered damage to their homes and property. I'll briefly highlight one of our associates who have gone above and beyond to make a difference in North Carolina during these trying times. Josh Hogue is a salesman for US Foods and local to Boone County. He gathered volunteers to provide a wide variety of grassroots relief support. He and others coordinated a GoFundMe page that raised more than $400,000 in donations for those impacted, deployed 11 truckloads of food donations gathered with the support of local organizations and businesses, including US Foods, organized the purchase and delivery of 40 generators to impacted areas. Thank you, Josh, for your incredible efforts and to all our associates who have helped and continue to help our customers and communities during this challenging time. Now, let's turn to our results from the third quarter. I will then update you on core initiatives across each of our four strategic pillars before passing it to Dirk to review our financial results and provide an update to our fiscal year 2024 guidance. Turning to slide four, we delivered 13% adjusted EBITDA growth solid adjusted EBITDA margin expansion, and 21% adjusted EPS growth as we continue to deploy our proven operational playbook and execute our strategic initiatives. We delivered another quarter of strong results despite a challenging macro environment and unforeseen weather-related impacts, which pressured industry case volumes. This is a real testament to our team's focus, our execution, and our ability to control the controllables. We drove volume growth and captured market share in our target customer types of independent restaurants, healthcare, and hospitality. Total volume grew 3.8%, while our independent restaurant cases grew 4.1%, which resulted in our 14th consecutive quarter of market share gains. Moving to capital deployment, we were prudently aggressive with share repurchases this quarter, totaling $580 million. We will continue to execute buybacks as we believe our shares remain undervalued. Since initiating our buyback program in late 2022, we have repurchased over $1.1 billion of our shares at an average price of $50.68 and will continue to be good stewards of capital deployment. Let's turn to the broader macro and our focus on our target customer types. In addition to the softer macro environment, there were several large storms in the third quarter that adversely impacted our southeast business, where we over-indexed on independent restaurant market share. The impact from the slower southeast growth was nearly a 100 basis point headwind to independent volume growth. And excluding the southeast, our organic independent volume growth was modestly higher than our second quarter growth rate. Monthly foot traffic was down approximately 3.5% for the third quarter, but sequentially improved throughout the quarter. And once we got past the storm impacts in the early part of the fourth quarter, we have seen further improvement, which has translated to an approximately 100 basis point acceleration in our organic independent case growth. we are also seeing a similar improvement in our chain same-store volume. Our go-to-market strategy, including team-based selling, innovation, and digital, combined with our operational playbook, enable us to capture proper market share no matter what external factors come our way. And despite the challenges I just outlined, we were quite pleased to grow independent market share in the third quarter both sequentially and year over year at a faster rate than we did in the second quarter. Let's move now to our four strategic pillars. I'll discuss our progress on each starting with slide five. Our first pillar is culture. Our focus and top priority are always the safety of our associates. During the quarter, our injury and accident rates were 21% better than the prior year. While we continue to make incremental progress each quarter, we will not rest until we have zero injuries for our associates. This year, we supported the American Red Cross with a donation of $300,000 to support disaster relief efforts, including Hurricane Selina and Milton. Our U.S. food teams also sent thousands of cases of product to disaster relief organizations across the impacted footprint. Additionally, we announced a national partnership with the Military Family Advisory Network, or MFAN, this July and made a $250,000 contribution. This organization's mission is to understand and amplify the needs of military-connected families who face food insecurity. Our contribution will help MFAN distribute 500 pantry restock boxes per month designed to get transferred military families started in their new homes with essential items typically discarded during a move. The MFAN collaboration is our first national hunger relief partnership supporting military families, a group disproportionately impacted by food insecurity. Turning to slide six, our second pillar, service. Again this quarter, we delivered year-over-year improvement with on-time and in full service levels. We also remain focused on delivering improved distribution productivity through our DECART routing technology, which is now live in 15 markets. By year-end, we expect to launch an additional 11 markets and remain on track to have approximately 50% of our routed miles on the cart. We continue to see this technology produce incremental improvement in cases per mile. And we continue to enhance the user experience of our proprietary leading digital platform, Moxie, which enables our customers to place orders, track deliveries, pay bills, and seamlessly manage inventories. Given the significant portion of total cost that food represents for our customers, we introduced a new food cost calculator feature embedded into MOXIE. This tool tracks and manages food costs over time, providing customers with valuable insights to help them with their menu prices, inventory, and product selection. This innovative solution is available to all U.S. Foods customers and further enhances our digital leadership position. Now let's turn to growth our growth pillar on slide seven. Pronto, our small truck delivery service, continues to gain steam and is now live in 40 markets. We're excited about this rapidly growing opportunity and its ability to reach hard-to-service customers in dense geographies. Pronto provides these previously untapped customers for U.S. foods with smaller, more frequent deliveries and later cutoff times. Earlier this year, we launched Pronto Penetration in two pilot markets. This service fills in non-routine delivery days for our existing independent restaurant customers, leading to further wallet share for U.S. foods. In these pilot markets, we are seeing an approximate 20% uplift in case volumes, while showing no cannibalization in broad-line delivery size or frequency. The successful launch and early learnings gave us confidence to expand Pronto penetration from two pilot markets to six. We remain on track for Pronto to deliver nearly $700 million of annualized sales this year. Moving to national sales, our targeted business development activity drove new wins during the quarter, and we onboarded more than $100 million in annualized sales in healthcare and hospitality. Finally, in September, we launched our scoop-themed Bar & Grill and Beyond. Our fall scoop highlights 24 new on-trend products designed by U.S. foods product development experts who leverage a wealth of culinary expertise, industry experience, and data-driven insights to bring new product innovation to our private label brands. Many of you saw this in action at our Investor Day last June. My favorite from the fall lineup is the Chef's Line natural smoked pork butt, which tastes amazing and is pre-packaged in a boiling bag and saves customers approximately 40 minutes of labor per case. Turning to slide eight, our profit pillar. Our go-to-market strategy and strong execution drove a 7% increase in adjusted gross profit to $1.7 billion. This was primarily driven by total case volume growth and improved cost of goods sold. We grew adjusted gross profit 240 basis points faster than adjusted operating expense, driving a 27 basis point of adjusted EBITDA margin expansion. We also made additional progress on cost of goods through our strategic vendor management efforts, realizing more than $70 million year to date. We now expect to deliver more than $230 million in cost of goods savings in our current 2022 to 2024 long-range plan, which is nearly complete. On the productivity front, we delivered 3.5% improvement in warehouse productivity in line with our goal of 3% to 5% annual productivity gains to offset wage inflation. Regarding ChefStore, a quick update. As a reminder, we are actively exploring strategic alternatives for this business and have recently begun discussions with several potential buyers. We remain fully committed to supporting the business, our associates, and our customers through this process. And we will continue to keep you informed as we make further progress. As we have previously said, in the event of a sale, we would expect to deploy the majority of the proceeds to repurchasing shares. Before I hand it over to Dirk, in September, the International Food Service Distributors Association inducted 20 U.S. Foods drivers into its Truck Driver Hall of Fame. This honor recognizes the food service industry's top drivers for their exceptional safety record and length of service, each with more than 25 years of service at U.S. Foods. It's a highly coveted honor for truck drivers in our industry. With Veterans Day just around the corner, I want to highlight two of the Hall of Fame both of whom are veterans that served in the U.S. Armed Forces and hail from our Fort Mill, South Carolina facility. The first is Orlando Smith, who has 30 years of service at U.S. Foods. The second is Larry Boyer, who has been a driver for us for 34 years. I thank them both, not only for their decades of service to our company, but especially for their bravery and courage in serving and protecting our great nation. Finally, I also thank all veterans within and outside of U.S. foods who have served our country and protected our freedom. We owe you all a huge debt of gratitude that can never be repaid. Let me now turn the call over to Dirk to discuss our third quarter results in more detail and our updated 2024 guidance.

Thank you, Dave, and good morning, everyone. Our double-digit adjusted EBITDA growth is the result of consistent execution for our strategy to capture market share and expand margins. Starting on slide 11, third quarter net sales increased 6.8% to $9.7 billion, driven by total case volume growth of 3.8% and food cost inflation and mix impact of 3%. We drove solid case growth and captured share gains in each of our target customer types. Our independent restaurant volume grew 4.1%, including 170 basis points from acquisitions. Healthcare growth remained strong at 5.7%, and hospitality growth accelerated further to 3% as we onboarded new business. Adjusted EBITDA grew 13.2% from the prior year to $455 million, and we expanded adjusted EBITDA margin by 27 basis points to 4.7%. As we continue to execute our profitable growth strategy and proactively manage gross margin and operating expenses, we see these actions drive margin expansion. During the third quarter, as Dave mentioned, We made further progress on our strategic vendor management work and now expect to achieve more than $230 million in cost of goods savings from 2022 through the end of this year. We also remain on track to realize the $120 million of annualized operating expense savings that we highlighted last quarter. And we are on track to deliver more than $20 million in savings this year from the indirect spend work that we previously discussed. This highlights our team's strong ability to execute initiatives regardless of the macro environment. We are pulling the appropriate levers to sustainably grow gross profit rate and drive operating expense productivity. As a reminder, a significant portion of our operating costs are structured as variable to provide us flexibility to match expense to volume in different market scenarios. Finally, adjusted diluted EPS increased 21.4% to 85 cents. demonstrating our ability to grow adjusted diluted EPS meaningfully faster than adjusted EBITDA. We expect this to continue as we deploy our strong free cash flow towards share repurchases, which I'll talk more about shortly. Moving to slide 12, we made significant progress in growing adjusted gross profit per case faster than adjusted operating expense per case again this quarter. Adjusted gross profit per case grew by 24 cents, or more than 3% versus prior year. This growth was primarily driven by executing initiatives within our control, including our strategic vendor management work and continued focus on private label penetration. Adjusted operating expense per case increased 4 cents, or less than 1%. We're offsetting a significant portion of operating cost inflation with productivity, including improving supply chain productivity, streamlining administrative processes and costs, and realizing indirect spend procurement savings. This all led to adjusted EBITDA per case of $2.12, up 17 cents, or 8.7% from the prior year. We expect continued adjusted EBITDA per case growth as we execute our initiatives. Moving on to slide 13. Our strong cash flow generation was evident again this quarter. Year to date, we've generated $891 million of operating cash flow and $658 million of free cash flow driven by increased profitability and disciplined working capital management. Our robust cash flow creates financial flexibility to deploy capital strategically, enabling us to invest in the business for growth and return capital to shareholders via share repurchases. We invested $236 million in cash capex for the first nine months, mainly focused on projects to support growth, including information technology, property, and equipment, as well as maintenance of our district facilities. During the quarter, we significantly accelerated the pace of share repurchases in line with our commentary last quarter and repurchased 10.4 million shares for a total of $580 million. In the fourth quarter today, through November 4th, we purchased an additional $160 million of shares. We have $238 million of remaining funds authorized under our $1 billion share repurchase program. We will remain disciplined in continuing to execute our share repurchase program, in addition to continued investment in the business for organic growth and opportunistic token M&A. Turning to net leverage on slide 14. We ended the quarter at 2.8 times net leverage within our two to three times target range. Net leverage is unchanged from year end, even with the significant share repurchases this quarter. Subsequent to quarter end, we addressed the next maturity in our debt structure. We issued $500 million in senior notes due 2033 at 5.75% and used the proceeds to repay a portion of our term loan facilities. We also extended the maturity of the remaining balance of our term loan due 2026 to 2031, lowered the interest rate margin on both of our term loan facilities by 25 basis points, and eliminated the credit spread adjustment of 11 basis points on the facility due 2031. As a result of this, we capture approximately $9 million in annualized interest savings. Our debt structure is strong, and we have no long-term debt maturities until 2028. With that, Let me now turn to our updated outlook for 2024 on slide 15. Given our year-to-date performance and outlook for the remainder of the year, we're updating our fiscal year 2024 guidance. We now expect net sales to be in a range of 37.7 to $38 billion. We're increasing the bottom end of our adjusted EBITDA range to 1.72 to $1.74 billion. Finally, we're tightening our adjusted diluted EPS range to $3.05 to $3.15. Moving to modeling assumptions. For 2024, given the continued soft macro environment and the unanticipated hurricane impacts, we now expect total case growth of 4 to 4.5%. We're also updating our sales inflation assumption, which includes mix, to a range of 2 to 2.5%. Interest expense is projected to be lower than our previous forecast and is now expected to be in the range of $310 to $320 million. Finally, depreciation and amortization is at the higher end of our range, partially due to M&A, and is now projected to be in the range of $435 to $445 million. Despite the softer macro backdrop, we continue to strengthen our execution and remain confident in our ability to grow volume, gain share with target customer types, increase profitability, and return capital to shareholders. I'm pleased with our strong progress this year as we've driven balanced, profitable growth. we remain well-positioned to achieve our current long-range plan and 2024 financial targets. And I look forward to getting off to a strong start to our next long-range plan beginning in 2025. With that, I'll now pass it back to Dave for his closing remarks.