US Foods, Sysco sales soar; US Foods acquires Saladino’s

US Foods has acquired Fresno, California-based Saladino’s Foodservice – which supplies restaurants in California, Arizona, Nevada, and Oregon – a move that will bolster its growth as it and Sysco both report big sales and revenue spikes.

“We are excited to announce that we have signed a definitive agreement to acquire Saladino's Foodservice, our second tuck-in acquisition this year, and look forward to welcoming the Saladino's team to US Foods, adding improved scale as we continue to enhance our position with new and existing customers in central California,” US Foods CEO Dave Flitman said. 

The acquisition is US Foods second so far this year. In May US Foods acquired Watertown, New York, U.S.A.-based broadline distributor Renzi Foodservice for an undisclosed amount.

US Foods chain restaurant volume dropped 3.6 percent in Q3 2023, while its gross profit increased 5.6 percent to USD 1.5 billion (EUR 1.4 billion). Its net revenue also increased 2.1 percent to USD 9.1 billion (EUR 8.4 billion), partially offset by food cost deflation of 1.3 percent.

"We drove strong case volume growth in our target customer types again this quarter, with volume increasing nearly 6 percent for independent restaurants, 8 percent for healthcare, and 6 percent for hospitality,” Fittman said. The distributor accelerated its market share gains in the third quarter with independent restaurants despite a slowing macro environment, according to Fittman.

Houston, Texas, U.S.A.-based Sysco realized similarly favorable results in its most recent fiscal first quarter of 2024. Revenue increased 2.6 percent, operating profit jumped 9.1 percent to USD 803.6 million (EUR 738 million), gross profit soared 4.5 percent to USD 3.6 billion (EUR 3.3 billion), and U.S. foodservice volume increased 1.6 percent.

The distributor’s record first-quarter operating profit of USD 803.6 million (EUR 739 million) included “meaningful” gross margin expansion and positive operating leverage, Sysco Chief Financial Officer Kenny Cheung said.

“Our positive momentum in the first quarter gives us confidence in reiterating our fiscal year 2024 guidance of mid-single digit sales growth to approximately USD 80 billion (EUR 73.5 billion), and five to ten percent adjusted earnings per share growth to USD 4.20 to USD 4.40 (EUR 4.04 to EUR 3.86).”

Sysco President and CEO Kevin Hourican added that the company's planned acquisition of Edward Don & Company – one of the largest kitchen equipment and supplies distributors – will add “new capabilities and diversified offerings to our product assortment.”

“Combining DON and Sysco will enable us to better serve our hundreds of thousands of customers with a more complete restaurant and hospitality assortment," he said. 

Sysco’s “strong profitability, size and scale advantages, and balance sheet position us for profitable growth for the remainder of fiscal year 2024 and beyond,” Hourican added.

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