1-Star Price
INVESTOR
5-Star Price
INVESTOR
Economic Moat
INVESTOR
Capital Allocation
INVESTOR
After no-moat US Foods’ second-quarter results, we don’t plan a material change to our $41.50 fair value estimate, as stronger sales are offset by our view that U.S. food-service industry volumes will soften in the next year. While US Foods, like narrow-moat Sysco, is not yet seeing signs of weaker demand, we think this will materialize, as consumers conserve budgets by eating at restaurants less often.
us Foods is the second-largest U.S. food service distributor behind Sysco, holding 10% market share of the highly fragmented food service distribution industry. us Foods distributes more than 400,000 food and nonfood products to the healthcare and hospitality industries (collectively 22% of 2021 sales), restaurants (61%), and education, government facilities, and grocers (17%). In addition to its delivery business, the firm has 80 cash-and- carry stores under the Chef’Store banner. After Sysco’s attempt to purchase us Foods failed to gain federal approval in 2015, us Foods entered the public market via an initial public offering.
