Shares of The Chefs' Warehouse (NASDAQ: CHEF) were surging last month after the restaurant-supply company posted a strong second-quarter earnings report. According to data from S&P Global Market Intelligence, the stock moved up 19%.
Continue Reading Below
The purveyor of specialty food products saw strong organic revenue growth in the quarter and beat earnings estimates. As the chart below shows, the stock surged after the company released its results on Aug. 9.
Chefs' Warehouse said that revenue increased 13.9% in the period to $331.7 million, essentially matching estimates, as the company saw 10% revenue growth not including acquisitions. Adjusted earnings per share slipped a penny to $0.14, but that still beat expectations at $0.12.
CEO Chris Pappas said, "The positive momentum we experienced in the first quarter continued into the second quarter. Organic growth was up 10% in Q2 and reported sales growth was up approximately 14%. In addition, we are having success on the bottom line with gross margins up 24 basis points, including a 12 basis point increase in the protein division."
Later in the month, the stock spiked briefly as the company said it acquired Fells Point Wholesale Meats. Terms of the deal were not disclosed, but the company is expected to generate $55 million in revenue next year and be accretive to earnings.
Adding to the optimism, Chefs' Warehouse lifted the bottom end of its guidance for the year, calling for revenue of $1.28 billion to $1.29 billion, up from $1.27 billion at the low end. On the bottom line, it now sees EPS of $0.37 to $0.41, up from a prior range of $0.36 to $0.41.
With a savvy acquisition strategy and interest in gourmet foods continuing to build, Chefs' Warehouse looks primed for continued growth.
10 stocks we like better than The Chefs' WarehouseWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and The Chefs' Warehouse wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of September 5, 2017