What happened
Shares of Chefs' Warehouse (CHEF 2.13%) were climbing this week after the restaurant wholesaler posted a strong second-quarter earnings report.
Through Thursday afternoon, the stock was up 15.5%.
Image source: Getty Images.
So what
Restaurants are coming back to life now that many Americans are vaccinated, and Chefs' Warehouse is one of a number of beneficiaries in related industries.
As the company lapped the lockdown era of a year ago, revenue jumped 111% to $423 million, which was well ahead of the analyst consensus at $355 million. It also reversed an adjusted EBITDA loss and posted an EBITDA profit of $17.2 million, up from a loss of $13.7 million in the year-ago quarter. On a per-share basis, the company reported a profit of $0.04, easily beating expectations of a loss of $0.32.
CEO Chris Pappas summed up the performance, saying,
Business activity and revenue grew steadily throughout the second quarter as existing and new customer openings increased and COVID-related restrictions eased across many key markets. As the quarter progressed, our customers benefited from in-door and out-door capacity growth, strengthening consumer demand and the initial stages of menu expansion. Sales toward the end of June 2021 were trending in line with 2019 sales, inclusive of acquisitions completed in 2020 and 2021.
While the Delta variant of the coronavirus could spoil the pandemic recovery, thus far, the restaurant industry has been resilient, and many of the restaurant chains that have already reported second-quarter earnings predicted strong results in the third quarter. According the Census Bureau, restaurant sales are now on par with 2019 levels.
Now what
Looking ahead, Chefs' Warehouse declined to give guidance, saying that there was too much uncertainty around the broader economic recovery and the return of normal business travel and events. However, the company's recovery seems likely to track with the overall restaurant industry's recovery and the broader economic reopening.
The stock is still trading below where it was before the pandemic, so there's room to the upside here, especially if it keeps trouncing analyst estimates.
