Shares of The Chefs' Warehouse (CHEF 0.99%), which sells specialty food products to restaurants and other food venues, dropped as much as 10% today. Although the stock had clawed back some of the decline, it was still lower by roughly 6% at 3:30 p.m. EDT. Driving the negative mood here was the company's pre-market earnings release.
Revenue for the first quarter of 2021 came in at $280.2 million, down roughly 25% compared to the $375.4 million it brought in the same quarter last year. The company highlighted business restrictions on its customers due to the coronavirus and reduced menu sizes (a notable trend during the pandemic) as key reasons for the weak sales results. That shouldn't be shocking, given that The Chefs' Warehouse peddles its wares to restaurants, which have been hit hard during the efforts to slow the spread of the coronavirus.
The company's adjusted loss was $0.50 per share in the quarter. While that was better than the $0.60-per-share loss in the first quarter of 2020, it was worse than the $0.42-per-share loss analysts had been looking for. Investors really don't like it when companies miss Wall Street estimates, so it makes sense that the stock sold off today.
The company noted that in March sales had improved to 75% of 2019 levels. In other words, The Chefs' Warehouse's sales are still off materially from where they were before the coronavirus was an issue. So not only was the quarter a bust, but it looks like there's still more work to be done before business is back to some semblance of normal here. Add it all up and this quarterly update wasn't a particularly inspiring one for long-term investors.