Shares of The Chefs' Warehouse (CHEF 1.34%), a specialty supplier to restaurants and other food locations, rose as much as 13.5% on Wednesday. The gains were likely driven by the company's fourth-quarter 2021 earnings release, which hit the market before it opened today. The reading was pretty good.
The Chefs' Warehouse reported sales of just over $558 million in the fourth quarter of 2021, up 98% over the same quarter of 2020, when it posted sales of just under $282 million. But the more interesting period to compare it to is probably the fourth quarter of 2019, when sales were a touch under $427 million.
In other words, the specialty retailer's top line has more than rebounded from the hit it took when many of its customers were shut down, often by government decree. And the final sales figure also beat Wall Street expectations of around $510 million. This top-line update was very good news.
On the bottom line, The Chefs' Warehouse posted fourth-quarter adjusted earnings of $0.26 per share, up from a loss of $0.52 per share in the fourth quarter of 2020. The analyst call was for earnings of $0.19 per share, so there was a solid beat here, too. That said, adjusted earnings in the same stanza of 2019 were $0.39 per share, so the company isn't exactly back to where it was.
Part of the problem are rising costs. Although The Chefs' Warehouse was able to pass along cost increases to customers, slightly expanding its gross margin, it was hit with a nearly 32% increase in selling, general, and administrative expenses. Still, the improvement in the business is clear, and going in the right direction.
While the past quarter was nice to see, the other good news from the report was the company's guidance for 2022. It expects full-year sales to increase by as much as 26%, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) expanding by as much as 80%.
In other words, if the trends the company is seeing today keep going, 2022 is likely to be even better than the year that just ended. No wonder investors were upbeat today.