Q3 2026 Chefs Warehouse Inc Earnings Call

October 28, 2026

Operator: Greetings, and welcome to The Chefs' Warehouse Q3 2026 earnings conference call. As a reminder, this conference is being recorded. We would now like to turn the conference over to your host, Alex Aldous, General Counsel, Corporate Secretary, and Chief Government Relations Officer. Please go ahead, sir.

Speaker #1: Greetings. And welcome to the Chefs' Warehouse third quarter, 2026, earnings conference call. As a reminder, this conference is being recorded. We'd now like to turn the conference over to your host, Alex Aldous, General Counsel, Corporate Secretary, and Chief Government Relations Officer.

Speaker #1: Please, go ahead, sir.

Alex Aldous: Thank you, operator. Good morning, everyone. With me on today's call are Chris Pappas, Founder, Chairman, and CEO, and Jim Leddy, our CFO. By now, you should have access to our Q3 2026 earnings press release. It can also be found at www.chefswarehouse.com under the investor relations section. Throughout this conference call, we will be presenting non-GAAP financial measures, including, among others, historical and estimated EBITDA and adjusted EBITDA, as well as historical adjusted net income, adjusted earnings per share, adjusted operating expenses, adjusted operating expenses as a percentage of net sales and as a percentage of gross profit, net debt, net debt leverage, and free cash flow. These measures are not calculated in accordance with GAAP and may be calculated differently in similarly titled non-GAAP financial measures used by other companies.

Speaker #2: Thank you, operator. Good morning, everyone. With me on today's call are Chris Pappas, founder, chairman, and CEO, and Jim Leddy, our CFO. By now, you should have access to our third quarter 2026 earnings press release.

Speaker #2: It can also be found at www.chefswarehouse.com under the Investor Relations section. Throughout this conference call, we will be presenting non-GAAP financial measures, including, among others, historical and estimated EBITDA and adjusted EBITDA, as well as historical adjusted net income, adjusted earnings per share, adjusted operating expenses, adjusted operating expenses as a percentage of net sales, and as a percentage of gross profit.

Speaker #2: Net debt, net debt leverage, and free cash flow. These measures are not calculated in accordance with GAAP and may be calculated differently in similarly titled non-GAAP financial measures used by other companies.

Alex Aldous: Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today's press release and Q3 2026 earnings presentation. Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements, including statements regarding our estimated financial performance. Such forward-looking statements are not guarantees of future performance, and therefore you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Some of these risks are mentioned in today's release. Others are discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q, which are available on the SEC website. Today, we are going to provide a business update and go over our Q3 results in detail.

Speaker #2: Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today's press release and third quarter 2026 earnings presentation.

Speaker #2: Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements, including statements regarding our estimated financial performance.

Speaker #2: Such forward-looking statements are not guarantees of future performance. And therefore, you should not put under reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.

Speaker #2: Some of these risks are mentioned in today's release. Others are discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q, which are available on the SEC website.

Speaker #2: Today, we are going to provide a business update and go over our third quarter results in detail. For a portion of our discussion this morning, we will refer to a few slides posted on the Chefs' Warehouse website under the Investor Relations section titled "Third Quarter 2026 Earnings Presentation." Please note that these slides are disclosed at this time for illustration purposes only.

Alex Aldous: For a portion of our discussion this morning, we will refer to a few slides posted on the Chefs' Warehouse website under the investor relations section titled Third Quarter 2026 Earnings Presentation. Please note that these slides are disclosed at this time for illustration purposes only. Then we will open up the call for questions. With that, I will turn the call over to Chris Pappas. Chris?

Speaker #2: Then we will open up the call for questions. With that, I will turn the call over to Chris Pappas. Chris?

Chris Pappas: Thank you, Alex, and thank you all for joining our Q3 2026 earnings call. Revenue trends displayed typical seasonal cadence through Q3 2026, building from the summer months into September with strong year-over-year growth. Our regional Chefs' Warehouse teams delivered excellent execution across markets and product categories, driving strong growth in revenue and gross profit dollars, as well as continued progress increasing relevance with our customer base with solid year-over-year growth in unique item placements and unique customers. Momentum continued into October. As we head into the busy holiday season, I would like to thank all our Chefs' Warehouse teams, from sales, procurement, and operations, to all the supporting functions, for their dedication and commitment to delivering a diverse, high-quality product and service in partnership with our suppliers and customers and the communities we serve.

Speaker #3: Thank you, Alex. And thank you all for joining our third quarter 2026 earnings call. Revenue trends display typical seasonal cadence through the third quarter of 2026.

Speaker #3: Building from the summer months into September with strong year-over-year growth, our regional Chefs' Warehouse teams delivered excellent execution across markets and product categories, driving strong growth in revenue and gross profit dollars, as well as continued progress increasing relevance with our customer base with solid year-over-year growth and unique item placements and unique customers.

Speaker #3: Momentum continued into October and as we head into the busy holiday season, I would like to thank all our Chef Warehouse teams from sales, procurement, and operations to all the supporting functions for their dedication and commitment to delivering our diverse high-quality product and service in partnership with our suppliers and customers and the communities we serve.

Chris Pappas: Our Middle East operations continue to operate effectively in a challenging environment. Revenue trends in recent weeks have been approximately 100% of prior year, as food away from home activity is supported by local residents and expatriates returning from the summer off-season. Our teams in the UAE, Qatar, and Oman are doing an exceptional job of executing for our customers in the region and delivering high EBITDA margin results. We remain committed to our business and customers and to the region long term. With that, please refer to slide 3 of the presentation. A few highlights from Q3 include organic net sales grew 10.3%. Organic specialty sales were up 8.4% over the prior year, which was driven primarily by unique placement growth of 7.2%, specialty case growth of 6.1%, and price inflation. Unique customers grew 4.4% year over year.

Speaker #3: Our Middle East operations continued to operate effectively in a challenging environment. Revenue trends in recent weeks have been approximately 100% of prior year as food away from home activity is supported by local residents and expatriates returning from the summer off-season.

Speaker #3: Our teams in the UAE, Qatar, and Oman are doing an exceptional job of executing for our customers in the region and delivering high EBITDA margin results.

Speaker #3: We remain committed to our business and customers, and to the region long-term. With that, please refer to slide 3 of the presentation. A few highlights from the third quarter include: organic net sales grew 10.3%.

Speaker #3: Organic specialty sales were up 8.4% over the prior year which was driven primarily by unique placement growth of 7.2%, specialty case growth of 6.1%, and price inflation.

Speaker #3: Unique customers grew 4.4% year-over-year. Reported unique customer growth was impacted partially by the conflict in the Middle East, excluding this impact third quarter unique customer growth was approximately 5.7%.

Chris Pappas: Reported unique customer growth was impacted partially by the conflict in the Middle East. Excluding this impact, Q3 unique customer growth was approximately 5.7%. Pounds in Center of the Plate were approximately 6.6% higher than the prior year Q3. Gross profit margins increased approximately 84 basis points. Gross margin in the specialty category increased approximately 63 basis points as compared to Q3 2025, while gross margin in the center-of-the-plate category increased approximately 137 basis points year over year. Jim will provide more detail on gross profit and margins in a few moments. For an update on certain of our operating metrics, including continued improvements in year-over-year gross profit per route and adjusted EBITDA per employee, please refer to the slides provided in the appendix of our Q3 2026 earnings presentation.

Chris Pappas: Reported unique customer growth was impacted partially by the conflict in the Middle East. Excluding this impact, Q3 unique customer growth was approximately 5.7%. Pounds in Center of the Plate were approximately 6.6% higher than the prior year Q3. Gross profit margins increased approximately 84 basis points. Gross margin in the specialty category increased approximately 63 basis points as compared to Q3 2025, while gross margin in the center-of-the-plate category increased approximately 137 basis points year-over-year. Jim will provide more detail on gross profit and margins in a few moments. For an update on certain of our operating metrics, including continued improvements in year-over-year gross profit per route and adjusted EBITDA per employee, please refer to the slides provided in the appendix of our Q3 2026 earnings presentation.

Speaker #3: Pounds in center of the plate were approximately 6.6% higher than the prior year third quarter. Gross profit margins increased approximately 84 basis points. Gross margin in the specialty category increased approximately 63 basis points as compared to the third quarter of 2025, while gross margin in the center of the plate category increased approximately 137 basis points year-over-year.

Speaker #3: Jim will provide more detail on gross profit and margins in a few moments. For an update on certain of our operating metrics including continued improvements in year-over-year gross profit per route and adjusted EBITDA per employee, please refer to the slides provided in the appendix of our third quarter 2026 earnings presentation.

Chris Pappas: With that, I'll turn it over to Jim to discuss more detailed financial information for the quarter and an update on our liquidity. Jim?

Speaker #3: With that, I'll turn it over to Jim to discuss more detailed financial information for the quarter and an update on our liquidity. Jim?

Jim Leddy: Thank you, Chris, and good morning, everyone. I will now provide a comparison of our current quarter operating results versus the prior year quarter and provide an update on our balance sheet and liquidity. Please refer to slide number 4. Our net sales for the quarter ended 25 September 2026 increased approximately 11.2% to $1.135 billion from $1.021 billion in the third quarter of 2025. The growth in net sales was a result of an increase in organic sales of approximately 10.3%, as well as the contribution of sales from acquisitions, which added approximately 0.9% to sales growth for the quarter. Net inflation was 4.1% in the third quarter, consisting of 2.6% inflation in our specialty category and 6.6% inflation in our Center of the Plate category versus the prior year quarter.

Jim Leddy: Thank you, Chris, and good morning, everyone. I will now provide a comparison of our current quarter operating results versus the prior year-quarter and provide an update on our balance sheet and liquidity. Please refer to slide number 4. Our net sales for the quarter-ended 25 September 2026 increased approximately 11.2% to $1.135 billion from $1.021 billion in the third quarter of 2025. The growth in net sales was a result of an increase in organic sales of approximately 10.3%, as well as the contribution of sales from acquisitions, which added approximately 0.9% to sales growth for the quarter. Net inflation was 4.1% in the third quarter, consisting of 2.6% inflation in our specialty category and 6.6% inflation in our Center of the Plate category versus the prior year-quarter.

Speaker #4: Thank you, Chris. And good morning, everyone. I'll now provide a comparison of our current quarter operating results versus the prior year quarter and provide an update on our balance sheet and liquidity.

Speaker #4: Please refer to slide number 4. Our net sales for the quarter ended September 25, 2026, increased approximately 11.2% to 1.135 billion, from 1.021 billion in the third quarter of 2025.

Speaker #4: The growth in net sales was a result of an increase in organic sales of approximately 10.3% as well as the contribution of sales from acquisitions, which added approximately 0.9% to sales growth for the quarter.

Speaker #4: Net inflation was 4.1% in the third quarter, consisting of 2.6% inflation in our specialty category and 6.6% inflation in our center-of-the-plate category, versus the prior year quarter.

Jim Leddy: Gross profit increased 15% to $284.3 million for the third quarter of 2026 versus $247.2 million for the third quarter of 2025. Gross profit margins increased approximately 84 basis points to 25%. Selling, general, and administrative expenses increased approximately 12.1% to $233.4 million for the third quarter of 2026 from $208.1 million for the third quarter of 2025. The increase was primarily due to higher costs associated with compensation and benefits, facilities and distribution to support sales growth, fuel prices, as well as higher depreciation driven by facility and fleet investments. Adjusted operating expenses increased 11% versus the prior year third quarter, and as a percentage of net sales, adjusted operating expenses were 17.8% for the third quarter of 2026. Operating income for the third quarter of 2026 was $51.5 million, compared to $38.9 million for the third quarter of 2025.

Speaker #4: Gross profit increased 15% to 284.3 million, for the third quarter of 2026, versus 247.2 million for the third quarter of 2025. Gross profit margins increased approximately 84 basis points to 25%.

Speaker #4: Selling general and administrative expenses increased approximately 12.1% to 233.4 million for the third quarter of 2026, from 208.1 million for the third quarter of 2025, the increase was primarily due to higher costs associated with compensation and benefits facilities and distribution to support sales growth, fuel prices, as well as higher depreciation driven by facility and fleet investments.

Speaker #4: Adjusted operating expenses increased 11% versus the prior year third quarter, and as a percentage of net sales, adjusted operating expenses were 17.8% for the third quarter of 2026.

Speaker #4: Operating income for the third quarter of 2026 was 51.5 million, compared to 38.9 million for the third quarter of 2025. The increase in operating income was driven primarily by higher gross profit partially offset by higher selling general and administrative expenses.

Jim Leddy: The increase in operating income was driven primarily by higher gross profit, partially offset by higher selling general and administrative expenses. Our GAAP net income was $29.6 million or $0.67 per diluted share for the third quarter of 2026, compared to net income of $19.1 million or $0.44 per diluted share for the third quarter of 2025. On a non-GAAP basis, we had adjusted EBITDA of $82.2 million for the third quarter of 2026, compared to $65.1 million for the prior year third quarter. Adjusted net income was $29.5 million or $0.66 per diluted share for the third quarter of 2026, compared to $21.5 million or $0.50 per diluted share for the prior year third quarter. Turning to the balance sheet and an update on our liquidity. Please refer to slide number 5 and 6.

Speaker #4: Our gap net income was 29.6 million or 67 cents per diluted share for the third quarter of 2026, compared to net income of 19.1 million or 44 cents per diluted share for the third quarter of 2025.

Speaker #4: On a non-gap basis, we had adjusted EBITDA of 82.2 million for the third quarter of 2026, compared to 65.1 million for the prior year third quarter.

Speaker #4: Adjusted net income was 29.5 million or 66 cents per diluted share for the third quarter of 2026, compared to 21.5 million or 50 cents per diluted share for the prior year third quarter.

Speaker #4: Turning to the balance sheet and an update on our liquidity. Please refer to slide number 5 and 6. At the end of the third quarter, we had total liquidity of 348.1 million, comprised of 164.7 million in cash and 183.4 million of availability under our ABL facility.

Jim Leddy: At the end of the third quarter, we had total liquidity of $348.1 million, comprised of $164.7 million in cash and $183.4 million of availability under our ABL facility. During the third quarter, we priced and allocated a new $675 million seven-year term loan, and subsequently issued a redemption notice to the holders of our 2028 convertible notes. Subsequent to the third quarter close on 15 October 2026, the new term loan closed and funded concurrent with the settlement of the convertible notes. Proceeds of the new term loan were used to prepay the term loan due in 2029 and settle the principal and a portion of the premium of the convertible notes. The remainder of the premium was settled via the issuance of approximately 2.7 million shares of common stock to note holders. Our objectives in executing this refinancing are as follows.

Speaker #4: During the third quarter, we priced and allocated a new 675 million seven-year term loan and subsequently issued a redemption notice to the holders of our 2028 convertible notes.

Speaker #4: Subsequent to the third quarter close, on October 15, 2026, the new term loan closed and funded concurrent with the settlement of the convertible notes.

Speaker #4: The proceeds of the new term loan were used to prepay the term loan due in 2029 and settle the principal and a portion of the premium of the convertible notes.

Speaker #4: The remainder of the premium was settled via the issuance of approximately 2.7 million shares of common stock to noteholders. Our objective in executing this refinancing are as follows.

Jim Leddy: To address the 2028 convertible maturity and the related springing maturities on our then existing term loan and our ABL facility, to maintain net debt leverage in our target 1.5 to 2.5 times range, and to reduce our fully diluted share count, aligning our capital structure with our previously announced 2030 financial targets. As of 25 September 2026, total net debt was approximately $448.5 million, inclusive of all cash and cash equivalents, and net debt to adjusted EBITDA was approximately 1.4 times. By year-end 2026, we expect net debt to be in the range of $550 to $600 million, and net debt to adjusted EBITDA to be in a range of 1.7 to 2 times. For Q4 2026, we expect interest expense to be between $15.5 million and $17.5 million.

Speaker #4: To address the 2028 convertible maturity, and the related springing maturities on our then-existing term loan and our ABL facility. To maintain net debt leverage in our target 1.5 to 2.5 times range, and to reduce our fully diluted share count, aligning our capital structure with our previously announced 2030 financial targets.

Speaker #4: As of September 25, 2026, total net debt was approximately 448.5 million, inclusive of all cash and cash equivalents, and net debt to adjusted EBITDA was approximately 1.4 times.

Speaker #4: By year-end 2026, we expect net debt to be in the range of 550 to 600 million, and net debt to adjusted EBITDA to be in a range of 1.7 to 2 times.

Speaker #4: For the fourth quarter of 2026, we expect interest expense to be between $15.5 million and $17.5 million. Approximately $2.7 million of estimated fourth quarter interest expense is related to one-time costs associated with the debt refinancing.

Jim Leddy: Approximately $2.7 million of estimated Q4 interest expense is related to one-time costs associated with the debt refinancing. We currently expect our fully diluted share count to be in the range of 43 to 43.5 million shares for Q4 2026. For future modeling purposes, we currently expect the fully diluted share count for 2027 to be in the range of 42 to 43 million shares. Please refer to slide seven. We are raising our full year 2026 guidance as follows. We estimate net sales for the full year 2026 will be in the range of $4.56 billion to $4.61 billion, gross profit to be between $1.13 billion and $1.14 billion, and adjusted EBITDA to be between $317 million and $321 million. Thank you, and at this point, we will open it up to questions. Operator?

Speaker #4: We currently expect our fully diluted share count to be in the range of 43 to 43.5 million shares for the fourth quarter of 2026.

Speaker #4: For future modeling purposes, we currently expect the fully diluted share count for 2027 to be in the range of 42 to 43 million shares.

Speaker #4: Please refer to slide 7. We are raising our full year 2026 guidance as follows. We estimate net sales for the full year 2026 will be in the range of 4.56 billion to 4.61 billion.

Speaker #4: Gross profit to be between 1.13 billion and 1.14 billion, and adjusted EBITDA A to be between 317 million and 321 million. Thank you. And at this point, we will open it up to questions.

Speaker #4: Operator?

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Mark Carden with UBS. Please proceed with your question.

Speaker #1: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.

Speaker #1: Our first question is from Mark Carden with UBS. Please proceed with your question.

Mark Carden: Good morning. Thanks so much for taking the question. To start, you continue to generate double-digit organic sales growth with some pretty strong results across the business. Do you think this is being driven more by market share gains from your competitors, or against your competitors, or by continued underlying strengths from your higher income consumers just overall? So any shifts on that front, that is first. Then second, are you seeing any pockets of what we will call relative weakness to the rest of your portfolio? Thank you.

Speaker #4: Good morning. Thanks so much for taking the question. So to start, you continue to generate double-digit organic sales growth with some pretty strong results across the business.

Speaker #4: Do you think this is being driven more by market share gains from your competitors, or against your competitors, or by continued underlying strengths from your higher income consumers just overall?

Speaker #4: So any shifts on that front, that's first. And then second, are you seeing any pockets of what we'll call relative weakness the rest of your portfolio?

Speaker #4: Thank you.

Chris Pappas: Yeah, great question. I think it is Goldilocks. I think it is coming from a little bit from everywhere. It is really good demand. We continue to take market share and we could continue to grow new categories, new territories. I think just the team is executing to the plan that we laid out for the next few years. You are just seeing good tailwind from the consumer. A lot of new customers in all regions for all Chefs' Warehouse businesses. I think it is just really good execution and it is what we are counting on to continue.

Speaker #2: Yeah. Great question. I think it's Goldilocks. I think it's coming from a little bit from everywhere. It's really good demand, we continue to take market share, and we continue to grow new categories, new territories.

Speaker #2: I think just the team is executing to the plan that we laid out for the next few years. And you're just seeing good tailwind from the consumer, a lot of new customers, in all regions for all Chef Warehouse businesses, and I think it's just really good execution and it's what we're counting on to continue.

Mark Carden: Okay, great. As a follow-up, your implied guidance for Q4 suggests a noticeable slowdown on net sales and EBITDA growth. Have you seen anything quarter to date that is giving you more hesitancy on any parts of the business, or is this just a case of being prudent given the macro?

Speaker #4: Okay. Great. And then as a follow-up, your implied guidance for Q4 suggests a noticeable slowdown on net sales and EBITDA growth. Have you seen anything quarter to date that's giving you more hesitancy on any parts of the business, or is this just a case of being prudent given the macro?

Jim Leddy: Yeah, thanks, Mark. No, actually, the top end of our guide for Q4 implies really consistent year-over-year revenue growth. It is pretty much all organic. In Q4, we lapped the Italco acquisition. That is about 50 to 80 basis points of year-over-year that evaporates just from lapping that acquisition. We have a little bit of conservatism on the Middle East. December is a very powerful tourism month in the Middle East, so even though they are operating a little bit above 100% right now, we are putting in a little bit of conservatism. We have a tougher comparison, about 1% tougher comp to last year. If you looked at our organic growth, the first three quarters of the year was about 11%.

Speaker #2: Yeah. Thanks, Mark. No. Actually, the top end of our guide for Q4 implies really consistent year-over-year revenue growth. It's pretty much all organic in Q4.

Speaker #2: We lapped the Italco acquisition. That's about 50 to 80 basis points of year-over-year that evaporates just from lapping that acquisition. We have a little bit of conservatism on the Middle East.

Speaker #2: December is a very powerful tourism month in the Middle East, and so even though they're operating a little bit above 100% right now, we are putting in a little bit of conservatism.

Speaker #2: And then we have a tougher comparison about 1% tougher comp to last year. So if you looked at our organic growth the first three quarters of the year, it was about 11%.

Jim Leddy: The top end of our guide implies about 10%, and it is just very consistent throughout the year and what the guide really implies, given what I just kind of went through.

Speaker #2: The top end of our guide implies about 10%, and it's just very consistent throughout the year. What the guide really implies, given what I just kind of went through...

Mark Carden: Makes sense. Thanks so much, and good luck, guys.

Speaker #4: Makes sense. Thanks so much. Good luck, guys.

Jim Leddy: Thank you.

Speaker #2: Thank you.

Operator: Our next question is from Brian Harbour with Morgan Stanley. Please proceed with your question.

Speaker #1: Our next question is from Brian Harbor with Morgan Stanley. Please proceed with your question.

Hillary Lee: Hi, this is Hillary Lee on for Brian Harbour. Great quarter, guys. Another quarter of strong margins. Just wanted to know if you guys could provide some color on what drove the expansion, and do you think this sort of expansion is sustainable into Q4 in 2027?

Hilary Lee: Hi, this is Hillary Lee on for Brian Harbour. Great quarter, guys. Another quarter of strong margins. Just wanted to know if you guys could provide some color on what drove the expansion, and do you think this sort of expansion is sustainable into Q4 in 2027?

Speaker #5: Hi, this is Hillary Lee, on for Brian Harbor. Great quarter, guys—another quarter of strong margin. I just wanted to know if you could provide some color on what drove the expansion, and do you think this sort of expansion is sustainable in Q4 and 2027?

Jim Leddy: Hillary, are you referring to gross margin or EBITDA margin?

Speaker #2: Hillary, you referring to gross margin or a little bit of EBITDA? In adjusted EBITDA. Yeah. No. I think our guidance implies a very consistent kind of above 7% type of EBITDA margin in Q4.

Hillary Lee: Adjusted EBITDA.

Hilary Lee: Adjusted EBITDA.

Jim Leddy: In adjusted EBITDA. Yeah, no, I think our guidance implies a very consistent above 7% type of EBITDA margin in Q4. Our full-year guidance implies getting to 7%, which was our 2028 target. We have been seeing pretty consistent growth there. As I just mentioned, there is a little bit of conservatism in the guide, but that is just mostly driven by what I kind of just discussed.

Speaker #2: Our full year guidance implies getting to 7%, which was our 2028 target. And we've been seeing pretty consistent growth there. As I just mentioned, there's a little bit of conservatism in the guide, but that's just mostly driven by what I kind of just discussed.

Hillary Lee: Great. Thanks. As a follow-up, I guess what are you guys really seeing in terms of inflation? Anything that you can provide on diesel prices rising rapidly?

Hilary Lee: Great. Thanks. As a follow-up, I guess what are you guys really seeing in terms of inflation? Anything that you can provide on diesel prices rising rapidly?

Speaker #5: Great. Thanks. And just as a follow-up, I guess, what are you guys really seeing in terms of inflation? Anything that you can provide on diesel prices, rising rapidly?

Jim Leddy: Yeah. I think one thing to point out, obviously, fuel prices have rose egregiously, really since March. If you look at our operating leverage this quarter and last quarter as a percent of revenue, you see that most of it is coming from the gross profit margin line, and the adjusted OpEx line is relatively flat versus prior year. The main driver of that is fuel. Then you're seeing the offset in the gross profit margin line. So I would say we're passing most of it on, not all of it. You're never really going to be able to pass all of it on, but that's been the real driver of that operating leverage gap dynamic.

Speaker #2: Yeah. I think one thing to point out, obviously, fuel prices have rose egregiously really since March. And so if you look at if you look at our operating leverage this quarter and last quarter, as a percent of revenue, you see that most of it is coming from the gross profit margin line and the adjusted OPEX line is relatively flat versus prior year.

Speaker #2: And the main driver of that is fuel. And then you're seeing the offset in the gross profit margin line. So I would say we're passing most of it on, not all of it.

Speaker #2: You're never really going to be able to pass all of it on, but that's been the real driver of that operating leverage gap dynamic.

Hillary Lee: All right. Great. Thank you guys so much.

Hilary Lee: All right. Great. Thank you guys so much.

Speaker #5: All right. Great. Thank you guys so much.

Jim Leddy: Thank you.

Speaker #2: Thank you.

Operator: Our next question is from Alex Slagle with Jefferies. Please proceed with your question.

Speaker #1: Our next question is from Alex Slagel with Jefferies. Please proceed with your question.

Alex Slagle: Hey, thanks. Good morning. Just following up on the fuel, I do not know if inbound freight has become any more of a challenge or sort of how you are looking at that passing through. Then just looking out 2027, I do not know if there is any initial comments at the high level just to start thinking about. I mean, should we think about that overall view for 2027 to 2030 on revenue, gross profit, EBITDA? Is that sort of linear, or is there something different in 2027 to think about?

Speaker #6: Hey, thanks. Good morning. He's following up on the fuel. I don't know if inbound freights have become any more of a challenge, or sort of how you're looking at that passing through.

Speaker #6: And then, just looking out to 2027, I don't know if there's any initial comments at a high level, just to start thinking about it. I mean, should we think about the overall view for 2027 to 2030 on revenue, gross profit, EBITDA?

Speaker #6: Is that sort of linear, or is there something different in '27 to think about?

Jim Leddy: Thanks, Alex. No. Look, I would say on the inbound freight, I think our teams have done a really good job of managing procurement and pricing very effectively in this environment of higher fuel and higher freight costs. Obviously, you see it in our gross profit dollar growth at 15% year over year and strong gross profit margins. As our smaller markets and high-growth markets start to get scale and generate the benefits of that scale on the procurement side, that flows into pricing. We are leveraging our digital platform. As I just mentioned, we are able to pass on a good portion of that fuel cost. So I think as Chris mentioned, our teams are executing at a very high level and it is showing through in the results.

Jim Leddy: Thanks, Alex. No. Look, I would say on the inbound freight, I think our teams have done a really good job of managing procurement and pricing very effectively in this environment of higher fuel and higher freight costs. Obviously, you see it in our gross profit dollar growth at 15% year-over-year and strong gross profit margins. As our smaller markets and high-growth markets start to get scale and generate the benefits of that scale on the procurement side, that flows into pricing. We are leveraging our digital platform. As I just mentioned, we are able to pass on a good portion of that fuel cost. So I think as Chris mentioned, our teams are executing at a very high level and it is showing through in the results.

Speaker #2: Thanks, Alex. No. Look, I would say on the inbound freight, I think our teams have done a really good job of kind of managing procurement and pricing very effectively.

Speaker #2: In this environment of higher fuel and higher freight costs, obviously, you see it in our gross profit dollar growth at 15% year-over-year, and strong gross profit margins.

Speaker #2: So, as our smaller markets and high-growth markets start to achieve scale and generate the benefits of that scale on the procurement side, that flows into pricing.

Speaker #2: We're leveraging our digital platform. And as I just mentioned, we're able to pass on a good portion of that fuel cost. So, I think as Chris mentioned, our teams are executing at a very high level.

Speaker #2: And it's showing through in the results.

Chris Pappas: Yeah. Alex, we are running the business with the outlook of if something great happens and the world is at peace and oil comes down and there is better logistics out there and all the other things that we have built into the model that the world has inflated. It is moderate at this point. I mean, it is up and down. Protein can always be a little tricky. It can be really high one year and down the next. We are kind of seeing, I think we only reported in specialty only about 2%, 2.5% of inflation. So we are trying to keep costs down. Obviously, we have to be competitive and we want our customers to be able to get the best value of what we can provide. But I just think the new world is higher cost, and you have to fight it with technology.

Speaker #3: Yeah. And Alex, we're running the business with the Outlook of if something great happens and the world's at peace and oil comes down and there's a better logistics out there and all the other things, that we've kind of built into the model that the world has inflated.

Speaker #3: It's moderate at this point. I mean, it's up and down protein can always be a little tricky. It can be really high one year and down the next.

Speaker #3: What kind of seeing I think we only reported in specialty only about 2%, 2, 2 and a half percent of inflation. So we're just we're trying to keep costs down.

Chris Pappas: Obviously, we have to be competitive and we want our customers to be able to get the best value of what we can provide. But I just think the new world is higher cost, and you have to fight it with technology.

Speaker #3: Obviously, we have to be competitive, and we want our customers to be able to get the best value. Of what we can provide. But I just think the new world is higher cost, and you have to fight it with technology.

Chris Pappas: You have to fight it with a team operating kind of like a symphony and being able to take out some costs as much as possible as we do start to leverage our new facilities. I think you are seeing that, and it is built into our forecast to 2030. I do not think we are going to see much different. If it does, it is a plus. If we have a little headwind, I think we built that in. So I like where we sit, and I like where the team is taking us.

Speaker #3: You have to fight it with a team operating kind of like a symphony. And being able to take out some costs as much as possible as we do start to leverage our new facilities.

Speaker #3: And I think you're seeing that, and it's built into our forecast to 2030. I don't think we're going to see much different if it does.

Speaker #3: It's a plus. If we have a little headwind, I think we've built that in. So I like where we sit, and I like where the team is taking us.

Alex Slagle: Great. Thanks for the color.

Speaker #6: Great. Thanks for the color.

Chris Pappas: Thank you.

Speaker #2: Thank you.

Operator: Our next question is from Peter Saleh with BTIG. Please proceed with your question.

Speaker #1: Our next question is from Peter Selah with BTIG. Please proceed with your question.

Peter Saleh: Great. Thanks, and congrats on another great quarter. I did want to ask, I guess first, if you guys could give us a little bit more color on the gross margin gains that you are seeing. There are really some healthy gains here for the past several quarters. Just trying to understand maybe what is driving that and how much of that is sustainable as we head into 2027.

Speaker #4: Great. Thanks. And congrats on another great quarter. I did want to ask, I guess, first, if you guys could give us a little bit more color on the gross margin gains.

Speaker #4: You're seeing some really healthy gains here over the past several quarters. I'm just trying to understand what's driving that, and how much of it is sustainable as we head into 2027.

Jim Leddy: Yeah, Alex, I will just revert to my previous comment. Peter, the operating leverage as expressed as percent of revenue could shift around quarter to quarter, year over year based on market dynamics. This quarter, it happens to be that fuel prices are causing. Normally with 11% or 10% type of growth in revenue, you are going to see your adjusted OpEx line be lower year over year, but it is relatively flat, really because of fuel prices and the impact on the OpEx line. Then you are seeing that offset, and that is juicing up the gross profit margin line a little bit. But I would say what we are really seeing is product mix.

Jim Leddy: Yeah, Alex, I will just revert to my previous comment. Peter, the operating leverage as expressed as percent of revenue could shift around quarter to quarter, year-over-year based on market dynamics. This quarter, it happens to be that fuel prices are causing. Normally with 11% or 10% type of growth in revenue, you are going to see your adjusted OpEx line be lower year-over-year, but it is relatively flat, really because of fuel prices and the impact on the OpEx line. Then you are seeing that offset, and that is juicing up the gross profit margin line a little bit. But I would say what we are really seeing is product mix.

Speaker #2: Yeah. Alex, I'll just revert to kind of my previous comment about sorry, Peter. That the operating leverage as expressed as a percent of revenue could shift around quarter to quarter year-over-year based on market dynamics.

Speaker #2: This quarter, it happens to be that fuel prices are causing normally with 11% or 10% type of growth in revenue, you're going to see your adjusted OPEX line be lower year-over-year.

Speaker #2: But it's relatively flat, really, because of fuel prices and the impact on the OPEX line. And then you're seeing that offset and that's juicing up the gross profit margin line a little bit.

Speaker #2: But I would say what we're really seeing is product mix, as our operating companies and many of our markets are becoming more of a true chef's warehouse over time as we grow categories, as our sales teams become more mature, more experts.

Jim Leddy: As our operating companies in many of our markets are becoming more of a true Chefs' Warehouse over time, as we grow categories, as our sales teams become more mature and more experts and continue to drive market share. We are selling a higher mix of higher margin products, both on the specialty side and on the protein side. I mentioned before that we are starting to get to really leverage our scale on the procurement and pricing side. Then behind that, we have continued improvements in digital with integrating AI type technology that is flowing through to our pricing and to our sales teams. It is all of those things coming together. It is not two home runs. It is like we like to say, it is 20 base hits and doubles. That is really contributing to a lot of that gross profit margin improvement.

Speaker #2: And continue to drive market share. We're selling a higher mix of higher margin products, both on the specialty side and on the protein side.

Speaker #2: I mentioned before that we're starting to get to leverage really leverage our scale on the procurement and pricing side. And then behind that, we have continued improvements in digital with integrating AI-type technology.

Speaker #2: That's flowing through to our pricing and to our sales teams. And so it's all of those things coming together. It's not two home runs.

Jim Leddy: It is all of those things coming together. It is not two home runs. It is like we like to say, it is 20 base hits and doubles. That is really contributing to a lot of that gross profit margin improvement.

Speaker #2: It's like we like to say, it's 20 base hits and doubles. And that's really contributing to a lot of that gross profit margin improvement.

Chris Pappas: Peter, cautiously optimistic. We like to think there are lots of buffers going forward into 2030, 2031, beyond, with just the growth into the capacity we have built. We are still running many mid-size small businesses. We only have one or two really sizable businesses. As our new facilities keep coming online, where we do have the space to buy direct, buy in volume, not have LTLs, all those will contribute to better top line GP, which should result in better bottom line GP and EBITDA margins. We kind of look at it that we could take a few hits. There could be headwinds, but there is a lot of tailwinds coming with the growth of CW family of businesses as we do grow into all these new investments and we start to get the synergies and the leverage on the enormous investments we have made the last 12 years.

Speaker #3: And Peter, cautiously optimistic, we like to think there's lots of buffers going forward into 2030, '31, beyond. With just the growth into the capacity, we have built we're still running many midsize small businesses.

Speaker #3: We only have one or two really sizable businesses. And as our new facilities keep coming, online, where we do have the space to bidirect, buy in volume, not have LTLs, all those will contribute to better top line GP.

Speaker #3: Which should result in better bottom line GP and EBITDA margins. So we kind of look at it that we could take a few hits that could be tailwinds, but there's a lot of I mean, headwinds, but there's a lot of tailwinds coming.

Chris Pappas: We kind of look at it that we could take a few hits. There could be headwinds, but there is a lot of tailwinds coming with the growth of CW family of businesses as we do grow into all these new investments and we start to get the synergies and the leverage on the enormous investments we have made the last 12 years.

Speaker #3: With the growth of the CW family of businesses, as we do grow into all these new investments, and we start to get the synergies and the leverage on the enormous investments we've made over the last 12 years.

Chris Pappas: Very cautiously optimistic about that.

Speaker #3: So, very cautiously optimistic about that.

Chris Pappas: Very cautiously optimistic about that.

Peter Saleh: Understood. Can you guys give us an update? The organic growth has been double digit all year. Where are we on the sales force? Has that been growing at the same rate, maybe slower? How are you seeing hiring trends right now?

Speaker #4: Understood. And then just can you guys give us an update the organic growth has been double digit all year. Where are we on the Salesforce?

Speaker #4: Has that been growing at the same rate, maybe slower? And how are you seeing hiring trends right now?

Chris Pappas: Yeah, I think no change. Really, the team is executing. It's always been very hard to find great people to do what we do because you have to have a lot of knowledge. You have to be able to absorb all that knowledge and talk like an advisor to the best chefs in the world. So we find good people, we hire them. Unfortunately, there is some turnover at the bottom. It's not for everybody. It's a very expensive investment to invest 2, 3 years into somebody who doesn't make it or stay. So, we do take a lot of time and care, spend the time in the hiring process. But we're hiring still as fast as possible where we could find really good people because we still can't meet the demand that's coming at us.

Speaker #2: Yeah. I think no change. Really,

Speaker #3: the team is executing to it's always been very hard to find great people to do what we do because you have to have a lot of knowledge.

Speaker #3: You have to be able to absorb all that knowledge and talk like an advisor. To the best chefs in the world. So we find good people.

Speaker #3: We hire them. We're always unfortunately, there is some turnover at the bottom. It's not for everybody. It's a very expensive investment to invest two, three years into somebody who doesn't make it or stay.

Speaker #3: So we do take a lot of time and care and spend the time. In the hiring process, but we're hiring still as fast as possible where we could find really good people because we still can't meet the demand that we'll that's coming at us.

Chris Pappas: A lot of our regions, the salespeople still have way too many accounts. So we see it that we just can't hire fast enough to meet the demand that we have for our businesses.

Speaker #3: A lot of our regions that the salespeople still have way too many accounts. So we see it that we can't we just can't hire fast enough to meet the demand that we have.

Speaker #3: For our businesses.

Peter Saleh: Thank you very much.

Speaker #4: Thank you very much.

Chris Pappas: Thanks, Peter.

Speaker #3: Thanks, Peter.

Operator: Our next question is from Kelly Bania with BMO Capital Markets. Please proceed with your question.

Speaker #1: Our next question is from Kelly Banya with BMO Capital Markets. Please proceed with your question.

Kelly Bania: Good morning, Chris and Jim. Just wanted to follow up on the top line. You have obviously had an incredibly strong year, not to nitpick at all, but I guess some might do some math and say if CME really accelerated and the top line did moderate just a little bit, looks like the domestic business maybe slowed a little bit. Is there anything to note from just a seasonality standpoint or customer behavior standpoint? As well, can you talk about the visibility you have into just the holiday season and the bookings that your customers are seeing at this stage? I think you normally have some visibility into what that looks like for Q4.

Speaker #5: Good morning, Chris and Jim. Just wanted to follow up on the top line you've obviously had an incredibly strong year and not to nitpick at all, but I guess some might do the some math and say if CME really accelerated and the top line did moderate just a little bit, looks like the domestic business maybe slowed a little bit.

Speaker #5: Is there anything to note from just a seasonality standpoint or customer behavior standpoint? And as well, can you talk about the visibility you have into just the holiday season and the bookings that your customers are seeing at this stage?

Speaker #5: I think you normally have some visibility into what that looks like for the fourth quarter.

Jim Leddy: Yeah. I will start. I will let Chris comment more if you would like. I will really just go back to my comments earlier. While we always build a little bit of conservatism into our guidance, we did raise it fairly significantly. The top end of the guidance implies very consistent year-over-year organic growth with the prior year when you factor in a tougher comp to last year, about 1%, and some conservatism around December for the Middle East, just given that there is still a lot of unknowns there. So there is nothing in the guidance change that we really need to expect to call out. I would say that revenue trends, as we said in our prepared remarks, continued into October. We saw a really good October, double-digit growth consistent with what we have been seeing all year.

Speaker #2: Yeah. I'll start and I'll let Chris comment. Mora, if you'd like. I'll really just go back to kind of my comments earlier. While we always build a little bit of conservatism into our guidance, we did raise it fairly significantly.

Speaker #2: And it does imply the top end of the guidance implies very consistent year-over-year organic growth with the prior year when you factor in a tougher comp to last year about 1% and some conservatism around December for the Middle East, just given that there's still a lot of unknowns there.

Speaker #2: So I don't there's nothing in the guidance change that we really need to expect to call out. We're not, I would say that revenue trends as we said in our prepared remarks continued into October.

Speaker #2: We saw a really good October, double digit growth consistent with what we've been seeing all year. So I'll just I'll let Chris comment on the what we expect for the fourth quarter, but that's really what we have.

Jim Leddy: I will let Chris comment on what we expect for Q4, but that is really what we have.

Chris Pappas: Basically, Kelly, what we are hearing from all our sales meetings and obviously looking at the numbers, there is a lot of demand in Q4 of private events, corporate events, celebrations. So it is really healthy at the top. Anything negative that I could hear is certain conferences have 10% to 12% less people attending. I do not think that is a surprise to anybody. From a lot of our private club businesses, what I may be hearing is the summer was a little up and down. A lot of people were traveling. A la carte could be a little soft, but the private events are more than making up their top line, bottom line for their budget. So it seems like a little bit goes down and then a little bit goes up.

Speaker #3: Yeah, I mean, basically, Kelly, what we're hearing from all our sales meetings—and obviously looking at the numbers—is there's a lot of demand in the fourth quarter for private events, corporate events, celebrations.

Speaker #3: So it's really healthy at the top. Anything negative that I could hear is certain conferences have 10, 12 percent less people attending. I don't think that's a surprise.

Speaker #3: To anybody. And from a lot of our private club businesses, what I may be hearing is the summer was a little up and down.

Speaker #3: A lot of people were traveling. But à la carte could be a little soft. But the private events are more than making up their top line bottom line for their budget.

Speaker #3: So it seems like a little bit goes down and then a little bit goes up. And from our seat, we see in our forecast, obviously, we'd like to be conservative, but we don't see anything we've taken out guidance.

Chris Pappas: From our seat, in our forecasts, obviously, we would like to be conservative, but we do not see anything. We have taken out guidance. I think Black Box will tell you there is a little slowness here and there in some customer bases, and I am sure that is true. Our investment really to grow the sales force, grow territory and categories, was always designed to make up any downturn in the typical customer base and make it up by having more and more customers. We look at it again as how many GP dollars can we get on trucks and fill those routes, and that is the way we run the business, and it is working pretty well.

Speaker #3: So there's a little—I think the black box will tell you—there's a little slowness here and there in some customer bases. And I'm sure that's true, but our investment really to grow the Salesforce, grow territory, and categories was always designed to make up any downturn.

Speaker #3: And in the typical customer base, and make it up by having more and more customers we look at it again as how much how many dollars, how many GP dollars can we get on trucks?

Speaker #3: And fill those routes, and that's the way we run the business. And it's working pretty well.

Kelly Bania: Okay. Thank you. Just had one more follow-up. Some in the industry are calling for some sizable savings from AI. Obviously, Chefs' has been at the forefront, and you have outlined many areas from pricing to sourcing, logistics, inventory, that you are working on projects there. Just curious if there is any update on the size of the potential savings as you continue to work through that and feedback from the sales force as they continue to get more tools on that front.

Speaker #5: Okay. Thank you. Just had one more follow-up. Some in the industry are calling for some sizable savings from AI. Obviously, Chefs has been at the forefront and you've outlined many areas from pricing to sourcing logistics inventory that you are working on projects there.

Speaker #5: But just any just curious if there's any update on the size of the potential savings as you continue to work through that and feedback from the Salesforce as they continue to get more tools on that front.

Chris Pappas: Yeah, great question. We are all in on the investment. It is part of our budget to continue to invest in digital and have the best AI tools for our team. My 2020 vision still thinks that it is going to continue to make the sales force at every department more effective. I am not ready to give up on people. I think people play a really important part of what we do and how we do it. We have always been on the mindset that you are going to have to do more with less, just from the point that there is just not enough people. The birth rates are not what they used to be across the world, so you are going to have to use AI and every piece of technology to drive your bottom line. I think it is an upside for us.

Speaker #3: Yeah. I mean, great question. We're all in on the investment. It's part of our it's part of our budgets to continue to invest in digital and have the best AI tools for our team.

Speaker #3: My 2020 vision still thinks that it's going to continue to make the Salesforce at every department more effective. I'm not ready to give up on people.

Speaker #3: I think people play a really important part of what we do. And how we do it. But we've always been on the mindset that you're going to have to do more with less.

Speaker #3: Just from the point that there's just not enough people. The birth rates aren't what they used to be. Across the world. So you're going to have to use AI in every piece of technology.

Chris Pappas: The birth rates are not what they used to be across the world, so you are going to have to use AI and every piece of technology to drive your bottom line. I think it is an upside for us.

Speaker #3: To drive your bottom line. And I think it's an upside for us. I mean, we're going to be conservative and say that our forecast that we gave you is not built with any.

Chris Pappas: We are going to be conservative and say that our forecast that we gave you is not built with any big ahas. Would we love to see an aha? Absolutely. If we get another 1 or 2 points to the bottom line because we are able to be that much more efficient, that would be truly incredible. I think we are satisfied really what our forecast looks like going into 2030 and just hitting that, I think it would be a tremendous reward for shareholders.

Speaker #3: Big ahas. But would we love to see an aha? Absolutely. If we get another point, or two points, to the bottom line because we're able to be that much more efficient, that would be truly incredible.

Speaker #3: But I think we're satisfied really what our forecast looks like going into 2030. And just hitting that, I think it'd be a tremendous reward for shareholders.

Kelly Bania: Thank you.

Speaker #5: Thank you.

Chris Pappas: Thank you.

Speaker #2: Thank you.

Operator: Our next question is from Todd Brooks with StoneX. Please proceed with your question.

Speaker #1: Our next question is from Todd Brooks with StoneX. Please proceed with your question.

Todd Brooks: Hey, good morning, guys. Congrats on the continued momentum in the quarter as well.

Speaker #6: Hey. Good morning, guys. Congrats on the continued momentum in the quarter as well.

Chris Pappas: Thank you.

Speaker #2: Thank you.

Todd Brooks: Two quick questions. One, Jim, if you look at kind of where we stand in the year and the full year guidance, what inflation outlook is embedded in the Q4 guidance for specialty and center-of-the-plate?

Speaker #6: Two quick questions. One, Jim, if you look at kind of where we stand in the year and the full year guidance, what inflation outlook is embedded in the Q4 guidance for specialty and center?

Jim Leddy: Nothing really out of the ordinary from what we've been seeing, Todd Brooks. Price inflation throughout the year has been pretty consistently at the upper end of what we would consider the normal range of 2% to 4%. If you exclude the kind of extreme price inflation we're seeing in the Middle East, our aggregate price inflation in the quarter was closer to 3.5%. As Chris Pappas mentioned earlier, specialty was really 2.5%. So we're just assuming consistent kind of inflation through the remainder of the year. We don't expect anything other than you have a few categories that are always a little bit higher, a little bit lower. But that's normal.

Speaker #2: Nothing really out of the ordinary from what we've been seeing, Todd. Price inflation throughout the year has been pretty consistently kind of at the upper end of what we would consider.

Speaker #2: The normal range of 2 to 4 percent. If you exclude kind of extreme price inflation you were seeing in the Middle East, our aggregate price inflation in the quarter was closer to 3 and a half percent.

Speaker #2: As Chris mentioned early, earlier specialty was really 2 and a half percent. So we're just assuming consistent kind of inflation through the remainder of the year.

Speaker #2: We don't expect anything other than you have a few categories that are always a little bit higher, a little bit lower. But that's normal.

Todd Brooks: Okay, great. Then my second and final question, if we're looking out now, 2027, 2028, how has the new facility plan shaped up? What facilities are on the come? Have you had any success? I know it's kind of a holy grail, but finding any sort of opportunity for a second facility in the New York Metro market. Thanks.

Speaker #6: Okay. Great. And then my second and final question. If we're looking out now 27, 28, how has the new facility plan shaped up? What facilities are on the common?

Speaker #6: Have you had any success? I know it's kind of a holy grail, but finding any sort of opportunity for a second facility in the New York metro market?

Speaker #6: Thanks.

Jim Leddy: Yeah. Thanks, Todd Brooks. We kind of laid out when we put out our 2030 guidance, kind of the markets that we'll be adding distribution capacity and consolidating facilities. Many of them are in process right now, and they'll come online over the next two, three years. That's Texas to consolidate facilities in Dallas and build a state-of-the-art distribution center. New England is underway to do consolidations, add capacity. We're in the process of expanding Las Vegas, our protein processing. Then there's a couple of markets in the Midwest that are underway as well. Those are really our focus right now, and then we are working on New York. There's multiple scenarios. Nothing to announce right now.

Speaker #3: Yeah. Thanks, Todd. We kind of laid out at our when we put out our 2030 guidance, kind of the markets that we'll be adding distribution capacity and consolidating facilities.

Speaker #3: We're in many of them are in process right now and they'll come online over the next two, three years. And that's Texas, to consolidate facilities in Dallas and build a state-of-the-art distribution center.

Speaker #3: New England, is underway to do consolidations. Add capacity. We're in the process of expanding Las Vegas. Our protein processing and then there's a couple of markets in the Midwest that are underway as well.

Speaker #3: Those are really our focus right now. And then we are working on New York. There's multiple scenarios. Nothing to announce right now.

Todd Brooks: Okay, great. Thank you both.

Speaker #6: Okay. Great. Thank you both.

Jim Leddy: Thank you.

Speaker #3: Thank you.

Operator: We have reached the end of the question and answer session. We would like to turn the floor back over to Chris Pappas for closing comments.

Speaker #1: We have reached the end of the question and answer session. I'd like to turn the floor back over to Chris Pappas for closing comments.

Chris Pappas: Well, thank you all for joining our Q3 earnings call. It was a very strong quarter. The team continues to execute. We couldn't be more proud of how the team continues to drive forward The Chefs' Warehouse and the passion they have for selling the world's finest ingredients to the best chefs in the world. We look forward to you joining us again on our Q4 call. Thank you very much.

Speaker #2: Yeah. Well, thank you all for joining our third quarter earnings call. It was a very strong quarter. The team continues to execute. We couldn't be more proud of how the team continues to drive forward the Chef Warehouse and the passion they have for selling the world's finest ingredients to the best chefs in the world.

Speaker #2: We look forward to you joining us again on our fourth quarter call. Thank you very much.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.