US Foods Holding Corp (NYSE:USFD) stock rose 0.24% (As on August 11, 11:24:48 AM UTC-4, Source: Google Finance) after the company posted mixed results for the second quarter of FY 23. Adjusted earnings before interest, taxes, depreciation and amortization increased 17% to $432 million, which the company said was a record level, while the metric’s margin expanded 60 basis points. Total case volume increased 2.7% annually in the second quarter, driven by gains in independent restaurants, hospitality and healthcare. Volume growth was partially offset by a 4.5% decline in chain volume while food cost deflation weighed on revenue. Year-over-year total case growth for the fourth quarter was negatively impacted approximately 1% by the strategic exit of a small number of lower margin chain restaurant and education customers. Net income available to common shareholders was $83 million, an increase of $24 million compared to the prior year. Net cash provided by operating activities for fiscal 2022 was $765 million, an increase of $346 million from the prior year. Cash capital expenditures for fiscal 2022 were $265 million, a decrease of $9 million from the prior year.

USFD in the second quarter of FY 23 has reported the adjusted earnings per share of 79 cents, beating the analysts’ estimates for the adjusted earnings per share of 76 cents. The company had reported the adjusted revenue growth of 11.5 percent to $9.01 billion in the second quarter of FY 23, missing the analysts’ estimates for revenue of $9.3 billion. This is driven by food cost inflation of 8.4% compared to prior year. Operating expenses of $1.3 billion increased $153 million, or 13.8% from the prior year. Operating expenses increased primarily driven by higher distribution costs, reflecting higher labor costs as a result of increased turnover and higher than normal wage inflation. These increases were partially offset by cost savings initiatives outlined in the long-range plan including routing improvements and focused efforts positively impacting labor turnover and productivity. Operating expenses as a percent of Net sales were 14.8%.

For the full year, US Foods revised its adjusted EPS guidance to a range of $2.55 to $2.65, lifting the lower-end target from $2.45 previously. The Capital IQ consensus is for 2023 normalized EPS of $2.59. The company raised its adjusted EBITDA target to between $1.51 billion and $1.54 billion from a prior view of $1.45 billion to $1.51 billion.

The company used free cash flow to repurchase $166 million of shares in the second quarter, prepay $60 million of debt and acquire Renzi Foodservice, a deal that closed in the current quarter