Why Shares of The Chefs Warehouse Inc. Dropped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of The Chefs Warehouse were getting cut up today, falling as much as 10% after the company provided disappointing guidance in its earnings report.
So what: The food-products seller actually beat estimates in the quarter gone by with a per-share profit as sales jumped 35.6% to $193.4 million, and earnings per share of $0.22 topped expectations of $0.20. CEO Chris Pappas called 2013 a year of "significant growth" for the company, and said the acquisition of Allen Brothers would help the company grow in 2014 and beyond.
Now what: Revenue guidance for 2014 was solid as sales expectations of $810 to $840 million were in line with the consensus at $820.4 million, but the bottom line came up short. Chefs Warehouse expects a full-year-adjusted EPS of $0.70-$0.80 against estimates of $0.87. Considering the company posted adjusted EPS of $0.81 in 2013, profits are moving in the wrong direction, but that seems to be the result of costs relating to integrating Allen Brothers and other investments in infrastructure. As long as sales are growing at a clip above 20%, I wouldn't be too concerned about the downside EPS guidance. Shares had recovered later in session and were trading down just 4% closer to the bell.
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The article Why Shares of The Chefs Warehouse Inc. Dropped originally appeared on Fool.com.Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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