US Foods Holding Corp. (USFD) September 2026 Conference Transcript

Good afternoon, everyone. Thank you very much for joining us as we move through the afternoon of day two. I hope everyone had a chance to grab some lunch. My name is Jeff Bernstein. I'm the Restaurant and Food Service Distribution Analyst here at Barclays. We're thrilled to have our next presenting company with us today, U.S. Foods. With us on stage from Rosemont, Illinois, we have Dirk Lacasio, the CFO. So, by way of background, for those not familiar with U.S. foods, they are a leader in the U.S. food service distribution industry, partnering with roughly 250,000 restaurants and food service operators from 70-plus broad line locations and 90-plus cash-and-carry stores. Their 2026 guidance calls for 4% to 6% revenue growth, supported by 2.5% to 4.5% case growth, and ultimately culminating in 9% to 13% EBITDA growth, and a very impressive 18% to 24% EPS growth. so I have a slew of questions for Dirk but we wanted to thank everyone for joining us and again thank U.S. Foods for making the trip and I will kick it off with some Q&A thank you glad to be here so I figured rather than mincing words we would just start with a question about current environment and trends we are in the midst of your third quarter I'm wondering what you could share in terms of volumes and how they're trending, if anything.

Well, it's an interesting world out there where things change regularly, it seems like. Overall, when I think about our target customer types of independent healthcare and hospitality, growth rates continue to be very healthy in those. It's pretty similar broadly to Q2. So that's the key takeaway. way our team continues to be pleased with the 21 quarters of share gains and independence that we had through the second quarter 23 with with health care and then you know if you go sort of broader than that we have on chain our expectation is it continues to be similar to black box we've seen black box soften a little bit from q2 through q3 so far say the industry has had a little bit of a But short-term challenge from the cyclospora recalls and that, but that's begun to normalize on produce volume. So that's soon to be behind us. And then I think overall a few sort of all other type of noise that we've talked about before with a retailer that closed some stores for us, education just later back to school and, you know, customer losses there. But otherwise, key customers very similar and feel like our ability to continue to gain share in those is well on track.

And being that you service 250,000 restaurants and food service operators, you have your finger on the pulse from a consumer standpoint. As you think about the consumer and the restaurant industry, how would you characterize that health of the consumer? I know it sounds like trends have been stable. Clearly, the restaurant industry traffic, or at least the big chains that we talk about are still somewhat challenged. But I'm just wondering what you're seeing across different customer types and what levers can operators you think pull to sustain the sales and profit growth.

Well, I think on our last quarterly call, I think Dave Flipman, our CEO, put it well, challenged but stable, I think, is a good way to describe it out there. You see within specific concepts, to your point, you see winners and losers and those that are challenged. It seems like those that have found on the chains, those that have found that right value proposition seem to be winning. I think independents continue to be positioned well. They tend to have a loyal customer base, and they've fared well. So they will lean into values in some ways. There are specials in that, but they're not really the meal deals and some of that like a lot of the chains tend to be. So overall, I think the consumer continues to be pretty stable as we think about their overall consumption ability, and I think the case shape continues to be, unfortunately, fully in force.

We're in the independent case growth. It seems like that's the area of focus for you, the most profitable, and they have obviously a loyal customer base themselves. You had a very strong first half of this year. It seems like momentum has continued into the third quarter based on your comments moments ago. what do you think is driving that acceleration in the share gains? And again, why you believe maybe the independents are outperforming those chains?

Sure. Well, I'm pleased, although we believe we can do more. I'm pleased with the continued acceleration, five quarters in a row of acceleration in our independent case growth. And it really comes down to just core execution. So Randy Taylor, who leads our field sales organization and field operations period, he is overall with that team. They focused a lot on whether it's underperforming markets and or capabilities to be able to advance those, and that's helped increase. We've seen our net new customer accounts acquisitions continue to grow for those five quarters, same as our overall case growth, so we're encouraged by that. And then we have things like our digital platform, our Pronto platform, which both continue to support the growth within the digital platform. For example, we continue to deploy new capabilities, leveraging AI to be able to enhance sales growth, cross-sell, up-sell type of things, and each of those all contribute. What I get really excited about, though, is we have a number of markets that are growing well north of 5%, so we know that over time 5% is something we can definitely well exceed even in a current environment. so we try not to lose the so whatever the noise of the day or the week is into the march toward continued acceleration and I know we have the three largest players here over the three days it seems like the common theme being when we talk about market share that the big three put aside your differences collectively have 35 less than 40% market share how do you see that trending over time

it would seem like there are other industries that are way north of a number like that. I think that's exactly right.

I would expect us to continue to see consolidation. There's still far more fragmentation in our industry than there are in many others. I think historically there were very low barriers to entry in this industry. So if someone had a few trucks in a rental warehouse they could get in, just the cost of real estate, the technology expectations of customers, it gets harder and harder. So I would expect that consolidation to continue. And I think your point was right on, where the three of us only have about 40%. So there's still plenty of opportunity for growth. And we'll get the question sometimes, how can each be winning? And that's the point. There's still a lot out there that's from other customer types. And we think that through our continued, again, organic growth, leveraging our core service platform, our Pronto, our digital, is a good enabler of that. And then supplementing that with Tuck and M&A, where it makes sense. and our team continues to work that pipeline robustly. And sometimes you have more that come to fruition and sometimes less, but I would expect that consolidation to continue in the industry over time.

And putting aside M&A for a moment because that could obviously drive sales growth. But if you just think about the other ways to do it, it's either you're adding new accounts, which you mentioned new account growth has been strong, versus further penetrating existing accounts, which would seem like that's a no-brainer to be able to just drop off more packages at an existing customer. So how much of the independent growth do you think is coming from new accounts versus deeper penetrating of existing accounts and maybe how those economics differ?

Sure. Well, in our case, almost all the growth is coming from net new accounts. And the reason being, although sellers are focused on winning additional lines within existing customer, it gets masked by just the slower underlying traffic. So you don't see that show up as much. So the positives that are happening there in conversions get offset by the traffic. So our trend line on the net new account acceleration looks an awful lot like our five-quarter-in-a-row acceleration in independent case growth. And that will still always be the main driver, but I think as you get back to a more normalized, where you have traffic growth, our expectation is that penetration or same-store will be a contributor on that over time.

Yeah, and we talk about the primary being new account growth. People talk about the restaurant industry and just how it's such a competitive industry and the closures in the space. Like, what have you seen? You know, we know with COVID there were a fair amount of closures, but how would you size up the industry in terms of closures and reopenings and the number of boxes now versus a few years ago as you think about adding more new accounts?

Well, I think in the last few years you've seen fewer new restaurants, but you've also seen fewer closures. And so sort of on net, they don't seem to be all that different sort of from year to year than they've been in the past. And I think the thing sometimes that gets forgotten in our industry is if you want to go out to eat, even if there's not as many new restaurants in your neighborhood or where you may go, you're probably just going to go to someplace else that you like or you want to go to. So, again, that's a benefit of serving a whole portfolio of different customer types and cuisine types is we are essentially an index of a lot of different options out there for people to dine. So we benefit when you go out, no matter whether it's to a new door or to an existing restaurant.

But there was a lot of discussion, and there has been, around your new sales compensation model or the changes you're making to that compensation model. I think it officially launched in June, just a couple of months ago. Maybe you can explain to people just what that change was, and then I just have a few questions about that.

So this was a change for us going from our local sellers going from 50% fixed and 50% variable in their structure to 100% variable. And so in June, all those sellers cut over to this new structure. But an important point is that on day one, hardly anyone comes in at 100% variable. So it's not as though we come in and it's good luck. Almost every seller comes in on day one at 100% fixed or essentially on a stipend. and then they earn their way through this program all the way to 100% variable. And in the first two and a half months, we've actually had quite a few sellers that have done extremely well that are already on 100% commission, and others, again, that maybe are earlier in their tenure that are still mostly through the fixed. So we've been pretty pleased. I give, again, Randy, that I mentioned earlier, a lot of credit. He's really spearheaded a lot of this. And a year and a half or so ago, had a lot of conviction around making sure we did the right amount of work up front on planning and communicating ongoing and modeling and discipline, et cetera. So that's the overall change. And, you know, we're encouraged by seeing a number of the behaviors that we were looking for starting to show up already.

So what I know, I wanted to ask about seller behavior, like what changes were you hoping to see that you are seeing now that obviously gives you confidence in the plan?

Yeah, there's a few things. One is it makes it, so we, although the construct of the plan of essentially gross profit or contribution margin per drop is not that different than it was before, and then there are additional incentives for private label, for independent restaurants, for pronto, et cetera, but we've simplified the plan and increased the understanding for sellers. So it's much easier for someone to understand now, if I do this, here's how it impacts my pay. We've also enhanced some of the technology that they can see that on a more real-time basis, and so it's made it, again, more effective. And you have certain, you know, sellers who have fully embraced it and, again, are running and making quite a bit more than they did, and others, if I'm still finding my way through it, at least I still know if I'm in with a particular customer that there's these things they're not buying from us or they used to or this is an opportunity, then I'm still going to focus on picking up those extra few cases. So we are seeing that increased behavioral of wanting to own more of that relationship with customers and understanding how I get paid. And also, they still have autonomy where if they want to invest in certain products in order to make sure they get a basket or more of the basket, they can do that. So it's balancing the structure with the autonomy.

You're not the first. Others have made that move towards more variable compensation. How do you think about it in terms of retention versus your expectation perhaps in recruiting new salespeople, which seemingly for a very eager, aggressive salesperson getting 100% variable comp would be quite attractive. What are you seeing in terms of early days retention and the ability to recruit new salespeople?

We've been very pleased. So our retention for the broader sales force and the more tenured groups has actually been in line or less than what it's been historically. So leading into this, it's one of those things where handling this transition, again, communication, deliberation, making sure people understand it, and transitions to the 100% over the right time was important to us. And so there's one of the insurance steps we took was to increase our hiring leading up to it. So if you remember on our second quarter earnings call, we talked about that our seller headcount was up about 8% year over year. And part of that was we wanted to make sure that if we did see increased turnover, that we were ready for it. And so ultimately, I think we've taken the right steps for insurance. The other thing is as we've gone through this in a couple of months, over the couple of months, again, like I said, we've seen a number of sellers move to the 100%. We've had others that we're still kind of protecting as they're being coached and work through it. And so our transition costs are running a little higher than we expected. But, you know, I would take something like that any day because it's temporary over a flawed execution where you have sellers that feel like you didn't do right by them or some other issue. I mean, Dave's been very clear all along. We want sellers to make as much money as they possibly can, and we want them to be there to support their customers and really help those customers make it.

And being that it's only a couple of months in and this transition can take some time, How do you think about when investors might see the changes translate into more meaningful, presumably case growth, penetration, private label gains? How do you think that a change will flow through your system?

I would think relatively quickly. You could try to parse out some of the macro. You start to see, again, we're starting to see the behaviors show up already. So I don't think this is a year. I think this is within the quarter or two quarters, again, because we're seeing the behaviors already and very pleased with the reception and the understanding and how people are owning and running with it.

And there's often talk about your Pronto business, which is more your small order delivery business, roughly a billion dollars in 2025. We're talking about $1.7 billion in 2027, which is a meaningful acceleration. How would you describe or prioritize the drivers of that meaningful acceleration in such a short period of time and maybe have those customers differ from Broadline.

Well, Pronto has been well-received from the beginning. And so Pronto, a billion last year, as you mentioned, contract for a billion three this year, a billion seven next year. And that's up from, we took that up on our last call. We were originally expecting a billion five. The thing that's exciting is I think Pronto will be a continued growth engine for U.S. Foods for a lot of years to come. And I think that the reason that it's been successful is we listen to customers and we listen to what customers want. We're trying to meet customers with what they want. And there's two elements of it, one that's been in place for eight or nine years, Pronto Legacy, which was for customers that were either smaller and needed more frequent deliveries or those that were in dense urban areas that we couldn't get to with the big trucks. And so this is a way for us to give them that more flexible service. but yet they get some of our advanced digital tools, our broader assortment and that than they're getting from a specialty provider and that's been very well received. And the second piece that we just began to put in place a little over a year ago is Pronto Next Day and that's for our delivered customers, our larger truck delivered customers where they can do fill-ins. And this is basically saying instead of ordering those fill-ins from a specialty provider, why don't you order them from us? So it's simpler to have one fewer distributor and when you're doing fill-ins, And instead of just getting whatever that particular, whether it's produce or protein, et cetera, you can fill in groceries, et cetera, from us as well. And that's been in place, again, and well-received, not seeing cannibalization. And that's one where, just because you could see that cannibalization, so we went slow to go fast. And so we took our time. But just to give you all that context, in these markets that we've deployed, which is the legacy Pronto is in almost 60 markets, and then the Pronto next day in almost 40, and that one, when it's deployed, it has one or two trucks. And so in order to make sure we're using it with the right customers, the right deliveries, we continue to add trucks. So in 2026, we made our biggest investment in trucks. In 27, I would expect we'll be talking about another bigger investment, but well-received, a lot of runway ahead, and Pronto is an area that we get excited about because it's just as profitable as our overall independent business. And, again, it's an area where customers are asking for it and demanding it, and we want to meet their needs.

But seeing no cannibalization to the broader broad line business?

No, we're not. In fact, when we put this in place to begin with, we did A-B testing to make sure that we weren't seeing that cannibalization. And then now as we've rolled it out more broadly, we have the right metrics in place where we can see that. And so when you have that many customers on in that many markets, it's not as though it's going to be foolproof. But we have where we can flag, and the deployment team will work with the local markets, and then they'll go and work with, okay, do you have the right customers on, or I see this customer moved from two big deliveries to six smaller deliveries, and they'll manage our way through it. Again, that's why we're being thoughtful in creating that scarcity value of deploying it. But more to come. But Pronto is pretty exciting.

Right in the billion and 25, billion seven, a recently raised number in 27, like it sounds like there's a lot of growth still to come. Like how do you size up what the total market could potentially be or the timeframe to achieve something like that?

Yeah, I got asked that question quite a few times today already, and we get asked it. And, you know, I don't like to answer. I don't know too many things, but this is one where we don't know what the actual number is, but we know it's significantly higher than the 1.7. I think as we get in more places with the Pronto next day, that will continue to inform how we think about what that TAM is over time. And we've learned a lot over a year of how we, again, gain more of that market share. We're going to continue to learn and get better, I think, at gaining more of that share. So, again, what I do know is that Pronto will be a meaningful growth driver for U.S. foods for a lot of years to come.

I think as most in the investment community look at your business, we're ultimately looking at adjusted EBITDA and the margin there and the improvements you've already made, which have been very strong. I think you talk about at least 20 basis points of margin improvement each year on that adjusted EBITDA margin. What gives you the confidence that you can sustain that in good times and bad? Oftentimes people talk about the broader macro being more challenged. I feel like I can hear you in my head saying this is more self-help initiatives, but just curious, your level of confidence that you can continue to achieve that margin expansion for years to come?

Well, hopefully what people have seen is since it's not a flash in the pan, we've been doing this for years, that self-help, it's not a buzz phrase that we like to use versus really how we're running and operating the business. And it's across things like gaining market share. It's activities like strategic vendor management and private label. In gross profit, it is things like routing and other admin productivity in the bottom part of the P&L. So each of those, from year to year, it varies, but if you think of it in the continuous improvement mindset, it continues to build upon itself. And oftentimes, it's some form of technology enablement, whether it's more traditional technology in the past, now leveraging more AI capabilities for the past year. and I expect that the bigger opportunity is yet to come on that as the capabilities have advanced there. But we've done this for the last three and a half or four years where we've actually exceeded our 20 basis points, and I think that will continue to come. But we do think that the balance of that margin expansion with top-line growth is important. Top-line growth is a key enabler for the long term, and I think I'd be remiss to not focus on So we're very pleased with how that's translated into our EBITDA growth. But then we've also leveraged it to EPS growth far stronger than anyone in the industry and or even a lot of other distributors out there by putting that together with a creative capital allocation on top of our core and pleased with that. And we think that, again, healthy EPS growth is also out there for quite a long time to come.

Yep. We all appreciate the distribution business, and you mentioned AI and the potential opportunities there, and that's obviously a big catchphrase. But between technology and AI, where do you think they're producing the clearest measurable benefits across different parts of your business, whether it's sales, supply chain, customer? How do you see technology and AI contributing to that? Sure.

Well, we've seen it, you know, support us the last few years in a few different ways. And we've talked about it in components on different earnings call, et cetera. Here on our second quarter call, we chose to bring it together in a more comprehensive story and a page in our materials. And, you know, we're going to let the multi-hundred billion dollar investments leave that to the metas and others of the world. But we have a pretty sophisticated and good-sized data science team. Myself, which is part of my team, and I work closely with our chief information and digital officer, and our teams work together to deploy these. And when we put a lot of them in place, we do A-B testing so we can measure the impact. And so I'll use maybe a few examples of where we've seen benefits to date. Our recommendations to customers on cross-sells, up-sells, things like that, Those are places where historically they're not new concepts, but they were very generic recommendations that retail, we, others used. The last year and a half, we've been able to get far more specific, and so when we put those in place, we can see the conversion rates are higher than they were in the past. And so if we put one of those in place and it's a couple million more cases, it adds up pretty quickly when you do that. Another place is we have a third-party tool we use for procuring our inventory and ordering that, doing the forecast, and it has AI embedded in it, but our team identified some opportunities to add a couple of additional models on top of that, and just in the last six to nine months, we've been able to increase that forecast accuracy by over 300 basis points, which may not sound like a lot, but in the interest of accuracy of inventory, that's been significant. I mean, we've taken a number of actions over the last three years and improved working capital by several hundred million dollars, And I'm proud of what the work the team has done, but AI has been part of that. Then I would say the third piece would be around labor planning, around routing and things like that, that are all AI, and they generate, again, real value there. The thing that's the unlock now that we've – we will still have some, I'll call it, point solutions, but the real unlock now is thinking about more end-to-end process transformation. and that is the models have come so far with the agentic capabilities that are out there and ability to create digital twins and so many things. We really have to and are thinking bigger on several end-to-end processes now of how do you redesign the process and leverage AI far more significantly across there. And a lot of times, like there's one that I'm thinking of where the individuals that are working on it are working with my data science team And they are excited as can be because it's taking a lot of the work that was very manual, more error-prone for them, and it's automating it into workflow. And yet, but they still have the decision rights over the key parts where the thinking is taking place. But the machine is doing a lot of the gathering and workforce. So a lot to come there, and it's still pretty early innings. I think our business and our industry is very conducive to this just because of the number of people in it. And so hopefully what we can do is take a lot of the, call it, more labor-intensive parts of the workout that humans may not want to do and let them have things that are more fulfilling.

Right. And over time, would you expect a larger opportunity to come from revenue growth, productivity, or both? I mean, most people think of technology as saving from a cost standpoint, but it seems like it could be a revenue opportunity as well. I think it would be both.

I would expect that revenue will probably be the bigger piece. If you think of revenue, it unlocks an unlimited potential, et cetera. I mean, labor is a certain pool. Now, I think on the labor side where, you know, if you think of just what we talked about on our last call, the visit assistant for our sales force, this is something that takes a lot of things that they would have to go to different places and sort out and figure out and look up, et cetera. And this AI tool gathers a lot of that for them and tees it up in front of them. So you think in the spirit of helping sellers reduce the amount of administrative work they're doing, this frees up essentially their time to be able to be in front of more customers, whether it's existing customers or future companies, customers. And that's a great way for productivity because then they're out there ultimately converting that into sales growth.

Shifting gears a little bit, I can hear Dave Flipman, the CEO, in my head right now, saying that you guys focus on the three most profitable, strong growth segments in U.S. food service distribution, which is restaurants, health care, and hospitality. And I feel like it's health care and hospitality that maybe doesn't get as much attention as restaurants do, but why do you view health care and hospitality? What specific attributes make those attractive to you and how differentiated do you think U.S. foods is in delivering that to those customers versus your peers?

Well, we view those as very important customers for us. They are, again, profitable and fast-growing. We, in healthcare, we're the industry leader, and each of those are areas where we've created some form of differentiation. We have a strong value offering for customers, whether it's the expertise we bring or the digital capabilities. We have separate suites of tool and process around both of them. So Vitals is the one for healthcare, and it goes far beyond just what we do interact with that customer from an ordering perspective, but it helps them understand nutritionals, menu, understand retail sales performance, et cetera, and customers that use that historically have saved roughly 5% overall. So there's different value that we bring to those customers as well. Signature is a little newer, but it's the same idea for hospitality, and it's bringing a suite of, again, tools and expertise together to help them operate more effectively. Those are tough businesses, tough industries, and so we're striving to help them find those places that they can be more effective. And then just with our own business, either directly with those customers or through some larger GPOs, we found a good economic balance with those customers that also creates a very attractive economic profile. And so each of those two, along with the independent restaurants, we think we can add value with our products, our digital expertise, and therefore continue to drive share gains. As I mentioned earlier, we've seen with independents 21 quarters in a row, health care 23 quarters in a row, and health care and hospitality. Our team continues to have very strong pipelines, and you see that converting to case growth over time.

Chris, if I understand it correctly, with health care, it's vitals. With hospitality, it's signature. And clearly they've had some momentum there, but maybe just help understand how big the total addressable market could be in those. Like we understand how the market share is for restaurants, but where do you see yourself in the TAM for health care and hospitality?

From a share perspective, it's not all that different in those. I mean, there's still a significant amount of share to be had in both of those. And that's why we bring the focus on what's the value we can bring to those customers so that they want to do business with us, we show them the value we can bring. So we see each of them being significant growth drivers. And I think you see, we talk from time to time on calls about the pipelines and the best way I'd describe to people, you can see it's converting into case growth is our case growth has been quite healthy in both healthcare and hospitality, we call it that 3% to 4% for several years. And if that pipeline wasn't strong in converting, you wouldn't see them growing at that because the industry is not growing at that pace. And so the work that the team is doing to serve existing customers and win new customers is definitely showing up.

And we do get a lot of questions. I mean, I think investors increasingly recognize the execution improvement that you guys have delivered. So it's always the durability of that algorithm and how long you can continue to sustain that. What do you think is maybe still underappreciated about the durability of the long-term growth and margin algorithm?

Well, a few things. I think that just, first of all, if I zoom up a little bit, just the resiliency of our industry, period, I think is underestimated. Just, you know, you have industries that are talking about plus and minus 30%. We're talking about it in the Great Recession, down 4% or 5%, you know, kind of mid-single digits on cases. And so I think that's misunderstood. But our focus, to your point on the execution, is that we've been doing this for multiple years. This is not new. And, again, in the spirit of the continuous improvement culture, there's always opportunity. It's not going to be the same things. It's going to be what's the next step to drive that improvement. But core execution, although we've made improvement in a lot of areas across the business, there's still more to do. And that will come with time. And also, the final thing on that is some of it is process, but some of it is, again, as technology continues to advance, We pair technology in with the process, and that allows, whether it's productivity, more efficient, accurate outcomes, and so the durability for our business is there, and we expect it to be able to produce sustainable results for a long time to come.

Right, and in terms of, in our last few minutes, thinking about maybe capital allocation, clearly you have strong cash generation, and the shares to your credit are at a higher valuation than perhaps they were. How do you balance the reinvestment in organic growth versus M&A, versus share of purchase? How do you think about balancing all of those levers?

Sure. Well, investment in the business, the core business for organic is job one, and that's priority one. And so if we have the right return projects and or the things in order to make sure we're keeping the business maintained, et cetera, we will continue to invest in that. We're investing capital at record levels, and where we have those things, we'll continue to do that. And then after you go to that, because our leverage is at a sort of healthy mid-twos, strongest among peers, that we really don't need to use cash to pay down debt. So then it's the toggle back and forth between repurchase and M&A. And M&A, our team continues to work a solid pipeline. And the nice thing is if nothing comes to fruition there, then we can toggle it over to share repurchase. And just your point, historically, with our shares being where they were from a valuation perspective, we've deployed excess cash flow, and you've seen that really show up in the form of supporting the stock, and also we've bought a lot of it at a lot lower prices than we've been at today. So we think it's a good use of cash, and we view ourselves as an important part of my job, and our job is to be prudent allocators of capital.

And investors often talk about the M&A opportunity when you say that the big three have sub-40% market share. I think it's often talked about as tuck-in M&A, but what do you think are the biggest opportunities there for U.S. food in terms of M&A opportunity?

I think it will continue to be tuck-in M&A. I think there's periodically where we'll look at something just because it's our responsibility from a strategy perspective that may be bigger, but the tuck-in M&A is really more of our core. I think there's elements especially that are interesting just because of our success with Pronto that could be out there, but I think that tuck-in or maybe even on the larger end of tuck-in is really where you'd probably expect us to continue to focus. And we're going to continue to do deals if we think they're the right deals as opposed to just doing M&A for the sake of M&A.

In our final minute, we are rolling towards the end of 2026. And as we think about 2027, I'm wondering if there's any particular initiative or milestone that you think has the greatest potential to change the earnings power of the company. Maybe the leading indicators that the investor should be watching for as we think about looking to big things for 2027?

I think for us, the acceleration we've seen in independence, I think that's a big unlock. Again, in this environment, we're very pleased to be at that 5% plus, and we think with, because we know we have a number of markets that are growing meaningfully faster than 5%, so we know that's a big unlock. Then as we leverage technology across the business, that will continue to be a big unlock. And as I said, with AI, I'm pleased with the work we've done. We've leaned in very heavy. We will continue to lean in extensively there. I think there's a lot of opportunity to be harvested there, both from sales growth and productivity. And then there'll be things like strategic vendor management, indirect spend that had multi-year horizons that will continue to yield value. So I think for us, what you'll continue to see is more from share gains, GP expansion, and OPEX productivity that balance is healthy. and our execution story is in full force and I'm pleased that we've been able to accomplish, but there's much more to do. Well, thank you very much.

We've exhausted our time limit, but we wanted to thank Dirk and U.S. Food for attending and joining us today. Thank you very much.

All right.

Thanks, Jeff. Appreciate being here.