What Happened?

Shares of food distribution giant US Foods (NYSE: USFD) jumped 9.3% in the morning session after the company reported fourth-quarter results where its profit beat analyst expectations, overshadowing a slight miss on revenue. 

The foodservice distributor posted adjusted earnings of $1.04 per share, surpassing Wall Street's estimate of $1.01. This profit beat appeared to outweigh the fact that its revenue of $9.8 billion came in just shy of the $9.9 billion consensus. While sales volumes were flat compared to the previous year, the company's ability to significantly grow earnings per share from $0.84 in the same quarter last year demonstrated strong profitability. Looking ahead, analysts expect the company's earnings per share to continue growing by 18.6% over the next twelve months, which likely fueled investor confidence in the stock.

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What Is The Market Telling Us

US Foods’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

US Foods is up 33.1% since the beginning of the year, and at $99.38 per share, has set a new 52-week high. Investors who bought $1,000 worth of US Foods’s shares 5 years ago would now be looking at an investment worth $2,694.

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