Building A Cash Machine - Highlights from Our Management Meetings; Reiterate Buy and Raising Price Target to $100

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Building A Cash Machine - Highlights from Our Management Meetings; Reiterate Buy and Raising Price Target to $100

n EBITDA margins going forward. We note that Chefs' FY26E EBITDA 289.69 289.69

Warehouse's core business operates with a 10% EBITDA margin, or nearly 400bps FY27E EBITDA 325.63 325.63

higher than the consolidated rate. On several occasions management noted that

the brand was in the early innings of leveraging investments and AI to drive EBITDA Revenue (M)

margin expansion. FY Dec 2025A 2026E 2027E

Q1 950.75 1,059.01A 1,144.13 ■ AI - Making OpEx Much More Efficient. A key topic of discussion was the

investment in AI and the benefit to Chefs' Warehouse. The team noted that AI was Q2 1,034.91 1,131.86 1,239.89

driving efficiency in procurement, pricing, inventory, hiring, and training to name a Q3 1,021.32 1,091.26 1,184.45

few. The company indicated that it is leveraging AI to accelerate the training process Q4 1,142.56 1,211.43 1,373.33

for its sales people, bringing them up the curve much faster as the technology FY REV 4,149.54 4,493.56 4,941.80

can easily scrub and organize menus by ingredients. AI is also freeing up time for FY EV/S 0.9x 0.8x 0.7x

many of the company's best sales people to focus on relationship management.

FY P/S 0.8x 0.8x 0.7x We believe the combination of AI efficiencies and leverage from organic growth will

be a powerful driver of margins for the near and medium term, and should allow EBITDA (Adjusted)

Chefs' Warehouse to exceed their 2028 targets well ahead of schedule. FY Dec 2025A 2026E 2027E

■ Thoughts on Acquisitions and Leverage. Our conversations suggested that small Q1 47.48 60.10A 64.42

tuck-in acquisitions are possible in almost every market, but that a large Q2 65.45 73.37 81.72

transformational purchase was unlikely.