Good morning, everybody. I'm Kelly Bainey, a food retail analyst at BMO. I'm thrilled to host this next fireside chat with US Foods. US Foods is a food service distributor with a laser focus on its core customers of independent restaurants, healthcare, and hospitality customers. Just using round numbers here, but correct me where I'm wrong. We have about 70 distribution centers, about 4,000 sales associates, 400,000 SKUs, and over 250,000 customer locations. We have the company forecasted just shy of $40 billion in revenue in 2025. This is a great time because you're coming off a very strong quarter to start the year in what looks like not an easy quarter to operate in. I believe you were the only of the big three distributors to really reiterate your full-year guidance at earnings just in the last couple of weeks. So thrilled to have Dave Flitman, CEO, with us. Dave joined, I think it was about two and a half years ago now, has brought an incredible high level of focus and execution to the organization. Also Dirk Locascio. Dirk has been with US Foods since, I believe it's been 2017. So thrilled to have you both, as always. Time flies, so I'm going to dive into questions here. You know, Dave, one of the things that struck me as I've kind of followed you guys over the years is just this journey that you've been talking about in terms of decentralizing. It maybe sounds easier; it's easier said than done because we see some companies struggle with what to centralize, what to decentralize. Maybe you can start with some examples of where that's implemented today. What is best centralized? What is best given back to the field leaders? Where do you see more opportunity on that front? Sure. Good morning, Kelly. Good to be with you. Thanks for having us. We have been on a decentralization journey for the last couple of years and just fundamentally believe that having the right resources closest to the customer is the right way to run a distribution business. We have been unwinding a lot of that decentralization. Simple things. I can give you an example. I joined the company back in January 2023. Our local sales organization reported centrally into corporate. We have unwound that. They now report to the local presidents in the area. Again, fundamentally, you are touching customers every day. You need speed of decision-making. You need execution capability. That is best served out in the field. Now, having said that, Dirk and I are very aligned that we believe in fundamental standardized business processes and practices. You take supply chain, the metrics that we have. You take pricing, and our approach to pricing is a standard approach. Our sales force, every market is different. The competitive situation is different locally. They have the autonomy they need to make those local sales decisions and price accordingly to the market. Okay. One of the things that we always ask about, I feel like every quarter as we think about your three-year plan, is the COGS savings initiatives because it is really critical to kind of the total EBITDA growth plan that you have outlined. You continue to move forward this with no delay in the recent quarter. Maybe just can you help us understand what are the challenges in achieving those goals? I know you started with some of the bigger suppliers and are maybe moving down into some of the smaller suppliers that haven't really been touched yet. How should we think about your visibility in accomplishing this over the next three years and where the opportunity is? Yeah, I think Dirk and I can tag team this one. Let me just start. We just tied a bow around our last three-year plan where we delivered $230 million in COGS savings. My point in saying that is the company has been at this for quite some time and has developed a lot of muscle in terms of the how. Going forward, we've committed an additional $260 million in the next three years. Fundamentally, we call it strategic vendor management. It's a process that we run in parallel with our vendors, and we do this in a win-win way. What makes us stand out, I believe, to our vendors is the fact that we consistently take market share. A lot of these suppliers serve retail. Volume has been hard to come by. They are quite willing to step in with us where we can consistently guarantee them above market growth and participate in that process. We have gone down a couple of new paths in our most recent plan, and I will let Dirk maybe talk about some of that. Yeah, a couple of things on that one, as Dave said. This one, we have a high level of confidence. This is multiple times that we've done this over the years. Some of it is continuation. Some of it is that you get smarter and improve the process in order to deliver different outcomes. Dave's point around trying to approach it with a win-win with vendors is very important for that mutual opportunity for growth going forward. You mentioned about going further down. The tail vendors or the smaller vendors are something where, to your point, that's an enhancement this time around where we haven't focused as much in the past and now are focused more on that. Also, just looking more strategically at the category level where it's the vendor, but also are we making sure that we're priced right relative to the share gains that we're striving for? And so just enhancing some of our capabilities as far as it as well versus simply a COGS play. It's an interesting point you make about the retail side where maybe some of the growth isn't quite what it used to be. Have you kind of done an analysis and looked at where you are in terms of your size and growth relative to maybe your supplier partners on the retail side and how much potential? Is it just catching up to where maybe you should be in terms of buying efficiencies with some of these vendors? I think there's a lot of momentum that we build based on our growth. The vendors continue to improve their operations, get more efficient and effective, and we can couple that together in a way where we share in that benefit and really drive that win-win focus. We have partners in all product categories that we've had for a number of years. Sometimes you have leverage and you can switch sources if you need to. We've done some of that in the past, not as much lately because, again, the vendors have leaned in pretty well with us and really driving that partnership is winning. Okay. Let's switch gears to another area of cost savings, which is just kind of more on the overhead. You announced an additional $30 million. I've been getting questions just on exactly where that was. How are you monitoring those kind of cost savings initiatives to make sure there's absolutely no impact on the customer? You've talked also about further levers to pull if the environment is tough. Maybe just let's spend a few moments on that front. First, where was the $30 million and what else can you do if the environment gets tougher? Sure. We have been on this journey again for a couple of years. That $30 million was on top of $120 million that we have done in the last 18 months. That decentralization journey that we are on affords us the opportunity to really look at the whole cost structure, not only where the resources are, but do we have an optimized plan of where they are deployed? What we found is as we have decentralized, we have been able to take some corporate costs out where we just right-mindedly had added a lot of complexity to some of our processes, including sales, including supply chain. We have unwound a lot of that and importantly moved some of the right resources back to the field. I think there is still more of that to do. As you've said, we've taken a pretty hard swing at it here in the last couple of years. There are some other areas of inefficiency. Dirk's leading a process around indirect spend, which is a billion-dollar category for us. I'll let him talk about that. Yeah, that's another area where we haven't really looked at it holistically over the years. As you stated, it's over $1 billion of spend. Our goal is $60 million of savings in 2027. We achieved $30 million last year. We're well on our way to get there. We also, this year, as part of the $30 million, Kelly, that you referenced, there was some additional non-people spend in there. One example there is consulting spend. For example, looking at third-party spend and instead enhancing some of our own capabilities with some high-potential, high-caliber individuals who can do that work more effectively, more efficiently, and then they know the company and they're around. Some of it's just rethinking how we invest and where we spend. We often will get asked on cost and productivity is what's the silver bullet? There is not a silver bullet. It is really a lot of the fancy word we use, the grind. It is the grind across each of these. It really is, at its simplest form, holistically looking at spend and then continuous improvement. Yeah, that continuous improvement theme is one I'm pressing really hard with the organization. We've got a plan to deliver 3%-5% annual productivity. And behind that is generally in normal times, that'll generally offset inflation. So that's the thinking and just finding ways to get more efficient and effective at what you do. I missed the other part of your question at first, which was around supply chain and how do we make sure we're not impacting the customer? We talked about this a little bit on our earnings call last week. We're right now achieving all-time record high service levels for the organization. Everybody was impacted coming out of COVID and got disproportionately hit. Our driver selector turnover is back to historic levels. We're getting productivity and efficiency as a result of that. Importantly, I think in this industry, no one has been consistently great at service over the long haul. I really think we have an opportunity here to create a competitive advantage with that. That is why I'm so pleased that our service levels are as high as they are, all-time highs, while we're gaining these efficiencies. It is not an either/or. We've got to be able to do both. We're doing that well right now. Do service levels vary across the different customer cohorts, like independents, chains, healthcare, hospitality? Do you measure it differently or does it not matter? We measure it the same. There is some minor variation. But when I say we're at all-time service levels, it's not for any one customer cohort. Perfect. Just a reminder, you can submit questions to the iPad here. I'll try to remember to take a look at those. I want to spend a couple of minutes on sales reps. It's probably the topic that we get the most questions on across the space. I think you're at about 3,000 local sales reps and about $13 billion in independent sales. I guess the question is, as we look at it from the outside and kind of do ratios of sales reps to dollars, how do we think about the right number there? How is your technology and things like MOXē and the different technology tools that you afford your sales reps? How is that changing that ratio, if at all? Yeah, we really think MOXē and our digital leadership affords us the opportunity to have a more effective and productive sales force. You can compare those ratios across the big three, and I'm sure you've done that. Importantly, what the technology does for us is it enables our sellers to go penetrate an existing customer, go find the next increment of growth with a new customer, as opposed to dealing with where's the delivery, helping the customer with the credit app. We can all handle that in our MOXē application, which is, by the way, the only one-stop shop in the industry for digital capability. It really takes the friction out of the relationship with our customer. They can look at our inventory, determine when their truck is going to be there, fill out a credit app, pay their bills, whatever they need to do. It's easy for them to do that in MOXē. Our salespeople have adopted that very well. That is why day one, we ask them, and they do get our customers up on MOXē because it helps them be more productive and efficient. Our algorithm is a low to mid-single-digit growth in headcount every year. We feel that is the sweet spot for us in terms of new seller headcount. Get a lot of questions around, are we having challenges finding sellers? We're really not. I think people get too hung up on, are the big three swapping sales reps? Where is the source of sellers? Actually, competitive reps from direct competition is the minority of who we hire for sellers. We hire a lot of people with industry experience. Oftentimes, they were operators. They were chefs. They understand, they've got the culinary background. We find them from all over and then train them in our sales process. What does that training process look like when you take someone that might have been an ex-chef and who knows the industry but maybe has not been a direct rep? How important is that training for them? Yeah, we've got a nine-week program that we put them through initially. It's called Steps. Part of that is training them on the product line. But that's something that never really ends. That journey continues. We've got general sales meetings out in each one of the areas that happen on a monthly basis. A portion of that's dedicated to the selling process, new capabilities that we're bringing to bear, training them on new products. That's an ongoing piece of work that never really stops. I think we do an excellent job of onboarding new sellers, whether they've got background in the industry or not. We put them through that. Here's how you sell at US Foods. What is that typical time that it takes for a new rep that might be new to the industry versus a more experienced rep that came with a book of business, that experience level? How does that look in terms of the ramp that they? If we hire a competitive rep, they typically come with a non-compete. They can't call on their prior customers for typically a 12-month period of time. They can be very productive very early because they understand the industry. We do teach them our product line. They have a good background, so they pick that up very quickly. Oftentimes, we find they're very productive in a new sales territory. When their non-compete rolls off, sometimes they want to go back, sometimes they don't because they built a new customer book of business and new relationships. If you take a rep without any direct sales experience in the industry, it could take them two to three years to be fully productive. We push them to get on our compensation plan as soon as possible. We try to get that done in the first 12 to 15 months or so. Their productivity ramp just continues beyond that. A lot of focus on the restaurant traffic, which is just one measure of the health of the industry, but it has been pretty weak for a couple of years now. What is your commitment to keeping that low to mid-single-digit sales force growth if that continues? Obviously, you're gaining market share within that, but how committed are you? We're very committed to it. Regardless of the macro, we think it's the right thing to do for long-term health and growth of the company. Look, we don't get hung up on the macro. I say this a lot, and I really mean it. We have a relatively minor market share in the three most profitable customer types in the industry, which is where our strength is, where we've applied our technology and our resources. The macro can ebb and flow. There's still plenty of share for us to go gain. That's why we'll stick with our hiring plan for our sellers. We'll stick with our commitments because we just believe there's ample runway for growth here regardless of what's going on with foot traffic. When we're adding sellers, we're not adding them peanut butter across the board. It's faster markets that can grow, get more reps. Those that have opportunity for growth, get more reps. It's also quite targeted in order to make sure that we're getting the highest and best use out of the reps we are adding. We've talked a lot about how we use the Circana data to target where the growth is greatest, even within a market, what customer types are going to be successful, where we might have share opportunities, bring in the right basket of products, make sure we have the right assortment in our distribution centers, and then we're off to the races. Is there any trends that you can talk about? Beyond that, I wish I could look at the Circana data and see which markets are growing and where everyone's investing. We kind of look at it on a national basis. Where are there areas of growth? I think if you just follow where population has grown and shifted. The Southeast is strong. Texas is strong. Florida is strong. Typically, over time, that's where we'll invest the most. We are investing pretty much across the board. Right. Okay. I want to talk about also just you mentioned pricing as one of the things that is more centrally managed. How much autonomy do you give your sales reps to kind of be reactive? There are questions about how competitive, I guess, that local competition is. How are your sales reps empowered to kind of make those decisions day to day versus relying on technology or local market dynamics? How do you strike that balance on pricing? Great question. We have a standard tool that we've applied across the company. Within that, there's a framework. The sellers have a lot of autonomy to a point. Even beyond that point, if there's a local competitive situation, there's an approval process that they can get around whatever floor may or may not be in place. The beauty of the tool is with AI embedded in it, it gets smarter. It learns more by product category, by customer type, and gets more effective at making those pricing recommendations to the sellers. They've got the autonomy they need to make those local pricing decisions. It really helps the seller because as a person, you can only know the right price points on a certain number of products. Let's say you've got 100 or 200 products. If you think across somebody's entire route, by giving them the target and the guardrails that are out there, it helps whether it's a new customer or products that your existing customer hasn't bought. It helps them be more on mark when they're getting to a price point versus just trying to gauge themselves what they think it is. Another thing they have autonomy around is really the basket of products for the customers. Yes, we price at the individual product level. If they need to give a little on a certain product here, they can look at optimizing the total for the customer as well. That gives them additional flexibility. Dave, you mentioned AI. I think you're the only distributor that's really been prolific about talking about how AI and how you're using that and embedding that into tools for, I think, your employees and your sales reps. Across the organization, I guess, do you think that's becoming a bigger competitive advantage, a bigger moat? Are there any distributors maybe outside our purview that are also investing heavily in that? I'm not sure what the competitive landscape looks like. But given the platforms that we have, particularly around our digital strength, so think about MOXē. We launched that two and a half years ago with certain ability to make product recommendations for customer. With the advent of AI, we're now able to tailor those much more specific to that individual customer versus making general product recommendations. We talked a little bit on the earnings call about the way we're helping our sales reps with menu design. So imagine they can go into an account that they've never been at before. With the advent of AI, they've already scoured what their menus look like, matched to our products. They go in with full pricing capability and have a very educated conversation the first time they meet the customer versus saying, "Hey, I'm here from US Foods. Show me your menu. I'm here to help you. You know what I mean? Right. It just helps them put their best foot forward. Then there are things like labor planning where we can use that internally with how we plan our distribution labor. The routing tool that we use, Descartes, that we talk about a lot, has AI embedded in that. Routing is a very dynamic process. You gain customers. You lose customers. You penetrate customers. You have to stay on top of that all the time. AI helps us do that and optimize the efficiency there. We are excited about it and what it can mean for the future. Yeah. I'm glad you mentioned Descartes because it's something we've been kind of checking on every quarter. It's a big undertaking to use a whole new system for your routing. It seems like it's gone incredibly smooth. There's been savings. How should we think about, I think you're at the later stages of this implementation. I think you'll be done by the end of this year. Is there more benefits to come? How have you been? How have you How have you executed this so seamlessly? There have been a few bumps on the road in terms of. It didn't look like it from the outside. No. I mean, you can't change the routing tool without having an impact on the customer. We had to have lots and lots of conversations with customers. Importantly, when I talk about our service levels, it gave us the opportunity to understand what the optimal delivery window was for our customers. Historically, we weren't great at that. By having that conversation and matching that up with Descartes, we've built credibility with our customers because now we're doing and showing up exactly when we say we're going to. Dirk, you want to talk about some of the productivity benefits for sure. Sure. I was going to say the couple% or so that we talk about of productivity improvements, that's really step one. We expect that there's further productivity that will come in the future years. Just anytime you put in a new system, you want to be thoughtful on how you turn the dials. What we do not want is we do not want customers to feel like their world's turned upside down. We do not want our supply chain to be turned upside down versus let's get the improvements. Now that we have the platform that has much more capability than we've ever had, it really allows us to continue to drive that productivity and service improvements over several years to come. Really, the beauty of Descartes is it's dynamic. Routing used to be an event for us. It was episodic. Now, as that routing need changes, we can do that more dynamically and continuously. We are really excited about getting it launched across the company and then further optimizing. I think Descartes is really just a good example when Dave talked about using AI. Whether it's the machine learning, advanced analytics, or the generative AI, we think of the things that the machine can do better and learn from, let's let the machine do it, and let's let the humans do where the humans add value in these areas. That's really the approach, whether it's something that's embedded in what we buy or some of the tools that our teams develop in-house. Excuse me. One more I wanted to ask, going back to the pricing conversation. I want to switch to kind of healthcare and hospitality because I feel like we do not talk about that enough. With respect to pricing, I guess with all of these products going online now, you are at a high percentage. What percent of your independent customers use MOXē and all these tools? How is that changing price transparency in the industry? Is that a good thing or a bad thing for US Foods and where you are positioned with your pricing and your ability to be dynamic with it? Yeah. I don't really think it's changed fundamentally anything around pricing transparency. I think that's always been part of the industry. Sales reps are pretty good at sniffing out competitive situations. They always have been in understanding certain products and how they're priced. We really don't think it's changed that at all and don't really spend any time thinking about it. Perfect. Okay. On to healthcare. So I believe you have over 20% share in healthcare. We have a good share in healthcare. Yeah. Maybe it's a little higher. We are the industry leader in healthcare. You're definitely the industry leader. I guess maybe can you help us think about the competitive set here? I think we know kind of one of your primary ones. Beyond that, what does the competitive set look like? Where are the majority of the market share gains coming from? Where do you expect them to come from? When you gain a new customer, you announced a new customer just this last quarter, what are the reasons why they're coming to you? Are they saying it's just your Vitals platform? Is it your SKUs, your expertise? What are you hearing most often that you can kind of continue to lean into? Yes. The answer is yes. It is an area that our team there in healthcare and hospitality have done an excellent job. It really has been a good growth engine for us. It comes down to, I say the yes, but it is the combination of those things. It is our offering of the technology. In that case, we have a tool suite called Vitals that really helps operators with not only ease of interaction with us, but it is also things like some of the dietary information, patient feeding costs, things that really help them. It is a tough industry to be an operator in. It helps them with that. Our service model is easier to interact with, fewer points of contact from an end operator than, say, some competitors. Also, some of our sales and service model and our expertise that we have there. We have dieticians. We have other experts that help those operators with how they run their business in order to, again, find ways to improve it. When you think of those things and then you combine it with we have decades-long partnerships with some large group purchasing organizations that we really have found that way for the win-win for sort of them, us, and the customer. It is good economics for the customer, and it is good economics for us overall, with healthcare and hospitality being really the second most profitable behind independents. They are an area where I expect that we have share gains to be had for a long time to come. Our differentiation and our team is out really pushing with customers to really help those that aren't, that are prospects, understand how we can help them knowing that they have a hard job in running their business. Are there a lot of smaller competitors in the healthcare segment that maybe we do not hear from every day? I would assume that they do not have the technology that you have. How big of a moat is that in that? It's a pretty big moat because in this case, the technology extends far beyond just the interaction with US Foods. From an operator perspective, between that and the GPO relationships, this altogether is a pretty big moat. As you pointed out, one large competitor does compete in this space, also the regionals and the large local. It is not a one answer in every market. When we talk about share gains, it really comes from a variety of different operators and sizes. Just our team, I mean, each year, it seems like when you keep telling us, "Well, maybe our new business pipeline will slow a little bit," and keep pushing, and they push. That, again, bringing that value proposition to life continues to be a very strong growth engine. We have been extremely pleased the last year or so. We expect that to continue to grow quickly. The other advantage we have with this being such a big part of our business is it's really economic agnostic. When things are slowing, etc., it still is a good growth engine for us. I think you've talked about this, but maybe we can kind of dig in a little bit on this. The SKUs that you carry for healthcare and hospitality, how does that complement kind of the efficiency of the organization when you're attacking independence and healthcare and just in terms of the SKUs that you need to carry in a DC? This is maybe something that I don't think we think about every day. How does that complement your strategy when you have this customer focus? It really is, as part of the focus on those three customer types, it's much more capital effective and accretive over time because when you typically have those SKUs in your warehouse, there's overlap between independent healthcare and hospitality. All three are pretty conducive to private label so that they're buying what you have in. Also, once you're servicing those customer types in a distribution center, typically when you have new customers come in, they're buying most of the products you already have in the distribution center. It's increasing product velocity as opposed to when you have chains come in, they come in with a fair number of their own proprietary items. That's why even with chains, you don't hear us talk about that chains are all good and all bad. It's about optimizing. We have a number of chain partners that are excellent partners and happy to continue to do business with them. Yes, over time, what you will not hear us talking about is investing in capital to support chain business and building, especially with what construction capital costs have done over the last few years. It is really about thoughtfully growing in that space while really focusing on continued share gains. Because as I think Dave and Dave said earlier today, we have so much opportunity still on share gains in those three and ability to really leverage our differentiation. I think Dirk touched on it. It's an important point, though. All three of our target customer types lend themselves to our exclusive brands. Right. Those brands are high-quality products. They're cheaper for the customers, and they're twice as profitable for the company. Hence our intense focus on those. The chain is a good base load for a lot of our distribution centers, but not worth further investment from our perspective because of the inefficiencies that come along with supporting the chain business, particularly their proprietary brands. Just remind me, so the penetration of private label with independents is over 50%. Just hit a new record, 53%. Where is it on? What's that penetration on healthcare and hospitality? Have we given that number? It's a little above our overall company. So it's more conducive. And then you compare it to, say, a chain, which is well below the overall business. Okay. One more on healthcare that's just been on my mind as I try to think about what might happen down the road here. If there are cuts to Medicaid or work requirements, we're just kind of reading the news about the budgets that are being proposed. Is that something that investors should worry about and how that could impact this segment? I don't think so for what we do because a lot of that business historically has been acute care for us, i.e., you need the service because there's a problem. We're shifting more towards senior living, which is probably the fastest growing portion of the healthcare space right now. Regardless of what segment it is and any potential cuts that happen, a lot of that service is going to continue to be needed, and those people need to be fed. Okay. We're not concerned. Could we talk about hospitality a little bit too? Some data points that suggest tourism is maybe down in the U.S. Who knows where this will go? Do you think, is this something, are those data points we should follow, number one, in terms of tourism and how that equates to kind of the underlying demand for the customers you have? Or do you expect that business to remain kind of steady as we go forward? I think it'll ebb and flow. I think that's a good metric to look at. And we've talked a lot about our historic focus on lodging, perhaps a little bit over-indexed in the hospitality space. More recently, we've shifted to recreation and other areas, which is opening up new pockets of growth for us. We talked last week about onboarding $100 million of new business between healthcare and hospitality. It wasn't quite equally split. It's over-indexed towards healthcare, but a significant chunk. You saw our growth, 3.5% or so in hospitality. Because of our shift in focus, we believe we've got a lot of confidence in continued growth and share gains within the hospitality space as well. Yeah. It's obviously not immune to the slowing. Even in the first quarter, that's a good example where we still grew, accelerated to 3.6% growth despite some slowing. That really is that new business conversion in the pipeline there. The question we get sometimes is, what's that mean recreation? Think of it as large-scale venues as one example there, whether it's concert venues or other things like that, and bringing some of the value and differentiation we have to that space. Okay. Also, we spent a lot of time looking at and seeing what our retail companies are doing with supply chain automation. I was wondering if we could touch on that for a minute because you do have your first facility, I guess, coming on board soon and near your headquarters. What do the returns look like? What have you learned so far? Could this be something that you could roll out and that could be a step function in terms of productivity at your distribution centers? We'll tell you more about the returns once we start it up. Okay. We're getting close. Within the next couple of months, we'll start up our first, what we call, semi-automated distribution center just outside of Chicago in Aurora. The beauty about that, I think, is twofold. One is it's going to enable us to be a lot more efficient, i.e., less headcount required. Importantly, I think it'll afford us the opportunity to have a more consistent offering for our customers. If you think about just the night selection process now, a lot of people selecting cases, building pallets, doing their best to get them out on time and get them on the trucks, that process is typically fraught with error. We all have challenges around that. Importantly, you automate a lot of that, and you have the opportunity to have a much higher success rate in terms of selecting the right products, building what I'll describe as a perfect pallet, and importantly, having the customer have a much better experience on the other end of that. I think it'll help us be more productive, yes, but we're also excited about what it means for our customers. We'll learn a lot more. We're excited about how to apply that not just to a new facility, but our learnings and how we can take that into some of our existing facilities, certainly where we have expansions going forward. We may lean into that more aggressively based on what we learned in Aurora when we started up. Another added benefit we have is our drivers with that perfect pallet. It makes the driver's job a little bit easier. They have a hard job. There are things that we can do to make that a little easier. We're very happy to do that. This is really, as we've often said, not about testing does the automation work. It's well established out there. It's just in our space. What are we going to learn from getting it into our first location in order to make sure that we adapt and deploy it in the right ways over time? Okay. Wanted to also talk about Pronto because there's really kind of two components of Pronto now, where it started with kind of some maybe smaller, dense markets, or maybe not smaller, but more dense markets. Now it's kind of been extended to existing customers. I wanted to ask twofold. One, what have you been learning from your customers as you've broadened this kind of service? Where does this idea generate from? Is this from a local sales rep that said, "Hey, we have a lot of clients that want more service, and we think there's an opportunity here," and kind of developed the process? Or just how does that come about at the company? We're very excited about Pronto. That's why we talk about it so much. Really started several years ago, aimed at unlocking a part of the market that we had a challenge competing with, being the specialty suppliers. A little bit of the frustration I think the company had at the time—I wasn't here when this started—was the fact that we had all the great products that the specialty suppliers did. We just didn't have the right service model. We embarked on this journey to just target new customers and learn if we could deliver that model, how we could do it efficiently. There's really a couple of things you worry about. One is how you price that product because it's a much less efficient delivery for us, smaller trucks, more frequent deliveries. Are we able to get the margin profile that we need to be able to generate that service? The second thing was we wanted to ensure that we weren't just cannibalizing our existing broadline business. Hence, that's why we did all of the pilot work. About the middle of last year, we launched it to our existing customers. We call it Pronto penetration. We were thoughtful around those two points. That's why we started in a few markets to prove the model, to prove we could deliver the margin that we needed. In fact, we weren't going to cannibalize anything from our larger deliveries. That's all gone extremely well. That's why you see us stepping on the gas and rolling that out. I think it will prove to be a key unlock. We said last week where we've deployed Pronto penetration with those targeted customers, it's generated a 10-15% uplift in volume in cases. We expect that will play out as we take this more broadly. Some of that's getting masked by the current foot traffic environment and all that. We're tracking it closely, and we're confident in the data I just shared with you. Pronto is a journey for us, but an exciting one and one our sales force is really excited about. As you think about where Pronto penetration, where that strategy could be rolled out, what component or what percentage of your markets could that be? I mean, because that's a pretty significant lift there with this service. Yeah, we'll see. I mean, we launched Pronto to target the new customers in about 40-45 markets, something like that. Certainly those markets are applicable. I think where you start to lose a bit of the benefit is in some of the more rural markets where you can't justify the added expense and the inefficient deliveries just because you don't have the customer density that you have in some of the urban markets. Even in the markets that have been existing, though, there's still a lot of years of growth. I mean, to Dave's point, the legacy Pronto has been in place for seven, eight years. I mean, we still have those markets that we're adding trucks to. Because when you put it into a market, you're typically adding one or two trucks because you want to make sure just through our process that we're using them, to Dave's point, effectively and efficiently. As that happens, you add another truck, another couple of trucks. There is still growth opportunity in the legacy Pronto and a lot of still in the Pronto penetration. Okay. I think we have two minutes. I think I have two questions. I'm going to try to fit these both in. In terms of the cash and carry, we kind of changed course. You announced last week about maybe keeping that. What did you learn? I think there were maybe some synergies that maybe didn't quite come through. What did you learn about that business? How long will you consider keeping that, or will you reevaluate that at a future time? I have one closing question. Yeah. We did announce that we intended to look at divesting that business a year ago at our investor day. Really, if you go back to the business case when it was purchased, we had some experience. I was not here at the time, but we had some experience with some stores that we had built right in the heart of our broadline markets that operated really well. We got a lot of synergy with our existing customer base. The acquisition was predominantly in the western part of the country. Those facilities just were not as close to our broadline market. Those synergies just did not play out with our existing customers to the extent we believed it would when the acquisition was made. We went through the process. Tariffs happened. Foot traffic slowed. There was some retraining of the deal once we got into it. We just decided, look, the business is not a drag on the company. In fact, it grew at the same rate that we grew EBITDA in the first quarter. We are not going to give it away. I still fundamentally do not believe we are the right long-term owner for that business, but there is no pressure on us to do anything. We will operate it. We will continue to serve our customers there unless and until there is another outcome. Okay. I guess less than a minute of final remarks. Why is now a good time for investors to be considering US Foods? You've made a lot of promises. Great question. I have 10 seconds. We're on an exciting journey. We've got an exciting algorithm over the next three years. Importantly, ours is an execution and a self-help story. You see us delivering that algorithm in some of the lowest foot traffic since COVID. That gives me and our team confidence that we've got a long runway of improvement ahead of us. We're an earnings compounder. We just delivered 26% EPS growth in a very difficult quarter. We believe our ability to do that really will transcend even this three-year plan. It is not too late. Perfect. Perfect time to wrap it up. All right. Thank you so much, Dave. Thanks a lot, Kelly. Thank you.