How did USFD's Q1 2024 earnings surprise the market?

**US Foods Holding Corp.'s (USFD) Q1 2024 earnings did not significantly surprise the market**, as evidenced by the earnings per share (EPS) surprise of $0.01, which was relatively modest compared to the company's historical performance and market expectations. 1. **Context of Performance**: In the previous quarter, Q3 2024, US Foods had reported a robust net income increase of 55.8% to $148 million, with gross profit improving by 8.1% to $1.7 billion. This strong performance set a high bar for market expectations. 2. **Market Expectations**: Analysts had been anticipating a continuation of the company's positive trajectory. The EPS of $0.85 reported in Q3 2024 was significantly higher than the $0.01 surprise in Q1 2024, indicating that the market may have had higher expectations based on the recent past performance. 3. **Revenue and Profitability**: While the company's net sales increased by 6.8% year-over-year to $9.7 billion in Q3 2024, there was no corresponding revenue surprise reported for Q1 2024. The lack of revenue growth or any specific revenue-related surprises could be a factor in the muted EPS surprise. 4. **Stock Reaction and Analyst Ratings**: Following the Q3 2024 earnings release, Piper Sandler and UBS Group had raised their ratings on US Foods stock, indicating a positive outlook that did not immediately reflect the Q1 2024 earnings surprise. This suggests that the market may have been influenced more by long-term growth prospects rather than short-term earnings fluctuations. In conclusion, while USFD's Q1 2024 earnings report showed a slight positive surprise with an EPS of $0.01, the overall market reaction was likely muted due to high expectations from the previous quarter's strong performance and the absence of significant revenue surprises. The stock's performance and analyst ratings suggest that the market may prioritize long-term growth prospects over short-term earnings fluctuations.