US Foods Holding Corp. ( USFD ) shares are trading higher after the company announced a $211 million repurchase of shares from Sachem Head Capital Management LP.

The company inked a Purchase Agreement to buy back shares at $52.28 per share, including approximately $2 million in excise taxes.

The share repurchase is part of US Foods’ $1 billion program authorized on June 1, 2024, with approximately $691 million remaining.

Dave Flitman, CEO, said, “Given our strong execution and confidence in our ability to deliver our 2027 financial targets, we believe our shares remain significantly undervalued. As a result, we will be more aggressive buying back our shares over the balance of this year.”

Last week, US Foods ( USFD ) reported second-quarter sales of $9.70 billion, surpassing the analyst consensus of $9.64 billion, and adjusted earnings per share of 93 cents, which is in line with the street view.

The company maintained its FY24 guidance, with net sales expected to be $37.5 billion – $38.5 billion (versus $37.87 billion estimate), adjusted EBITDA between $1.69 billion and $1.74 billion, and adjusted EPS between $3.00 and $3.20 (versus $3.11 estimate).

Investors can gain exposure to the stock via AdvisorShares Restaurant ETF ( EATZ ) and Invesco Dorsey Wright Consumer Staples Momentum ETF .

Price Action: USFD shares are trading higher by 2.86% to $55.36 at last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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