Chefs' Warehouse (NASDAQ: CHEF) stock was strong on Wednesday as shares jumped 6% by early afternoon trading. That's compared to a modest decline in the S&P 500. The rally added to a great run for the specialty foods distributor's stock. Shares are up 19% so far in 2024, beating the wider market's 5% uptick.

Wednesday's gains were sparked by management's first-quarter update, which was stuffed with good news about the business's operating trends.

The good news

There was plenty for investors to cheer in the report. Chefs' Warehouse posted a 22% sales spike in the Q1 period that ran through late March. Most of that spike came from recent acquisitions, though, and so investors are better served following organic revenue trends. The good news is this metric was up a healthy 9%.

Food deliveries were up across Chefs' Warehouse's international and domestic business units and throughout its product portfolio. Prices continued trending higher as well, indicating solid pricing power. Management called the performance "a great start to 2024" in a press release.

Chefs' Warehouse remained profitable, but only slightly. Operating income landed at 2% of sales, roughly even with a year ago.

Looking ahead

The company boosted its short-term outlook and now sees sales and earnings landing slightly higher than the range that management issued back in mid-February. That expanding outlook is likely the biggest factor behind the consumer staples stock's spike immediately following the earnings report.

Investors should watch growth metrics like organic sales gains going forward, as that's the current focus for this expanding company. But net profit trends are also important right now, especially as interest rates rise and interest expenses eat up a larger portion of profits. The stock's potential to continue beating the market will largely depend on management's ability to improve on both of those metrics over the coming quarters and years.

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Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Chefs' Warehouse Stock Dropped on Wednesday was originally published by The Motley Fool