US Foods Holding Corp.

What they do

US Foods distributes fresh, frozen and dry food products and non-food items sourced from thousands of suppliers to independent and chain restaurants, healthcare, hospitality, government and education customers. It operates as a single reportable segment with over 4,000 sales associates, a fleet of over 6,500 trucks, more than 90 cash and carry locations, and the MOX ecommerce platform. In fiscal 2025, no single customer represented more than 2% of total customer sales, while the top 50 customers including GPOs were about 42% of net sales and GPOs alone about 27%.

Revenue drivers

• Independent restaurants — A target customer type; independent restaurant case volume grew 3.3% in fiscal 2025 and 5.1% in Q2 fiscal 2026, with organic growth of 2.7% and 5.0% respectively.
• Healthcare customers — Target customer type serving hospital systems, nursing homes and long-term care; case volume rose 4.4% in fiscal 2025 and 3.5% in Q2 fiscal 2026.
• Hospitality customers — Target customer type ranging from hotel chains to casinos and country clubs; case volume rose 2.9% in fiscal 2025 and 4.4% in Q2 fiscal 2026.
• Chain restaurants — Non-target customer type; chain case volume declined 3.5% in fiscal 2025 and 1.5% in Q2 fiscal 2026, partially offsetting growth elsewhere.

Recent performance

For the second quarter of fiscal 2026 ended June 27, 2026, net sales increased 4.5% to $10.53 billion and total case volume rose 1.9%. Net income increased 22.8% to $275 million, diluted EPS rose 29.2% to $1.24, Adjusted EBITDA increased 10.2% to a record $604 million, and Adjusted EBITDA margin expanded 29 basis points to 5.7%. Gross profit increased 8.0% to $1.9 billion, or 18.2% of net sales. Full fiscal 2025 net sales were $39.42 billion, net income $676 million, and diluted EPS $2.94.

Strategy

The company's stated strategy, WE HELP YOU MAKE IT, centers on three elements: more quality products including Exclusive Brands, more tools led by the MOX digital platform, and more deliveries through broadline service and the Pronto program. Management operates the business as one segment, centralizing activities where scale matters while field teams focus on customers. In Q2 fiscal 2026 the company repurchased $374 million of shares and year-to-date invested $174 million in capital expenditures and repurchased approximately $500 million of shares, maintaining net leverage at 2.6 times. Management cites continuous improvement and a self-help culture as ways to enhance service, improve productivity and gain share with target customer types.

Risks

• Economic and consumer spending sensitivity — A downturn, public health crisis or other factors reducing food prepared away from home can adversely affect results, given the industry's sensitivity to national, regional and local economic conditions.
• Low margins and food cost volatility — The business is characterized by relatively high inventory turnover and low profit margins, and inability to respond quickly to inflationary or deflationary cost pressures could materially hurt results.
• Customer concentration in top accounts and GPOs — Sales to the top 50 customers including GPOs were approximately 42% of fiscal 2025 net sales, and GPOs alone accounted for approximately 27%, creating dependence on these relationships.
• Chain customer volume declines — Chain case volume declined 3.5% in fiscal 2025 and 1.5% in Q2 fiscal 2026, partially offsetting growth in independent restaurant, healthcare and hospitality volumes.

Outlook

Management said second quarter results are in line with its long-range plan, including 10% Adjusted EBITDA growth and 21% Adjusted Diluted EPS growth driven by 29 basis points of margin expansion and 5% independent restaurant case growth. The CEO stated confidence in continuing to gain share with target customer types, improve customer service levels, deploy accelerating cash flow with discipline and compound earnings growth over time. The CFO said the company remains confident in delivering sustained earnings growth and long-term shareholder value.