Executive Summary

Q1 2025 delivered resilient growth despite severe weather: net sales rose 4.5% to $9.35B, gross margin held at 17.3%, Adjusted EBITDA increased 9.3% to $389M, and Adjusted EPS rose 25.9% to $0.68 .
Consensus comparison: small misses on revenue ($9.35B vs $9.39B*) and Adjusted EPS ($0.68 vs $0.69*); EBITDA consensus was above reported EBITDA, while management highlighted Adjusted EBITDA strength (4.2% margin) .
Guidance reaffirmed: FY 2025 net sales +4–6%, Adjusted EBITDA +8–12%, Adjusted EPS +17–23%; modeling assumptions updated (total case growth +1–3%, independent +2–5%, sales inflation/mix ~3%) .
Catalysts: new $1B share repurchase authorization and continued share gains in independent restaurants (16th consecutive quarter) and healthcare (18th) support EPS compounding and margin expansion narrative .

What Went Well and What Went Wrong

What Went Well

Adjusted EBITDA grew 9.3% YoY to $389M with margin expansion to 4.2%, driven by operating leverage and self-help initiatives; “Adjusted Gross Profit grew faster than Adjusted Operating Expenses” (CFO) .
Independent restaurants and healthcare strength: independent case volume +2.5% (organic +1.3%) and healthcare +6.1%; management emphasized continued share gains and strong healthcare leadership .
Capital returns and balance sheet: Board authorized a new $1B buyback; net leverage reduced to 2.7x; operating cash flow surged to $391M in Q1 .

What Went Wrong

Weather and macro headwinds: extreme weather caused 18 shipping-day losses in 13 markets, driving supply chain inefficiencies and higher OpEx per case; broader foot traffic pressure persisted (Black Box down in Q1) .
Chain volume softness: chain case volume declined 4.3%, broadly in line with industry traffic; company remains focused on higher-margin independents, healthcare, hospitality .
Consensus misses: Q1 revenue and Adjusted EPS slightly missed S&P Global consensus; EBITDA consensus was above reported EBITDA (management highlights Adjusted EBITDA) [GetEstimates]* .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$9,728	$9,491	$9,351
Gross Profit ($USD Millions)	$1,667	$1,666	$1,614
Gross Margin %	17.1%	17.6%	17.3%
Net Income ($USD Millions)	$148	$66	$115
Net Income Margin %	1.5%	0.7%	1.2%
Diluted EPS (GAAP)	$0.61	$0.28	$0.49
Adjusted EBITDA ($USD Millions)	$455	$441	$389
Adjusted EBITDA Margin %	4.7%	4.6%	4.2%
Adjusted Diluted EPS	$0.85	$0.84	$0.68

KPIs and YoY context (Q1 2025 vs Q1 2024):

Net sales +4.5% to $9.35B
Net income +40.2% to $115M
Adjusted EBITDA +9.3% to $389M
Adjusted EPS +25.9% to $0.68

Customer volume KPIs (Q1 2025):

Total case volume +1.1%; independent restaurants +2.5% (organic +1.3%); healthcare +6.1%; hospitality +3.6%; chain -4.3% .
Adjusted gross profit per case +$0.30 YoY; Adjusted EBITDA per case $1.90 (+$0.15 YoY) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales Growth	FY 2025	+4% to +6%	+4% to +6%	Maintained
Adjusted EBITDA Growth	FY 2025	+8% to +12%	+8% to +12%	Maintained
Adjusted Diluted EPS Growth	FY 2025	+17% to +23%	+17% to +23%	Maintained
Total Case Growth (modeling)	FY 2025	N/A	+1% to +3%	Updated/clarified
Independent Case Growth (modeling)	FY 2025	N/A	+2% to +5%	Updated/clarified
Sales Inflation/Mix (modeling)	FY 2025	N/A	~3%	Updated/clarified

Notes:

Company reaffirmed FY 2025 guidance; modeling assumptions updated to reflect softer macro but continued execution of self-help levers .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 / Q4 2024)	Current Period (Q1 2025)	Trend
AI/technology initiatives	Emphasis on digital solutions supporting margin expansion and execution (press release narrative)	Launched generative AI automatic order guide; cart routing rollout in 50 markets (~70% of routed miles)	Increasing focus and deployment
Supply chain/service	Weather-related challenges and continued productivity improvements	18 shipping-day losses due to severe weather; Ops QC improved ~20% YoY to best since Q1 2021	Strong operational resilience despite disruptions
Tariffs/macro	Softer macro acknowledged; disciplined execution and margin expansion	Monitoring evolving tariff environment; imported exposure mid- to high-single-digit % of purchases	Vigilant, manageable exposure
Private label penetration	Margin strategy driver (prior narrative)	Total company penetration +90 bps to 34%; core independent penetration >53% record	Expanding penetration supports margins
Customer mix: healthcare/hospitality	Healthcare +5.7% in Q3; strong overall	Healthcare +6.1%; hospitality +3.6%; onboarding >$100M annualized new business	Strengthening growth and share gains
Capital allocation	$580M repurchases in Q3; $958M in FY 2024	New $1B buyback; intent to step up repurchases; OCF $391M; net leverage 2.7x	Accelerating returns with balance sheet discipline
CHEF’STORE	FY 2024 focus on strategic fit and plan outcomes	Sale paused due to macro valuation; retained and improving operations; <5% of EBITDA	Strategic optionality maintained
Capex/automation	Ongoing IT, property, maintenance investments	Semi-automated Aurora facility starting up; capacity not constrained	Targeted productivity and capacity investments
Product innovation	Ongoing innovation narrative	Scoop product sales surpassed $1B in 2024; Spring Scoop launched	Sustained innovation supports share gains

Management Commentary

CEO: “We outperformed the industry… Adjusted EBITDA growing 9% and Adjusted Diluted EPS increasing 26%… delivering consistent share gains… 16th consecutive quarter of growth with independent restaurants and 18th with healthcare.”
CFO: “Adjusted Gross Profit grew faster than Adjusted Operating Expenses… delivering operating leverage improvement… confident in achieving our long-range plan.”
CEO on buybacks: “Board authorized a new $1 billion share repurchase program… expect to return to more meaningful share repurchases in the second quarter and the balance of the year.”
CEO on AI: “Launched a new generative AI automatic order guide… acceleration in net new independent accounts during March and April… early stages of leveraging proprietary AI tools.”
CFO on modeling: “Reaffirming guidance… expect higher sales inflation/mix (~3%) and lower case growth; total cases +1–3%, independent +2–5%.”

Q&A Highlights

Self-help levers underpin confidence: management emphasized operating expense and gross margin levers enabling guidance delivery in a choppy macro .
Independent momentum: April within 2–5% guidance range; strongest net new independent account generation of the year in April, strength continuing into May .
Expense actions: incremental ~$30M OpEx savings in 2025 (above 2024’s $120M) from simplifying and pushing resources to field; savings starting to flow .
Tariff exposure: mid- to high-single-digit share of purchases potentially subject; supplier negotiations continue; confident in $260M COGS savings over three years .
Weather impact and OpEx per case: 18 shipping days lost; inefficiencies elevated in Q1 but GP per case growth outpaced OpEx per case growth .

Estimates Context

Metric	Q1 2025 Consensus	Q1 2025 Actual	Beat/Miss
Primary EPS Consensus Mean	$0.694*	$0.68*	Miss*
Revenue Consensus Mean ($USD)	$9,391,668,190*	$9,351,000,000*	Miss*
EBITDA Consensus Mean ($USD)	$397,329,400*	$341,000,000*	Miss*

Values retrieved from S&P Global.
Notes: Company reported Adjusted EBITDA of $389M and Adjusted EBITDA margin of 4.2% (non-GAAP) . Consensus EBITDA may reference a different EBITDA definition than company’s Adjusted EBITDA.

Key Takeaways for Investors

Execution story intact: operating leverage and private label penetration drove margin resilience despite severe weather and softer traffic; expect continued share gains in independents and healthcare .
Near-term trading: modest consensus misses likely tempered by reaffirmed full-year guidance, strong cash generation, and $1B buyback authorization; buybacks should support EPS momentum .
Medium-term thesis: self-help portfolio (COGS savings, productivity, pricing tools, AI) and customer mix (independent/healthcare/hospitality) underpin the 2025–2027 growth algorithm (5% sales CAGR, 10% Adjusted EBITDA CAGR, 20% Adjusted EPS CAGR) .
Watch model updates: case growth assumptions reduced but offset by inflation/mix; monitor tariff developments (limited exposure) and weather normalization impacts on OpEx per case .
Capacity and tech catalysts: semi-automation start-up in Aurora and AI order guide deployment should enhance productivity and seller efficiency, supporting margin expansion and growth .
Customer type strategy: continued de-emphasis on chain volumes and focus on independent, healthcare, and hospitality where economics are better and share gains are visible .
Product innovation as a differentiator: Scoop surpassing $1B and Spring Scoop launch support menu optimization and private label penetration, aiding gross profit per case .

Additional Q1 2025 press materials:

US Foods Reports First Quarter Fiscal Year 2025 Earnings (press release)
Form 8-K Item 2.02 with press release (Q1 2025)
Q1 2025 earnings call transcript
Product innovation: Scoop surpassed $1B (press release, Mar 17, 2025)

Prior quarters for trend analysis:

Q4 2024 earnings press release (FY outcomes, margin expansion, capital returns)
Q3 2024 earnings press release (margin gains despite weather, repurchases)

US Foods Holding Corp. (USFD)·Q1 2025 Earnings Summary