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US Foods Holding Corp. (USFD)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid execution: net sales rose 3.8% to $10.082B, gross profit increased 4.2% to $1.777B, net income rose 13.1% to $224M, and Adjusted EBITDA reached a record $548M (5.4% margin); Adjusted Diluted EPS increased 28% to $1.19 .
  • EPS beat S&P Global consensus, while revenue was slightly below: Primary EPS $1.19 vs $1.133* and revenue $10.082B vs $10.178B*; strength came from margin expansion, vendor cost savings, and buybacks, while chain volume declines and Freshway divestiture modestly weighed on cases .
  • Guidance raised at the low-end: FY25 Adjusted EBITDA growth to 9.5–12% (from 8–12%) and Adjusted EPS growth to 19.5–23% (from 17–23%); net sales growth maintained at 4–6%; interest expense guided lower to $300–$315M .
  • Catalysts: continued independent/healthcare/hospitality share gains (17th consecutive quarter with independents), Pronto program scaling toward $1.5B sales by 2027, productivity wins (Descartes, UMOS), and $250M Q2 repurchases; management also addressed potential strategic combination with PFG as exploratory, reinforcing confidence in multi-year algorithm .

Values with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Record profitability: Adjusted EBITDA reached $548M (+12.1% YoY) and Adjusted EBITDA margin expanded 40 bps to 5.4%; “our record adjusted EBITDA margin is not a ceiling,” highlighting long runway for margin expansion .
  • Share gains and mix: Independent cases +2.7%, healthcare +4.9%, hospitality +2.4%; “seventeenth consecutive quarter of market share gains with independent restaurants” and nineteenth with healthcare .
  • Productivity and digital: Record cases per mile, Ops QC improved ~28% YoY, and independent e-commerce penetration reached 78% (89% total); Moxie digital platform cited as industry-leading .

What Went Wrong

  • Chain volumes and portfolio actions: Chain restaurant volume declined 4% due to a strategic exit (≈300 bps drag) and Freshway divestiture (~50 bps impact to total case growth) .
  • Revenue modestly below consensus: Net sales of $10.082B came in a touch light versus $10.178B* despite underlying case growth and 2.5% food cost inflation .
  • Inflation/macro overhang: While center-of-the-plate inflation moderated (eggs, beef), broader macro and tariffs continue to pressure consumer demand and traffic, keeping top-line growth below long-term aspirations .

Values with * retrieved from S&P Global.

Financial Results

Key Metrics vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Net Sales ($USD Billions)$9.491 $9.351 $10.082
Gross Profit ($USD Billions)$1.666 $1.614 $1.777
Gross Margin (%)17.6% 17.3% 17.6%
Net Income ($USD Millions)$66 $115 $224
Net Income Margin (%)0.7% 1.2% 2.2%
Adjusted EBITDA ($USD Millions)$441 $389 $548
Adjusted EBITDA Margin (%)4.6% 4.2% 5.4%
Diluted EPS (GAAP) ($)$0.28 $0.49 $0.96
Adjusted Diluted EPS ($)$0.84 $0.68 $1.19

Q2 2025 Actual vs Consensus (S&P Global)

MetricActualConsensusSurprise
Revenue ($USD Billions)$10.082 $10.178*-$0.096B
EPS (Primary/Adjusted) ($)$1.19 $1.133*+$0.057
EBITDA ($USD Millions)$489 (EBITDA, non-GAAP) $536.373*-$47.373

Values with * retrieved from S&P Global.

Customer-Type Case Volume Trends (YoY)

Customer TypeQ4 2024Q1 2025Q2 2025
Independent Restaurants+3.2% +2.5% +2.7%
Healthcare+4.7% +6.1% +4.9%
Hospitality+2.4% +3.6% +2.4%
Chain+2.6% -4.3% -4.0%

KPIs and Operating Metrics

KPIQ2 2025Prior/Change
Adjusted Gross Profit per Case+$0.32 YoY Improving (cost of goods, inventory management)
Adjusted OpEx per Case+$0.09 YoY Productivity offsetting inflation
Adjusted EBITDA per Case$2.52; +$0.25 YoY Record per-case profitability
Independent e-Commerce Penetration78% On track to ~95% by 2027
Total e-Commerce Penetration89% Industry-leading Moxie platform
Cases per Mile (Routing Productivity)>2% YoY improvement; ~6% vs two years Record cases per mile
Ops QC (Service Quality Composite)~28% YoY improvement Fewer delivery errors
Net Leverage2.6x Down from 2.8x YE 2024
Share Repurchases$250M in Q2 $1B program authorized 5/7/25

Guidance Changes

MetricPeriodPrevious Guidance (2/13/25)Current Guidance (8/7/25)Change
Net Sales GrowthFY 20254%–6% 4%–6% Maintained
Adjusted EBITDA GrowthFY 20258%–12% 9.5%–12% Raised (low end)
Adjusted Diluted EPS GrowthFY 202517%–23% 19.5%–23% Raised (low end)
Interest ExpenseFY 2025N/A$300M–$315M New (lower)
Guidance Reaffirmed9/10/25—Reaffirmed FY25 ranges and 2025–2027 algorithm Reaffirmed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
AI/Technology (Moxie, GenAI tools)Digital leadership noted; focus on e-commerce and innovation 78% independent e-comm penetration; Moxie leadership; GenAI automated order guides expanding across sales and operations Strengthening adoption and impact
Supply Chain Efficiency (Descartes, UMOS)Productivity improvements and operating leverage gains Record cases per mile; Descartes in ~65 markets (~90% miles) and UMOS rolling to >60 markets by YE Scaling nationwide; more gains expected
Macro/Tariffs/TrafficIndustry softer but resilient; volumes outpace industry Macro “soft but stable”; tariff impacts more consumer-side; Black Box traffic improved but still down YoY Stabilizing; cautious
Customer Mix & Private LabelPrivate label supporting margins Core independent private label >53% (+80 bps YoY) Positive mix tailwind
Regional TrendsNot detailedSoutheast/South strong; Pacific NW/Upper New England softer (border traffic) Mixed by region
Strategic M&ATuck-ins funded by cash; Jake’s Finer Foods acquired Exploratory outreach to PFG for potential combination; emphasizes multi-year algorithm confidence Watch list (no change to philosophy)

Management Commentary

  • “Record second quarter adjusted EBITDA of $548,000,000 and a record adjusted EBITDA margin of 5.4%… our record adjusted EBITDA margin is not a ceiling and we have significant margin expansion opportunity for years to come.” — CEO Dave Flitman .
  • “This is the seventeenth consecutive quarter of market share gains with independent restaurants and the nineteenth... with healthcare.” — CEO Dave Flitman .
  • “We significantly accelerated the pace of share buybacks as we repurchased $250,000,000 of shares… ended the quarter at 2.6 times net leverage.” — CFO Dirk Locascio .
  • On PFG: “We believe that a combination with PFG has the potential to create significant value… PFG has declined our invitation to do so… we have no further information to disclose.” — CEO Dave Flitman .

Q&A Highlights

  • Chain portfolio optimization and independence acceleration: chain decline due to a strategic exit (≈300 bps drag); onboarding new concepts; independent case growth accelerated to ~3% in June/July with share gains each month .
  • Inflation moderation: eggs and beef saw sequential deflation; overall center-of-the-plate inflation moderated into preferred 2–3% range .
  • Cost of goods/vendor management: >$110M expected COGS savings in 2025, with selective reinvestment into customer promotions/incentives; inventory loss reduction targeted >$30M in 2025 .
  • Productivity initiatives: Descartes routing delivering >2% productivity with more to come; UMOS rollout across >60 of 74 markets by YE; Aurora semi‑automated DC ramping, with Austin expansion underway .
  • Capital allocation: Q2 buybacks a good proxy for ongoing deployment while maintaining leverage target (2–3x) .

Estimates Context

  • Q2 2025 EPS beat and revenue slight miss vs S&P Global consensus: EPS $1.19 vs $1.133*, revenue $10.082B vs $10.178B*; EBITDA (non-GAAP) $489M vs $536M* .
  • Forward quarters (context): Q3 2025 consensus EPS ~$1.03* and revenue ~$10.168B*; Q4 2025 consensus EPS ~$1.00* and revenue ~$9.954B*; target price consensus ~$92.07* (14 estimates) persists [GetEstimates].
  • Implications: Estimate revisions likely skew positive for EPS given margin trajectory, productivity, and buybacks; top-line revisions modestly cautious as chain optimization and macro softness persist .

Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • Margin-led EPS compounding: Multi-pronged self-help (vendor management, private label, inventory, routing) is expanding margins and driving EPS growth, supporting the raised FY25 EPS/EBITDA guidance .
  • Mix and share gains provide resilience: Continued outperformance with independents, healthcare, and hospitality should underpin volume as macro normalizes, even as chains are optimized .
  • Buybacks are an incremental EPS lever: $250M in Q2 repurchases and $800M remaining authorization help sustain EPS outperformance vs EBITDA growth .
  • Watch near-term narratives: Slight revenue miss vs consensus offset by EPS beat; monitor independent case momentum (June/July ~3%) and chain onboarding in H2 .
  • Operational catalysts: Descartes/UMOS scaling, Aurora/Austin semi‑automation, and Moxie/AI tools should continue to lower cost-to-serve and lift per-case profitability .
  • Strategic optionality: Management’s outreach to PFG indicates openness to value-creating scale, though core plan does not rely on transformative M&A .
  • Trading lens: Bias to reward EPS/margin momentum into H2; any evidence of accelerating independent volumes and sustained productivity gains should be viewed favorably; watch macro inflation/tariff headlines and any signals on chain volumes .

Source Notes

  • Q2 2025 earnings press release and non-GAAP reconciliations .
  • Q2 2025 earnings call transcript (prepared remarks and Q&A) .
  • 8‑K Item 2.02/Exhibit 99.1 for Q2 2025 .
  • Prior quarter releases for trend analysis: Q1 2025 ; Q4 2024 .
  • Guidance reaffirmation press release (9/10/25) .
  • Values with * retrieved from S&P Global.