Executive Summary

Q3 2025 delivered modest top-line growth and strong non-GAAP earnings: Net sales rose 4.8% to $10.191B, GAAP diluted EPS was $0.67, and Adjusted Diluted EPS was $1.07, with Adjusted EBITDA up 11% to $505M and margin up 28 bps YoY to 5.0% .
Results were above Wall Street consensus: Adjusted EPS beat ($1.07 vs $1.03*) and revenue slightly exceeded ($10.191B vs $10.167B*); Adjusted EBITDA was roughly in line/slightly above S&P consensus ($505M vs $503M*) .
Guidance tightened on FY net sales (4–5% from 4–6%) but raised on Adjusted EBITDA (10–12% from 9.5–12%) and Adjusted Diluted EPS (24–26% from 19.5–23%); case volume growth narrowed to 1–2% (from 1–3%) .
Strategic momentum: independent restaurant case growth accelerated to +3.9%; share repurchases of ~$335M (4.1M shares) and a definitive agreement to acquire Shetakis in Las Vegas support shareholder value and local density strategy .

Note: Asterisked values are consensus figures retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well
- Continued share gains in target customers with independent restaurant cases +3.9% and healthcare +3.9%; hospitality +2.4% supported the overall 1.1% total case growth .
- Margin execution: Adjusted EBITDA rose 11% to $505M with 28 bps margin expansion YoY driven by volume, improved COGS and inventory management, despite unfavorable YoY LIFO adjustment; Adjusted gross profit +6.4% .
- Management highlighted AI-enabled product search in Moxie lifted conversion by 3%, implying ~1.3M incremental cases annualized, and routing productivity improved (cases/mile +2.3%) .
What Went Wrong
- Sequential margin compression vs Q2: Adjusted EBITDA margin fell to 5.0% from a record 5.4% in Q2 2025 as event costs (Food Fanatics Live) added ~$0.07 per case to both gross profit and OpEx .
- Chain volume -2.4% YoY, only partially improving sequentially; macro/traffic backdrop described as “sluggish,” with choppiness tied to government shutdown impacts on consumer confidence, especially in East Coast markets .
- Operating expenses +6.0% YoY to $1.471B given higher distribution, selling, and admin costs; Adjusted OpEx +5.0% .

Financial Results

Core P&L (chronological order: prior year → prior quarter → current)

Metric	Q3 2024	Q2 2025	Q3 2025
Net Sales ($USD Billions)	$9.728	$10.082	$10.191
Gross Profit ($USD Billions)	$1.667	$1.777	$1.753
Net Income ($USD Millions)	$148	$224	$153
Net Income Margin (%)	1.5%	2.2%	1.5%
Adjusted EBITDA ($USD Millions)	$455	$548	$505
Adjusted EBITDA Margin (%)	4.7%	5.4%	5.0%
Diluted EPS (GAAP, $)	$0.61	$0.96	$0.67
Adjusted Diluted EPS ($)	$0.85	$1.19	$1.07

Actual vs S&P Global Consensus (Q3 2025)

Metric	Actual	Consensus	Beat/Miss
Revenue ($USD Billions)	$10.191	$10.167*	Beat
Primary EPS (Adjusted) ($)	$1.07	$1.03*	Beat
EBITDA ($USD Millions)	$505 (Adj.)	$503*	Beat/Inline

Values with asterisk are retrieved from S&P Global. Definitions for EBITDA may differ between company-reported (Adjusted) and S&P consensus.*

Customer Type Case Volume Growth (QoQ/YoY context)

Customer Type	Q1 2025	Q2 2025	Q3 2025
Independent Restaurants	+2.5%	+2.7%	+3.9%
Healthcare	+6.1%	+4.9%	+3.9%
Hospitality	+3.6%	+2.4%	+2.4%
Chains	-4.3%	-4.0%	-2.4%
Total Case Volume	+1.1%	+0.9%	+1.1%

KPIs and Productivity

KPI	Q3 2025	Notes
Adjusted GP per case change ($)	+$0.41 YoY	Vendor management, inventory loss reduction
Adjusted OpEx per case change ($)	+$0.22 YoY	Productivity offsets some inflation
Adjusted EBITDA per case ($)	$2.33	+$0.21 YoY
Cases per mile (%)	+2.3% YoY	Descartes routing rollout
Operations quality composite (%)	+24% YoY	UMOS deployment
Pronto sales run-rate ($)	~$0.95B FY25, >$1.0B YE run-rate	Small-truck delivery expansion

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales Growth	FY 2025	4%–6%	4%–5%	Tightened (lower high-end)
Adjusted EBITDA Growth	FY 2025	9.5%–12%	10%–12%	Raised low-end
Adjusted Diluted EPS Growth	FY 2025	19.5%–23%	24%–26%	Raised
Total Case Volume Growth	FY 2025	1%–3% (prior)	1%–2%	Tightened (lower high-end)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q1)	Current Period (Q3)	Trend
AI/Technology in Commerce	Margin execution focus; no explicit AI detail in Q1/Q2 press releases	Moxie AI search +3% conversion; ~1.3M incremental cases annualized; faster seller proposals; routing/tracking improvements	Expanding deployment, near-term ROI positive
Supply Chain Productivity	Ongoing distribution productivity; leverage improvement	Cases/mile +2.3%; UMOS quality +24%; semi-automated Aurora facility ramping with learnings	Continuing improvement; automation early-stage
Private Label Penetration	Emphasis on value proposition and margin; share gains	Over 53% among core independents; higher profitability than branded; incentivized in new comp plan	Rising; reinforced by comp changes
Pronto Small-Truck Service	Growth initiative underway	~$0.95B FY25 sales; >$1.0B YE run-rate; largest annual investment planned for 2026	Scaling; capital-light growth
Macro/Traffic & Chains	Chains pressured (-4.3% Q1; -4.0% Q2)	Chains -2.4%; backdrop “sluggish”; govt shutdown choppiness; independent share gains continue	Sequential improvement but macro remains mixed

Management Commentary

CEO (press release): “Our third quarter performance reflects our team’s ability to consistently deliver earnings growth through share gains and margin expansion... We’re focused on delivering long-term shareholder value and disciplined capital allocation – investing for growth while executing share repurchases and targeted tuck-in M&A.”
CFO (press release): “We delivered a combination of top-line growth and 28 basis points of Adjusted EBITDA margin expansion again this quarter, resulting in 11% Adjusted EBITDA growth.”
CEO (call): “Independent case growth accelerated by 120 basis points from Q2 to Q3… eighteenth consecutive quarter of market share gains with independent restaurants.”
CFO (call): “Adjusted gross profit per case improved $0.41… inventory loss reduction on track to generate $35M in savings this year.”
CEO (call): On seller comp change to 100% variable: “The more they make, the better it is for growth and for the business... we believe these changes will accelerate profitable volume growth.”

Q&A Highlights

Sales compensation transition to 100% variable in 2026: pilots in Q4, thoughtful change management, expectation to accelerate growth without increasing turnover; incentives aligned to independent case growth, private label, and Pronto .
Macro environment and October trends: choppiness tied to government shutdown; management continues to “control our own destiny” with share gains; case growth held solid through October .
AI applications: broader use across e-commerce, digital marketing, routing visibility, and seller tooling (proposal time cut to 15–20 minutes) with focus on tangible near-term impact .
Chain business: sequential improvement with new onboardings, but performance varies by concept; continued optimization expected .
Semi-automation: Aurora facility ramp progressing; too early for quantified impact, but long-term role seen as “almost inevitable” .

Estimates Context

Q3 2025 performance exceeded S&P Global consensus on revenue and Adjusted EPS, and was roughly in line/slightly above on Adjusted EBITDA, supporting estimate momentum into Q4 2025. Adjusted EPS beat ($1.07 vs $1.03*) likely reflects vendor management savings, inventory efficiency and continued share gains offsetting a tougher macro and higher event-related costs .

Metric	Q3 2025 Actual	Q3 2025 Consensus	Q4 2025 Consensus
Primary EPS ($)	$1.07	1.0315*	1.0036*
Revenue ($USD Billions)	$10.191	10.1675*	9.9543*
EBITDA ($USD Millions)	$505 (Adj.)	503.10*	487.56*

Values with asterisk are retrieved from S&P Global. Definitions for EBITDA/Adjusted EBITDA may differ between company reporting and S&P consensus.*

Key Takeaways for Investors

Quality beat: Adjusted EPS and revenue modestly exceeded consensus, with YoY margin expansion; focus remains on self-help and share gains amid a “sluggish” backdrop .
Sequential normalization vs Q2’s record margin: event-driven costs and chain softness weighed on sequential margins, but productivity initiatives and vendor management continue to drive durable leverage .
Guidance mix-shift: top-line tightened while profitability targets were raised—watch for estimate revisions higher on EPS and EBITDA despite macro uncertainty .
Structural growth levers: independent penetration, private label, Pronto, and AI/digital initiatives should sustain earnings power into 2026; largest Pronto investment planned .
Capital allocation: ~$335M repurchases in Q3 and $467M remaining authorization, net leverage at 2.6x with no LT maturities until 2028—supports ongoing buybacks and tuck-in M&A (Shetakis) .
Near-term trading implications: beats plus raised EPS guidance and repurchases are positive catalysts; monitor chain traffic trends, government-related choppiness, and event cost cadence into Q4 .
Medium-term thesis: portfolio of productivity and growth initiatives, rising private label mix, and capital-light Pronto expansion underpin the long-range plan (5% sales CAGR, 10% EBITDA CAGR, ≥20 bps margin expansion, 20% EPS CAGR through 2027) .

Additional Documents Reviewed

Q3 2025 press release and 8-K (Item 2.02 with Exhibit 99.1) including full GAAP and non-GAAP reconciliations .
Q3 2025 earnings call transcript (full) –.
Q2 2025 press release –.
Q1 2025 press release –.

US Foods Holding Corp. (USFD)·Q3 2025 Earnings Summary