US Foods — Second Quarter Fiscal 2026 Earnings Summary

Financial Performance

• Net sales increased 4.5% year-over-year to $10.5 billion for the second quarter of fiscal 2026.
• Net income increased 22.8% year-over-year to $275 million, with a net income margin of 2.6% (an increase of 39 basis points).
• Diluted EPS increased 29.2% year-over-year to $1.24.
• Adjusted EBITDA increased 10.2% year-over-year to a record $604 million, with an Adjusted EBITDA margin of 5.7% (an increase of 29 basis points).
• Adjusted Diluted EPS increased 21.0% year-over-year to $1.44.
• Gross profit increased 8.0% year-over-year to $1.9 billion, representing 18.2% of net sales.
• Operating expenses increased 5.1% year-over-year to $1.5 billion, representing 14.0% of net sales.
• Adjusted Gross profit increased 6.9% year-over-year to $1.9 billion.
• Adjusted Operating expenses increased 5.5% year-over-year to $1.3 billion.
• Cash flow provided by operating activities for the first six months of fiscal 2026 was $725 million, unchanged from the prior year period.
• Net debt at the end of the second quarter was $5.2 billion, with a Net Debt to Adjusted EBITDA ratio of 2.6x.

Guidance and Future Outlook

• The Company reaffirmed its Fiscal Year 2026 guidance provided on February 12, 2026.
• Net sales growth is guided for 4% to 6%.
• Adjusted EBITDA growth is guided for 9% to 13%.
• Adjusted Diluted EPS growth is guided for 18% to 24%.
• Guidance includes the impact of a 53rd week in fiscal 2026, expected to add approximately 1% to total case growth and Adjusted EBITDA growth.

Business Segments and Product Lines

• Total case volume increased 1.9% year-over-year.
• Independent restaurant case volume increased 5.1% year-over-year.
• Healthcare volume increased 3.5% year-over-year.
• Hospitality volume increased 4.4% year-over-year.
• Chain volume decreased 1.5% year-over-year.
• Total organic case volume increased 1.7%, including 5.0% organic independent restaurant case volume growth.
• Net sales growth was driven by case volume growth and 2.3% food cost inflation.
• Gross profit growth was driven by increased total case volume, improved cost of goods sold, and a $19 million favorable year-over-year LIFO adjustment.

Market and Competitive Landscape

• The industry environment is described as challenging but stable.
• Management expressed confidence in the ability to continue gaining share with target customer types.
• US Foods partners with approximately 250,000 customer locations.

Risks and Challenges

• Forward-looking statements are subject to risks including changes in consumer eating habits, economic factors affecting discretionary spending, and advancements in pharmaceutical therapies reducing away-from-home food consumption.
• Risks include cost inflation/deflation, commodity volatility, fuel cost increases, geopolitical developments, and supply chain disruptions.
• Potential challenges include competition, reliance on third-party suppliers, changes in customer relationships, and labor relations or increased labor costs.
• Other risks include cybersecurity incidents, technology disruptions, interest rate levels, and the timing and scope of future stock repurchases.

Management Commentary and Tone

• Dave Flitman, Chair of the Board and CEO, stated the team delivered a strong quarter with accelerating volume growth and record Adjusted EBITDA.
• Results are in line with the long-range plan, including 10% Adjusted EBITDA growth and 21% Adjusted Diluted EPS growth.
• Management emphasized leveraging a continuous improvement and self-help culture to enhance service, improve productivity, and deliver sustainable, profitable growth.
• Dirk Locascio, CFO, noted consistent execution of key initiatives supported by strong operating performance and margin expansion through volume growth, gross profit gains, and cost productivity improvements.
• Management remains confident in delivering sustained earnings growth and creating long-term shareholder value.

Other Key Points

• The Company repurchased $374 million of shares during the second quarter (4.4 million shares).
• For the first six months of fiscal 2026, the Company repurchased approximately $500 million of shares (5.8 million shares).
• $640 million remained authorized under the November 2025 share repurchase program.
• Capital expenditures for the first six months of fiscal 2026 totaled $174 million, an increase of $13 million from the prior year, focused on information technology, property, equipment, and distribution facility improvements.
• Net leverage was maintained at 2.6 times.
• The Company operates with more than 70 broadline locations and more than 90 cash and carry stores.