US Foods — Third Quarter Fiscal 2026 Earnings Summary

Financial Performance:

• Net sales increased 2.1% year-over-year to $10.4 billion for the third quarter, driven by a 1.3% increase in total case volume and 0.4% food cost inflation.
• Net income rose 42.5% to $218 million, with net income margin expanding 60 basis points to 2.1%.
• Gross profit increased 8.6% to $1.9 billion; Adjusted Gross profit increased 5.7% to $1.9 billion.
• Operating expenses increased 4.2% to $1.5 billion; Adjusted Operating expenses increased 4.0% to $1.3 billion.
• Adjusted EBITDA grew 9.9% to $555 million, with Adjusted EBITDA margin expanding 38 basis points to 5.3%.
• Diluted EPS increased 49.3% to $1.00; Adjusted Diluted EPS increased 17.8% to $1.26.
• Cash flow provided by operating activities for the first nine months of fiscal 2026 was $1,160 million, compared to $1,076 million in the prior year period.
• Net Debt at the end of the third quarter was $5.1 billion, with a Net Debt to Adjusted EBITDA ratio of 2.4x, down from 2.7x at the end of fiscal year 2025.

Guidance and Future Outlook:

• Fiscal Year 2026 Net Sales growth guidance was tightened to 4% to 5% (previously 4% to 6%).
• Fiscal Year 2026 Adjusted EBITDA growth guidance was tightened to 9% to 11% (previously 9% to 13%).
• Fiscal Year 2026 Adjusted Diluted EPS growth guidance was tightened to 18% to 20% (previously 18% to 24%).
• The updated guidance includes the impact of a 53rd week in fiscal year 2026, expected to add approximately 1% to total case growth and Adjusted EBITDA growth.
• Management cited a sustained slower macroeconomic environment and elevated fuel costs as drivers for the tightened outlook.

Business Segments and Product Lines:

• Total case volume increased 1.3%, with independent restaurant case volume growing 5.0%, healthcare volume up 3.3%, and hospitality volume up 3.7%.
• Chain volume decreased 1.5%, partially offsetting growth in other segments.
• Organic case volume increased 1.2%, including 5.0% organic independent restaurant case volume growth.
• The company completed the acquisition of Prime Line Distributors in October, a specialty distributor of gourmet Italian products, broadening its specialty and imported assortment.
• Digital ecosystem and AI initiatives are being advanced to drive topline growth, productivity gains, and margin expansion.

Market and Competitive Landscape:

• US Foods extended its track record of market share gains to 22 consecutive quarters with Independent Restaurants and 24 consecutive quarters with Healthcare.
• The company serves approximately 250,000 customer locations with more than 70 broadline locations and over 90 cash and carry stores.

Risks and Challenges:

• Forward-looking statements highlight risks including changes in consumer eating habits, economic factors affecting discretionary spending, and the impact of pharmaceutical therapies reducing away-from-home food consumption.
• Risks include cost inflation/deflation, commodity volatility, and increases in fuel costs.
• Potential challenges involve geopolitical developments, supply chain disruptions, competition, and reliance on third-party suppliers.
• Other risks include labor relations, increased labor costs, cybersecurity incidents, technology disruptions, and the execution of growth strategies including acquisitions.

Management Commentary and Tone:

• Dave Flitman, Chair and CEO, stated that results reflect the strength of the strategy and disciplined execution, highlighting continued market share gains and strong earnings growth.
• Flitman noted the team's focus on self-help initiatives and execution, driving 10% Adjusted EBITDA growth and 18% Adjusted Diluted EPS growth.
• Dirk Locascio, CFO, emphasized ongoing operational excellence and disciplined cost management, noting the company continues to compound Adjusted EPS growth at a double-digit rate despite external headwinds.
• Management expressed gratitude to 30,000 associates for their dedication.

Other Key Points:

• The company repurchased $191 million of common stock during the third quarter of fiscal 2026.
• For the first nine months of fiscal 2026, the company repurchased $690 million of common stock, inclusive of fees, commissions, and excise tax.
• $450 million remained authorized under the November 2025 share repurchase program.
• Cash capital expenditures for the first nine months of fiscal 2026 totaled $266 million, a decrease of $10 million from the prior year, related to IT, property, equipment, and distribution facility improvements.
• The company hosts a live webcast on November 5, 2026, at 8 a.m. CST to discuss results.