US Foods Holding Corp. (NYSE:USFD) on Thursday reported fourth-quarter and full-year fiscal 2025 results and issued fiscal 2026 guidance, delivering an earnings beat and strong margin performance that lifted investor sentiment.
For the fourth quarter, adjusted diluted EPS of $1.04 beat a $1.00 estimate, while net sales of $9.800 billion missed a $9.913 billion estimate.
Fourth Quarter Results
Net sales increased 3.3% to $9.8 billion. Net income increased 178.8% to $184 million. GAAP diluted EPS was 82 cents, while adjusted diluted EPS was $1.04.
Total case volume increased 0.8%, driven by a 4.1% increase in independent restaurant case volume, a 2.9% increase in healthcare volume, and a 3.1% increase in hospitality volume, partially offset by a 3.4% decrease in chain volume.
Total organic case volume increased 0.3%, which includes 3.7% organic independent restaurant case volume growth.
Gross profit increased 3.2% to $1.7 billion, and gross profit as a percentage of net sales was 17.6%. The company cited an “unfavorable year-over-year LIFO adjustment.” Adjusted EBITDA increased 11.1% to $490 million, and adjusted EBITDA margin was 5.0%.
Fiscal 2025 Results
Net sales increased 4.1% to $39.4 billion, and net income increased 36.8% to $676 million. GAAP diluted EPS was $2.94, while adjusted diluted EPS was $3.98.
Total case volume increased 1.0%, driven by a 3.3% increase in independent restaurant case volume, a 4.4% increase in healthcare volume, and a 2.9% increase in hospitality volume, partially offset by a 3.5% decrease in chain volume.
Total organic case volume increased 0.4%, which includes 2.7% organic independent restaurant case volume growth.
Adjusted EBITDA increased 11.0% to $1.93 billion, and adjusted EBITDA margin expanded 30 basis points to 4.9%.
Cash Flow, Debt, and Buybacks
Cash flow provided by operating activities for fiscal 2025 was $1.37 billion, and cash capital expenditures totaled $410 million. Cash and cash equivalents were $41 million at year-end.
Net debt at the end of fiscal year 2025 was $5.2 billion, and the ratio of Net Debt to Adjusted EBITDA was 2.7x. During the fourth quarter, the company repurchased 4.2 million shares for $327 million, and for the full year, repurchased 11.9 million shares for $934 million.
As of the end of fiscal year 2025, the company had approximately $1.09 billion total in remaining funds authorized under its share repurchase programs.
Management Comments
“2025 was a strong start to our three year long-range plan. We grew Adjusted EBITDA 11% to a record $1.9 billion, expanded Adjusted EBITDA margin by 30 basis points to 4.9%, and increased Adjusted Diluted EPS 26% to a record $3.98,” said Dave Flitman, CEO, citing results “despite a softer economic environment.”
Dirk Locascio, CFO, commented, “We are excited about our recently announced $1 billion share repurchase authorization, which reinforces our confidence in the company’s future and our commitment to driving shareholder value. Looking ahead, we remain committed to achieving our long-range plan algorithm and financial targets, including generating more than $4 billion of cumulative operating cash flow from 2025 to 2027.”
Outlook
For fiscal 2026, US Foods guided to adjusted diluted EPS growth of 18% to 24%, net sales growth of 4% to 6% and adjusted EBITDA growth of 9% to 13%, and said the guidance includes the impact of a 53rd week expected to add approximately 1% to total case growth and adjusted EBITDA growth.
The company sees fiscal 2026 adjusted EPS of $4.70 to $4.93, versus a $4.67 estimate, and sales of $41.001 billion to $41.789 billion, versus a $42 billion estimate.
USFD Price Action: US Foods Holdings shares were up 10.70% at $91.65 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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