US Foods Holding Corp., one of the leading foodservice distributors in the United States, has reported strong financial and operational results for the first quarter of fiscal year 2026, highlighting continued momentum in its independent restaurant business, disciplined execution of growth initiatives, and resilience despite ongoing macroeconomic uncertainty and weather-related disruptions.
The company posted steady gains across several key performance indicators during the quarter, including increased sales, improved profitability, higher case volumes, and meaningful growth in adjusted earnings per share. Management credited the results to strong customer demand, strategic execution, operational productivity improvements, and continued investments in the business.
For the first quarter of fiscal 2026, US Foods recorded total net sales of $9.6 billion, representing an increase of 2.8% compared with the same period last year. The sales growth was driven primarily by higher case volume and moderate food cost inflation of approximately 1.0%.
One of the strongest areas of performance during the quarter came from the company’s independent restaurant segment. Independent restaurant case volume increased 4.6% year over year, reflecting continued market share gains and strong customer engagement. Overall total case volume rose 1.4% compared with the prior-year period.
In addition to independent restaurants, several other customer segments also delivered positive growth. Healthcare case volume increased 3.7%, while hospitality volume climbed 5.0%. These gains helped offset weaker performance in chain restaurant accounts, where case volume declined 2.3% during the quarter.
On an organic basis, which excludes the impact of acquisitions and other adjustments, total case volume increased 1.1%, including organic independent restaurant case volume growth of 4.4%.
President and Chief Executive Officer Dave Flitman said the company’s performance demonstrated the effectiveness of its long-term strategy and the strength of its customer relationships, even amid external challenges.
According to Flitman, the company accelerated year-over-year independent restaurant case growth during the quarter and continued gaining market share among its target customer categories. He noted that despite difficult macroeconomic conditions and weather-related disruptions affecting parts of the business, the company still achieved approximately 15% growth in adjusted diluted earnings per share.
Flitman also stated that as weather conditions improved later in the quarter, the company exited the period with sustained business momentum, reinforcing confidence in the organization’s operational capabilities and customer-focused approach.
Gross profit for the quarter totaled $1.7 billion, an increase of $39 million, or 2.4%, compared with the prior year. The improvement was primarily driven by higher case volumes and favorable cost-of-goods-sold performance.
However, the quarter also included a $33 million unfavorable year-over-year LIFO inventory accounting adjustment, which partially offset the underlying gains in profitability. Gross profit margin as a percentage of net sales came in at 17.2%.
On an adjusted basis, gross profit reached approximately $1.7 billion, increasing $72 million, or 4.4%, year over year. Adjusted gross profit margin improved to 17.6% of net sales, reflecting stronger operational execution and improved product mix.
Operating expenses during the quarter totaled $1.4 billion, representing an increase of $47 million, or 3.4%, compared with the prior year period. The increase was mainly associated with higher case volumes and increased distribution, selling, and administrative expenses.
Despite the higher costs, the company continued to benefit from productivity enhancements across its distribution network and ongoing initiatives aimed at streamlining administrative operations and reducing overhead costs.
Operating expenses represented 15.0% of net sales during the quarter. Adjusted operating expenses rose 3.9% to $1.3 billion, while adjusted operating expenses as a percentage of net sales were 13.3%.
Net income attributable to the company totaled $116 million during the first quarter, up slightly from the prior year’s result. The increase represented growth of 0.9%, or approximately $1 million. Net income margin was 1.2%, down marginally by 2 basis points compared with the same quarter last year.
Adjusted EBITDA, one of the company’s primary profitability measures, increased 6.2% year over year to $413 million. Adjusted EBITDA margin improved by 14 basis points to 4.3%, demonstrating continued operating leverage and efficiency improvements across the business.
Diluted earnings per share for the quarter reached $0.52, an increase of 6.1% from the prior year period. Adjusted diluted earnings per share climbed 14.7% to $0.78, significantly outpacing Adjusted EBITDA growth and reflecting the company’s focus on disciplined capital allocation and share repurchases.
Chief Financial Officer Dirk Locascio said the company’s self-help initiatives continued to support solid financial performance during the quarter. He emphasized that US Foods successfully expanded margins while growing adjusted diluted earnings per share at a faster pace than adjusted EBITDA.
Locascio also highlighted the company’s strong operating cash flow generation and disciplined approach to capital allocation, which included investments to support long-term growth while simultaneously returning capital to shareholders through stock repurchases.
Cash flow from operating activities for the first three months of fiscal year 2026 totaled $294 million. This represented a decrease of $97 million compared with the prior year period, largely due to changes in operating assets and liabilities as well as higher tax payments during 2026.
Capital expenditures during the quarter reached $98 million, increasing by $14 million year over year. The spending primarily supported investments in information technology systems, facility improvements, property and equipment, and expansion and modernization of distribution infrastructure.
US Foods ended the quarter with net debt of approximately $5.1 billion. The company’s net debt-to-adjusted EBITDA ratio improved to 2.6x at the end of the first quarter, compared with 2.7x at the end of fiscal year 2025, indicating continued balance sheet strengthening.
The company also remained active in returning value to shareholders through stock buybacks. During the first quarter, US Foods repurchased approximately 1.4 million shares of common stock for a total of $125 million. This included $50 million related to settlements from an accelerated share repurchase agreement initiated in November 2025.
At the end of the quarter, the company still had $14 million remaining under its May 2025 share repurchase authorization and approximately $1 billion remaining under its November 2025 repurchase program.
Looking ahead, US Foods reaffirmed its full-year fiscal 2026 guidance originally issued in February 2026. The company continues to expect net sales growth between 4% and 6% for the full fiscal year.
Management also reaffirmed expectations for Adjusted EBITDA growth in the range of 9% to 13%, while adjusted diluted earnings per share are projected to increase between 18% and 24% during fiscal year 2026.
The company noted that fiscal year 2026 includes a 53rd week, which is expected to contribute approximately 1% to both total case growth and Adjusted EBITDA growth for the year.
With continued momentum in its independent restaurant business, ongoing operational improvements, disciplined cost management, and strong shareholder return initiatives, US Foods believes it remains well-positioned to navigate market uncertainty while continuing to drive profitable growth throughout fiscal 2026.
Source link:https://ir.usfoods.com/
