- Adjusted EPS of $1.19 beat estimates and rose 28% on margin expansion and buybacks, even as Q2 sales of $10.08 B lagged forecasts.
- YTD cost-of-goods savings topped $50M, private-label mix climbed to 53%, and tighter inventory controls are set to boost profit by $30M.
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US Foods Holding Corp. USFD shares are trading lower on Thursday after the company reported second-quarter results.
US Foods Holding Corp. markets and sells products under various brands, including Chef's Line, Stock Yards, Metro Deli, Harvest Value, Monarch, Monogram, Molly's Kitchen, and Glenview Farms. They also distribute foodservice equipment and supplies under brands like Chef'Stores, Food Fanatics, and Smart Foodservice.
It clocked second-quarter adjusted earnings per share of $1.19, beating the analyst consensus estimate of $1.13. Quarterly sales of $10.082 billion (up 3.8% year over year) missed the Street view of $10.166 billion.
"We delivered top-line growth and margin expansion combined with accretive share buybacks, which resulted in 28% Adjusted EPS growth," said CFO Dirk Locascio.
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Quarterly sales growth was driven by case volume growth and food cost inflation of 2.5%.
Total case volume increased 0.9% from the prior year, driven by a 2.7% increase in independent restaurant case volume, a 4.9% increase in healthcare volume and a 2.4% increase in hospitality volume, US Foods Holding said in a press release.
Adjusted gross profit increased by $85 million year-over-year (up 5.0%) to $1.8 billion. It represented 17.8% of net sales, compared with 17.6% in the year-ago period.
Adjusted EBITDA of $548 million, increased by 12.1%, from the prior year. Adjusted EBITDA margin was 5.4%, an increase of 40 basis points compared to the prior year.
The company said it has secured over $50 million in year-to-date cost-of-goods savings through strategic vendor management and is positioned to exceed its $260 million 2027 commitment.
Private-label penetration climbed more than 80 basis points to over 53% in core independent restaurants, driving improved margins.
Enhanced inventory controls are projected to deliver a $30 million gross profit benefit in 2025, while $45 million in indirect-spend savings this year will further reduce operating expenses.
The company exited the quarter with cash and equivalents worth $61 million, higher than $59 million in the year-ago period.
Outlook
US Foods Holding affirmed its fiscal year 2025 sales guidance at $39.392 billion to $40.150 billion, compared with the consensus estimate of $39.764 billion.
The company also narrowed its adjusted EPS guidance for fiscal 2025 to $3.76–$3.87, tightening the prior range of $3.69–$3.88, and compared with the street estimate of $3.81.
Price Action: USFD shares are trading lower by 8.56% to $77.39 at last check Thursday.
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