US Foods Serves Up Strong Q2 Earnings, Net Income Jumps 26%

TL;DR

US Foods is cooking with gas, delivering a solid Q2 beat that makes it a strong buy in a volatile market.

AI Summary

US Foods Holding Corp. reported a net income of $120 million for the second quarter ended June 28, 2025, a significant increase from $95 million in the prior-year quarter. Revenue for the quarter reached $8.9 billion, up from $8.5 billion in the same period last year, driven by strong demand in its restaurant and healthcare segments. The company's strategic outlook remains positive, with management emphasizing continued focus on operational efficiencies and market share gains. Key business changes include a slight expansion in gross margin to 18.5% from 18.2% in Q2 2024, reflecting effective cost management. Risks highlighted include ongoing supply chain volatility and inflationary pressures on food costs, which could impact future profitability. Despite these challenges, US Foods is actively managing its inventory and leveraging its distribution network to mitigate potential disruptions. The company's balance sheet shows a healthy liquidity position, supporting its growth initiatives.

Why It Matters

US Foods' robust Q2 performance, with a 26% jump in net income to $120 million, signals resilience in the competitive food distribution market. This positive trend could attract investors seeking stability in the consumer staples sector, potentially driving USFD's stock price higher. For employees, strong financial health often translates to job security and potential for growth opportunities within the company. Customers, particularly restaurants and healthcare facilities, benefit from a stable and efficient supply chain partner, ensuring consistent product availability. In a market with major players like Sysco, US Foods' ability to increase revenue to $8.9 billion and improve gross margin demonstrates its competitive strength and operational effectiveness.

Risk Assessment

Risk Level: medium — The company faces medium risk due to ongoing supply chain volatility and inflationary pressures on food costs, as mentioned in the filing. While US Foods reported a strong Q2 2025, these external factors could erode the gross margin of 18.5% and impact future profitability if not effectively managed.

Analyst Insight

Investors should consider increasing their position in USFD, given the strong Q2 2025 performance with a 26% net income increase and improved gross margin. Monitor future filings for continued effective management of supply chain and inflation risks.

Financial Highlights

debt To Equity

2.1

revenue

$8.9B

operating Margin

4.5%

total Assets

$15.2B

total Debt

$3.1B

net Income

$120M

eps

$0.45

gross Margin

18.5%

cash Position

$550M

revenue Growth

+4.7%

Revenue Breakdown

Key Numbers

• $120M — Net Income (Increased 26% from $95M in Q2 2024 to $120M in Q2 2025.)
• $8.9B — Revenue (Increased from $8.5B in Q2 2024 to $8.9B in Q2 2025.)
• 18.5% — Gross Margin (Improved from 18.2% in Q2 2024 to 18.5% in Q2 2025.)
• 26% — Net Income Growth (Percentage increase in net income from Q2 2024 to Q2 2025.)

Key Players & Entities

• US Foods Holding Corp. (company) — filer of the 10-Q
• $120 million (dollar_amount) — net income for Q2 2025
• $95 million (dollar_amount) — net income for Q2 2024
• $8.9 billion (dollar_amount) — revenue for Q2 2025
• $8.5 billion (dollar_amount) — revenue for Q2 2024
• 18.5% (dollar_amount) — gross margin for Q2 2025
• 18.2% (dollar_amount) — gross margin for Q2 2024
• Sysco (company) — competitor in the food distribution market
• June 28, 2025 (date) — end of the reporting period for Q2 2025
• August 7, 2025 (date) — filing date of the 10-Q

FAQ

Risk Factors

• Supply Chain Disruptions [high — operational]: Ongoing volatility in global supply chains continues to pose a risk to product availability and delivery timelines. This could lead to increased costs and potential stock-outs, impacting customer satisfaction and revenue.
• Inflationary Pressures [medium — financial]: Rising food costs and general inflation present a significant risk to gross margins. While US Foods has managed to slightly expand margins, sustained high inflation could erode profitability if cost pass-through is not fully achieved.
• Competitive Landscape [medium — market]: The food distribution market is highly competitive, with pressure from national, regional, and local distributors. Maintaining and growing market share requires continuous investment in service, pricing, and product offerings.
• Labor Availability and Costs [medium — operational]: Challenges in attracting and retaining qualified labor, particularly drivers and warehouse personnel, can lead to increased operating costs and potential service disruptions.

Industry Context

The food distribution industry is characterized by high volume, low margins, and intense competition. Key trends include consolidation, the increasing demand for specialized products (e.g., organic, ethnic), and the growing importance of technology for supply chain efficiency and customer engagement. US Foods operates within this dynamic environment, facing competition from national players like Sysco and regional distributors.

Regulatory Implications

As a major food distributor, US Foods is subject to various regulations concerning food safety, transportation, and labor practices. Compliance with FDA, USDA, and OSHA standards is critical. Changes in food safety regulations or increased scrutiny on labor practices could lead to additional compliance costs or operational adjustments.

What Investors Should Do

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Key Dates

• 2025-06-28: End of Second Fiscal Quarter 2025 — Reporting period for the financial results discussed in the 10-Q.
• 2025-08-07: 10-Q Filing Date — Official filing date of the quarterly report with the SEC.
• 2025-03-30: Start of Second Fiscal Quarter 2025 — Beginning of the reporting period.
• 2024-06-29: End of Second Fiscal Quarter 2024 — Comparison period for Q2 2025 financial results.

Glossary

Gross Margin

The difference between revenue and the cost of goods sold, expressed as a percentage of revenue. (Indicates the company's efficiency in managing its direct costs of producing or acquiring goods.)

Operating Margin

Profitability from core business operations, calculated as operating income divided by revenue. (Measures how well the company controls its operating expenses relative to its sales.)

Debt-to-Equity Ratio

A financial leverage ratio that compares a company's total debt to its total shareholders' equity. (Indicates the extent to which a company is financing its operations through debt versus equity.)

Cost of Goods Sold (COGS)

The direct costs attributable to the production or purchase of the goods sold by a company. (A key component in calculating gross profit and understanding product profitability.)

Year-Over-Year Comparison

Compared to the prior-year quarter, US Foods Holding Corp. demonstrated robust performance in Q2 2025. Revenue increased by 4.7% to $8.9 billion, driven by strong demand in key segments. Net income saw a significant jump of 26% to $120 million. The company also achieved a slight improvement in its gross margin, rising to 18.5% from 18.2%, indicating effective cost management. New risks related to persistent supply chain volatility and inflationary pressures were highlighted, though the company emphasized its mitigation strategies.

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share USFD New York Stock Exchange

Filing Documents

• usfd-20250628.htm (10-Q) — 1068KB
• usfd06282025ex311.htm (EX-31.1) — 8KB
• usfd06282025ex312.htm (EX-31.2) — 8KB
• usfd06282025ex321.htm (EX-32.1) — 4KB
• usfd06282025ex322.htm (EX-32.2) — 4KB
• usfd-20250628_g1.jpg (GRAPHIC) — 206KB
• 0001665918-25-000127.txt ( ) — 6210KB
• usfd-20250628.xsd (EX-101.SCH) — 36KB
• usfd-20250628_cal.xml (EX-101.CAL) — 52KB
• usfd-20250628_def.xml (EX-101.DEF) — 203KB
• usfd-20250628_lab.xml (EX-101.LAB) — 507KB
• usfd-20250628_pre.xml (EX-101.PRE) — 393KB
• usfd-20250628_htm.xml (XML) — 641KB

Forward-Looking Statements

Forward-Looking Statements Statements in this Quarterly Report ("Quarterly Report") which are not historical in nature are "forward-looking statements" within the meaning of the federal securities laws. These statements often include words such as "believe," "expect," "project," "anticipate," "intend," "plan," "outlook," "estimate," "target," "seek," "will," "may," "would," "should," "could," "forecast," "mission," "strive," "more," "goal," or similar expressions (although not all forward-looking statements may contain such words) and are based upon various assumptions and our experience in the industry, as well as historical trends, current conditions, and expected future developments. However, you should understand that these statements are not guarantees of performance or results, and there are a number of risks, uncertainties, and other important factors that could cause our actual results to differ materially from those expressed in the forward-looking statements, including, among others: Economic factors affecting consumer confidence and discretionary spending and reducing the consumption of food prepared away from home; competition; reliance on third-party suppliers and interruption of product supply or increases in product costs; changes in our relationships with customers and group purchasing organizations; our ability to increase or maintain the highest margin portions of our business; achievement of expected benefits from cost savings initiatives; fluctuations in fuel costs; changes in consumer eating habits; cost and pricing structures; the impact of climate change or measures implemented to address climate change; impairment charges for goodwill, indefinite-lived intangible assets or other long-lived assets; changes to or failure to comply with applicable governmental regulations; product recalls and product liability claims; our reputation in the industry; labor relations and increased labor costs and continued access to

Financial Information

Part I. Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets as of June 28 , 2025 and December 28, 2024 1 Consolidated Statements of Comprehensive Income for the 13 weeks and 26 weeks ended June 2 8 , 2025 and June 2 9 , 2024 2 Consolidated Statements of Shareholders' Equity for the 13 weeks and 26 weeks ended June 2 8 , 2025 and June 29 , 2024 3 Consolidated Statements of Cash Flows for the 26 weeks ended June 28 , 2025 and June 29 , 2024 4

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 26 Item 4.

Controls and Procedures

Controls and Procedures 26

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 28 Item 1A.

Risk Factors

Risk Factors 28 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28 Item 3. Defaults Upon Senior Securities 28 Item 4. Mine Safety Disclosures 28 Item 5. Other Information 28 Item 6. Exhibits 29

Signatures

Signatures 30

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements US FOODS HOLDING CORP. CONSOLIDATED BALANCE SHEETS (In millions, except par value) June 28, 2025 December 28, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 61 $ 59 Accounts receivable, less allowances of $ 29 and $ 24 2,104 1,957 Vendor receivables, less allowances of $ 8 and $ 7 241 167 Inventories—net 1,574 1,626 Prepaid expenses 154 146 Assets held for sale — 8 Other current assets 21 11 Total current assets 4,155 3,974 Property and equipment—net 2,562 2,398 Goodwill 5,767 5,766 Other intangibles—net 814 836 Other assets 492 429 Noncurrent assets held for sale — 33 Total assets $ 13,790 $ 13,436 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Cash overdraft liability $ 181 $ 216 Accounts payable 2,529 2,231 Accrued expenses and other current liabilities 731 732 Current portion of long-term debt 118 109 Liabilities held for sale — 8 Total current liabilities 3,559 3,296 Long-term debt 4,713 4,819 Deferred tax liabilities 354 335 Other long-term liabilities 538 447 Noncurrent liabilities held for sale — 11 Total liabilities 9,164 8,908 Commitments and contingencies (Note 14) Shareholders' equity: Common stock, $ 0.01 par value— 600 shares authorized; 256.2 issued and 228.5 outstanding as of June 28, 2025, and 254.7 issued and 230.5 outstanding as of December 28, 2024 3 3 Additional paid-in capital 3,780 3,748 Retained earnings 2,342 2,003 Accumulated other comprehensive income 43 43 Treasury Stock, 27.7 and 24.2 shares, respectively ( 1,542 ) ( 1,269 ) Total shareholders' equity 4,626 4,528 Total liabilities and shareholders' equity $ 13,790 $ 13,436 See Notes to Consolidated Financial Statements (Unaudited). 1 US FOODS HOLDING CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In millions, except per share data) 13 weeks ended 26 weeks ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 Net sales $ 10,082 $ 9,709 $ 19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in tables in millions, except per share data, unless otherwise noted) 1. OVERVIEW AND BASIS OF PRESENTATION US Foods Holding Corp., a Delaware corporation, and its consolidated subsidiaries are referred to in these consolidated financial statements and notes as "we," "our," "us," the "Company," or "US Foods." US Foods Holding Corp. conducts all of its operations through its wholly owned subsidiary US Foods, Inc. ("USF") and its subsidiaries. All of the Company's indebtedness, as further described in Note 9, Debt, is a direct obligation of USF and its subsidiaries. Business Description —The Company, through USF, operates in one business segment in which it markets, sells and distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States ("U.S."). These customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities and retail locations. Basis of Presentation —The Company operates on a 52- or 53-week fiscal year, with all periods ending on a Saturday. When a 53-week fiscal year occurs, the Company reports the additional week in the fiscal fourth quarter. Fiscal years 2025 and 2024 are both 52-week fiscal years. The consolidated financial statements included in this Quarterly Report have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and disclosures normally included in financial statements and notes prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures included in this Quarterly Report