US FOODS HOLDING CORP (NYSE:USFD) reported its second-quarter fiscal 2025 earnings, delivering mixed results relative to analyst expectations. The company posted adjusted diluted earnings per share (EPS) of $1.19, a 28% year-over-year increase, surpassing the consensus estimate of $1.16. However, revenue came in at $10.08 billion, falling short of the expected $10.38 billion. The market reaction has been muted, with shares down approximately 1.7% in pre-market trading, suggesting investor caution despite the earnings beat.
Key Financial Highlights
- Revenue Growth: Net sales rose 3.8% year-over-year to $10.1 billion, driven by a 0.9% increase in total case volume and 2.5% food cost inflation. Independent restaurant case volume grew 2.7%, while healthcare and hospitality segments also saw gains.
- Profitability Improvements: Gross profit increased 4.2% to $1.8 billion, with adjusted gross profit margin expanding to 17.8%. Adjusted EBITDA climbed 12.1% to $548 million, with margins improving by 40 basis points to a record 5.4%.
- Net Income & EPS: Net income rose 13.1% to $224 million, while adjusted diluted EPS grew 28% to $1.19, reflecting operational efficiency and share repurchases.
Market Reaction & Analyst Expectations
While the EPS outperformance is a positive signal, the revenue miss appears to be weighing on investor sentiment. The stock’s pre-market decline suggests concerns over top-line growth, particularly as inflationary pressures and supply chain dynamics remain unpredictable.
Looking ahead, US Foods maintained its full-year revenue growth guidance of 4% to 6%, aligning with consensus estimates. However, the company raised its adjusted EBITDA growth forecast to 9.5%-12% (from 8%-12% previously) and adjusted diluted EPS growth to 19.5%-23% (from 17%-23%). This upward revision indicates confidence in margin expansion and cost management.
Capital Allocation & Strategic Execution
- Share Buybacks: The company repurchased 3.2 million shares for $250 million in Q2 and authorized a new $1 billion buyback program, signaling a commitment to returning capital to shareholders.
- Debt Management: Net debt declined to $4.8 billion, with a net debt-to-adjusted EBITDA ratio improving to 2.6x from 2.8x at the end of fiscal 2024.
Outlook vs. Analyst Estimates
For Q3 2025, analysts expect revenue of $10.44 billion and EPS of $1.05, while full-year 2025 revenue is projected at $40.57 billion. US Foods’ updated EBITDA and EPS guidance suggests the company is on track to meet or exceed full-year expectations, though the Q2 revenue shortfall may temper near-term optimism.
Conclusion
US Foods’ Q2 results highlight strong profitability and execution, but weaker-than-expected sales growth has led to a cautious market response. The company’s focus on margin expansion, cost controls, and shareholder returns provides a solid foundation, though investors will be watching for sustained revenue acceleration in the coming quarters.
For more detailed earnings estimates and historical performance, visit US Foods’ earnings page.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
