US FOODS HOLDING CORP (NYSE:USFD) Reports Q3 2025 Earnings Beat and Raises Full-Year EPS Outlook Despite Revenue Miss

US FOODS HOLDING CORP (NYSE:USFD) has released its financial results for the third quarter of fiscal year 2025, presenting a mixed performance against analyst expectations. The foodservice distributor demonstrated strength in profitability metrics while falling slightly short on the top line, a combination that appears to have triggered a cautious market response in pre-market trading.

Earnings and Revenue Performance Versus Estimates

The company's third-quarter results revealed a notable divergence between revenue performance and earnings achievement when measured against Wall Street forecasts. While US Foods posted solid fundamental growth, it did not fully meet the market's elevated expectations for sales.

• Revenue: Reported net sales of $10.19 billion, representing a 4.8% year-over-year increase but falling short of the analyst estimate of approximately $10.38 billion.
• Earnings Per Share: Achieved Adjusted Diluted EPS of $1.07, surpassing the analyst consensus estimate of $1.05 and marking a significant 25.9% increase from the prior year.

The market's immediate reaction, with the stock trading down over 2% in pre-market activity, suggests investor focus may be centered on the revenue miss despite the earnings beat. This indicates that while the company is effectively managing costs and profitability, the growth in total sales volume did not meet the high bar set by expectations.

Operational Highlights and Financial Health

Beyond the headline earnings figures, the company's press release detailed several positive operational trends and strategic developments that underscore the underlying health of the business. Management highlighted continued execution on key initiatives aimed at driving long-term value.

• Case Volume Growth: Total case volume increased by 1.1%, with the strategically important independent restaurant segment showing a robust 3.9% growth.
• Profitability Expansion: Adjusted EBITDA grew by 11.0% to $505 million, with the margin expanding by 28 basis points to 5.0%, indicating improved operational efficiency.
• Capital Allocation: The company aggressively repurchased 4.1 million shares for $335 million during the quarter, demonstrating a commitment to returning capital to shareholders.
• Balance Sheet Strength: The Net Debt to Adjusted EBITDA ratio improved to 2.6x from 2.8x at the end of fiscal 2024, reflecting a stronger financial position.

Updated Fiscal 2025 Outlook

Looking ahead, US Foods provided an updated forecast for the full fiscal year, which offers a lens through which to view future performance. The company's guidance presents a nuanced picture, raising expectations for earnings while slightly tempering the outlook for sales growth.

• Net Sales Growth: Guidance narrowed to 4% to 5%, compared to a previous range of 4% to 6%.
• Adjusted EBITDA Growth: Projected at 10% to 12%, an increase from the prior guidance of 9.5% to 12%.
• Adjusted Diluted EPS Growth: Significantly raised to 24% to 26%, up from the previous forecast of 19.5% to 23%.

This updated outlook suggests management is confident in its ability to continue driving substantial bottom-line growth, even as top-line expansion is expected to be at the more conservative end of the initial forecast. When compared to the full-year analyst sales estimate of $40.37 billion, the company's guidance implies a sales figure that is roughly in line with or slightly below current market expectations.

Conclusion

US Foods delivered a quarter characterized by strong earnings outperformance and disciplined margin expansion, though it was counterbalanced by a revenue figure that did not meet consensus estimates. The market's negative pre-market reaction highlights the weight investors are currently placing on top-line growth. The company's raised EPS guidance for the year, however, signals confidence in its ongoing profitability trajectory and the effectiveness of its operational initiatives. Investors will likely monitor subsequent quarters to see if sales momentum can accelerate to match the company's impressive earnings power.

For a detailed look at historical performance and future analyst estimates for US Foods, you can review the earnings and estimates data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The information presented is based on publicly available data and should not be relied upon as the sole basis for making an investment decision. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.