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US Foods Holding Corp.

USFD
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Business Summary

The U.S. foodservice distribution industry is highly competitive, with national, multi-regional, regional and local distributors and specialty competitors. Foodservice distributors typically fall into three categories: broadline distributors who offer a broad line of products and services, system distributors who carry products specified for large chains, and specialized distributors who primarily focus on specific product categories or customer types. Given its mix of products and services, US Foods is considered a broadline distributor. The industry serves different customer types including independent restaurants, regional and national restaurant chains, healthcare customers, hospitality customers, colleges and universities, K-12 schools, and government locations. Key dynamics affecting the industry include the impact of evolving consumer tastes and preferences, technology and artificial intelligence transforming the industry, and tariffs, inflation and economic pressures creating challenges for both consumers and operators.

The U.S. foodservice distribution industry has a large number of companies competing in the space, including local, regional, and national foodservice distributors. Certain competitors may have greater scale, financial and other resources than US Foods in certain markets. Competition also comes from cash-and-carry operations, commercial wholesale outlets, warehouse clubs, grocery stores, online direct food wholesalers, and competitors utilizing technology including artificial intelligence and machine learning. US Foods believes most purchasing decisions are based on the type, quality and price of the product and a distributor's ability to completely and accurately fill orders and provide timely deliveries. The company's strategy is anchored in leading quality and innovation through its own Exclusive Brands, and its WE HELP YOU MAKE IT brand promise is centered on bringing three key elements to customers: More Quality products, More Tools centering on the MOXÉ digital platform, and More Deliveries enabled by traditional broadline services, the Pronto program and convenient delivery options.

US Foods operates as one business with standardized business processes, shared systems infrastructure, and an organizational model that optimizes national scale with local execution, allowing the company to manage its business as a single operating segment. The company generates revenue by supplying approximately 250,000 customer locations nationwide with fresh, frozen, and dry food products, as well as non-food items, sourced from thousands of suppliers. Revenue is recognized when the performance obligation is satisfied, which occurs when a customer obtains control of the promised goods or services, typically at delivery. Customer sales incentives such as volume-based rebates or discounts are treated as a reduction of revenue at the time the revenue is recognized. The company has centralized activities where scale matters while its local field structure focuses on customer-facing activities, with over 4,000 sales associates managing customer relationships at local, regional, and national levels.

US Foods has a broad assortment of products and brands designed to meet customers' needs, offering products under a spectrum of private brands based on price and quality. The company's principal product categories include meats and seafood, dry grocery products, refrigerated and frozen grocery products, dairy, equipment, disposables and supplies, beverage products, and produce. For fiscal year 2025, net sales by category were: meats and seafood $13,974 million, dry grocery products $6,685 million, refrigerated and frozen grocery products $6,635 million, dairy $4,214 million, equipment, disposables and supplies $3,631 million, beverage products $2,338 million, and produce $1,947 million . The company's Exclusive Brands portfolio is guided by a spirit of innovation and a commitment to delivering superior quality products and value, with organic broadline sales of private brands representing approximately 35% of net sales in fiscal year 2025 .

The company's strategy includes the Scoop program, which introduces high-quality innovative products multiple times a year through a rigorous product development process. MOXÉ is an all-in-one foodservice business application that includes features such as image ordering, AI-powered real-time delivery alerts, Inventory and Food Cost Calculator tools, and a new AI-powered Menu IQ tool. The Check Business Tools suite includes website design, online ordering, staff management, inventory and food cost control, point-of-sale systems, and the US Foods Menu Design Service. The omnichannel delivery approach includes Scheduled Delivery, US Foods Pronto offering daily deliveries in high-volume dense markets with deliveries six days a week and late order times, Pronto Next Day, over 90 CHEF'STORE locations, and US Foods Direct offering more than 200,000 items online delivered via FedEx.

On January 10, 2025, USF completed the acquisition of Jake's Finer Foods and Gourmet Ranch in Houston, Texas, for a purchase price of $92 million . On November 14, 2025, USF completed the acquisition of Shetakis for a purchase price of $46 million . During the fiscal year ended December 27, 2025, the Company completed the sale of the Freshway business for net proceeds of $38 million . In the year ended December 27, 2025, the Company repurchased 11,881,693 shares of its common stock at an aggregate purchase price of approximately $934 million under the Original Share Repurchase Program and the May 2025 Share Repurchase Program, collectively, inclusive of approximately $8 million of fees, commissions, and any related excise tax . On November 24, 2025, the Company entered into an accelerated share repurchase agreement with Morgan Stanley & Co. LLC to repurchase an aggregate of $250 million of the Company's common stock under the May 2025 Share Repurchase Program . Additionally, on November 24, 2025, the Board of Directors approved the November 2025 Share Repurchase Program under which the Company is authorized to repurchase up to an additional $1 billion of its outstanding common stock .

Net sales increased $1,547 million, or 4.1%, to $39,424 million in fiscal year 2025 driven by case volume growth and food cost inflation of 2.6% . Gross profit increased $330 million, or 5.1%, to $6,864 million in fiscal year 2025 . Operating income increased $100 million to $1,199 million in fiscal year 2025 . Net income increased $182 million to $676 million in fiscal year 2025 . Adjusted EBITDA increased $191 million, or 11.0%, to $1,932 million in fiscal year 2025 . Adjusted EBITDA as a percentage of net sales was 4.9% in fiscal year 2025, as compared to 4.6% in fiscal year 2024 . Cash flows provided by operating activities increased $195 million to $1,369 million in fiscal year 2025 .

Business Outlook

The Company expects total cash capital expenditures in fiscal year 2026 to be between $400 million and $450 million .

The company's growth strategy is centered on the WE HELP YOU MAKE IT brand promise, which brings three key elements to customers: More Quality products including the large portfolio of Exclusive Brands, More Tools centering on the MOXÉ business platform, and More Deliveries enabled by traditional broadline services, the Pronto program and convenient delivery options. The company believes this strategy enables it to reach more customers and create deeper relationships with existing ones, particularly within target customer types of independent restaurants, healthcare, and hospitality, and drive increased penetration of private brand products. Acquisitions have historically played an important role in supporting the execution of the growth strategy, and the company will selectively pursue acquisition opportunities in the future if they are aligned with and enhance strategic priorities. The company believes its growth prospects with independent restaurant, healthcare and hospitality customers are greater than with other customer types because these customers value foodservice distributors with a broad product offering and value-added services.

The company's technology investments include the MOXÉ digital platform, which is an industry leading platform that makes it easy for customers to transact and run their businesses. New AI-powered tools include the Menu IQ tool to help operators better manage recipes and menu items, and AI-powered real-time delivery alerts. The Check Business Tools suite provides digital solutions designed to help customers modernize operations, simplify staffing and drive diner traffic. The company believes that technology and AI are transforming the foodservice industry, driving efficiency and deeper customer engagement, and that foodservice distributors who invest in advanced technology, analytics and supply chain capabilities may gain a competitive edge. The company has invested in embedding continuous improvement in operations to increase service consistency and efficiency and to engage employees in improving day-to-day processes.

The company's LIFO method of inventory costing resulted in an expense of $65 million in fiscal year 2025, compared to an expense of $61 million in fiscal year 2024 . Gross profit as a percentage of net sales was 17.4% in fiscal year 2025 and 17.3% in fiscal year 2024 . Operating expenses as a percentage of net sales were 14.4% in fiscal year 2025, compared to 14.3% in fiscal year 2024 . The company has taken actions to streamline administrative processes and costs, and continues to focus on distribution productivity improvement.

The company's extensive network includes over 70 distribution facilities and a fleet of over 6,500 trucks, along with over 90 cash and carry locations. As of December 27, 2025, the company employed a total of approximately 30,000 associates . The company has a program to train interested warehouse associates to become commercial driver's license Class A delivery drivers. The company utilizes technology to improve driver safety from distracted driver alerts to collision mitigation technology. The company expects to fund capital expenditures with available cash or cash generated from operations and through fleet financing.

Total cash capital expenditures in fiscal year 2025 were $410 million . The Company expects total cash capital expenditures in fiscal year 2026 to be between $400 million and $450 million . As of December 27, 2025, there were no remaining funds authorized under the Original Share Repurchase Program, approximately $90 million in remaining funds authorized under the May 2025 Share Repurchase Program and $1 billion in remaining funds authorized under the November 2025 Share Repurchase Program . The company has not paid any dividends on its common stock since it began trading publicly in 2016 and has no plans to pay dividends in the foreseeable future.

The company faces headwinds from inflation and rising input costs that are creating challenges for both consumers and operators. Tariffs on imported ingredients, packaging and equipment are impacting costs, and broader inflation is increasing food, labor and utility expenses, threatening profitability and potentially dampening consumer demand. The company also faces risks from changes in consumer eating habits, including a decline in consuming food away from home, and from the impact of advancements in pharmaceutical therapies which may reduce the consumption of food prepared away from home. The company's business is a low-margin business, and profitability and results of operations are directly affected by cost deflation or inflation, volatile food costs and other factors.

The company faces execution risks related to integrating acquired businesses and realizing anticipated synergies. The company also faces risks related to labor relations, with approximately 6,600 associates who are members of local unions, and 11 CBAs covering approximately 2,100 union associates subject to renegotiation during fiscal year 2026 . The company may be unable to attract or retain a qualified and diverse workforce, which could adversely affect business. Fuel costs related to outbound deliveries approximated $174 million during fiscal year 2025, and higher costs of fuel may negatively affect consumer confidence and discretionary spending .

Risk Factors

The U.S. foodservice distribution industry is highly competitive, and the company may not be able to compete successfully against national, multi-regional, regional and local distributors, cash-and-carry operations, warehouse clubs, and online competitors. The company's business is a low-margin business with relatively high inventory turnover and low profit margins, and volatile food costs have a direct impact on profitability. The company had $5.2 billion of indebtedness outstanding as of December 27, 2025, with approximately 34% of the net principal amount accruing interest at variable rates, exposing the company to interest rate risk . A hypothetical 1% change in the applicable rate would cause interest expense on floating rate debt to change by approximately $19 million per year . The company relies on third party suppliers and typically does not have long-term contracts, and any interruption of supplies or increases in product costs could adversely affect operations. Approximately 27% of net sales in fiscal year 2025 were made to customers under terms negotiated by GPOs, and if the company is unable to maintain relationships with GPOs, it could lose business .

Management Priorities

Management's message emphasizes the company's mission to inspire and empower chefs and foodservice operators to bring great food experiences to consumers, supported by the brand promise of WE HELP YOU MAKE IT. The strategic priorities emphasized for the period ahead include delivering More Quality products through the large and diverse Exclusive Brand portfolio, More Tools centering on the industry-leading MOXÉ digital platform, and More Deliveries with expanded options for on-time delivery enabled by traditional broadline services and the Pronto program. Management highlights that the company operates as one business with standardized business processes, shared systems infrastructure, and an organizational model that optimizes national scale with local execution. The company expects total cash capital expenditures in fiscal year 2026 to be between $400 million and $450 million .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Products and Brands
  2. [2] Item 1, Business — Products and Brands
  3. [3] Item 1, Business — Products and Brands
  4. [4] Item 1, Business — Products and Brands
  5. [5] Item 1, Business — Products and Brands
  6. [6] Item 1, Business — Products and Brands
  7. [7] Item 1, Business — Products and Brands
  8. [8] Item 7, MD&A — Results of Operations
  9. [9] Item 1, Business — Our Business Strategy
  10. [10] Item 1, Business — Our Business Strategy
  11. [11] Item 8, Note 5 — Acquisitions and Divestitures
  12. [12] Item 5, Market for Registrant's Common Equity — Share Repurchase Program
  13. [13] Item 5, Market for Registrant's Common Equity — Share Repurchase Program
  14. [14] Item 5, Market for Registrant's Common Equity — Share Repurchase Program
  15. [15] Item 5, Market for Registrant's Common Equity — Share Repurchase Program
  16. [16] Item 7, MD&A — Comparison of Results
  17. [17] Item 7, MD&A — Comparison of Results
  18. [18] Item 7, MD&A — Comparison of Results
  19. [19] Item 7, MD&A — Comparison of Results
  20. [20] Item 7, MD&A — Comparison of Results
  21. [21] Item 7, MD&A — Comparison of Results
  22. [22] Item 7, MD&A — Comparison of Results
  23. [23] Item 7, MD&A — Comparison of Results
  24. [24] Item 7, MD&A — Comparison of Results
  25. [25] Item 7, MD&A — Comparison of Results
  26. [26] Item 7, MD&A — Comparison of Results
  27. [27] Item 7, MD&A — Comparison of Results
  28. [28] Item 7, MD&A — Comparison of Results
  29. [29] Item 7, MD&A — Cash Flows
  30. [30] Item 7, MD&A — Cash Flows
  31. [31] Item 7, MD&A — Liquidity and Capital Resources
  32. [32] Item 7, MD&A — Liquidity and Capital Resources
  33. [33] Item 7, MD&A — Comparison of Results
  34. [34] Item 7, MD&A — Comparison of Results
  35. [35] Item 7, MD&A — Comparison of Results
  36. [36] Item 7, MD&A — Comparison of Results
  37. [37] Item 7, MD&A — Comparison of Results
  38. [38] Item 7, MD&A — Comparison of Results
  39. [39] Item 1, Business — Human Capital Management
  40. [40] Item 7, MD&A — Cash Flows
  41. [41] Item 7, MD&A — Liquidity and Capital Resources
  42. [42] Item 7, MD&A — Liquidity and Capital Resources
  43. [43] Item 5, Market for Registrant's Common Equity — Share Repurchase Program
  44. [44] Item 5, Market for Registrant's Common Equity — Share Repurchase Program
  45. [45] Item 5, Market for Registrant's Common Equity — Share Repurchase Program
  46. [46] Item 1, Business — Human Capital Management
  47. [47] Item 1, Business — Human Capital Management
  48. [48] Item 7A, Quantitative and Qualitative Disclosures about Market Risk
  49. [49] Item 1A, Risk Factors — Risks Relating to Our Indebtedness
  50. [50] Item 1A, Risk Factors — Risks Relating to Our Indebtedness
  51. [51] Item 7A, Quantitative and Qualitative Disclosures about Market Risk
  52. [52] Item 1, Business — Our Industry
  53. [53] Item 7, MD&A — Liquidity and Capital Resources
  54. [54] Item 7, MD&A — Liquidity and Capital Resources
  55. [55] Item 8, Consolidated Statements of Comprehensive Income
  56. [56] Item 8, Consolidated Statements of Comprehensive Income
  57. [57] Item 8, Consolidated Statements of Comprehensive Income
  58. [58] Item 8, Consolidated Statements of Comprehensive Income
  59. [59] Item 8, Consolidated Statements of Comprehensive Income
  60. [60] Item 8, Consolidated Statements of Comprehensive Income
  61. [61] Item 8, Consolidated Statements of Comprehensive Income
  62. [62] Item 8, Consolidated Statements of Comprehensive Income
  63. [63] Item 7, MD&A — Results of Operations
  64. [64] Item 7, MD&A — Results of Operations
  65. [65] Item 7, MD&A — Non-GAAP Reconciliations
  66. [66] Item 7, MD&A — Non-GAAP Reconciliations
  67. [67] Item 1A, Risk Factors — Risks Relating to Our Indebtedness
  68. [68] Item 8, Consolidated Balance Sheets
  69. [69] Item 8, Note 7 — Goodwill and Other Intangibles
  70. [70] Item 8, Consolidated Statements of Comprehensive Income
  71. [71] Item 7, MD&A — Fiscal Year 2025 Highlights
  72. [72] Item 7, MD&A — Fiscal Year 2025 Highlights
  73. [73] Item 7, MD&A — Fiscal Year 2025 Highlights
  74. [74] Item 7, MD&A — Fiscal Year 2025 Highlights
  75. [75] Item 7, MD&A — Fiscal Year 2025 Highlights

Analysis on 10/16/2026