US Foods Holding Corp. (USFD) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This filing covers the 13-week period ended March 28, 2026. US Foods operates as a single segment broadline foodservice distributor, supplying fresh, frozen, and dry food products to approximately 250,000 customer locations across the U.S., including independent restaurants, chains, healthcare, and hospitality sectors.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Sales | $9,610 million | $9,351 million |
| Gross Profit | $1,653 million (17.2% margin) | $1,614 million (17.3% margin) |
| Operating Income | $216 million (2.2% margin) | $224 million (2.4% margin) |
| Net Income | $116 million | $115 million |
| Diluted EPS | $0.52 | $0.49 |
| Adjusted EBITDA | $413 million (4.3% margin) | $389 million (4.2% margin) |
| Free Cash Flow | $197 million | $308 million |
| Total Debt | $5,167 million | $5,200 million |
| Cash & Equivalents | $49 million | $101 million |
| Available Liquidity (ABL) | $1,597 million | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 2.8% ($259 million), driven by a 1.4% increase in total case volume and 1.0% food cost inflation. Independent restaurant case volume grew 4.6%, offsetting a 2.3% decline in chain volume.
- Margin Pressure: Gross profit margin decreased slightly to 17.2% from 17.3%, impacted by a $38 million LIFO expense (compared to $5 million in the prior year).
- Operating Expenses: Increased 3.4% to $1,437 million due to higher distribution and administrative costs associated with volume growth, partially offset by productivity improvements.
- Cash Flow: Operating cash flow decreased to $294 million from $391 million, primarily due to higher tax payments and changes in working capital. Free cash flow declined to $197 million from $308 million.
- Debt & Liquidity: Total debt decreased slightly to $5.167 billion. The company maintained $1.6 billion in total liquidity, with $1.597 billion available under its Asset-Based Lending (ABL) facility.
Guidance, Outlook, and Risks
- Capital Expenditures: Management expects total cash capital expenditures for fiscal year 2026 to range between $400 million and $450 million.
- Share Repurchases: The company repurchased approximately 1.4 million shares for $125 million in Q1 2026. As of March 28, 2026, approximately $14 million remained under the May 2025 program and $1 billion under the November 2025 program.
- Risk Factors: Key risks include cost inflation (fuel and commodities), supply chain disruptions, labor availability and costs, and changes in consumer eating habits. The company utilizes interest rate caps to hedge approximately 34% of its floating-rate debt exposure.
- Outlook: Management continues to focus on operational improvements, cost savings initiatives, and expanding its exclusive brand portfolio to drive margin expansion.
Investor Verification Checklist
- Verify the sustainability of the 4.6% growth in independent restaurant case volume versus the 2.3% decline in chain volume.
- Monitor the impact of LIFO adjustments on gross margins, which added $38 million to cost of goods sold in Q1 2026.
- Assess the trajectory of operating cash flow, which declined significantly year-over-year due to working capital and tax payments.
- Review the utilization of the $1.6 billion liquidity position against the $400-$450 million capital expenditure guidance.
- Track the execution of the $2 billion remaining share repurchase authorization and its impact on earnings per share.