US Foods Q2FY26 Results: Adjusted EBITDA up 10% to $604M, EPS up 21%
- Adjusted EBITDA rose 10.2% YoY to a record $604 million, with margin expanding 29 bps to 5.7%
- Adjusted diluted EPS increased 21% YoY to $1.44, outpacing EBITDA growth due to share buybacks
- Independent restaurant case volume accelerated to 5.1%, marking the fifth consecutive quarter of acceleration
- Net sales grew 4.5% to $10.5 billion, driven by 1.9% volume growth and 2.6% inflation/mix impact
- Company repurchased over $370 million in shares during the quarter, maintaining net leverage at 2.6x
*this image is generated using AI for illustrative purposes only.
US Foods Holding Corp reported strong second-quarter fiscal 2026 results on Thursday, delivering record adjusted EBITDA of $604 million and adjusted diluted earnings per share (EPS) of $1.44, representing a 21% increase year-over-year.
The company’s performance was driven by robust volume growth in its target customer segments, particularly independent restaurants, which saw case growth accelerate to 5.1%. This marks the fifth consecutive quarter of acceleration for this segment, despite persistent pressure on broader industry foot traffic. Net sales increased 4.5% to $10.5 billion, supported by total case volume growth of 1.9% and a food cost inflation and mix impact of 2.6%.
Financial Performance Highlights
The quarter showcased significant operating leverage, with adjusted gross profit per case growing faster than adjusted operating expenses per case. Adjusted EBITDA margin expanded by 29 basis points to a record 5.7%. The divergence between EBITDA growth (10.2%) and EPS growth (21%) highlights the benefit of disciplined capital allocation, specifically through share repurchases.
| Metric | Q2FY26 | Change (YoY) | Notes |
|---|---|---|---|
| Net Sales | $10.5 billion | +4.5% | Volume +1.9%, Inflation/Mix +2.6% |
| Adjusted EBITDA | $604 million | +10.2% | Record level; Margin at 5.7% |
| Adjusted Diluted EPS | $1.44 | +21% | Outpaced EBITDA growth |
| Independent Case Vol | N/A | +5.1% | Strongest since Q4 2023 |
| Healthcare Case Vol | N/A | +3.5% | Continued share gains |
| Hospitality Case Vol | N/A | +4.4% | Strong pipeline conversion |
Segment Growth and Strategic Initiatives
Independent restaurant volumes grew 5.1%, healthcare volumes rose 3.5%, and hospitality volumes increased 4.4%. The company noted it has now achieved 21 consecutive quarters of share gains with independent restaurants. A key driver of this momentum is the Pronto delivery service, which is live in 52 markets and expected to generate approximately $1.3 billion in sales in 2026, up from $1 billion in 2025.
Management also highlighted the successful rollout of a new seller compensation plan in June, which aligns incentives with long-term growth objectives. Early indicators show positive seller engagement and flat attrition rates. Additionally, the company continues to integrate AI into its operations, with tools like Visit Assistant providing over 700,000 actionable insights to sellers in the first six weeks of deployment.
What the Numbers Show
A critical observation from the financials is the disproportionate growth in adjusted EPS (21%) compared to adjusted EBITDA (10.2%). This gap underscores the effectiveness of the company’s capital allocation strategy, particularly the repurchase of over $370 million in shares during the quarter. While operational improvements drove the EBITDA expansion, the EPS outperformance was significantly amplified by the reduction in share count, demonstrating how disciplined balance sheet management can enhance shareholder returns beyond pure operational gains.
Guidance and Outlook
US Foods reaffirmed its full-year fiscal 2026 guidance, expecting net sales growth of 4% to 6%, adjusted EBITDA growth of 9% to 13%, and adjusted EPS growth of 18% to 24%. The company ended the quarter with net leverage of 2.6 times, well within its target range of 2x to 3x. Year-to-date operating cash flow stood at $725 million, supporting both growth investments and shareholder returns.
How will the planned expansion of the Pronto delivery service beyond its current 52 markets impact US Foods' long-term market share gains against Sysco?
What are the sustainability risks to the 21% EPS growth if share repurchase activity slows due to rising interest rates or stricter leverage constraints?
Can the acceleration in independent restaurant case volumes continue if broader industry foot traffic remains under pressure in the second half of fiscal 2026?
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