US Foods Q1 2025 presentation: 26% EPS growth, announces $1B share buyback

US Foods Holding Corp . (NYSE:USFD) presented its first quarter fiscal year 2025 results on May 8, 2025, highlighting strong financial performance with significant growth in adjusted earnings per share and continued market share gains across key customer segments. The foodservice distributor also announced a new $1 billion share repurchase program, building on its previous buyback initiatives.

Quarterly Performance Highlights

US Foods reported solid first quarter results, demonstrating its ability to navigate a challenging macroeconomic environment. The company achieved 4.5% growth in net sales to $9.35 billion, while adjusted EBITDA increased 9.3% to $389 million compared to the same period last year. Notably, adjusted diluted EPS rose 25.9% to $0.68, significantly outpacing top-line growth.

As shown in the following comprehensive performance summary:

Case volume growth remained positive across all key customer segments, with total case volume up 1.1%. Healthcare led the growth with a 6.1% increase, followed by Hospitality at 3.6% and Independent (LON:IOG) Restaurants at 2.5%. This performance extends US Foods’ streak of market share gains to 16 consecutive quarters with Independent Restaurants and 18 consecutive quarters with Healthcare customers.

The company demonstrated strong margin expansion despite inflationary pressures. Adjusted gross profit per case increased 4.0% to $7.89, while operating expenses per case grew at a slower rate of 2.7%, resulting in adjusted EBITDA per case improvement of 8.6% to $1.90.

As illustrated in this margin trend analysis:

Strategic Initiatives and Market Share Gains

US Foods continues to execute on its four strategic pillars: embracing culture, delivering service excellence, growing profitable market share, and optimizing EBITDA margin. The company highlighted several achievements in these areas, including a 20% improvement in Operations Quality Composite and the rollout of its Descartes (NASDAQ:DSGX) routing platform across 50 markets, representing approximately 70% of routed miles.

The company’s focus on differentiation through food innovations, team-based selling, and value-added services has contributed to its consistent market share gains. US Foods also expanded its private label penetration by nearly 50 basis points to over 53% with core independent restaurants, a key driver of margin improvement.

As shown in the following slide detailing the company’s execution strategy:

CEO Dave Flitman has emphasized the company’s ability to adjust to macroeconomic conditions while continuing to drive growth. US Foods is implementing several self-help initiatives to enhance gross profit and streamline operating expenses, including strategic vendor management, accelerating private label mix, improving customer mix, and optimizing supply chain and delivery operations.

The company’s long-term strategy positions it well in the foodservice distribution industry:

Capital Allocation and Cash Flow

US Foods reported a significant improvement in operating cash flow, which increased from $139 million in Q1 2024 to $391 million in Q1 2025. This enhanced cash generation supports the company’s capital allocation priorities, including investments in the business, shareholder returns, maintaining a strong balance sheet, and pursuing accretive acquisitions.

The company’s financial strength is illustrated in the following capital allocation overview:

In January 2025, US Foods acquired Jake’s Finer Food for $92 million, continuing its strategy of tuck-in acquisitions. The company also repurchased $23 million of shares in Q1 2025 and announced a new $1 billion share repurchase program, demonstrating confidence in its long-term prospects.

US Foods has maintained its net leverage within the target range of 2.0-3.0x, with no long-term debt maturities until 2028. The company’s financial discipline was recognized with a credit rating upgrade by S&P to BB+.

Forward Guidance and Long-term Targets

US Foods reaffirmed its fiscal year 2025 guidance, projecting net sales growth of 4-6%, adjusted EBITDA growth of 8-12%, and adjusted diluted EPS growth of 17-23%. The company expects total case growth of 1-3% and sales inflation and mix of approximately 3%.

As detailed in the guidance slide:

Looking further ahead, US Foods outlined its 2025-2027 financial targets, including approximately 5% net sales CAGR, 10% adjusted EBITDA CAGR, more than 20 basis points of annual adjusted EBITDA margin expansion, and approximately 20% adjusted diluted EPS CAGR. The company expects to generate more than $4 billion in deployable capital over this period.

US Foods’ stock closed at $69.12 on May 7, 2025, representing a 3.1% increase. The stock has traded between $50.05 and $73.19 over the past 52 weeks, reflecting investor confidence in the company’s growth strategy and execution capabilities.

The first quarter results and forward guidance suggest US Foods is well-positioned to continue its growth trajectory despite potential macroeconomic headwinds, leveraging its scale, differentiated value proposition, and operational excellence to drive sustainable shareholder value.

Full presentation:

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