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US Foods Q3 Earnings Surpass Estimates, Sales Increase Y/Y
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Key Takeaways
US Foods' Q3 adjusted EPS rose 17.8% to $1.26, beating estimates, while sales missed despite 2.1% growth.
USFD's adjusted EBITDA grew 9.9% to $555 million, with margins expanding 38 basis points to 5.3%.
USFD narrowed fiscal 2026 sales, EBITDA and EPS growth outlook amid slower macro conditions and fuel costs.
US Foods Holding Corp. (USFD - Free Report) reported mixed third-quarter fiscal 2026 results, wherein the bottom line beat the Zacks Consensus Estimate, but the top line missed the same. Both metrics increased year over year.
US Foods reported adjusted earnings of $1.26 per share, beating the Zacks Consensus Estimate of $1.25. The metric increased 17.8% from $1.07 in the year-ago quarter.
US Foods Holding Corp. Price, Consensus and EPS Surprise
The company generated net sales of $10,402 million, missing the Zacks Consensus Estimate of $10,563 million. However, the metric increased 2.1% from $10,191 million reported in the year-ago quarter. Revenue growth was driven by higher case volumes and food-cost inflation of 0.4%.
USFD’s Quarterly Performance: Key Metrics and Insights
Total case volume increased 1.3% year over year, supported by continued demand across key customer categories. Independent restaurant case volume grew 5%, while healthcare and hospitality volumes increased 3.3% and 3.7%, respectively. However, chain volume declined 1.5%.
Organic case volume rose 1.2%, including 5% growth in organic independent restaurant volume. Management highlighted that the company extended its market share gains to 22 consecutive quarters in independent restaurants and 24 consecutive quarters in healthcare.
Gross profit increased 8.6% year over year to $1,904 million, benefiting from higher case volumes, improved cost of goods sold and a favorable $49 million year-over-year LIFO adjustment. Adjusted gross profit rose 5.7% to $1,901 million, representing 18.3% of net sales.
Adjusted operating expenses increased 4% year over year to $1,346 million, primarily reflecting higher distribution, selling and administrative costs. However, administrative cost-streamlining initiatives helped mitigate expense pressures. Adjusted operating expenses represented 12.9% of net sales.
Adjusted EBITDA grew 9.9% to $555 million from $505 million in the prior-year quarter. Adjusted EBITDA margin expanded 38 basis points to 5.3%.
US Foods' Financial Position and Capital Allocation
US Foods exited the third quarter with cash and cash equivalents of $54 million, long-term debt of $4,952 million and shareholders' equity of $4,335 million. Net debt stood at $5.1 billion, with the net leverage ratio improving to 2.4 times from 2.7 times in fiscal 2025.
For the first nine months of fiscal 2026, operating cash flow totaled $1,160 million compared with $1,076 million in the prior-year period. Capital expenditures declined to $266 million from $276 million.
The company repurchased $191 million of shares during the quarter, bringing year-to-date repurchases to $690 million. US Foods had $450 million remaining under its November 2025 repurchase authorization.
Following quarter-end, US Foods completed the acquisition of Prime Line Distributors, expanding its specialty and imported food assortment.
USFD Narrows Fiscal 2026 Growth Outlook
US Foods revised its fiscal 2026 guidance, reflecting a sustained slower macroeconomic environment and elevated fuel costs. Management now expects net sales growth of 4% to 5%, compared with its previous projection of 4% to 6%.
Adjusted EBITDA growth is anticipated between 9% and 11%, narrower than the earlier guidance of 9% to 13%.
Adjusted earnings per share are projected to increase 18% to 20%, compared with the prior expectation of 18% to 24%.
This Zacks Rank #3 (Hold) stock has rallied 11.2% in the past month compared with the industry’s growth of 10.3%.
Image Source: Zacks Investment Research
Stocks to Consider
Lamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. LW presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year earnings indicates 7.6% growth from the year-ago numbers. Lamb Weston delivered a trailing four-quarter earnings surprise of 22.1%, on average.
BJ’s Wholesale Club Holdings, Inc. (BJ - Free Report) is a leading membership-based warehouse club operator concentrated primarily in the eastern half of the United States. It currently has a Zacks Rank #2 (Buy). BJ’s Wholesale delivered a trailing four-quarter earnings surprise of 4.8%, on average.
The Zacks Consensus Estimate for BJ’s current fiscal-year sales and EPS indicates growth of 13.3% and 6.8%, respectively, from the prior-year reported levels.
The J. M. Smucker Company (SJM - Free Report) manufactures and markets branded food and beverage products worldwide. It currently carries a Zacks Rank #2. SJM delivered a trailing four-quarter earnings surprise of 13.8%, on average.
The Zacks Consensus Estimate for The J. M. Smucker’s current fiscal-year earnings indicates growth of 17.1% from the prior-year reported levels.
View the Zacks #1 Rank List
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US Foods Q3 Earnings Surpass Estimates, Sales Increase Y/Y
Key Takeaways
US Foods Holding Corp. (USFD - Free Report) reported mixed third-quarter fiscal 2026 results, wherein the bottom line beat the Zacks Consensus Estimate, but the top line missed the same. Both metrics increased year over year.
US Foods reported adjusted earnings of $1.26 per share, beating the Zacks Consensus Estimate of $1.25. The metric increased 17.8% from $1.07 in the year-ago quarter.
US Foods Holding Corp. Price, Consensus and EPS Surprise
US Foods Holding Corp. price-consensus-eps-surprise-chart | US Foods Holding Corp. Quote
The company generated net sales of $10,402 million, missing the Zacks Consensus Estimate of $10,563 million. However, the metric increased 2.1% from $10,191 million reported in the year-ago quarter. Revenue growth was driven by higher case volumes and food-cost inflation of 0.4%.
USFD’s Quarterly Performance: Key Metrics and Insights
Total case volume increased 1.3% year over year, supported by continued demand across key customer categories. Independent restaurant case volume grew 5%, while healthcare and hospitality volumes increased 3.3% and 3.7%, respectively. However, chain volume declined 1.5%.
Organic case volume rose 1.2%, including 5% growth in organic independent restaurant volume. Management highlighted that the company extended its market share gains to 22 consecutive quarters in independent restaurants and 24 consecutive quarters in healthcare.
Gross profit increased 8.6% year over year to $1,904 million, benefiting from higher case volumes, improved cost of goods sold and a favorable $49 million year-over-year LIFO adjustment. Adjusted gross profit rose 5.7% to $1,901 million, representing 18.3% of net sales.
Adjusted operating expenses increased 4% year over year to $1,346 million, primarily reflecting higher distribution, selling and administrative costs. However, administrative cost-streamlining initiatives helped mitigate expense pressures. Adjusted operating expenses represented 12.9% of net sales.
Adjusted EBITDA grew 9.9% to $555 million from $505 million in the prior-year quarter. Adjusted EBITDA margin expanded 38 basis points to 5.3%.
US Foods' Financial Position and Capital Allocation
US Foods exited the third quarter with cash and cash equivalents of $54 million, long-term debt of $4,952 million and shareholders' equity of $4,335 million. Net debt stood at $5.1 billion, with the net leverage ratio improving to 2.4 times from 2.7 times in fiscal 2025.
For the first nine months of fiscal 2026, operating cash flow totaled $1,160 million compared with $1,076 million in the prior-year period. Capital expenditures declined to $266 million from $276 million.
The company repurchased $191 million of shares during the quarter, bringing year-to-date repurchases to $690 million. US Foods had $450 million remaining under its November 2025 repurchase authorization.
Following quarter-end, US Foods completed the acquisition of Prime Line Distributors, expanding its specialty and imported food assortment.
USFD Narrows Fiscal 2026 Growth Outlook
US Foods revised its fiscal 2026 guidance, reflecting a sustained slower macroeconomic environment and elevated fuel costs. Management now expects net sales growth of 4% to 5%, compared with its previous projection of 4% to 6%.
Adjusted EBITDA growth is anticipated between 9% and 11%, narrower than the earlier guidance of 9% to 13%.
Adjusted earnings per share are projected to increase 18% to 20%, compared with the prior expectation of 18% to 24%.
This Zacks Rank #3 (Hold) stock has rallied 11.2% in the past month compared with the industry’s growth of 10.3%.
Image Source: Zacks Investment Research
Stocks to Consider
Lamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. LW presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year earnings indicates 7.6% growth from the year-ago numbers. Lamb Weston delivered a trailing four-quarter earnings surprise of 22.1%, on average.
BJ’s Wholesale Club Holdings, Inc. (BJ - Free Report) is a leading membership-based warehouse club operator concentrated primarily in the eastern half of the United States. It currently has a Zacks Rank #2 (Buy). BJ’s Wholesale delivered a trailing four-quarter earnings surprise of 4.8%, on average.
The Zacks Consensus Estimate for BJ’s current fiscal-year sales and EPS indicates growth of 13.3% and 6.8%, respectively, from the prior-year reported levels.
The J. M. Smucker Company (SJM - Free Report) manufactures and markets branded food and beverage products worldwide. It currently carries a Zacks Rank #2. SJM delivered a trailing four-quarter earnings surprise of 13.8%, on average.
The Zacks Consensus Estimate for The J. M. Smucker’s current fiscal-year earnings indicates growth of 17.1% from the prior-year reported levels.