A broadline foodservice distributor that supplies fresh, frozen, and dry food plus non-food items to restaurants, hospitals, hotels, schools, and government cafeterias across the US. Its WE HELP YOU MAKE IT® strategy centers on exclusive private brands, the MOXē® digital ordering platform, and flexible delivery options like CHEF’STORE® cash-and-carry locations. It runs dozens of distribution facilities and serves hundreds of thousands of customer locations nationwide.
Gross margin hit 18.2% as a $19M favorable LIFO swing and cost optimization lifted Q2 operating income 19%.
reached its highest level in the five-year record. rose 4.5% to $10.5 billion and climbed 19.1% to $443 million, driven by a $19 million favorable swing in the and improved cost of goods sold that more than offset a 1.9% increase in case volume. The company repurchased $445 million in stock during the first half, but case volume growth remains below 2% for the fourth consecutive quarter.
Key takeaways
expanded 0.6 points to 18.2%, the highest quarterly margin in the data provided, as a $19 million favorable swing in the —from a $14 million unfavorable adjustment a year ago to a $5 million benefit this quarter—combined with cost of goods sold optimization to lift 8.0% to $1.9 billion.
rose 19.1% to $443 million, and widened 0.5 points to 4.2%, as the 8.0% increase in outpaced a 5.1% rise in operating expenses tied to higher volume and distribution costs.
Section summaries
Management's Discussion and Analysis
US Foods Q2 FY2026 net sales rose 4.5% to $10.5B on 1.9% volume growth and 2.3% food inflation, with gross margin expanding 60 bps.
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Total case volume grew 1.9% in Q2, led by a 5.1% jump in independent restaurant cases, while chain volume declined 1.5%.
increased 8.0% to $1,919 million, helped by volume, improved cost of goods sold, and a $19 million favorable swing in the LIFO reserve.
Total case volume grew 1.9%, with independent restaurant volume up 5.1% while chain volume declined 1.5%, continuing the pattern of independent strength and chain contraction that has defined recent quarters.
rose 22.8% to $275 million, and climbed 29.2% to $1.24, reflecting the flow-through of higher .
reached $355 million, up 38.1% from $257 million a year ago, as rose 29.0% to $431 million on improved .
The company repurchased $445 million of common stock during the first half of fiscal 2026, and total available liquidity stood at $1.8 billion at quarter-end.
What changed
The swung from a $14 million unfavorable adjustment in Q2 2025 to a $5 million benefit in Q2 2026, a $19 million favorable move that was the single largest driver of the 0.6-point expansion—a reversal of the LIFO that had compressed margins in prior quarters.
Total case volume growth of 1.9% improved from 1.4% in Q1 2026 and 0.9% in Q2 2025, but remains well below the 5.2% growth posted in Q2 2024, confirming the demand plateau flagged in earlier filings.
The CHEF'STORE sale process, a prominent watch item across four consecutive filings, was again absent from disclosures, suggesting the strategic review may have been shelved or concluded without a transaction.
Share repurchases resumed at scale with $445 million deployed in the first half of fiscal 2026, after the company paused buybacks in Q1 2026 following the exhaustion of the prior $926 million authorization in FY2025, indicating a new authorization was put in place.
What to watch
Whether can hold near 18.2% in Q3 as the company laps a $46 million LIFO charge from Q3 2025, which will create a more difficult comparison.
Whether total case volume growth can sustain or build on the 1.9% rate, or whether independent restaurant growth of 5.1% moderates and chain volume continues to contract.
The size and pace of remaining share repurchases under the new authorization, and how buybacks are balanced against the $5.1 billion debt load and planned .
The April 2027 expiration of the $450 million interest rate caps, given that 34% of debt remains at variable rates and a 1% rate increase would add approximately $19 million in annual .
Operating expenses rose 5.1% to $1,476 million on higher volume and distribution costs, partially offset by administrative streamlining.
climbed 10.2% to $604 million, with margin expanding 30 to 5.7% of .
Liquidity remained strong at $1.8 billion; the company repurchased $445 million of common stock during the first half of fiscal 2026.
Quantitative and Qualitative Disclosures About Market Risk
The company faces interest rate and fuel price risks, using caps and forward purchases to partially hedge exposures.
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Floating-rate debt was 34% of total debt as of June 27, 2026; a hypothetical 1% rate rise would increase annual by about $19 million.
The company holds interest rate caps on $450 million of Term Loan Facilities through April 30, 2027, capping the variable rate at 5%.
Diesel fuel costs for outbound deliveries were approximately $174 million in fiscal 2025; the company uses route optimization, EV fleet growth, and fuel surcharges to manage exposure.
As of June 27, 2026, lock about 33% of projected diesel needs through December 2026.
A hypothetical 10% unfavorable diesel price move could add roughly $7 million in fuel cost on uncommitted volumes through December 2026.
The company does not use derivatives for trading or speculation and may add interest rate hedges in the future.
There have been no material changes to the principal risks that we believe are material to our business, results of operations, and financial condition from those disclosed in Part I, Item 1A—“Risk Factors” of the 2025 Annual Report.
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There have been no material changes to the principal risks that we believe are material to our business, results of operations, and financial condition from those disclosed in Part I, Item 1A—“Risk Factors” of the 2025 Annual Report.