US Foods Holding Corp. (USFD) just gave investors exactly what they wanted: an earnings beat, expanding margins, and confidence about the future. Shares jumped over 10% Thursday, hitting a new 52-week high after the foodservice distributor reported fourth-quarter and full-year fiscal 2025 results that showed the business humming along nicely despite what management called a "softer economic environment."

Breaking Down the Quarter

For the fourth quarter, US Foods delivered adjusted diluted EPS of $1.04, beating the $1.00 estimate. Revenue came in at $9.8 billion, up 3.3% year-over-year, though that fell slightly short of the $9.913 billion analysts were expecting. Net income surged 178.8% to $184 million, while GAAP diluted EPS hit 82 cents.

The volume story was interesting. Total case volume increased just 0.8%, but the mix tells you where the strength is. Independent restaurant case volume climbed 4.1%, healthcare jumped 2.9%, and hospitality rose 3.1%. The weak spot? Chain restaurants, where volume dropped 3.4%. On an organic basis, total case volume grew 0.3%, with independent restaurants showing particularly strong 3.7% organic growth.

Gross profit increased 3.2% to $1.7 billion, representing 17.6% of net sales. The company noted an unfavorable year-over-year LIFO adjustment impacting margins. But here's what got investors excited: adjusted EBITDA jumped 11.1% to $490 million, pushing the adjusted EBITDA margin to 5.0%. That kind of margin expansion is what you want to see.

The Full Year Picture

Zoom out to the full fiscal 2025, and the picture gets even better. Net sales rose 4.1% to $39.4 billion, while net income climbed 36.8% to $676 million. GAAP diluted EPS was $2.94, and adjusted diluted EPS hit $3.98.

For the full year, total case volume increased 1.0%, driven by that same strong performance in independent restaurants (up 3.3%), healthcare (up 4.4%), and hospitality (up 2.9%), while chains continued to struggle with a 3.5% decline. Organic case volume rose 0.4%, including 2.7% organic growth in independent restaurants.

The real headline for the year: adjusted EBITDA surged 11.0% to a record $1.93 billion, with margins expanding 30 basis points to 4.9%. That's execution.

Capital Allocation and Balance Sheet

US Foods generated $1.37 billion in operating cash flow for fiscal 2025, with capital expenditures of $410 million. The company ended the year with $41 million in cash and cash equivalents, while net debt stood at $5.2 billion. The net debt to adjusted EBITDA ratio of 2.7x suggests a manageable leverage profile.

Share buybacks were aggressive. The company repurchased 4.2 million shares for $327 million in Q4 alone, and bought back 11.9 million shares for $934 million over the full year. As of year-end, roughly $1.09 billion remained authorized under existing repurchase programs.

What Management Is Saying

"2025 was a strong start to our three year long-range plan. We grew Adjusted EBITDA 11% to a record $1.9 billion, expanded Adjusted EBITDA margin by 30 basis points to 4.9%, and increased Adjusted Diluted EPS 26% to a record $3.98," said CEO Dave Flitman, emphasizing these results came despite a softer economic environment.

CFO Dirk Locascio added, "We are excited about our recently announced $1 billion share repurchase authorization, which reinforces our confidence in the company's future and our commitment to driving shareholder value. Looking ahead, we remain committed to achieving our long-range plan algorithm and financial targets, including generating more than $4 billion of cumulative operating cash flow from 2025 to 2027."

Looking Ahead

The fiscal 2026 guidance is what really sent shares flying. US Foods is projecting adjusted diluted EPS growth of 18% to 24%, net sales growth of 4% to 6%, and adjusted EBITDA growth of 9% to 13%. The guidance includes a boost from a 53rd week, which should add approximately 1% to both total case growth and adjusted EBITDA growth.

Specifically, the company expects fiscal 2026 adjusted EPS of $4.70 to $4.93, versus the $4.67 analyst estimate, and sales of $41.001 billion to $41.789 billion, compared to the $42 billion estimate. That EPS guidance being above consensus is what matters here.

USFD shares were trading up 10.70% at $91.65 at the time of publication Thursday, marking a fresh 52-week high. When you beat earnings, expand margins, and guide above expectations, this is what happens.