Food distribution giant US Foods (NYSE: USFD) met Wall Streets revenue expectations in Q3 CY2025, with sales up 4.8% year on year to $10.19 billion. Its non-GAAP profit of $1.07 per share was 3.7% above analysts’ consensus estimates.
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US Foods (USFD) Q3 CY2025 Highlights:
- Revenue: $10.19 billion vs analyst estimates of $10.16 billion (4.8% year-on-year growth, in line)
- Adjusted EPS: $1.07 vs analyst estimates of $1.03 (3.7% beat)
- Adjusted EBITDA: $505 million vs analyst estimates of $503.1 million (5% margin, in line)
- Operating Margin: 2.8%, in line with the same quarter last year
- Free Cash Flow Margin: 2.3%, similar to the same quarter last year
- Sales Volumes rose 1.1% year on year (3.8% in the same quarter last year)
- Market Capitalization: $19.11 billion
Company Overview
With a fleet of over 6,500 trucks delivering everything from fresh produce to frozen entrées, US Foods (NYSE: USFD) is a major foodservice distributor that supplies food products and services to approximately 250,000 restaurants, healthcare facilities, hotels, and educational institutions across the United States.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, US Foods grew its sales at a 10.6% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. US Foods’s recent performance shows its demand has slowed as its annualized revenue growth of 5.5% over the last two years was below its five-year trend. 
US Foods also reports its number of units sold. Over the last two years, US Foods’s units sold averaged 3.2% year-on-year growth. Because this number is lower than its revenue growth, we can see the company benefited from price increases. 
This quarter, US Foods grew its revenue by 4.8% year on year, and its $10.19 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 5% over the next 12 months, similar to its two-year rate. This projection is underwhelming and suggests its newer products and services will not accelerate its top-line performance yet.
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Operating Margin
US Foods’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 3% over the last two years. This profitability was inadequate for a consumer discretionary business and caused by its suboptimal cost structure.
This quarter, US Foods generated an operating margin profit margin of 2.8%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
US Foods’s EPS grew at a solid 39.7% compounded annual growth rate over the last five years, higher than its 10.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
In Q3, US Foods reported adjusted EPS of $1.07, up from $0.85 in the same quarter last year. This print beat analysts’ estimates by 3.7%. Over the next 12 months, Wall Street expects US Foods’s full-year EPS of $3.78 to grow 18%.
Key Takeaways from US Foods’s Q3 Results
It was good to see US Foods beat analysts’ EPS expectations this quarter. Zooming out, we think this was a decent quarter. The stock remained flat at $85.70 immediately following the results.
Is US Foods an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
