US Foods gains market share as independent restaurant volume accelerates in Q1

US Foods Holding (NYSE:USFD) demonstrated resilient growth in the first quarter of fiscal 2026, successfully capturing market share in high-margin segments despite a softening broader economic backdrop.

The Rosemont, Illinois-based distributor reported net sales of $9.6 billion for the quarter ended March 28, 2026, a 2.8% increase over the prior-year period.

The top-line growth was fueled by a 1.4% increase in total case volume, anchored by a standout 4.6% acceleration in independent restaurant case volume.

The company also saw healthy demand in other core sectors, with healthcare volume rising 3.7% and hospitality volume increasing 5%.

These gains were partially offset by a 2.3% decrease in chain volume, reflecting a strategic shift toward more profitable customer types.

Profitability metrics remained strong as the company’s "self-help" productivity initiatives continued to yield results.

Net income for the quarter reached $116 million, a slight 0.9% increase.

Adjusted EBITDA rose 6.2% to $413 million, with adjusted EBITDA margins expanding by 14 basis points to 4.3%.

Adjusted diluted EPS grew 14.7% to $0.78, significantly outpacing total revenue growth.

Gross profit for the quarter increased 2.4% to $1.7 billion, even as the company navigated an unfavorable $33 million LIFO (Last-In, First-Out) inventory adjustment.

On an adjusted basis, gross profit rose 4.4%, supported by improved procurement strategies and a 1% contribution from food cost inflation.

Operating expenses rose 3.4% to $1.4 billion, primarily due to higher distribution and administrative costs associated with increased volumes.

However, management noted that ongoing investments in routing technology and warehouse automation helped mitigate these costs, allowing adjusted operating expenses as a percentage of sales to remain disciplined at 13.3%.