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    CHEF
    Earnings call· Jun 2026(Q2 FY26)

    Chefs' Warehouse Q2 FY26 earnings call CHEF

    Jul 29, 2026 Source

    Executive summary

    The Chefs' Warehouse Q2 FY26 — Strong Growth and Raised Full-Year & Long-Term Targets

    The Chefs' Warehouse delivered robust Q2 FY26 results, driven by strong organic growth and operational efficiencies across its North American business. The company raised its full-year 2026 guidance and extended its long-term financial targets to 2030, reflecting confidence in its differentiated model, strategic investments in capacity and technology, and maturing sales force. Management emphasized continued market share gains and operating leverage despite ongoing geopolitical and macroeconomic factors.

    Highlights

    5

    • Organic net sales grew 12.2% in Q2 FY26.

    • Adjusted EBITDA increased 34.7% to $88.1 million in Q2 FY26.

    • Gross profit margins increased 49 basis points to 25.1% in Q2 FY26.

    • Full-year 2026 net sales guidance raised to $4.5 billion-$4.6 billion and adjusted EBITDA to $305 million-$315 million.

    • Updated 2030 annual revenue growth target of 7%-10% and adjusted EBITDA of $450 million-$520 million.

    Concerns

    2

    • Middle East operations impacted by conflict, operating at approximately 94% of prior year, with uncertainty for Q4 tourism.

    • Fuel costs remain high, with diesel prices over $5 across the nation, embedded conservatively in guidance.

    Guidance & targets

    11
    CategoryTargetConfidence
    Net sales
    $4.5B-$4.6B
    high materiality
    High
    Gross profit
    $1.102B-$1.125B
    medium materiality
    High
    Adjusted EBITDA
    $305M-$315M
    high materiality
    High
    Fully diluted share count
    46M-46.7M shares
    low materiality
    Medium
    Annual revenue growth rate
    7%-10%
    high materiality
    High
    Revenue
    $6B-$6.5B
    high materiality
    High
    Adjusted EBITDA
    $450M-$520M
    high materiality
    High
    Adjusted EBITDA margin
    7.5%-8%
    high materiality
    High
    Capital expenditure
    Average 1% of revenue
    medium materiality
    High
    Net debt to adjusted EBITDA leverage
    1.5x-2.5x
    medium materiality
    High
    Free cash flow conversion
    40%-60% of adjusted EBITDA
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Middle East
    Middle East operations are improving gradually as they enter the seasonally slower summer period. Performance in May and June was approximately 94% of the prior year. The team has managed sourcing challenges by rerouting and using alternative logistics.
    Operations performance vs. prior year (May/June): 94%Operations performance vs. prior year (beginning of conflict): 75%
    		————
    Texas
    The Texas business is growing nicely, with improved EBITDA margins after fully lapping non-core customer attrition. The company is working on real estate solutions in Dallas and Houston for new space and facility consolidation.
    		—growing nicely—EBITDA margin improved by multiple hundred basis points

    Operational metrics

    28
    Organic net sales growth
    12.2%YoY
    Q2 FY26

    Primary driver of net sales growth.

    Acquisition contribution to sales growth
    0.7%YoY
    Q2 FY26

    Contribution from acquisitions to total sales growth.

    Net inflation
    4.9%YoY
    Q2 FY26

    Overall net inflation across product categories.

    Specialty category inflation
    4%YoY
    Q2 FY26

    Inflation specific to the specialty product category.

    Center-of-the-plate category inflation
    6.4%YoY
    Q2 FY26

    Inflation specific to the center-of-the-plate product category.

    Selling, general and administrative expenses growth
    9.6%YoY
    Q2 FY26

    Increase in SG&A expenses primarily due to compensation, benefits, facilities, and distribution.

    Adjusted operating expenses growth
    8.4%YoY
    Q2 FY26

    Increase in adjusted operating expenses.

    Adjusted EBITDA
    $88.1Mup from $65.4M YoY
    Q2 FY26

    Non-GAAP adjusted EBITDA.

    Adjusted net income
    $34.7Mup from $22.5M YoY
    Q2 FY26

    Non-GAAP adjusted net income.

    Adjusted diluted EPS
    $0.78up from $0.52 YoY
    Q2 FY26

    Non-GAAP adjusted diluted earnings per share.

    Total liquidity
    $321.1M
    Q2 FY26

    Comprised of cash and ABL availability.

    Cash and cash equivalents
    $135.5M
    Q2 FY26

    Cash balance at quarter end.

    ABL facility availability
    $185.6M
    Q2 FY26

    Available capacity under the ABL facility.

    ABL debt repaid
    $30M
    Q2 FY26

    Amount of ABL debt repaid during the quarter.

    ABL outstanding drawn balance
    $70M
    Q2 FY26

    Remaining drawn balance on the ABL facility.

    Total net debt
    $478.5M
    Q2 FY26

    Inclusive of all cash and cash equivalents.

    Net debt to adjusted EBITDA
    1.6x
    Q2 FY26

    Leverage ratio at quarter end.

    Middle East operations performance vs prior year
    94%vs prior year
    May and June FY26

    Performance during the seasonally slower summer period.

    Middle East operations performance vs prior year (beginning of conflict)
    75%vs prior year
    beginning of conflict

    Performance at the start of the conflict.

    Adjusted EBITDA margin (implied FY26 guidance)
    6.8%70 bps improvement YoY
    FY26

    Implied full-year adjusted EBITDA margin based on updated guidance.

    Historical business size (pre-IPO)
    ~$300M
    pre-IPO

    Approximate size of the business when it went public.

    Produce as percentage of overall revenue
    ~14%
    current

    Approximate share of produce in total revenue.

    Unique customer growth
    3.6%YoY
    Q2 FY26

    Reported unique customer growth.

    Unique customer growth (ex-Middle East impact)
    4.9%YoY
    Q2 FY26

    Unique customer growth excluding the impact of the Middle East conflict.

    Specialty sales growth
    10%YoY
    Q2 FY26

    Organic specialty sales growth, driven primarily by unique placement growth and specialty case growth.

    Specialty unique placement growth
    7.2%YoY
    Q2 FY26

    Growth in unique placements within the specialty category.

    Specialty case growth
    6%YoY
    Q2 FY26

    Growth in case volume within the specialty category.

    Center-of-the-plate pounds growth
    8.8%YoY
    Q2 FY26

    Growth in pounds for the center-of-the-plate category.

    Industry KPIs

    2
    MetricValueDetails
    Sg a rate17.5%%
    Gross margin drivers25.1%%

    Capital programs

    2
    Distribution Center Development & Fleet Expansionunderway

    Benefit: Accommodate capacity needs for markets as they mature

    Continued investment in growth via distribution center development and fleet expansion. Current plans include New England, Texas, Las Vegas, the Midwest and potential new markets.

    AI and Technology Improvementsunderway

    Benefit: Enhanced efficiency in operations, inventory management, customer-facing digital enhancements, sales force training, dynamic pricing, and sourcing.

    Deployment of AI-based technology across functions, building on the data and analytics platform rolled out across operating companies. Outsourcing also used for development.

    Risks & headwinds

    3
    Middle East conflictQ2 FY26 and ongoing

    Operations at approximately 94% of prior year in May/June; 75% at beginning of conflict; unique customer growth impacted; uncertainty for Q4 tourism

    Mitigation: Team managing sourcing challenges by rerouting and using alternative logistics; conservatism built into forward guidance.

    High fuel costsOngoing

    Diesel over $5 per gallon across the nation; impacting logistics costs and produce prices

    Mitigation: Conservative assumption modeled into guidance; power of growth currently overwhelming fuel impact.

    M&A environment competitivenessOngoing

    M&A environment is 'frothier and frothier'

    Mitigation: Remain diligent and disciplined; prioritizing organic growth through talent investment due to better ROI than many current acquisition opportunities.

    What to watch in Q3 FY26

    4

    Middle East Tourism Levels

    Q4 FY26
    CurrentOperations at 94% of prior year (May/June), uncertainty for Q4 tourism.
    TargetClarity on Q4 tourism levels and impact on operations.

    Why it matters

    The Middle East business is a source of revenue and profitability, and its recovery impacts overall company performance.

    But it's still uncertain whether the level of tourism that will come back in the fourth quarter. So we did build in some conservatism into our guidance as it relates to that.

    Q&A highlights

    7

    What is driving the strong demand, unique placements, and new customer growth? Is it winning from competitors or broadening customer types?

    Chris Pappas attributed growth to comprehensive execution across all levels, including investments in sales force, new buildings, capacity, category additions, cross-selling, and maturing sales teams. He stated it's a combination of factors, not one single driver.

    “It's kind of Goldilocks. It's the large investments we made into building a sales force, giving our team new buildings with capacity, ability to add categories, cross-selling, team building, specialists, maturing of a lot of new people that we've been hiring coming out of COVID.”

    asked by Alex Slagle · answered by Christopher Pappas

    1 min read5 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Drivers

    Strong growth in Q2 FY26 was attributed to excellent execution by regional warehouse teams, driving market share gains through growth in product penetration, case volume, and unique customers. Ongoing improvement in operational efficiency also contributed to providing high-quality ingredients and flexible on-time delivery. Momentum continued into July, with double-digit top-line growth expected to start Q3.

    02

    Strategic Investments and Moat

    The company highlighted accelerated investment in distribution capacity, sales teams, product specialists, technology, and facility consolidation. These investments, combined with a unique supply chain, deep product expertise, and a maturing sales force, form the 'moat' that differentiates Chefs' Warehouse in the food-away-from-home industry, focusing on upscale casual to higher-end dining.

    03

    Technology and AI Deployment

    Chefs' Warehouse is deploying AI-based technology across sales, pricing, procurement, operations, inventory management, logistics, and customer experience. These tools leverage the existing data and analytics platform to provide real-time information, enhance customer service, upsell opportunities, and manage inventory and costs more efficiently, contributing to sustained growth.

    04

    Market Opportunity and Penetration

    Management believes the company is in the 'early innings of penetration' in virtually all its regions, citing significant underpenetrated market opportunities. This is expected to drive continued market share gains, particularly in larger markets like Texas and Florida, which are developing similarly to more mature markets like New York and San Francisco.

    05

    Capital Allocation Strategy

    The capital allocation model remains consistent, focusing on growth investments (distribution centers, fleet, technology), maintaining a strong balance sheet with a net debt to adjusted EBITDA target of 1.5x-2.5x, increasing share repurchases, and retaining dry powder for tuck-in M&A. The company has generated approximately $270 million of free cash flow since the start of 2024.

    AI-generated summary of the company’s earnings call. Not investment advice.