Detailed Narrative
Strategic Pillars and Culture
US Foods continues to prioritize safety, achieving over 50% improvement in injury and accident rates over the last 3.5 years. The deployment of approximately 2,500 center ride pallet jacks is 87% complete, with full deployment expected by year-end, significantly reducing workplace hazards. The company launched its Valor campaign to hire 3,000 military veterans by 2030, recognizing their leadership and work ethic. In 2025, 1.2 million hours were invested in training and development for associates.
Service and Operational Excellence
Operational quality composite (Ops QC), which tracks accurate, error-free orders, improved 13% year-over-year and 37% over the last two years. This reflects disciplined execution and ongoing improvement efforts. The company is also piloting autonomous inventory scanning robotics in one warehouse, with plans to expand testing to six additional locations by year-end, aiming to improve inventory accuracy and warehouse efficiency.
Accelerating Growth Initiatives
Independent restaurant case volume growth reached 5.1%, the strongest since Q4 2023, driven by healthy new account generation and improved penetration with existing customers. Pronto, the small truck delivery service, is now live in 52 markets and Pronto Next Day in 35 markets, with 8 more planned this year. Pronto sales are projected to reach $1.3 billion in 2026 and over $1.7 billion in 2027, an increase from the prior estimate of $1.5 billion. The new seller compensation plan, implemented in June, shows encouraging early results with flat attrition and positive seller engagement.
Profitability and Self-Help Initiatives
Adjusted EBITDA grew over 10% to a record $604 million, with EBITDA margin expanding 29 basis points to a record 5.7%. Strategic vendor management generated over $50 million in cost of goods savings in the first half, contributing to a target of over $300 million over the 3-year long-range plan ending in 2027. Inventory management is expected to generate an additional $10 million in gross profit benefit in 2026, building on $35 million in 2025. Indirect spend initiatives have generated over $20 million in year-to-date savings, targeting over $75 million in 2026 and over $100 million in 2027.
Leveraging AI and Technology
AI is integrated across the business to enhance customer service, sales force productivity, and supply chain optimization. The Visit Assistant, an AI-enabled tool, provided over 700,000 actionable insights to sellers in its first six weeks, streamlining preparation and increasing customer engagement. An AI sales assistant (Su AI assistant) is being piloted as a generative AI-powered chatbot. AI is also applied in supply chain for product demand forecasting, labor planning, and routing to improve service, productivity, and reduce working capital.
Financial Strength and Capital Allocation
The company generated $725 million in operating cash flow year-to-date, enabling investments in growth and shareholder returns. $374 million in shares were repurchased in Q2, bringing the year-to-date total to approximately $500 million. Net leverage stands at 2.6x, within the target range of 2x to 3x. The ABL facility was refinanced, extending maturity to 2031 and increasing its size to $2.5 billion, with no long-term debt maturities until 2028.