US Foods (USFD) Q2 FY26 earnings call: guidance and Q&A

Can you discuss the cadence of independent case growth in Q2, its drivers given industry traffic pressures, and the potential for the new sales compensation plan to further accelerate share gains?

Independent case growth was consistent throughout Q2, driven by strong net new account generation. The new sales compensation plan, which aligns incentives with strategic goals like independent restaurant growth and Pronto, is expected to be a long-term growth driver, with early positive indicators and flat seller attrition.

“At the heart of it is our net new account generation, which has always been the lifeblood of our growth. Our teams have really focused on that over the past couple of years, and you're seeing that continue to gain traction really confident that we're going to continue to lean in to independents and expect that volume to continue to accelerate.”

asked by Lauren Silberman · answered by David Flitman

What drove the Q2 EBITDA beat relative to expectations, especially given elevated fuel costs, and what are the fuel cost assumptions for the back half of the year?

The Q2 beat was primarily due to higher-than-expected fuel recovery (approximately 70% vs. typical 30-40%) and earlier-than-anticipated completion of some strategic vendor management negotiations. The H2 outlook assumes fuel costs remain around current levels, and the company is confident in its reaffirmed guidance.

“One is our fuel recovery was higher and better than we expected. So we expected, as we commented before, about a 2% headwind from fuel and ended to be in less than half of that. And it really relates to just the discipline and making sure that we are enforcing the surcharges that we have and also with fuel getting to higher levels some of the surcharges for some of our larger customers that don't kick in until higher prices did go into effect. And so our recovery rate instead of our typical 30%, 40% was more like 70% for the quarter.”

asked by Lauren Silberman · answered by Dirk Locascio

Can you elaborate on the success of Pronto, particularly in certain markets or customer types, and how the team is managing its growth while maintaining margins?

Pronto's growth is a multi-year journey, with careful piloting to ensure margin maintenance and avoid cannibalizing the broadline business. The company is now accelerating penetration across existing markets, confident in the model's performance. The return on investment for Pronto is high, with a long runway for growth, and there are no plans to slow investments.

“We're thoughtful as we take it into new markets to make sure that those two key pieces are performing as intended. But what you've seen us do then over the past few quarters has start to accelerate that penetration across our existing markets with our existing customers because we are confident in the model.”

asked by Alexander Slagle · answered by Dirk Locascio

How much of the AI opportunity is being captured, and is the long-term impact of AI on sales force and supply chain productivity comparable in scale to past operational execution improvements?

The company is in the early innings of AI adoption, focusing on practical applications in sales (Visit Assistant, Su AI assistant) and supply chain (forecasting, routing). AI is expected to be a significant long-term driver of productivity and differentiation, potentially offering transformational opportunities, and is already contributing to underlying performance.

“While I believe that we're in early innings, I do believe, long term, there will potentially be some transformational opportunities as we apply this more broadly across the business. But I think for the near term, what you can expect us to do is more of the same.”

asked by Edward Kelly · answered by Dirk Locascio

Where does the company stand on penetration (cases per line) versus net account growth, and are AI and the new sales compensation plan on the cusp of significantly improving penetration and local case growth?

Penetration, while still pressured by foot traffic, has improved sequentially for several quarters, supported by AI tools for sellers. The new sales compensation plan is expected to be a key unlock for accelerating future growth, and management believes the company is on the cusp of significant penetration improvements.

“I do, John, actually. And as I've commented in the past few quarters, our penetration, while still pressured has improved sequentially for several quarters in a row, including in the second quarter. that's continuing to show up based on all the good work that our teams are doing and some of the AI support that we've given our sellers.”

asked by John Heinbockel · answered by Dirk Locascio

Do you see a cap on EBITDA margin expansion, and are there regions operating at a higher level that could serve as a North Star for further improvement?

The company does not see a cap on EBITDA margin expansion in the near to mid-term, as it continues to drive growth through various initiatives. There are indeed markets and facilities operating at higher margins, indicating further opportunity for meaningful growth across the network.

“Because we're doing driving that growth through various initiatives. We really don't see a cap. I mean I'm sure maybe there's one out there, but it's going to be long down the road. And year-over-year, that 20 basis points that we're focused on delivering, we expect that we continue to deliver on to your question, yes, I mean, we have markets. We have parts of the country that are higher margin than others as far as our facilities even within customers.”

asked by Peter Saleh · answered by Dirk Locascio