CHEF

A month has gone by since the last earnings report for Chefs' Warehouse (CHEF). Shares have lost about 0.9% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Chefs' Warehouse due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. The Chefs’ Warehouse reported second-quarter 2026 results, wherein both earnings and sales surpassed the Zacks Consensus Estimate and increased from the year-ago quarter. Adjusted earnings of 78 cents per share beat the consensus estimate of 64 cents by 21.9% and rose 50% year over year. Net sales increased 12.9% to $1,168.6 million, exceeding the consensus estimate of $1,133 million by 3.1%.Organic sales rose 12.2% from the prior-year quarter. Acquisitions contributed $7.6 million, representing growth of 0.7%. The strong organic performance reflected growth across the specialty and center-of-the-plate categories. Management attributed the results to greater product penetration, increased case volumes and expansion in the number of unique customers.Organic case count in the specialty category increased approximately 6% year over year. Unique customers rose 3.6%, while product placements advanced 7.2%, indicating higher sales across a broader customer base. Organic pounds sold in the center-of-the-plate category increased approximately 8.8% from the year-ago period. Management stated that its regional teams delivered solid execution across markets and product categories. The company’s Middle East operations improved gradually during the quarter. Operations in the region ran at approximately 94% of the prior-year level during May and June, with that trend remaining relatively steady in recent weeks. Gross profit advanced 15.2% year over year to $292.9 million, driven by higher sales volumes, price inflation and contributions from acquisitions. Gross margin expanded 49 basis points to 25.1%. The specialty-category gross margin improved 47 basis points, while the center-of-the-plate category recorded a 75-basis-point increase. The improvement in gross margin, along with double-digit sales growth, supported stronger operating profitability. Higher gross profit more than offset the increase in operating expenses during the quarter.The company’s selling, general and administrative expenses increased 9.6% year over year to $234.2 million. The increase primarily reflected higher compensation and benefit costs, as well as additional facilities and distribution expenses to support sales growth. However, SG&A expenses declined to 20% of net sales from 20.7% in the prior-year quarter, as sales grew faster than costs.Operating income jumped to $58.6 million from $40.2 million a year ago. Operating margin expanded to 5.1% from 3.9%, reflecting higher gross profit and improved expense leverage. Adjusted EBITDA increased 34.6% year over year to $88.1 million from $65.4 million. CHEF ended the second quarter with cash and cash equivalents of $135.5 million, long-term debt (excluding the current portion) of $693.7 million and stockholders’ equity of $648.2 million.For the first half of 2026, net cash provided by operating activities was $96.7 million, and capital expenditures totaled $16.9 million.For 2026, management expects net sales in the range of $4.5-$4.6 billion. Gross profit is projected between $1.102 billion and $1.125 billion. Adjusted EBITDA is anticipated in the range of $305-$315 million. Since the earnings release, investors have witnessed a upward trend in estimates revision. The consensus estimate has shifted 11.66% due to these changes. At this time, Chefs' Warehouse has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a grade of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Chefs' Warehouse has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Chefs' Warehouse belongs to the Zacks Food - Miscellaneous industry. Another stock from the same industry, Lamb Weston (LW), has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended May 2026. Lamb Weston reported revenues of $1.77 billion in the last reported quarter, representing a year-over-year change of +5.6%. EPS of $0.87 for the same period compares with $0.87 a year ago. Lamb Weston is expected to post earnings of $0.58 per share for the current quarter, representing a year-over-year change of -21.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.4%. Lamb Weston has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report Lamb Weston (LW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:30 a.m. ET General Counsel, Corporate Secretary, and Chief Government Relations Officer - Alex Aldous Founder, Chairman, and Chief Executive Officer - Chris Pappas Chief Financial Officer - Jim Leddy Operator: Greetings, welcome to The Chefs' Warehouse second quarter 2026 earnings conference call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Alex Aldous, General Counsel, Corporate Secretary, and Chief Government Relations Officer. Please go ahead, sir. Alex Aldous: Thank you, operator. Good morning, everyone. With me on today's call are Chris Pappas, Founder, Chairman, and CEO, and Jim Leddy, our CFO. By now, you should have access to our second quarter 2026 earnings press release. It can also be found at www.chefswarhouse.com under the investor relations section. Throughout this conference call, we will be presenting non-GAAP financial measures, including, among others, historical and estimated EBITDA and adjusted EBITDA, as well as historical adjusted net income, adjusted earnings per share, adjusted operating expenses, adjusted operating expenses as a percentage of net sales and as a percentage of gross profit, net debt, net debt leverage, and free cash flow. These measures are not calculated in accordance with GAAP and may be calculated differently in similarly titled non-GAAP financial measures used by other companies. Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today's press release and second quarter 2026 earnings presentation. Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements, including statements regarding our estimated financial performance. Such forward-looking statements are not guarantees of future performance, and therefore you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Some of these risks are mentioned in today's release. Others are discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q, which are available on the SEC website. Today, we are going to provide a business update and go over our second quarter results in detail. We are also providing an update to our five-year financial targets. For a portion of our discussion this morning, we will refer to a few slides posted on The Chefs' Warehouse website under the investor relations section titled Second Quarter 2026 Earnings Presentation. Please note that these slides are disclosed at this time for illustration purposes only. We will open up the call for questions. With that, I will turn the call over to Chris Pappas. Chris? Chris Pappas: Thank you, Alex, and thank you all for joining our second quarter 2026 earnings call. Today, Jim and I will begin our remarks with an update on second quarter results and provide an increase to our full year 2026 financial guidance, followed by an update to our five-year financial targets, taking our previously provided 2028 targets out to 2030. Second quarter 2026 displayed strong growth in both revenue and profitability. Our regional The Chefs' Warehouse teams continue to deliver excellent execution across markets and product categories. We are driving market share gains via growth in product penetration, case volume, and unique customers, combined with ongoing improvement in operational efficiency to provide customers with the highest quality ingredients and flexible on-time delivery. Momentum continued into July, and we currently expect double-digit top-line growth to start the third quarter. Our Middle East operations are improving gradually as they enter the seasonally slower summer period. This trend has remained fairly steady through recent weeks. During May and June, our business located there operated at approximately 94% of prior year. I would like to thank all our teams from sales, procurement, and pricing, operations, and all the supporting functions for their dedication to serving our customers and our communities as we go to market as The Chefs' Warehouse family of brands and companies in North America and the Middle East. Please refer to slide three of the presentation. A few highlights from the second quarter include organic net sales grew 12.2%. Organic specialty sales were up 10% over the prior year, which was driven primarily by unique placement growth of 7.2% and specialty case growth of 6% and price inflation. Unique customers grew 3.6% year-over-year. Reported unique customer growth was impacted partially by the conflict in the Middle East. Excluding this impact, second quarter unique customer growth was approximately 4.9%. Pounds in center of the plate were approximately 8.8% higher than the prior year second quarter. Gross profit margins increased approximately 49 basis points. Gross margin in the specialty category increased approximately 47 basis points as compared to the second quarter of 2025. Gross margin in the center of the plate category increased approximately 75 basis points year-over-year. Jim will provide more detail on gross profit and margins in a few moments. For an update on certain of our operating metrics, including continued improvement in year-over-year gross profit per route and adjusted EBITDA per employee, please refer to the slides provided in the appendix of our second quarter 2026 earnings presentation. I'll turn it over to Jim to discuss more detailed financial information for the quarter and an update on our liquidity. Jim? Jim Leddy: Thank you, Chris, and good morning, everyone. I'll now provide a comparison of our current quarter operating results versus the prior year quarter and provide an update on our balance sheet and liquidity. Please refer to slide four of the presentation. Our net sales for the quarter ended June 26th, 2026, increased approximately 12.9% to $1.169 billion from $1.035 billion in the second quarter of 2025. The growth in net sales was a result of an increase in organic sales of approximately 12.2%, as well as the contribution of sales from acquisitions, which added approximately 0.7% to sales growth for the quarter. Net inflation was 4.9% in the second quarter, consisting of 4% inflation in our specialty category and 6.4% inflation in our center of the plate category versus the prior year quarter. Gross profit increased 15.2% to $292.9 million for the second quarter of 2026, versus $254.3 million for the second quarter of 2025. Gross profit margins increased approximately 49 basis points to 25.1%. Selling, general and administrative expenses increased approximately 9.6% to $234.2 million for the second quarter of 2026 from $213.8 million for the second quarter of 2025. The increase was primarily due to higher costs associated with compensation and benefits, facilities and distribution to support sales growth, as well as higher depreciation driven by facility and fleet investments. Adjusted operating expenses increased 8.4% versus the prior year second quarter, and as a percentage of net sales, adjusted operating expenses were 17.5% for the second quarter of 2026. Operating income for the second quarter of 2026 was $58.6 million, compared to $40.2 million for the second quarter of 2025. The increase in operating income was driven primarily by higher gross profit, partially offset by higher selling, general and administrative expenses. Our GAAP net income was $33.8 million, or $0.76 per diluted share for the second quarter of 2026, compared to net income of $21.2 million or $0.49 per diluted share for the second quarter of 2025. On a non-GAAP basis, we had adjusted EBITDA of $88.1 million for the second quarter of 2026, compared to $65.4 million for the prior year's second quarter. Adjusted net income was for $34.7 million, or $0.78 per diluted share for the second quarter of 2026, compared to $22.5 million or $0.52 per diluted share for the prior year's second quarter. Turning to the balance sheet and an update on our liquidity, please refer to slide number five. At the end of the second quarter, we had total liquidity of $321.1 million, comprised of $135.5 million in cash and $185.6 million of availability under our ABL facility. During the second quarter, we repaid $30 million of our ABL debt, reducing the outstanding drawn balance to $70 million. As of June 26th, 2026, total net debt was approximately $478.5 million, inclusive of all cash and cash equivalents, and net debt to adjusted EBITDA was approximately 1.6x. Please refer to slide six. As Chris mentioned, we are raising our full year 2026 guidance as follows. We estimate that net sales for the full year 2026 will be in the range of $4.5 billion-$4.6 billion. Gross profit to be between $1.102 billion and $1.125 billion, and adjusted EBITDA to be between $305 million and $315 million. Please note for the full year 2026, we expect the convertible notes maturing in 2028 to be dilutive, and therefore, we expect the fully diluted share count to be between approximately 46 and 46.7 million shares. I will now turn it back over to Chris for an overview on our updated five-year financial targets and to highlight certain of our initiatives supporting our growth expectations. Chris Pappas: Thank you, Jim. Please refer to slide eight of the presentation. As we are halfway through the five-year financial target ranges we set out in 2023 and are on track to meet or exceed those targets sooner than expected, we felt it appropriate to update our expectations to full year 2030. Our organic growth has exceeded the 4%-7% target range established in 2023, with the focus on full year 2028. Much of this growth has been driven by the accelerated investment cycle in a number of our key areas, including our expansion and distribution capacity, sales teams and product specialists, investments in technology, consolidation of facilities and routes, and key strategic acquisitions. Referring to the slide titled 2030 Financial Goals, our updated target ranges are as follows. An annual revenue growth rate of 7%-10%, reaching full year 2030 revenue of $6 billion-$6.5 billion. We assume organic growth will be the primary driver. With the potential for moderate acquired growth of approximately 1% per annum. In certain years where more significant M&A would occur, we would expect total growth to exceed the estimated range. Adjusted EBITDA of $450 million-$520 million, adjusted EBITDA margin of 7.5%-8%. Achieving these goals will not come from one or two areas of execution, but from many initiatives across our platform coming together over time to drive continued growth, market share gains, and improved operational efficiencies. In summary, we will continue to grow our differentiated model in the food away from home industry, focusing on the upscale casual to higher-end dining experience customer base, bringing together our unique supply chain and marketing model with deep product expertise and the ongoing training of a maturing sales force. Increasingly positioning our people as trusted advisors to the best chefs, combined with the deployment of our ever-evolving technology and a flexible distribution platform. We expect to continue to deliver operating leverage going forward by driving volume through invested capacity, consolidating routes and distribution centers into efficient and state-of-the-art facilities and processing centers, to both reduce cost per unit and drive top line growth via marketing opportunities with existing and potential customers. We will continue to invest in distribution capacity across our network to provide both growth and operational efficiencies going forward. Current plans include New England, Texas, Las Vegas, the Midwest, and potential new markets as they develop. We have begun and expect to continue to deploy Al-based tech across our functions, including sales, pricing, and procurement operations, inventory management, logistics, and customer experience. Building on the data and the analytics platform we have rolled out across operating companies, these tools give our teams real-time information to serve customers better, upsell more effectively, and manage inventory and cost more efficiently. CW teams across our regions and functions are committed to continual improvement and innovation in these areas and others, all with a laser-like focus on maintaining and growing our unique culinary focus culture that has been curated over 40 years. These areas represent the key components to The Chefs' Warehouse differentiation or moat within the industry. These competitive advantages, combined with the significant size of the under-penetrated market opportunity in virtually all our regions where we believe we remain in the early innings of penetration, will allow us to continue to grow market share going forward. I will turn it over to Jim to review our thinking on capital allocation. Jim? Jim Leddy: Thank you, Chris. Please refer to slide nine of the presentation. We expect our capital allocation model going forward to be consistent with the approach we have taken over the past few years, as we have generated approximately $270 million of free cash flow since implementing the plan at the start of 2024. We expect total CapEx to average approximately 1% of revenue going forward and capital deployment to be focused on the following areas. Continued investment in growth via distribution center development and fleet expansion to accommodate capacity needs for markets as they mature. Investment in Al and other technology improvements focused on key areas, operations and inventory management, customer-facing digital enhancements, driving upsell opportunities, enhanced search, and other value-add services. Enhanced sales force training and data utilization to better understand our customer needs and behavior, and dynamic pricing and sourcing initiatives. We're going to maintain a strong balance sheet and increase share repurchases. Target net debt to adjusted EBITDA leverage of 1.5 to 2.5, and we expect to allocate more dollars to share repurchases as leverage remains in the target range. We expect to retain dry powder to facilitate tuck-in M&A should accretive opportunities arise. Going forward, we expect free cash flow conversion to be in the range of 40%-60% of adjusted EBITDA. Thank you. At this point, we'll open it up to questions. Operator? Operator: Thank you. We will now be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing these star keys. One moment, please, while we pull for questions. Our first question comes from the line of Alex Slagle with Jefferies. Please proceed with your question. Alex Slagle: Thanks. Good morning. Really impressive growth. I just wanted to get your perspective on what's gone on from a demand perspective. I mean, really strong demand in your U.S. business, and we can kind of see the broader demand in food service at the upper end. Where are you seeing the biggest acceleration, or what surprised you the most?Both placements and the new customer growth are really strong. Is it a business you're winning from other specialty players, or is it more just broadening of new types of customers trying to expand the quality of what they put on the menu and I guess just some more color on that would be great. Chris Pappas: Yeah. A really easy answer. You mentioned everything, Alex. There's no one secret thing going on. It's kind of Goldilocks. 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. It's just execution on all sorts of levels, and you see the outlook. We think we're just getting started, really, and building this thing for so long. It's a 40-year-old business that's maturing now as a public company, and we're just finally getting the scale that we could start to leverage what we thought would be a great business model at The Chefs' Warehouse. Alex Slagle: Got it. You raised the longer-term outlook for the organic sales growth also. Is that additional market share gain baked in, kind of going from 4%-7% to, I guess, 6%-9%, the organic sales growth outlook? Jim Leddy: Thanks, Alex. If you look at the algo that we put out in 2023 to 2028 was 4%-7%. We've been outperforming that by 200 or 300 basis points since then. We just think it made sense to kind of raise that algo to 7%-10%. It is risk-adjusted to what we're doing the last couple of quarters. We've been growing above 10%, there is some conservatism in there, risk adjustment. I think we feel good about it because it's still an industry-leading growth algo, both from top line and adjusted EBITDA growth cadence. It's really just kind of aligning with what we've been doing and where we see all the things that Chris just mentioned, the capacity we've put in, the capacity we're going to put in as we continue to make a measured amount of investments across our network. It really just kind of aligns with our plan. Alex Slagle: Okay. Thank you very much. I will pass it on to others. Jim Leddy: Thank you. Chris Pappas: Thanks, Alex. Operator: Thank you. Our next question comes from the line of Mark Carden with UBS. Please proceed with your question. Mark Carden: Good morning. Thanks so much for taking the question. You guys continue to generate pretty strong top-line growth, really across the business. Building on Alex's main question a bit, did you see much fluctuation on a monthly basis? Do you think that you saw much of a benefit from unique events like the World Cup and the Knicks being in NBA Finals? Just any incremental color there and how it's been holding up quarter to date with some of the unique events like Cyclospora and some of the wildfires. Jim Leddy: It's been pretty consistent. Our year-over-year growth in the second quarter was a little bit higher than the first quarter, you have to remember, we had two major storms and the start of the war in the first quarter, and we talked about that having about 150 basis point impact on the year-over-year. Really kind of taking that out of the equation, our first half growth was pretty consistent across the board. I wouldn't say there was anything that really stood out other than the normal seasonality. The World Cup, we don't think had a major impact for us. We talked to a lot of our customers, and they did not see a huge uptick. Even in our major cities, we think that it was more sports bars and pubs that got the uptick from the World Cup for those four or five weeks. Some regions that we don't really operate in, like Kansas City, and obviously we're not in Mexico or Canada. We are in Canada, we didn't see much of an uptick there. I wouldn't say there was anything to call out. We've seen pretty consistent strength throughout the first part of the year. Mark Carden: That's great. Thanks. It sounds like your Middle Eastern business is proving to be pretty resilient, just given all the turmoil in the region. You mentioned that you're in this slow period there. How long does that last? Outside of the conflict, how impactful have the Middle Eastern events just been on your product sourcing? Thinking about the blockades and whatnot. Thank you. Jim Leddy: To the last part of the question, we haven't seen an impact on our sourcing into North America. Obviously, our team over there has been dealing with some challenges around getting product in the Middle East, but they've done an amazing job of working with suppliers to reroute, go into different ports, go over the air, over the ground, where we used to take it over the water. Obviously there's some long leads, and the prices of product have increased as a result of those logistics changes. Our team there is doing an incredible job of managing through that volatility. In terms of the first part of your question, we did build in some conservatism into the forward guidance. We are comping to a period this summer where there's not a lot of tourists in Dubai, and that's been the main difference between operating at 100%, and we were operating at 75% in the beginning of the conflict. As we got into the summer, we were comping to a period where it's 120 degrees there, and you don't really have a lot of tourism. The hotels were not as full last year as they were this year. We moved up into that mid-90s range. 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. Mark Carden: Makes sense. Appreciate it, guys. Good luck. Jim Leddy: Sure. Thank you. Operator: Thank you. Our next question comes from the line of Todd Brooks with Benchmark StoneX. Please proceed with your questions. Todd Brooks: Hey, good morning. Congrats on another amazing quarter, guys. Jim Leddy: Hey, Todd. Todd Brooks: A couple of questions for you, if I can. One, you kind of educated us over the years, Jim and Chris, that this is a hard business to inflect margin meaningfully, and it's more of a yearly grind. Let's get our 20, 30 basis points out of EBITDA margin. The last couple of quarters, the EBITDA margin performance has been amazing. The new forward five-year plan is taking us into that upper 7%-8% range, which is kind of a new frontier for profitability in the business. How should we think about the ratability of the improvement between this year where we may end up in the high sixes and getting into that high sevens? Is this just a step-up year for some reason, or we reset to that 20, 25 basis points a year in the guidance framework? How should we think about that? Jim Leddy: Yeah. I'll let Chris comment as well. Todd, I think, if you know us, we tend to be a little conservative in our forward guidance, and we've risk-adjusted the five-year algo as well. I think there's definitely potential for upside to that, but we want to build in potential things to happen that we don't control. I think it implies really industry-leading top-line growth, industry-leading adjusted EBITDA margin improvement over the timeframe, and continued operating leverage. You never know what the cadence is going to be exactly, but I think we're not saying that we can't repeat what we've been doing recently. This is a five-year look, and obviously, we're going to build in some risk adjustment. Chris Pappas: Yeah. It's a great question, Todd. If you go back through our history again, we're celebrating our 41st, going into our 41st year since we started the business as mainly a specialty business. Before we went public and started adding a lot of cost to build the model, it was a much higher EBITDA business. It was 10%+. Adding all the infrastructure to build The Chefs' Warehouse and adding new divisions. You've heard me say for years, "Listen, this is a big drag." Once we get scale, the EBITDA margins will go up, and I'm not going to cap it. We just updated our model till 2030, which is pretty much based just continuing as a specialty broadliner. As we fill up, we're giving ourselves room. We're building new facilities every year, and when you add space, usually you're adding more space than you need, so you're carrying more overhead. That's a little drag on EBITDA. As we fill them up, as we're starting to do right now, you start to see the real EBITDA of the company starting to show itself. Right? I think I've said many times, we have a lot of our core business, way over 10% EBITDA businesses. This is a model that purposely, we built the moat around. It's very hard to copy because there's such a long tail to what we do. We always say we do the hard stuff. We have 170 different outlets. Right? You have a very long tail. You're carrying extra inventory. Your overhead's higher than a typical broadliner. The flip side, once you execute and you start to get scale, it's very hard to replicate. Right. This is a 40-year-old business, you can get leverage on it, which you're starting to see. Tomorrow there'd be great opportunity. You see our model takes us over $6 billion. We could be $10 billion, but we've added more businesses that we thought there was opportunity that were lower margin to turn into The Chefs' Warehouse types of business like we've been doing over the past 10 years. Our forecast, again, is based on continuing to do what we're doing, moving into new buildings, expanding into new territories, and continuing to execute with our team sell, our cross-sell, and continuing to add new customers and sell our customers more products, which we think we can execute into a 2030 plan. Add that with a bunch of tuck-in small specialty businesses, you can easily be $8 billion, $9 billion. A very high margin business. Add some more businesses that are great businesses, but they'll need four or five years like other businesses that we've bought. Maybe that prevents us from going to a 9%, 10% EBITDA. At this point, I'm so proud of the team and the execution of all teams that I'm not capping where the EBITDA can go percentage-wise. Todd Brooks: Okay, that's great. Thanks to you both. Just a quick follow-up. You're talking more overtly about your moat and laying out the case for how you've built it through investment over the past five years here. What's your competitive environment like in specialty, and how are you winning market share? Because you're obviously aggressively taking it. Is it these capabilities and the moat and customers recognizing that, or is your competition not performing as well and opening potential businesses' eyes to the possibility of making a switch to The Chefs' Warehouse? Thanks. Chris Pappas: Yeah. There's plenty of competition. We fight every day. I think with the technology, we're just getting better and better, implementing better and better technology, making it easier for customers to do business with us and order more items. I think, we believe that was what's going to happen, and it's happening. It's good to be right once in a while. It takes five to 10 years to develop people. As much as everything is going online, and it's a great tool, we are in a relationship business. We sell the best chefs in the world, and they need information, and they constantly need new product. It's a stressful environment. You have to execute. When you're at the top, they're expecting a lot, the supply channels are always challenged for some reason, the logistic team, we rely on them, really. We cannot leave our customers without product, right? It's not like you're at a $20 average check average, and you could substitute, and no one's really going to complain. Our customers are very demanding, and we have to execute at a very high level. To do that takes a lot of expertise. You can't just rely on computers. It takes a lifetime to develop that type of team, and I think that the results you're seeing is because of that lifetime investment in people. We're very proud of them, and we know how hard it is to duplicate this. Todd Brooks: Well, congrats again, guys. Really impressive. Chris Pappas: Thank you, Todd. Todd Brooks: Thanks very much. Operator: Thank you. Our next question comes from the line of Brian Harbour with Morgan Stanley. Please proceed with your question. Brian Harbour: Yeah, thanks. Good morning, guys. Chris Pappas: Good morning. Brian Harbour: You've talked in the past about some of the younger markets could be 3x, maybe 4x the size they are today. I guess, as you think about adding a $2 billion of revenue over the next five years, where are we in some of those, or what opportunity are you assuming in some of those big, relatively under-penetrated markets? Chris Pappas: We have the microscope to look at what we've done in other businesses in other cities as they've grown, right? The West Coast, East Coast obviously is the most populated, and we look at how we've grown our more mature markets over the last 40 years. As our new markets are developing, they're developing very similar to how we developed more mature markets like New York and San Francisco. When we look at Texas and Florida as big markets, and then we have our smaller markets, Nashville, Detroit, and as we push into the Carolinas and Colorado, we see lots of similarity. It gives us the ability to pretty much forecast. Places like Texas and Florida, we see customer growth, we see maturity of staff, we see logistical efficiencies starting to form, where it's almost like a repeat of a playbook. As salespeople mature, as everybody gets better, as logistics get better, we start to sell more products, margins improve, and we continue to add people. That's why we see the 3x, 4x, 5x in those markets, because we're really small with lots of opportunity. Go to a market where not a lot of people, not a lot of customers, I think there's a ceiling. Even if you get all your categories humming, the business is only going to grow so X. That's why we see our bigger markets really adding a big amount of that growth we're talking about. Brian Harbour: Sounds good. Is there any of the tech investments you've made or maybe uses of Al that you'd point to as actually kind of driving margins today? I think certainly some of this is from just efficiency and like sales force efficiency, warehouse efficiency. You talked about that. How would you sort of point to some concrete examples of technology investments helping as well? Chris Pappas: I like to use the metaphor of you have a really smart student, he/she is doing great, but they've always had a lack of great eyesight, right? You put great glasses on them, and now they could do even better, right? They can digest the information quicker, make better decisions, and go faster. You give the same pair of great glasses to an average student, they'll still do better. I look at The Chefs' Warehouse as we had a great student, and we gave them really powerful lenses and they are doing a even better job, right? The tools are just assisting them to be a lot more efficient and do what they need to do, execute at a higher level. It's definitely making a difference and we think it's going to continue to enhance our model and the ability to sustain our growth rate. Operator: Thank you. Our next question comes from the line of Kelly Bania with BMO Capital Markets. Please proceed with your question. Kelly Bania: Morning. Thanks for taking our questions and congrats on just some really strong execution here. Had just maybe a near term question and then some longer term, given the new targets. I guess first, as we look at the second half guidance for 2026, sounds like top line continuing at this low double digit rate. I guess my question is just if the top line continues at this pace, is there any reason why the margins wouldn't be as strong as they were in the first half? Obviously, the OpEx leverage was very strong this quarter, but just curious if there's any reinvestment or other factors, or maybe why the margin wouldn't be quite as strong. Jim Leddy: Kelly, are you referring to gross profit margin or EBITDA margin? Kelly Bania: EBITDA margin. Jim Leddy: No, I don't think there's any reason that our EBITDA margin would be anything different than the kind of the cadence that we normally perform seasonally. Obviously, the first quarter is the weakest, and then you get the second and third quarter are fairly similar. Usually, the second quarter's a little stronger than the third quarter, and then the fourth quarter seasonally is pretty much for everybody in food distribution, the kind of powerhouse quarter driven by December. No, I don't think there's anything. I think the guidance implies really good cadence. Obviously, the top line growth in the second half we have in the guidance is a little bit slower year-over-year, but that's really driven by, I talked about earlier, a little bit of conservatism on the Middle East, and then we lack the Italco acquisition in the fourth quarter, and that's about 70 basis points of year-over-year growth. Chris Pappas: I think her question, Jim, was mainly on the second quarter, why the EBITDA margin wasn't higher with such great growth. Jim Leddy: No, it was about the second half. Chris Pappas: Yeah. Maybe I've got it wrong. Jim Leddy: Our EBITDA margin was up 120 basis points year-over-year. Kelly Bania: Yeah, I guess I was just kind of looking at the model. I know the top line is planned more conservatively in the second half, but if the growth stays at this double digit rate, the OpEx leverage that's coming through is very strong. Just trying to get a sense of what the upside could be to the second half if we keep at this double digit pace. Jim Leddy: Yeah. I think the full year guidance implies now 6.8% adjusted EBITDA margin. That'd be a 70 basis point improvement year-over-year on a full year basis. Yeah, I think as you know us from history, even though we've raised the guidance pretty significantly, we would've raised it in Q1. It's really kind of two raises at once. Implies very strong operating leverage. Is there upside from there? Sure. That's our history, is we tend to be a little bit conservative on our guidance. Kelly Bania: Got it. That makes sense. Just another question, Chris and Jim, as you think about kind of taking this organic profile over the next couple of years up, I guess from 4-7, maybe 6-9 on an organic basis, do you think you need to ramp up hiring of the sales force? Obviously, that takes a long time to mature. Or are you kind of expecting to extract more organic growth per salesperson? Just was curious how you think about the kind of sales force hiring plans over the next few years. Chris Pappas: My instructions are if you find a great talent with potential, hire them. With our growth rate, we never have enough people, and it takes so long to train them. That's why we got to make sure that we're hiring. I always say, we're giving them such a great career opportunity. We really should get a 10-year contract guarantee, right? Because the first few years is just putting so much investment in these people. Yes, the mature people are doing better and better. The people that have come on in the last four or five years are continuing to evolve and getting better and better. You constantly need that bench. At our growth rate, which was 12%+ this last quarter, you just can't have enough people. We spend a lot. Again, we blew up HR years ago. We took a different philosophy, hired a new leader, and we really focus on the hiring process. Hire slow, fire fast, right? You don't want to put the investment into people and two years later, you got the wrong person. It's a capital drain. We spend a lot of money on The Chefs' Warehouse University and recruiting, and it's something that we talk about every single day. Operator: Thank you. Our next question comes from the line of Peter Saleh with BTIG. Please proceed with your question. Peter Saleh: Great. Thanks for taking the question, congrats on the quarter and really the year. Chris Pappas: Thanks. Peter Saleh: I wanted to ask, historically, you guys have mentioned that the business has a lot of natural attrition, maybe in the high single-digit range, or more, and you kind of have to outgrow that. I'm curious if that natural attrition has moderated at all, and that's kind of helping boost some of these more near-term results. Jim Leddy: No, not really, Pete. We see a pretty consistent attrition rate in this industry, just in general, given the cyclical nature of our customer base. I wouldn't say it's changed materially. Peter Saleh: Understood. Okay. Then just on the gross margin gains, they're pretty substantial, really, in the first half of the year. I guess I was kind of under the impression, going back a couple of years, that gross margin rate didn't really have all that much upside to it. Maybe can you just talk about, do you think there's more upside from where we are today?Where is some of the growth going to come from? Is it more on the OpEx side or more on the gross margin? Just trying to understand where we go from here. Thanks. Chris Pappas: You're correct. All of the above. It's just not one particular thing that is going to drive margins and EBITDA up. It's getting leverage on all the investments, right? Once the bulk of your fixed overhead is built in, right?You're building and obviously, you're always going to add trucks, but your efficiencies. I go back to as the team matures. Remember, we were a family business that was only about $300 million, I think, when we went public 14, 15 years ago. It took a lot longer than I expected to build the platform, build the team. Like I said, unless we buy a commodity-driven business that has much lower margins, kind of like we did in Texas and kind of like we did in New England and in many other markets. The platform as it exists today, there's no reason. We're going to be conservative because we didn't see the plague coming, the COVID and the war and everything else that happens. The platform is built to get leveraged and to produce better margins and better EBITDA. Saying that, anything could go wrong, but what you're starting to see is execution, better logistics. When we open up Texas, we have tremendous headwinds in logistics. We don't have the volume. We're moving products, LTL, which costs a fortune. You have a lot of bad inventory because you're trying to forecast a lot of perishables and stuff that's very hard when you're small, but you have to have the product. As it grows and as it builds leverage, it should continue to improve on every single department, which should produce better results. Jim Leddy: Pete, I'll just add on the gross profit margin side. While on a quarter-to-quarter basis or year-over-year, it's often impacted by your product mix changes and the level of inflation. I'll just echo Chris. We've made a ton of investment in our pricing teams and technology, our procurement teams, leveraging our scale. Just the level of collaboration between these teams and our sales leaders and sales teams has been a big contributor to that gross profit margin improvement side. Operator: Thank you. Our next question comes from the line of Margaret May Binshtok with Wolfe Research. Please proceed with your question. Margaret May Binshtok: Good morning, guys. Thanks for taking my question. I just wanted to ask a little bit about the timeline and some of these AI investments. What have you guys done already? What should we be expecting to come and when, just to understand some of the ROI and when we could expect to see it? Thank you. Chris Pappas: I think you're starting to see it. We never called it AI, but we've always been investing in the technology that makes us faster, more efficient, and I think we're already getting a great ROI, and we think we're still in the first inning. We continue to invest. We have great leadership in that department, and we continue to hire really smart people. We outsource a lot also to people that are developing the Al tools for us. We're producing them in-house and outside. I think we're not moon shooting, expecting to get five, six points to the bottom line somehow, miraculously. I don't think that's the way our industry works. I think the tools, the agents, and everything else that we call them, I think it's just a part of our normal day-to-day business at this point, and we're constantly going to continue to invest, and we think it's going to keep producing good ROI. Margaret May Binshtok: Super helpful. I just wanted to ask, just to check in on the M&A environment. Any differences in the environment, like what you guys were seeing, versus six months ago to today? Thank you. Chris Pappas: Yeah. I think it's getting frothier and frothier. I think a lot of businesses that came out of COVID and, or some of the roll-ups that we've seen that also came out of COVID that are way behind trying to exit. My desk is full, but we continue to be very diligent and disciplined and probably do some tuck-ins, probably do some new market acquisitions. Our organic growth is so strong. I would still rather keep investing in people and just keep adding talent and can grow at a much better ROI than a lot of the acquisitions that we're looking at, that we're passing on. Operator: Thank you. Our next question comes from the line of Andrew Charles with TD Cowen. Please proceed with your questions. Andrew Charles: Great, thanks. Two for me. First, Jim, you talked about conservatism in the 2026 guidance. I'm curious, just given the volatility of fuel costs, what are you embedding within guidance for the back half of the year when it comes to fuel? Jim Leddy: Pretty conservative assumption. We just modeled forward what we're experiencing now, whether $5+ diesel on average across the nation. Obviously, in places like California, it's even more expensive than that. Yeah, it's in the guidance. We're not modeling any significant decrease or increase from that, I think we've shown that the power of our growth is overwhelming the fuel impact right now. Andrew Charles: That's helpful. The other piece as well is the produce category showed very impressive 34% growth in the quarter. I'm also just curious there for July or just what's embedded in the back half of the year around guidance for this line, just in light of recent news surrounding Cyclospora. Jim Leddy: I'm not sure what you're referring to with the 34%, but produce prices and inflation year-over-year has been pretty high. Most of that is due to logistics costs and driven by fuel, a lot of it driven by your first question, fuel. We haven't really embedded an assumption, anything different from what we've been seeing recently. Chris Pappas: Still a small division. Jim Leddy: Produce is generally around 14% of our overall revenue, I'm not sure what the 34% is. Operator: Thank you. Our next question comes from the line of Brian Mullan with Piper Sandler. Please proceed with your question. Allison Armstrong: Hi, this is Allison Armstrong for Brian Mullan. Thank you for the question. Last quarter, you noted that we would fully lap the Texas non-core customer attrition in Q2. Now that we're through that comparison, curious what you're seeing in terms of the underlying customer and volume trends in Texas. Jim Leddy: Thanks for the question. It was producing some noise on our reported volume and inflation because it was such a big program in the center of the plate category, but very low margin and really no profitability. We're through that. Our Texas business is growing really nicely. We're in the process of working out the real estate solutions in both Dallas and the big markets there, Dallas and Houston. Dallas being first, we'll be looking to take on new space and build it out and consolidate some facilities. That's down the road. Right now, our businesses there are growing really nicely. We've improved our overall Texas EBITDA margin by multiple hundred basis points versus the last couple of years. We're really happy with how it's growing right now. Allison Armstrong: Thank you. Chris Pappas: Thank you. Operator: Thank you. We have reached the end of the question-and-answer session. Now I'd like to turn the floor back over to Chris Pappas for closing remarks. Chris Pappas: Yes. Well, again, we thank everybody for their interest and joining our call. I couldn't be prouder of the CW family team, their execution, and devotion to the company and pushing it forward. I think the results speak for themselves. We're very excited about what's happening at Chef, and we look forward to speaking to everybody at our next quarterly call. Thank you. Have a great day. Operator: Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Chefs' Warehouse, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chefs' Warehouse wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Chefs' Warehouse (CHEF) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

The Chefs’ Warehouse, Inc. CHEF reported second-quarter 2026 results, wherein both earnings and sales surpassed the Zacks Consensus Estimate and increased from the year-ago quarter.Adjusted earnings of 78 cents per share beat the consensus estimate of 64 cents by 21.9% and rose 50% year over year. Net sales increased 12.9% to $1,168.6 million, exceeding the consensus estimate of $1,133 million by 3.1%. The Chefs' Warehouse, Inc. price-consensus-eps-surprise-chart | The Chefs' Warehouse, Inc. Quote Organic sales rose 12.2% from the prior-year quarter. Acquisitions contributed $7.6 million, representing growth of 0.7%.The strong organic performance reflected growth across the specialty and center-of-the-plate categories. Management attributed the results to greater product penetration, increased case volumes and expansion in the number of unique customers.Organic case count in the specialty category increased approximately 6% year over year. Unique customers rose 3.6%, while product placements advanced 7.2%, indicating higher sales across a broader customer base. Organic pounds sold in the center-of-the-plate category increased approximately 8.8% from the year-ago period. Management stated that its regional teams delivered solid execution across markets and product categories.The company’s Middle East operations improved gradually during the quarter. Operations in the region ran at approximately 94% of the prior-year level during May and June, with that trend remaining relatively steady in recent weeks. Gross profit advanced 15.2% year over year to $292.9 million, driven by higher sales volumes, price inflation and contributions from acquisitions. Gross margin expanded 49 basis points to 25.1%. The specialty-category gross margin improved 47 basis points, while the center-of-the-plate category recorded a 75-basis-point increase.The improvement in gross margin, along with double-digit sales growth, supported stronger operating profitability. Higher gross profit more than offset the increase in operating expenses during the quarter.The Zacks Rank #4 (Sell) company’s selling, general and administrative expenses increased 9.6% year over year to $234.2 million. The increase primarily reflected higher compensation and benefit costs, as well as additional facilities and distribution expenses to support sales growth. However, SG&A expenses declined to 20% of net sales from 20.7% in the prior-year quarter, as sales grew faster than costs.Operating income jumped to $58.6 million from $40.2 million a year ago. Operating margin expanded to 5.1% from 3.9%, reflecting higher gross profit and improved expense leverage. Adjusted EBITDA increased 34.6% year over year to $88.1 million from $65.4 million. CHEF ended the second quarter with cash and cash equivalents of $135.5 million, long-term debt (excluding the current portion) of $693.7 million and stockholders’ equity of $648.2 million.For the first half of 2026, net cash provided by operating activities was $96.7 million, and capital expenditures totaled $16.9 million.For 2026, management expects net sales in the range of $4.5-$4.6 billion. Gross profit is projected between $1.102 billion and $1.125 billion. Adjusted EBITDA is anticipated in the range of $305-$315 million. Shares of CHEF have surged 67.9% over the past six months against the industry’s decline of 1.8%. United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks hereThe consensus estimate for United Natural’s current fiscal-year earnings per share (EPS) stands at $2.52, which implies substantial growth from the year-ago period’s earnings of 71 cents. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.US Foods Holding Corp. USFD engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 1.4%, on average.The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.The Vita Coco Company, Inc. COCO, a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1. COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average.The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings implies growth of 31.6% and 64.7%, respectively, from the year-ago figures. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report US Foods Holding Corp. (USFD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a 'Goldilocks' environment of maturing sales teams, new facility capacity, and successful cross-selling across specialty and center-of-the-plate categories. Organic net sales grew 12.2%, supported by a 7.2% increase in unique placements and a 6% rise in specialty case volume, reflecting deep market share gains. Management attributes margin expansion to the 'moat' created by 40 years of culinary expertise and infrastructure investments that are now reaching profitable scale. Middle East operations showed resilience, improving to approximately 94% of prior-year levels despite regional conflict and significant logistics rerouting challenges. The company is successfully transitioning lower-margin acquisitions into the higher-margin Chefs' Warehouse model, particularly in newer markets like Texas and Florida. Operational leverage is accelerating as fixed overhead costs are spread across higher volumes in state-of-the-art distribution and processing centers. Updated 2030 targets include annual revenue growth of 7%-10% to reach $6 billion-$6.5 billion, primarily driven by organic expansion in under-penetrated regions. Management expects adjusted EBITDA margins to reach 7.5%-8% by 2030 as newer facilities fill up and logistics efficiencies improve. Capital allocation will prioritize distribution center development in New England, Texas, Las Vegas, and the Midwest to accommodate maturing market needs. Free cash flow conversion is projected to remain in the 40%-60% range of adjusted EBITDA, supporting both share repurchases and tuck-in M&A. AI-based technology deployment will focus on real-time data for sales, pricing, and inventory management to enhance upselling and reduce unit costs. Middle East guidance remains conservative due to uncertainty regarding the return of peak tourism levels in Dubai during the fourth quarter. The company successfully lapped the attrition of non-core, low-margin customers in Texas, resulting in a multi-hundred basis point improvement in regional EBITDA margin. Logistics costs remain a headwind, with guidance assuming continued high diesel prices at approximately $5+ per gallon. Convertible notes maturing in 2028 are expected to be dilutive for the full year 2026, impacting the total share count. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management raised the organic growth algorithm from 4%-7% to 7%-10% based on consistent outperformance and significant remaining opportunity in newer markets. Growth is being driven by a maturing sales force and the ability to provide flexible, on-time delivery that competitors struggle to replicate. Teams have successfully rerouted products via air and ground to bypass water blockades, though this has increased logistics costs. Management confirmed there has been no negative impact on product sourcing for the North American business from Middle Eastern turmoil. Management declined to 'cap' potential EBITDA margins, noting that core mature businesses already operate well above 10% EBITDA. Current margin expansion is a result of filling up previously underutilized capacity in new facilities and reducing LTL (less-than-truckload) shipping costs. The M&A market is described as 'frothy' with many post-COVID businesses seeking exits, but the company remains disciplined. Management currently favors investing in organic talent and internal capacity over expensive acquisitions due to better ROI profiles.

RIDGEFIELD, Conn., July 29, 2026 (GLOBE NEWSWIRE) -- The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) (the “Company” or “Chefs’”), a premier distributor of specialty food products in the United States, the Middle East, and Canada, today reported financial results for its second quarter ended June 26, 2026. Financial highlights for the second quarter of 2026: Net sales increased 12.9% to $1.17 billion for the second quarter of 2026 from $1.03 billion for the second quarter of 2025. GAAP net income was $33.8 million, or $0.76 per diluted share, for the second quarter of 2026 compared to $21.2 million, or $0.49 per diluted share, in the second quarter of 2025. Adjusted net income per share1 was $0.78 for the second quarter of 2026 compared to $0.52 for the second quarter of 2025. Adjusted EBITDA1 was $88.1 million for the second quarter of 2026 compared to $65.4 million for the second quarter of 2025. “Second quarter 2026 displayed strong growth in both revenue and profitability. Our regional Chefs’ Warehouse teams continued to deliver excellent execution across markets and product categories. We are driving market share gains via growth in product penetration, case volume and unique customers, combined with on-going improvement in operational efficiency to provide customers with the highest quality ingredients and flexible on-time delivery. Our Middle East operations are improving gradually as we enter the seasonally slower summer period. During May and June, our business located there operated at approximately 94% of prior year and this trend has remained fairly steady through recent weeks”, said Christopher Pappas, Chairman and Chief Executive of the Company. “I would like to thank all of our teams, from sales, procurement and pricing, operations and all the supporting functions, for their dedication to serving our customers and our communities as we go to market as the Chefs’ Warehouse family of brands and companies in North America and the Middle East.” Second Quarter Fiscal 2026 Results Net sales for the second quarter of 2026 increased 12.9% to $1.17 billion from $1.03 billion in the second quarter of 2025. Organic sales increased $126.1 million, or 12.2% versus the prior year quarter. Sales growth of $7.6 million, or 0.7%, was primarily a result of acquisitions. Organic case count increased approximately 6.0% in the Company’s specialty category for the second quarter of 2026 with unique customer and placement increases of 3.6% and 7.2% respectively, compared to the second quarter of 2025. Organic pounds sold in the Company’s center-of-the-plate category increased approximately 8.8% for the second quarter of 2026 compared to the prior year quarter. Gross profit increased 15.2% to $292.9 million for the second quarter of 2026 from $254.3 million for the second quarter of 2025. The increase in gross profit dollars was primarily a result of increased sales volumes, price inflation and acquisitions. Gross profit margins increased approximately 49 basis points to 25.1%. Gross profit margins increased 47 basis points in the Company’s specialty category and increased 75 basis points in the center-of-the-plate category. Selling, general and administrative expenses increased by approximately 9.6% to $234.2 million for the second quarter of 2026 from $213.8 million for the second quarter of 2025. The increase was primarily due to higher costs associated with compensation and benefits, facilities and distribution to support sales growth, as well as higher depreciation expense driven by facility and fleet investments. As a percentage of net sales, selling, general and administrative expenses were 20.0% in the second quarter of 2026 compared to 20.7% in the second quarter of 2025. Operating income for the second quarter of 2026 was $58.6 million compared to $40.2 million for the second quarter of 2025. The increase in operating income was driven primarily by higher gross profit, partially offset by higher selling, general and administrative expenses, as discussed above. As a percentage of net sales, operating income was 5.1% in the second quarter of 2026 as compared to 3.9% in the second quarter of 2025. Interest expense decreased to $9.4 million for the second quarter of 2026 compared to $10.7 million for the second quarter of 2025. The decrease was primarily due to lower fees and losses associated with debt transactions, as well as lower aggregate principal amounts of debt outstanding and lower interest rates in the current period compared to the prior year quarter. The Company’s effective tax rate was 31.4% and 28.0% for the second quarters of 2026 and 2025, respectively. The increase in the effective tax rate for the second quarter of 2026 resulted from increased permanent tax differences related to compensation expense. Net income for the second quarter of 2026 was $33.8 million, or $0.76 per diluted share, compared to $21.2 million, or $0.49 per diluted share, for the second quarter of 2025. Adjusted EBITDA1 was $88.1 million for the second quarter of 2026 compared to $65.4 million for the second quarter of 2025. For the second quarter of 2026, adjusted net income1 was $34.7 million, or $0.78 per diluted share compared to adjusted net income of $22.5 million, or $0.52 per diluted share for the second quarter of 2025. 2026 Guidance We are providing our fiscal 2026 full year financial guidance as follows: Net sales in the range of $4.50 billion to $4.60 billion, Gross profit to be between $1.102 billion and $1.125 billion and Adjusted EBITDA1 to be between $305 million and $315 million. Second Quarter 2026 Earnings Conference Call The Company will host a conference call to discuss second quarter 2026 financial results today at 8:30 a.m. ET. Hosting the call will be Chris Pappas, chairman and chief executive officer, and Jim Leddy, chief financial officer. The conference call will be webcast live from the Company’s investor relations website at http://investors.chefswarehouse.com. An online archive of the webcast will be available on the Company’s investor relations website. Non-GAAP Financial Measures We present EBITDA, adjusted EBITDA, adjusted net income and adjusted net income per share, as well as forecasted EBITDA and adjusted EBITDA ranges, which are not measurements determined in accordance with the U.S. Generally Accepted Accounting Principles (“GAAP”), because we believe these measures provide additional metrics to evaluate our operations and our forecasted results and which we believe, when considered with both our GAAP results and the reconciliation to net income and net income available to common shareholders, provide a more complete understanding of our business than could be obtained absent this disclosure. We use EBITDA, adjusted EBITDA, adjusted net income and adjusted net income per share together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of EBITDA, adjusted EBITDA, adjusted net income and adjusted net income per share as performance measures permits a comparative assessment of our operating performance relative to our GAAP performance while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures of other companies. These non-GAAP financial measures should only be used as supplemental measures of our operating performance. Please see the schedules accompanying this earnings release for a reconciliation of EBITDA, adjusted EBITDA, adjusted net income and adjusted net income per share to these measures’ most directly comparable GAAP measure. Forward-Looking Statements Statements in this press release regarding the Company’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. The risks and uncertainties which could impact these statements include, but are not limited to the following: our success depends to a significant extent upon general economic conditions, including disposable income levels and changes in consumer discretionary spending; the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures and intense competition; changes in our credit profile and any effect they may have on our relationships with suppliers; the effects of rising costs for and/or decreases in supply of commodities, ingredients, packaging, other raw materials, distribution and labor; price reductions by our manufacturers of products that we sell which could cause the value of our inventory to decline or our customers to demand lower sales prices; fuel cost volatility and its impact on distribution, packaging and energy costs; our continued ability to promote our brand successfully, to anticipate and respond to new customer demands, and to develop new products and markets to compete effectively; our ability and the ability of our supply chain partners to continue to operate distribution centers and other work locations without material disruption, and to procure ingredients, packaging and other raw materials when needed despite disruptions in the supply chain or labor shortages; risks associated with the expansion of our business; our possible inability to identify new acquisitions or to integrate recent or future acquisitions, or our failure to realize anticipated revenue enhancements, cost savings or other synergies from recent or future acquisitions; other factors that affect the food industry generally, including: recalls if products become adulterated or misbranded, liability if product consumption causes injury, ingredient disclosure and labeling laws and regulations and the possibility that customers could lose confidence in the safety and quality of certain food products; new information or attitudes regarding diet and health or adverse opinions about the health effects of the products we distribute; dependence on independent certifications for products; changes in disposable income levels and consumer purchasing habits; competitors’ pricing practices and promotional spending levels; fluctuations in the level of our customers’ inventories and credit and other related business risks; and the risks associated with third-party suppliers, including the risk that any failure by one or more of our third-party suppliers to comply with food safety or other laws and regulations may disrupt our supply of raw materials or certain products or injure our reputation; our ability to recruit and retain senior management and a highly skilled and diverse workforce; unanticipated expenses, including, without limitation, litigation or legal settlement expenses, adverse judgments, or impairment charges; the cost and adequacy of our insurance policies; the impact and effects of public health crises, pandemics and epidemics and the adverse impact thereof on our business, financial condition, and results of operations; economic and other developments, or events, including adverse weather conditions, in the culinary markets in which we operate; information technology system failures, cybersecurity incidents, or other disruptions to our use of technology and networks; our ability to realize the benefits we anticipate from investments in information technology; our ability to protect our intellectual property; significant governmental regulation and any potential failure to comply with such regulations; changing rules, public disclosure regulations and stakeholder expectations on ESG-related matters; federal, state, provincial and local tax rules in the United States and the foreign countries in which we operate, including tax reform and legislation; climate change, or the legal, regulatory or market measures being implemented to address climate change; the concentration of ownership among our existing executive officers, directors and their affiliates which may prevent new investors from influencing significant corporate decisions; risks relating to our substantial indebtedness; our ability to raise additional capital and/or obtain debt or other financing, on commercially reasonable terms or at all; our ability to meet future cash requirements, including the ability to access financial markets effectively and maintain sufficient liquidity; the effects of currency movements in the jurisdictions in which we operate as compared to the U.S. dollar; and the effects of international trade disputes, tariffs, quotas and other import or export restrictions on our international procurement, sales and operations. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. A more detailed description of these and other risk factors is contained in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 24, 2026 and other reports filed by the Company with the SEC since that date. The Company is not undertaking to update any information until required by applicable laws. Any projections of future results of operations are based on a number of assumptions, many of which are outside the Company’s control and should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced projections, but it is not obligated to do so. About The Chefs’ Warehouse The Chefs’ Warehouse, Inc. (http://www.chefswarehouse.com) is a premier distributor of specialty food products in the United States, the Middle East and Canada focused on serving the specific needs of chefs who own and/or operate some of the nation’s leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores. The Chefs’ Warehouse, Inc. carries and distributes more than 90,000 products to more than 55,000 customer locations throughout the United States, the Middle East and Canada. Contact:Investor Relations Jim Leddy, CFO, (718) 684-8415 1Earnings before interest, taxes, depreciation and amortization (“EBITDA”), Adjusted EBITDA, adjusted net income and adjusted net income per share are non-GAAP measures. Please see the schedules accompanying this earnings release for a reconciliation of EBITDA, Adjusted EBITDA, adjusted net income and adjusted net income per share to these measures’ most directly comparable GAAP measure. See the “Non-GAAP Financial Measures” section of the press release. Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock and stock options to our key employees and our independent directors. Represents non-cash changes in the fair value of contingent earn-out liabilities related to our acquisitions, non-cash charges related to asset disposals, asset impairments, including intangible asset impairment charges, certain third-party deal costs incurred in connection with our acquisitions or financing arrangements and certain other costs. Represents rent and occupancy costs expected to be incurred in connection with our facility consolidations while we are unable to use those facilities. Represents moving expenses for the consolidation and expansion of several of our distribution facilities. See the “Non-GAAP Financial Measures” section of the press release. Represents non-cash changes in the fair value of contingent earn-out liabilities related to our acquisitions, non-cash charges related to asset disposals, asset impairments, including intangible asset impairment charges, certain third-party deal costs incurred in connection with our acquisitions or financing arrangements and certain other costs. Represents rent and occupancy costs expected to be incurred in connection with our facility consolidations while we are unable to use those facilities. Represents moving expenses for the consolidation and expansion of several of our distribution facilities. Represents debt modification costs, extinguishment costs and interest expense related to the write-off of certain deferred financing fees related to our credit agreements. Represents the adjustments to the tax provision values to reflect a normalized annual effective tax rate on adjusted pretax earnings of 31.0% and 28.0% for the second quarters of 2026 and 2025, respectively, and year-to-date periods of 2026 and 2025, respectively. See the “Non-GAAP Financial Measures” section of the press release. Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock and stock options to our key employees and our independent directors. Represents rent and occupancy costs expected to be incurred in connection with our facility consolidations while we are unable to use those facilities. Represents non-cash changes in the fair value of contingent earn-out liabilities related to our acquisitions, non-cash charges related to asset disposals, asset impairments, including intangible asset impairment charges, certain third-party deal costs incurred in connection with our acquisitions or financing arrangements, moving expenses for the consolidation and expansion of several of our distribution facilities and certain other costs.

This article first appeared on GuruFocus. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. The Chefs' Warehouse Inc (NASDAQ:CHEF) reported a strong growth in both revenue and profitability for the second quarter of 2026, with net sales increasing by approximately 12.9% year-over-year. Organic net sales grew by 12.2%, driven by unique placement growth of 7.2% and specialty case growth of 6%. Gross profit increased by 15.2% compared to the prior year, with gross profit margins improving by approximately 49 basis points. The company raised its full-year 2026 financial guidance, expecting net sales to be in the range of $4.5 billion to $4.6 billion. The Chefs' Warehouse Inc (NASDAQ:CHEF) is implementing AI-based technology across various functions to enhance operational efficiency and customer service, which is expected to support future growth. Selling, general, and administrative expenses increased by approximately 9.6% due to higher costs associated with compensation, benefits, and facility investments. The company's Middle East operations are facing challenges due to regional conflicts, impacting unique customer growth and causing logistical issues. There is a noted increase in product prices due to logistical changes in the Middle East, affecting overall cost management. The company has built in conservatism into its forward guidance due to uncertainties in tourism levels in the Middle East, which could impact future performance. Despite strong growth, the company acknowledges the competitive environment and the challenges of maintaining market share against other specialty players. Warning! GuruFocus has detected 6 Warning Signs with QUAD. Is CHEF fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide insights into the strong demand in your US business and the factors driving new customer growth? A: Chris Pappas, CEO: The growth is due to multiple factors, including large investments in building a sales force, new facilities with capacity, cross-selling, and the maturing of new hires post-COVID. It's a combination of these efforts that is driving our growth, and we believe we're just getting started. Q: How does the updated long-term outlook for organic sales growth reflect market share gains? A: Jim Leddy, CFO: We've been outperforming our previous targets, so we've adjusted our growth outlook to 7-10%. This reflects our confidence in continued industry-leading growth, supported by our investments and strategic initiatives. Q: Did unique events like the World Cup impact your business, and how is the Middle Eastern market performing amidst regional turmoil? A: Chris Pappas, CEO: The World Cup didn't significantly impact us. Our Middle Eastern operations are resilient despite regional challenges, with our team effectively managing logistics and sourcing issues. We've built conservatism into our guidance due to uncertainties in tourism levels. Q: How should we view the potential for margin improvement in light of recent performance and future targets? A: Jim Leddy, CFO: We are conservative in our guidance but see potential for margin improvement through continued top-line growth and operational leverage. Our historical investments are starting to yield results, and we expect this trend to continue. Q: What role do technology and AI investments play in your current and future growth? A: Chris Pappas, CEO: Technology and AI are enhancing our efficiency and decision-making. These tools are helping us execute at a higher level, and we expect them to continue supporting our growth and operational improvements. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in The Chefs' Warehouse, Inc.? Here are five stocks we like better. Strong Q2 performance: Net sales rose 12.9% year over year to $1.169 billion, while adjusted EBITDA increased to $88.1 million from $65.4 million as gross margins expanded. Raised 2026 outlook: Chefs’ Warehouse now expects $4.5 billion–$4.6 billion in sales and $305 million–$315 million in adjusted EBITDA, despite ongoing Middle East logistics challenges. Long-term growth plan: The company extended its targets through 2030, projecting $6 billion–$6.5 billion in revenue and $450 million–$520 million in adjusted EBITDA, driven primarily by organic growth in underpenetrated markets. Chefs’ Warehouse is Cooking Up a Bargain Chefs' Warehouse (NASDAQ:CHEF) reported higher second-quarter sales, profit and adjusted EBITDA, citing continued gains in product penetration, case volume and customer counts across its regional operations. The specialty food distributor also raised its full-year 2026 financial outlook and extended its long-term targets through 2030. For the quarter ended June 26, net sales increased 12.9% year over year to $1.169 billion. Organic sales rose 12.2%, while acquisitions contributed 0.7 percentage points to sales growth. Net inflation was 4.9%, including 4% inflation in specialty products and 6.4% in center-of-the-plate products. → This Tiny AI Supplier Could Be More Important Than the Chipmakers United Natural Foods’ Risk-Reward Tradeoff Looks Appetizing Founder, Chairman and Chief Executive Officer Chris Pappas said the company’s regional teams delivered growth across markets and product categories, supported by investments in sales personnel, distribution capacity, technology and product specialists. He said momentum continued into July, when the company expected double-digit top-line growth to begin the third quarter. Gross profit rose 15.2% to $292.9 million, and gross margin increased 49 basis points to 25.1%. Specialty-category gross margin improved 47 basis points from the prior-year period, while center-of-the-plate gross margin increased 75 basis points. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Chefs’ Warehouse Stock is Giving a Window for Buyers Selling, general and administrative expenses rose 9.6% to $234.2 million, reflecting higher compensation and benefits, facility and distribution costs supporting growth, and depreciation associated with facility and fleet investments. However, adjusted operating expenses increased 8.4%, less than the company’s sales growth rate, and represented 17.5% of net sales. Operating income increased to $58.6 million from $40.2 million a year earlier. GAAP net income was $33.8 million, or $0.76 per diluted share, compared with $21.2 million, or $0.49 per diluted share, in the prior-year quarter. → Innovative ETF Strategies That Are Paying Off This Summer On an adjusted basis, EBITDA rose to $88.1 million from $65.4 million, while adjusted net income increased to $34.7 million, or $0.78 per diluted share, from $22.5 million, or $0.52 per diluted share. Pappas said the company’s margin opportunity stems from leveraging investments made to build its distribution and sales platform. He said newer markets can initially face higher logistics and inventory costs, but margins can improve as sales volume, customer density and operational efficiency increase. Chief Financial Officer James Leddy said Chefs’ Warehouse raised its full-year 2026 guidance. The company now expects: Net sales of $4.5 billion to $4.6 billion; Gross profit of $1.102 billion to $1.125 billion; and Adjusted EBITDA of $305 million to $315 million. The company expects its 2028 convertible notes to be dilutive during 2026 and projected a fully diluted share count of approximately 46 million to 46.7 million shares. Leddy said the outlook incorporates conservatism related to the Middle East, where the company’s operations have been affected by regional conflict and changes in product logistics. During May and June, operations in the region ran at about 94% of the prior-year level, Pappas said. Leddy said the Middle East team has worked with suppliers to reroute products through different ports and transport channels, including air and ground routes. Those changes have increased logistics costs, he said. The company also noted uncertainty surrounding the return of tourism to Dubai during the fourth quarter. Meanwhile, the company said its Texas operation is growing and has improved its EBITDA margin by “multiple hundred basis points” compared with the past several years. Leddy said the company is evaluating real estate solutions in Dallas and Houston, with Dallas expected to be addressed first. Chefs’ Warehouse updated the five-year targets it originally established in 2023, extending them from 2028 to 2030. The company is now targeting annual revenue growth of 7% to 10%, with 2030 revenue of $6 billion to $6.5 billion. The company expects organic expansion to be the main growth driver, with acquisitions potentially adding about 1% annually. It said years with more substantial acquisitions could produce total growth above the stated range. Its 2030 profitability targets include adjusted EBITDA of $450 million to $520 million and an adjusted EBITDA margin of 7.5% to 8%. Pappas said the company sees growth opportunities in underpenetrated markets, including Texas and Florida, as well as smaller and developing markets. He said these regions have followed patterns seen in more mature operations, with customer growth, maturing sales teams and improving logistics supporting additional expansion. Chefs’ Warehouse ended the quarter with $321.1 million in total liquidity, including $135.5 million in cash and $185.6 million available under its asset-based lending facility. During the quarter, it repaid $30 million of ABL debt, reducing the outstanding balance to $70 million. Net debt was approximately $478.5 million as of June 26, and net debt to adjusted EBITDA was about 1.6 times. The company said it has generated approximately $270 million of free cash flow since implementing its capital allocation plan at the start of 2024. It expects capital expenditures to average about 1% of revenue going forward, directed toward distribution-center development, fleet expansion, technology, inventory management, sales training and customer-facing digital tools. Leddy said the company intends to maintain net debt-to-adjusted-EBITDA leverage between 1.5 times and 2.5 times, increase share repurchases as leverage remains within that range, and retain capital for potential accretive tuck-in acquisitions. The company expects free-cash-flow conversion of 40% to 60% of adjusted EBITDA. Pappas said the company has begun deploying AI-based technology across sales, pricing, procurement, inventory management, logistics and customer experience. He described the investments as tools that help employees access information faster, improve execution and operate more efficiently rather than as a standalone source of dramatic cost reductions. Chefs' Warehouse, Inc is a specialty food distributor that supplies a broad range of high‐end ingredients and culinary products to professional chefs, restaurants, hotels, and other foodservice operators. Headquartered in Maspeth, New York, the company sources its portfolio from local artisans, boutique producers and leading global suppliers. Its core offerings include fresh and frozen proteins, specialty cuts of meat and seafood, handcrafted cheeses and charcuterie, seasonal produce, value‐added preparations, pantry staples and premium desserts and beverages. The company operates a network of distribution centers strategically located in major metropolitan markets across North America. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Chefs' Warehouse Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Chefs' Warehouse (CHEF) came out with quarterly earnings of $0.78 per share, beating the Zacks Consensus Estimate of $0.64 per share. This compares to earnings of $0.52 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +21.88%. A quarter ago, it was expected that this distributor of specialty food products would post earnings of $0.23 per share when it actually produced earnings of $0.4, delivering a surprise of +73.91%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Chefs' Warehouse, which belongs to the Zacks Food - Miscellaneous industry, posted revenues of $1.17 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.11%. This compares to year-ago revenues of $1.03 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Chefs' Warehouse shares have added about 60.7% since the beginning of the year versus the S&P 500's gain of 8.5%. While Chefs' Warehouse has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Chefs' Warehouse was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.54 on $1.09 billion in revenues for the coming quarter and $2.31 on $4.49 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food - Miscellaneous is currently in the bottom 15% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. US Foods (USFD), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $1.37 per share in its upcoming report, which represents a year-over-year change of +15.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. US Foods' revenues are expected to be $10.46 billion, up 3.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report US Foods Holding Corp. (USFD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research