US Foods Holding Corp.

Previous wording

The following discussion and analysis should be read together with the accompanying unaudited consolidated financial statements and the notes thereto included in this Quarterly Report and the audited consolidated financial statements and the notes thereto in the 2025 Annual Report. The following discussion and analysis contain certain financial measures that are not required by or presented in accordance with GAAP. We believe these non-GAAP measures provide meaningful supplemental information about our operating performance and liquidity. Information regarding reconciliations of and the rationale for these measures is discussed under “Non-GAAP Reconciliations” below. Results of operations for the 13 weeks ended March 28, 2026 are compared to the 13 weeks ended March 29, 2025, unless specifically noted otherwise.

Current wording

The following discussion and analysis should be read together with the accompanying unaudited consolidated financial statements and the notes thereto included in this Quarterly Report and the audited consolidated financial statements and the notes thereto in the 2025 Annual Report. The following discussion and analysis contain certain financial measures that are not required by or presented in accordance with GAAP. We believe these non-GAAP measures provide meaningful supplemental information about our operating performance and liquidity. Information regarding reconciliations of and the rationale for these measures is discussed under “Non-GAAP Reconciliations” below. Results of operations for the 13 weeks and 26 weeks ended June 27, 2026 are compared to the 13 weeks and 26 weeks ended June 28, 2025, unless specifically noted otherwise.

Previous wording

Case growth—Case growth, by customer type (e.g., independent restaurants) is reported as of a point in time. Customers periodically are reclassified, based on changes in size or other characteristics, and when those changes occur, the respective customer’s historical volume is included within the new classification.

Current wording

Case volume—Case volume, by customer type (e.g., independent restaurants) is reported as of a point in time. Customers periodically are reclassified, based on changes in size or other characteristics, and when those changes occur, the respective customer’s historical volume is included within the new classification.

Previous wording

Organic growth—Organic growth includes growth from operating businesses that have been reflected in our results of operations for at least 12 months.

Current wording

Organic volume—Organic volume includes volume from operating businesses that have been reflected in our results of operations for at least 12 months.

Previous wording

For the 13 weeks ended March 28, 2026, compared to the same period a year ago, total organic case volume increased 1.1%, which includes 4.4% organic independent restaurant case volume growth for the 13 weeks ended March 28, 2026.

Current wording

For the 13 weeks and 26 weeks ended June 27, 2026, compared to the same period a year ago, total organic case volume increased 1.7% and 1.4%, respectively, which includes 5.0% and 4.7% organic independent restaurant case volume growth for the 13 weeks and 26 weeks ended June 27, 2026, respectively.

Previous wording

Gross profit increased $39 million, or 2.4%, to $1,653 million for the 13 weeks ended March 28, 2026. For the 13 weeks ended March 28, 2026, the increase was primarily a result of an increase in total case volume and improved cost of goods sold, partially offset by an unfavorable year-over-year LIFO adjustment. Gross profit was negatively impacted by LIFO expense of $38 million for the 13 weeks ended March 28, 2026. Gross profit was negatively impacted by LIFO expense of $5 million for the 13 weeks ended March 29, 2025. As a percentage of net sales, gross profit was 17.2% and 17.3% for the 13 weeks ended March 28, 2026, and March 29, 2025, respectively.

Current wording

Gross profit increased $142 million, or 8.0%, to $1,919 million for the 13 weeks ended June 27, 2026, and increased $181 million or 5.3%, to $3,572 million for the 26 weeks ended June 27, 2026. For the 13 weeks ended June 27, 2026, the increase was primarily a result of an increase in total case volume, improved cost of goods sold and a favorable year-over-year LIFO adjustment. For the 26 weeks ended June 27, 2026, the increase was primarily a result of an increase in total case volume and improved cost of goods sold, partially offset by an unfavorable year-over-year LIFO adjustment. Gross profit was positively impacted by a decrease to LIFO reserve of $5 million for the 13 weeks ended June 27, 2026 and negatively impacted by LIFO expense of $33 million for the 26 weeks ended June 27, 2026. Gross profit was negatively impacted by LIFO expense of $14 million and $19 million for the 13 weeks and 26 weeks ended June 28, 2025, respectively. As a percentage of net sales, gross profit was 18.2% and 17.6% for the 13 weeks ended June 27, 2026, and June 28, 2025, respectively, and 17.7% and 17.4% for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively.

Previous wording

Total operating expenses increased $47 million, or 3.4%, to $1,437 million for the 13 weeks ended March 28, 2026. For the 13 weeks ended March 28, 2026, the increase was primarily a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by continued distribution productivity improvement as well as actions to streamline administrative processes and costs. As a percentage of net sales, operating expenses were 15.0% and 14.9% for the 13 weeks ended March 28, 2026 and March 29, 2025, respectively.

Current wording

Total operating expenses increased $71 million, or 5.1%, to $1,476 million for the 13 weeks ended June 27, 2026, and increased $118 million, or 4.2%, to $2,913 million for the 26 weeks ended June 27, 2026. For the 13 weeks and 26 weeks ended June 27, 2026, the increase was primarily a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by actions to streamline administrative processes and costs. As a percentage of net sales, operating expenses were 14.0% and 13.9% for the 13 weeks ended June 27, 2026 and June 28, 2025, respectively, and 14.5% and 14.4% for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively.

Previous wording

(4) Transformational costs represent non-recurring expenses prior to formal launch of strategic projects with anticipated long-term benefits to the Company. These costs generally relate to third party consulting and non-capitalizable technology. For both the 13 weeks ended March 28, 2026 and March 29, 2025, business transformation costs related to projects associated with information technology infrastructure initiatives and workforce efficiencies.

Current wording

(4) Transformational costs represent non-recurring expenses prior to formal launch of strategic projects with anticipated long-term benefits to the Company. These costs generally relate to third party consulting and non-capitalizable technology. For both the 13 weeks and 26 weeks ended June 27, 2026 and June 28, 2025, business transformation costs related to projects associated with information technology infrastructure initiatives and workforce efficiencies.

Previous wording

(5) Includes: (i) aggregate acquisition, integration related costs and divestiture costs of $1 million and $13 million for the 13 weeks ended March 28, 2026 and March 29, 2025, respectively; and (ii) other gains, losses or costs that we are permitted to addback for purposes of calculating Adjusted EBITDA under certain agreements governing our indebtedness.

Current wording

(5) Includes: (i) aggregate acquisition, integration related costs and divestiture costs of $1 million and $7 million for the 13 weeks and 26 weeks ended June 27, 2026 and June 28, 2025, respectively, and $2 million and $20 million for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively; and (ii) other gains, losses or costs that we are permitted to addback for purposes of calculating Adjusted EBITDA under certain agreements governing our indebtedness.

Previous wording

•Adjusted EBITDA as a percentage of net sales was 4.3% in 2026, compared to 4.2% in 2025.

Current wording

•Adjusted EBITDA as a percentage of net sales was 5.7% in 2026, compared to 5.4% in 2025.

Previous wording

Net sales increased $259 million or 2.8%, to $9,610 million in 2026, driven by case volume growth and food cost inflation of 1.0%. Total case volume increased 1.4% driven by a 4.6%increase in independent restaurant case volume, a 3.7%increase in healthcare volume and a 5.0%increase in hospitality volume, partially offset by a 2.3%decrease in chain volume. Total organic case volume increased 1.1% and organic independent restaurant case volume increased 4.4%. Organic broadline cases of private brands represented approximately 34% of total cases in 2026 and 2025.

Current wording

Net sales increased $450 million or 4.5%, to $10,532 million in 2026, driven by case volume growth and food cost inflation of 2.3%. Total case volume increased 1.9% driven by a 5.1%increase in independent restaurant case volume, a 3.5%increase in healthcare volume and a 4.4%increase in hospitality volume, partially offset by a 1.5%decrease in chain volume. Total organic case volume increased 1.7% and organic independent restaurant case volume increased 5.0%. Organic broadline cases of private brands represented approximately 35% of total cases in 2026 and 2025.

Previous wording

Operating expenses, comprised of distribution, selling and administrative costs, increased $47 million, or 3.4%, to $1,437 million in 2026. Operating expenses increased primarily as a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by continued distribution productivity improvement as well as actions to streamline administrative processes and costs. Operating expenses as a percentage of net sales were 15.0% in 2026, compared to 14.9% in 2025.

Current wording

Operating expenses, comprised of distribution, selling and administrative costs, increased $71 million, or 5.1%, to $1,476 million in 2026. Operating expenses increased primarily as a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by actions to streamline administrative processes and costs. Operating expenses as a percentage of net sales were 14.0% in 2026, compared to 13.9% in 2025.

Previous wording

Our operating income was $216 million in 2026, compared to operating income of $224 million in 2025. Thedecrease in operating income was due to the factors discussed in the relevant sections above.

Current wording

Our operating income was $443 million in 2026, compared to operating income of $372 million in 2025. Theincrease in operating income was due to the factors discussed in the relevant sections above.

Previous wording

Other income—net includes components of net periodic pension benefit credits, exclusive of the service cost component associated with our defined benefit and other postretirement plans. We recognized other income—net of$1 million in 2026 and$1 million in 2025.

Current wording

Other income—net includes components of net periodic pension benefit credits, exclusive of the service cost component associated with our defined benefit and other postretirement plans. We recognized other income—net of$3 million in 2026 and$2 million in 2025.

Previous wording

Interest expense—netdecreased $2 million to $75 million in 2026 primarily due to lower borrowings under the ABL Facility revolver and lower interest rates for our variable rate debt.

Current wording

Interest expense—netincreased $3 million to $77 million in 2026 primarily due to higher borrowings under the ABL Facility, partially offset by lower interest rates for our variable rate debt.

Previous wording

Our net income was $116 million in 2026, compared to a net income of $115 million in 2025. The improvement in net income was due to the relevant factors discussed above.

Current wording

Our net income was $275 million in 2026, compared to a net income of $224 million in 2025. The improvement in net income was due to the relevant factors discussed above.

Previous wording

Gross profit increased $39 million, or 2.4%, to $1,653 million in 2026, primarily as a result of an increase in total case volume and improved cost of goods sold, partially offset by a $33 million unfavorable year-over-year LIFO adjustment. Our LIFO method of inventory costing resulted in an expense of$38 million in 2026 compared to $5 million expense in 2025, driven by inflation and an increase in inventory values in multiple categories. Gross profit as a percentage of net sales was 17.2% in 2026, compared to 17.3% in 2025.

Current wording

Gross profit increased$181 million, or 5.3%, to$3,572 million in 2026, primarily as a result of an increase in total case volume and improved cost of goods sold, partially offset by a$14 million unfavorable year-over-year LIFO adjustment. Our LIFO method of inventory costing resulted in an expense of $33 million in 2026 compared to $19 million expense in 2025, driven by inflation and an increase in inventory values in multiple categories. Gross profit as a percentage of net sales was 17.7% in 2026, compared to 17.4% in 2025.

Previous wording

For the 13 weeks ended March 28, 2026, the Company’s effective income tax rate of 18% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax expense of $4 million related to an increase in an unrecognized tax benefit due to tax positions taken in prior years and a tax benefit of $15 million, primarily related to excess tax benefits associated with share-based compensation. For the 13 weeks ended March 29, 2025, the Company’s effective income tax rate of 22% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax benefit of $6 million, primarily related to excess tax benefits associated with share-based compensation.

Current wording

For the 26 weeks ended June 27, 2026, the Company’s effective income tax rate of 23% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax expense of $4 million related to an unrecognized tax benefit due to tax positions taken in prior years and a tax benefit of $16 million, primarily related to excess tax benefits associated with share-based compensation. For the 26 weeks ended June 28, 2025, the Company’s effective income tax rate of 24% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax benefit of $8 million, primarily related to excess tax benefits associated with share-based compensation.

Previous wording

Our ongoing operations and strategic objectives require working capital and continuing capital investment. Our primary sources of liquidity include cash provided by operations, as well as access to capital from bank borrowings and other types of debt and financing arrangements. As of March 28, 2026, the Company had approximately $1.6 billion in cash and available liquidity.

Current wording

Our ongoing operations and strategic objectives require working capital and continuing capital investment. Our primary sources of liquidity include cash provided by operations, as well as access to capital from bank borrowings and other types of debt and financing arrangements. As of June 27, 2026, the Company had approximately $1.8 billion in cash and available liquidity.

Previous wording

We had outstanding borrowings totaling $388 million and had issued letters of credit totaling $315 million under the ABL Facility as of March 28, 2026. There was remaining capacity of $1,597 million under the ABL Facility as of March 28, 2026.

Current wording

We had outstanding borrowings totaling $433 million and had issued letters of credit totaling $315 million under the ABL Facility as of June 27, 2026. There was remaining capacity of $1,752 million under the ABL Facility as of June 27, 2026.

Previous wording

The agreements governing our indebtedness contain customary covenants. These include, among other things, covenants that may restrict our ability to incur certain additional indebtedness, create or permit liens on our assets, pay dividends, or engage in mergers or consolidations. The Company had approximately $2.9 billion of restricted payment capacity under these covenants and approximately $1.4 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of March 28, 2026.

Current wording

The agreements governing our indebtedness contain customary covenants. These include, among other things, covenants that may restrict our ability to incur certain additional indebtedness, create or permit liens on our assets, pay dividends, or engage in mergers or consolidations. The Company had approximately $3.1 billion of restricted payment capacity under these covenants and approximately $1.2 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of June 27, 2026.

Previous wording

Cash flows used in investing activities in the 13 weeks ended March 28, 2026 and March 29, 2025 included cash expenditures of $98 million and $84 million, respectively, related to investments in information technology, property and equipment and construction of and improvements to distribution facilities.

Current wording

Cash flows used in investing activities in the 26 weeks ended June 27, 2026 and June 28, 2025 included cash expenditures of $174 million and $161 million, respectively, related to investments in information technology, property and equipment and construction of and improvements to distribution facilities.

Previous wording

During the 13 weeks ended March 29, 2025, the Company completed the asset acquisition of Jake’s Finer Foods. Cash paid for the acquisition of Jake’s Finer Foods was approximately $85 million. Investing activities for the 13 weeks ended March 29, 2025, also included cash proceeds from the sale of Freshway of$38 million.

Current wording

During the 26 weeks ended June 28, 2025, the Company completed the asset acquisition of Jake’s Finer Foods. Cash paid for the acquisition of Jake’s Finer Foods was approximately $87 million. Investing activities for the 26 weeks ended June 28, 2025, also included cash proceeds from the sale of Freshway of$38 million.

Previous wording

We expect total cash capital expenditures in fiscal year 2026 to be between $400 million and $450 million. We expect to fund our capital expenditures with available cash or cash generated from operations.

Current wording

We expect total cash capital expenditures in fiscal year 2026 to be between $400 million and $440 million. We expect to fund our capital expenditures with available cash or cash generated from operations.

Previous wording

Cash flows used by financing activities in the 13 weeks ended March 29, 2025 included $147 million in net payments under the ABL Facility and $23 million in scheduled payments under our financing leases. Financing activities in the 13 weeks ended March 29, 2025 also included $23 million common stock repurchased under the Amended Share Repurchase Program, $6 million of proceeds received from stock purchases under our employee stock purchase plan, $1 million of proceeds from the exercise of employee stock options, which were offset by $33 million of employee tax withholdings paid in connection with the vesting of stock awards.

Current wording

Cash flows used in financing activities in the 26 weeks ended June 27, 2026 included $4 million in net borrowings under the ABL Facility and $63 million in scheduled payments under our financing leases. The Company incurred approximately $4 million of lender fees and third-party costs in connection with the ABL Facility amendment, which were capitalized as deferred financing costs. Financing activities in the 26 weeks ended June 27, 2026 also included $445 million common stock repurchased under the May 2025 Share Repurchase Program and the November 2025 Share Repurchase Program, $17 million of proceeds received from stock purchases under our employee stock purchase plan, $10 million of proceeds from the exercise of employee stock options, which were offset by $51 million of employee tax withholdings paid in connection with the vesting of stock awards.

Previous wording

Cash flows used in financing activities in the 13 weeks ended March 28, 2026 included $41 million in net payments under the ABL Facility and $35 million in scheduled payments under our financing leases. Financing activities in the 13 weeks ended March 28, 2026 also included $75 million common stock repurchased under the May 2025 Repurchase Program, $7 million of proceeds received from stock purchases under our employee stock purchase plan, $7 million of proceeds from the exercise of employee stock options, which were offset by $51 million of employee tax withholdings paid in connection with the vesting of stock awards.

Current wording

Cash flows used by financing activities in the 26 weeks ended June 28, 2025 included $175 million in net payments under the ABL Facility and $77 million in scheduled payments under our financing leases. Financing activities in the 26 weeks ended June 28, 2025 also included $270 million common stock repurchased under the Company’s prior and original share repurchase program initially approved in November 2022, $16 million of proceeds received from stock purchases under our employee stock purchase plan, $5 million of proceeds from the exercise of employee stock options, which were offset by $34 million of employee tax withholdings paid in connection with the vesting of stock awards.

Previous wording

We held approximately $377 million of surety bonds, as of March 28, 2026 and $362 million as of December 27, 2025, primarily in favor of certain commercial insurers to secure obligations with respect to our insurance programs. In certain cases, surety bonds may be used as an alternative to letters of credit.

Current wording

We held approximately $354 million of surety bonds, as of June 27, 2026 and $362 million as of December 27, 2025, primarily in favor of certain commercial insurers to secure obligations with respect to our insurance programs. In certain cases, surety bonds may be used as an alternative to letters of credit.

Previous wording

We have prepared the financial information in this Quarterly Report in accordance with GAAP. Preparing the Company’s consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during these reporting periods. We base our estimates and judgments on historical experience and other factors we believe are reasonable under the circumstances. These assumptions form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report includes a summary of the critical accounting policies we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenue, or expenses during the 13 weeks ended March 28, 2026.

Current wording

We have prepared the financial information in this Quarterly Report in accordance with GAAP. Preparing the Company’s consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during these reporting periods. We base our estimates and judgments on historical experience and other factors we believe are reasonable under the circumstances. These assumptions form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report includes a summary of the critical accounting policies we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenue, or expenses during the 26 weeks ended June 27, 2026.