US Foods Q1 2025 Earnings Report

US Foods EPS Results

• Actual EPS: $0.68
• Consensus EPS: $0.69
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: $0.54

US Foods Revenue Results

• Actual Revenue: $9.35 billion
• Expected Revenue: $9.42 billion
• Beat/Miss: Missed by -$64.05 million
• YoY Revenue Growth: +4.50%

US Foods Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 9:00AM ET

US Foods (NYSE:USFD) (NYSE: USFD) is a major foodservice distributor serving restaurants and other food-away-from-home businesses across the United States. The company supplies independent and multi-unit restaurants, healthcare organizations, hospitality businesses, educational institutions, government facilities and other commercial customers.

Its product portfolio includes fresh produce, meat and seafood, dairy products, frozen and dry groceries, beverages, ingredients, disposable supplies, kitchen equipment and other foodservice-related products. US Foods also provides services and technology designed to support menu planning, purchasing, inventory management, operational efficiency and customer growth.

The company has roots dating to the 19th century and has expanded through a combination of organic growth and acquisitions. Formerly known as US Foodservice, it adopted the US Foods name as part of its broader corporate development and became a publicly traded company in 2016. Its distribution network and customer-focused services support foodservice operators throughout the United States.

US Foods Q1 2025 Earnings Call Transcript

Key Takeaways

• U.S. Foods delivered 9% adjusted EBITDA growth and 26% adjusted EPS growth in Q1 while achieving its sixteenth consecutive independent restaurant and eighteenth consecutive healthcare share gains, and the board authorized a $1 billion share repurchase program.
• The company reaffirmed fiscal 2025 guidance, targeting 8–12% adjusted EBITDA growth, 17–23% adjusted EPS growth, 4–6% sales growth, and 1–3% total case growth (2–5% in independents).
• Profitability initiatives drove a 5% increase in gross profit to $1.6 billion, supported by ongoing cost-of-goods savings and private label penetration rising to 34%, while supply chain turnover reached five-year lows and OpEx savings exceeded $120 million with $30 million more planned.
• Service performance hit its best levels since 2019 with on-time delivery and Ops QC improvements, deployment of Descartes routing in 70% of markets, and rollout of generative AI order-guide tools that accelerated new account wins in April.
• Growth investments advanced, expanding Pronto small-truck delivery to 10 markets (20 planned by year-end), onboarding over $100 million in annualized healthcare and hospitality business, and pushing Scoop private label sales past a $1 billion annual run rate.

Presentation

[Operator]

Thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the US Foods Holding Corp.'s First Quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. We are asking callers to limit their questions to one question and one follow-up. Thank you. I would now like to turn the call over to Mike Neese, SVP of Investor Relations. Please go ahead.

[Mike Neese, SVP of Investor Relations at US Foods]

Thank you, Lacey. Good morning, everyone, and welcome to the US Foods First Quarter Fiscal 2025 earnings call. On today's call, we have Dave Flitman, our CEO, and Dirk Locascio, CFO. We will take your questions after our prepared remarks conclude. Please limit yourself to one question and one follow-up. Our earnings release, issued this morning, and today's presentation can be found on the Investor Relations page of our website at ir.usfoods.com. During today's call, unless otherwise stated, we're comparing our first quarter of fiscal year 2025 to the same period in fiscal year 2024. In addition to historical information, certain statements made during today's call are considered forward-looking statements. Please review the risk factors in our Form 10-K for a detailed discussion of the potential factors that could cause our actual results to differ materially from those anticipated in forward-looking statements.

[Mike Neese, SVP of Investor Relations at US Foods]

Lastly, during today's call, we will refer to certain non-GAAP financial measures. All reconciliations to the most comparable GAAP financial measures are included in the schedules on our earnings press release, as well as in the presentation slides posted on our website. We are not providing reconciliations to forward-looking non-GAAP financial measures. Now I'll turn the call over to Dave.

[Dave Flitman, CEO at US Foods]

Thanks, Mike. Good morning, everyone, and thank you for joining us. Let's turn to today's agenda. I'll start by sharing our key results in the quarter, and then we'll provide an update on CHEF'STORE. Next, I'll highlight several key achievements under our strategic pillars and hand it over to Dirk to review our first quarter financial results and our fiscal 2025 guidance. In the first quarter, we outperformed the industry and again delivered strong profitability, with Adjusted EBITDA growing more than 9% and Adjusted Diluted EPS increasing 26%, despite the challenging operating environment and severe weather-related headwinds. Our results underscore the strength of our customer value proposition and our team's relentless execution of our strategy.

[Dave Flitman, CEO at US Foods]

We are delivering consistent share gains with our target customer types, including our 16th consecutive quarter of gains with independent restaurants and 18th consecutive quarter with healthcare.

[Dave Flitman, CEO at US Foods]

I'm also pleased to announce that our board recently authorized a new $1 billion share repurchase program, which builds upon our cumulative buyback of more than 24 million shares, totaling $1.3 billion since late 2022. I'll now take a minute to briefly discuss CHEF'STORE. At our Investor Day last June, I announced our intent to explore strategic alternatives for our CHEF'STORE business. After multiple conversations with potential buyers and engaging in active negotiations over the past several months, it became apparent that the current macro environment was not conducive to completing a transaction at an appropriate valuation. For the foreseeable future, we plan to retain and further improve the business. While I still believe the CHEF'STORE business is not the right long-term strategic fit for our company, our team has worked very hard over the last year to improve the operations and profitability.

[Dave Flitman, CEO at US Foods]

More specifically, first quarter EBITDA growth was in line with the overall company. And as a reminder, CHEF'STORE represents less than 5% of our total EBITDA. Earlier, I discussed our strong profitability gains in the first quarter, and now we'll dive a little deeper into our case growth. Total volume increased 1.1%, with independent restaurant case growth of 2.5%, while healthcare and hospitality grew 6.1% and 3.6%, respectively. Our healthcare business continues to perform very well. We are the industry leader in healthcare and remain confident in our ability to drive strong growth and continued market share gains this year and beyond. Our independent case growth was impacted by severe weather and multiple storms across the U.S., including the wildfires in LA.

[Dave Flitman, CEO at US Foods]

This impact was partially offset as we lapped last year's labor disruptions, translating to a net headwind of approximately 160 basis points to independent restaurant case growth.

[Dave Flitman, CEO at US Foods]

The broader industry faced similar headwinds with foot traffic, as published by Black Box, down 3% for the first quarter. It hit a low in February, down approximately 6%, but improved in March by nearly 350 basis points. However, we successfully gained share each month in independent restaurants and outperformed the industry. Our organic independent case growth accelerated 450 basis points from February to March, and that momentum carried into April. In fact, over the last three weeks, we delivered our highest cumulative independent case volumes of the year, and our net new independent account generation was the highest of the year in April. We now expect our growth rate to accelerate for the remainder of the quarter and be in line with our updated modeling assumption of 2%-5% independent case growth for the full year, which Dirk will discuss shortly.

[Dave Flitman, CEO at US Foods]

As we look ahead, another topic that's on everyone's mind is the tariff environment and the impact on our industry and the economy. We are monitoring the evolving situation and staying closely connected with our suppliers to source alternative products where appropriate. Imported products account for a small portion of our business, with mid- to high single-digit % of our purchases likely subject to some level of tariffs. Our customer value proposition remains our focus as we continue to help our customers in their efforts to be more efficient, run more profitably, and optimize their menu offerings, most notably with our private label brands. Turning to slide four, we operate in a large, resilient, and growing industry where restaurants, healthcare, and hospitality, the fastest growing and most profitable customer types, represent a $270 billion addressable market.

[Dave Flitman, CEO at US Foods]

And food away from home continues to steadily increase, a multi-decade trend that we believe will continue. Our business and industry have proven to be quite stable across macro cycles. As I've mentioned before, our self-help initiatives are in the early to mid-innings of implementation, and thus US Foods is well-positioned despite the slower macro backdrop. If demand softens further, we have various levers that we can pull in addition to those we already have in place. These include reducing discretionary spend, further accelerating productivity, and moderating capital expenditures. Importantly, 80% of our distribution operating expense is variable and flexes during sustained periods of softer demand. As a reminder, during the great financial crisis, our volume was down just mid-single digits, while Adjusted EBITDA was essentially flat.

[Dave Flitman, CEO at US Foods]

We will continue to adjust to the macro environment as appropriate while staying focused on executing our proven playbook.

[Dave Flitman, CEO at US Foods]

Turning to our focus plan to profitably grow US Foods, we are guided by four strategic pillars, and I'll discuss our progress on each over the next several slides. Moving to slide five, our first pillar is culture. Keeping our associates safe is our top priority, and during the first quarter, our injury and accident rates were 12% better than the prior year. We've made strong progress, and over the past two years, our rates have improved by 38%. I'm proud of our team's success, but we will not waver until we reach our goal of zero injuries and accidents. In March, I held my second annual CEO Award ceremony to celebrate associates who ignited excellence across US Foods. Shortly, I'll highlight two winners in particular who exemplify our cultural beliefs and drive our results. Not only are we supporting our associates, we're helping our communities.

[Dave Flitman, CEO at US Foods]

Last week, we announced an increased strategic investment in support of our Helping Communities Make It program, which represents more than a fivefold increase over the last two years. As part of this commitment, we donated $250,000 to Giving Kitchen to provide emergency assistance to food service workers. We're also proud to have renewed our American Red Cross partnership as an annual disaster giving partner. Turning to slide six, our second pillar, service. We continue to make excellent progress in improving our on-time delivery and service levels to our customers, and we are currently at our best service levels since 2019. An important element of our service is Operations Quality Composite, or OpsQc, which measures our ability to deliver products to our customers without errors.

[Dave Flitman, CEO at US Foods]

During the first quarter, our OpsQC metric improved approximately 20% from the prior year and was our best performance since the first quarter of 2021.

[Dave Flitman, CEO at US Foods]

We continue to roll out our Descartes routing platform, which is driving delivery efficiency gains and providing better customer service. 50 markets are live or in active deployment, which represent nearly 70% of our routed miles, and we remain on track to be fully deployed by year-end. In the fourth quarter of 2024, we launched a new generative AI automatic order guide for our sellers to make it more efficient for them to create customer proposals and onboard new business. This more efficient process, along with other activities we've taken off our sellers' plates, resulted in an acceleration in net new independent accounts during March and further acceleration in April. We're in the early stages of leveraging proprietary AI tools, and we're excited about the momentum we're building. Let's now turn to our growth pillar on slide seven.

[Dave Flitman, CEO at US Foods]

We remain focused on accelerating profitable growth and gaining market share with our target customer types. We continue to invest in our Pronto small truck delivery service. Last year, we launched Pronto penetration in six markets to further increase our share of wallet with our existing customer base. As a reminder, Pronto penetration extends our Pronto service to existing independent customers who will be able to order on non-routine delivery days with later cutoff times. In our pilot markets, we saw a sustained 10%-15% uplift in overall case growth from customers in the program. As a result, we now have Pronto penetration in 10 markets and plan to be in a total of 20 markets by the end of 2025. We are also continuing to gain new business in healthcare and hospitality.

[Dave Flitman, CEO at US Foods]

During the quarter, we began onboarding more than $100 million in annualized new business wins across hospitals, senior living, lodging, and recreation facilities. We captured additional share gains during the first quarter in both healthcare and hospitality by leveraging our expertise, our differentiated selling model, and our long-term relationships. And we are thrilled to announce that our Scoop products surpassed $1 billion in annual sales for the first time in 2024. We just launched our new Spring Scoop, which features 18 high-quality, innovative, and labor-saving products designed to attract and retain diners and address back-of-house pain points. A great example is our Chef's Line All-Natural Beef Birria, a trending Mexican beef dish that is projected to grow by more than 100% over the next four years. Turning to slide eight, our profit pillar.

[Dave Flitman, CEO at US Foods]

Adjusted gross profit grew 5% in the first quarter to $1.6 billion, driven by volume growth, improved cost of goods savings, and increased private label penetration. We made further progress on cost of goods by collaborating with additional vendors, and we remain confident in achieving $260 million of COGS savings under our new long-range plan. Total company private label penetration increased 90 basis points to 34%, and core independent restaurant penetration grew by nearly 50 basis points to a quarterly record of more than 53%. Private label growth remains a significant opportunity for US Foods and helps our customers offset inflationary pressure. Our products offer the competitively priced, high-quality value proposition that our customers are looking for while improving our margins.

[Dave Flitman, CEO at US Foods]

As a reminder, we do not see a near-term ceiling to our private label growth. We also continue to drive significant improvement in associate retention across our supply chain network.

[Dave Flitman, CEO at US Foods]

Our annualized selector turnover improved by approximately 20 percentage points, and driver turnover improved by low single digits over the prior year, both driven by our initiatives, including flexible scheduling. While there's more to do in this area, this is our best turnover rate for both selectors and drivers in the last five years. We're also seeking ways to identify cost savings and further streamline administrative processes. We removed spans and layers in 2024, and earlier this year, we took steps to reduce complexity, waste, and non-value-added work across the organization and focus resources closer to the customer. More specifically, additional administrative cost actions we have taken $1 million in expense savings in 2025. This is in addition to the $120 million in annualized operating expense savings actions we took last year.

[Dave Flitman, CEO at US Foods]

Our focus strategy and our ability to drive improved profitability through controlling what we can control highlight the resilience of our business model and our ability to adjust to any macro environment. I very much appreciate each of our associates for their hard work and dedication supporting our customers and executing our strategy. Before passing it to Dirk, I'll highlight two CEO award-winning associates, both of whom are veterans. Brian Butts, who served in the Army National Guard for eight years, is a market field trainer and was part of a team that led the replacement of our end rider forklifts with safer center ride models. His contributions made a positive impact on our safety results, and to date, there has not been a single recorded injury with the new center ride powered industrial equipment.

[Dave Flitman, CEO at US Foods]

Thank you, Brian, for not only keeping our associates safe, but keeping our country safe through your military service. I'd also like to acknowledge Philip Sagardoy, Region Margin Manager, who served in the Marines for four years for his contributions as part of our Next Generation Pricing Team. This initiative provides an integrated and agile platform that serves as a single source for local pricing execution and analysis. Thank you, Philip, for your work on this important initiative and for serving our country so bravely. As we approach Memorial Day, I express my deepest gratitude to Brian, Philip, and all of our veterans, including our associates who have served our great nation.

[Dave Flitman, CEO at US Foods]

US Foods proudly supports those who have sacrificed for our country, from our Those Who Serve employee business resource group to our new partnership with SkillBridge, which connects transitioning service members with hands-on civilian career experience through innovative internship partnerships. This holiday is a time for reflection, appreciation, and remembrance. As you spend time with family and friends, please join me in honoring the heroes who made the ultimate sacrifice for our country and for our freedom. Let me now turn the call over to Dirk to discuss our first quarter results and our 2025 guidance.

[Dirk Locascio, CFO at US Foods]

Thank you, Dave, and good morning, everyone. We again delivered solid topline and strong bottomline growth as we gained share in each of our target customer types and grew our business profitably. This growth is despite softer restaurant traffic driven by widespread extreme weather and weaker consumer sentiment.

[Dirk Locascio, CFO at US Foods]

Starting on slide 10, first quarter net sales increased 4.5% - $9.4 billion, driven by case volume growth of 1.1% and food cost inflation and mixed impact of 3.4%. Our independent restaurant volume grew 2.5%, including 120 basis points from acquisitions. Healthcare growth remained strong at 6.1%, and hospitality accelerated to 3.6% as we continued to successfully onboard new business. We expect healthcare and hospitality to show continued growth over the coming quarters based on our differentiated strategy. Our chain restaurant volume declined 4.3% and was broadly in line with industry foot traffic reported by Black Box. First quarter Adjusted EBITDA grew 9.3% from the prior year to $389 million from a combination of volume growth, gross profit gains, and operating expense productivity.

[Dirk Locascio, CFO at US Foods]

We again delivered meaningful operating leverage improvement as adjusted gross profit dollars grew 120 basis points faster than adjusted operating expenses, driven by the strong execution of our self-help initiatives. As a result, adjusted EBITDA margin increased by 18 basis points to 4.2%. Finally, adjusted diluted EPS increased 26% - $0.68. We continue to grow adjusted EPS significantly faster than adjusted EBITDA due to the combination of earnings growth and accretive share repurchases. Turning to slide 11, we increased adjusted EBITDA per case again this quarter as we drove further operating leverage improvement. Adjusted gross profit per case continued its strong growth trajectory, improving $0.30, or 4% compared to the prior year, driven in large part by our initiatives to accelerate cost of goods savings and increased private label penetration.

[Dirk Locascio, CFO at US Foods]

Adjusted operating expense per case increased $0.16, or 2.7%.

[Dirk Locascio, CFO at US Foods]

We continue to offset a portion of operating expense inflation by improving supply chain productivity, streamlining administrative processes, and capturing savings on indirect procurement spent. First quarter adjusted EBITDA per case was $1.90, up $0.15 from the prior year as our increase in adjusted gross profit per case was nearly twice as large as the increase in adjusted operating expense per case. We have consistently grown adjusted gross profit per case faster than adjusted operating expense per case, with our first quarter results building on consistent operating leverage gains every quarter of the last three years. This consistency in execution and balance of volume growth and operating leverage gains positions us well even in a slower macro backdrop. Our results demonstrate our sharp focus and effective execution of our strategy.

[Dirk Locascio, CFO at US Foods]

As we've commenced our 2025 to 2027 long-range plan, we are confident in our ability to deliver on the financial commitments we outlined at our investor day last June. Moving to slide 12, we continue to increase our cash flow and deploy capital in a manner that's consistent with our capital allocation priorities, investing in the business to support growth, returning capital to shareholders via share repurchases, maintaining net leverage within our target range, and executing accretive tuck and M&A. Operating cash flow increased $252 million-$391 million, driven by earnings growth and working capital management, as well as a shift in the year-over-year timing of holiday-related inventory build. In the second quarter, we expect inventory levels to normalize compared to the prior year.

[Dirk Locascio, CFO at US Foods]

We repurchased $23 million of shares during the first quarter and closed on the acquisition of Jake's Finer Foods for $92 million.

[Dirk Locascio, CFO at US Foods]

As we stated last quarter, we remain committed to returning capital to shareholders and will return to more meaningful share repurchases over the balance of this quarter and the remainder of 2025. As Dave noted earlier, our board recently authorized a new $1 billion share repurchase program. Finally, we ended the quarter at 2.7 times net leverage, well within our two to three times target range. This is a slight reduction compared to year-end and the same period last year. Our debt structure is strong, and we have no long-term debt maturities until 2028. I'm also pleased to report another positive development related to our credit rating. Our corporate credit rating was recently upgraded one notch by S&P to BB Plus, based on continued improvements in our financial performance and ability to sustain lower leverage. Now, turning to our guidance and modeling assumptions on slide 13.

[Dirk Locascio, CFO at US Foods]

Given our year-to-date performance and outlook for the balance of the year, we are reaffirming our fiscal year 2025 guidance and updating several modeling assumptions. Despite the softer macro drop, we continue to execute our self-help initiatives to drive profitable volume growth, enhance gross profit, streamline operating expenses, and deliver strong earnings growth. As a result, we continue to expect Adjusted EBITDA growth of 8%-12% and Adjusted Diluted EPS growth of 17%-23%. We also still expect 4%-6% sales growth. Within the sales growth, however, we expect higher sales inflation and mix of approximately 3% and lower case growth. Given the slower foot traffic and the soft macro environment, we now expect total case growth of 1%-3%, which includes independent restaurant case growth of 2%-5%, as Dave mentioned. All other modeling assumptions remain unchanged.

[Dirk Locascio, CFO at US Foods]

We have a long runway of growth ahead of us with distinct competitive advantages, scale, a diverse customer base, and brand awareness that sets us apart. We remain focused on executing our margin expansion initiatives, delivering strong earnings growth, and generating substantial cash flow, which drives our confidence in achieving our long-range plan. With that, I'll pass it back to Dave for his closing remarks.

[Dave Flitman, CEO at US Foods]

Thanks, Dirk. Looking ahead, we remain intensely focused on executing our strategy amid this challenging environment. Despite the noisy quarter, we drove solid Adjusted EBITDA growth, increased our margins, and delivered industry-leading 26% Adjusted EPS growth. We operate in a highly resilient industry. Ours is a self-help and execution story, and we have multiple gross profit and operating expense levers to pool to deliver results within our guidance range. We have the fastest growth algorithm among our large competitors.

[Dave Flitman, CEO at US Foods]

We remain confident to deliver our new long-range plan with a 5% sales CAGR, 10% adjusted EBITDA CAGR, 20-plus basis points of annual adjusted EBITDA margin expansion, and a 20% adjusted EPS CAGR through 2027. I am convinced that US Foods will continue to gain share and deliver value for our customers and our shareholders in any environment. With that, Lacey, please open up the line for questions.

[Operator]

At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We are limiting callers to one question and one follow-up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Edward Kelly with Wells Fargo. You may go ahead.

[Edward Kelly, Managing Director at Wells Fargo]

Yeah, hi. Good morning, guys, and nice quarter and a tough backdrop.

[Edward Kelly, Managing Director at Wells Fargo]

Dave, I wanted to ask you, you delivered EBITDA growth within your guidance in Q1 despite what we saw this quarter. I guess, first, what does that say about your ability to flex the self-help momentum of the business? And then you maintained the full-year guidance despite added uncertainty. So I just want to be clear about what you're saying there. Does that mean that the added choppiness maybe just sort of chipped away at maybe some of the upside that you might have expected? If conditions stay where they are, you can hit that range. Maybe just update us on what sort of defines the top end and the bottom end for the year at this point.

[Dave Flitman, CEO at US Foods]

Yeah, I think I'll take the second part of your question there first.

[Dave Flitman, CEO at US Foods]

Absolutely, we're confident in hitting that range, and underlying that assumption is that the macro stays where the macro is. And that leads me into the first part of your question, which is exactly the self-help story that we have. I think this, better than any quarter since I've been with the company, demonstrates, one, the strength of our strategy and our ramped-up execution, which we've been working hard on over the last two and a half years, as you know. We have so much self-help at the operating expense and gross margin level. You've seen us execute that. And then I think it also underscores the differentiation of our business model. The way we go to market, the fact that we're focused on three of the fastest-growing and most profitable segments of the customer base in food service distribution. Healthcare, we talk a lot about.

[Dave Flitman, CEO at US Foods]

We continue to gain share despite our strength in that industry, and it's agnostic to what's going on with the macro. So I just really love our model. I love our execution, and we've got a lot of self-help ahead of us, and I feel really good about our momentum.

[Edward Kelly, Managing Director at Wells Fargo]

I wanted to just follow up on independent cases. I think sequentially, your gap versus your biggest peers probably improved a little bit this quarter. Can you maybe just talk about the underlying momentum there? You mentioned some things like Pronto and the generative AI stuff. And then I'm curious as to how April and May are running versus that 2%-5% full-year goal.

[Dave Flitman, CEO at US Foods]

Well, I'll take the second part of that. We saw good strength in the back half of March that carried into the first several weeks of April.

[Dave Flitman, CEO at US Foods]

Then we had Easter, which was strong, and then the week after Easter is always fairly weak, as it is every year. But we're squarely within that range of the new guide that Dirk outlined in April, and we had increased strength as we started the month of May here. So I feel really good about our momentum with independent case growth. And as I said in my prepared remarks, we expect that to continue to strengthen throughout this quarter. Net new account generation in April was the strongest of the year. We're squarely focused on taking market share where we need to in the right way that's highly profitable. So our team is focused. We continue to add to our sales headcount in the mid-single-digit range. That's playing out this year just in similar fashion to what it has for the last two years. So I like our model.

[Dave Flitman, CEO at US Foods]

We're executing it consistently, and I think it's going to mean good things for the future.

[Edward Kelly, Managing Director at Wells Fargo]

Great. Thank you. Thanks, Ed.

[Operator]

Your next question comes from the line of Kelly Bania with BMO Capital Markets. You may go ahead.

[Kelly Bania, Equity Research Analyst at BMO Capital Markets]

Good morning. Thanks for taking our questions. Good morning. I wanted to ask, Dave and Dirk, you noted some of the additional levers on the expense side that you could pull, I guess, if the demand backdrop does weaken here. Have you already initiated any of those? And I think you called out $30 million in expense savings this year. I just want to confirm that was above and beyond what you had already planned for and just what buckets those are in and the timing of how that will impact this year.

[Dave Flitman, CEO at US Foods]

Yeah, I'll take the second part of your question there and then flip it over to Dirk to add some color and give you a little more detail. So the $30 million, yes, is incremental to any actions that we took last year. As you've heard me talk for the past year and a half or so, we're taking some of the cost burden out of the center and pushing the right resources back into the field to get the organization increasingly focused on the customer, but importantly, giving them the resources that they need to execute. And with that shift to the field, we're taking some cost out. So that $30 million is incremental to the $120 million that we did last year. Dirk?

[Dirk Locascio, CFO at US Foods]

And the only thing I'll add, Kelly, is you're right.

[Dirk Locascio, CFO at US Foods]

It was executed, and it's beginning to show savings toward the end of the first quarter and through the year. And it's really, as we saw this softer market, it was being proactive and working against it. But they're all still good, healthy things that will continue to make the business stronger as we move ahead. But I think that the bigger picture on gross profit and OpEx, as what Dave said earlier in his other comments, is with our self-help and the things we have in play, both on gross profit and OpEx, we're not starting from a standstill position. We really have a lot of this in play, and that's how you really see that excellent balance of top-line growth, margin expansion, and resulting in that industry-leading EPS that Dave talked about.

[Dave Flitman, CEO at US Foods]

And just to give our team all the credit that they deserve. I've never worked with a team as strong as this leadership team in my 40 years of working. Our team is very aligned on what we have to do to execute, and you see all parts of the organization, all functions aligned on our customer and executing to deliver our results. And that's really what informed our confidence in maintaining our guide for the year. If we can execute like we did in the first quarter with all the challenges that we had, there's no reason that we can't continue that execution and hit that guide. We're highly confident.

[Kelly Bania, Equity Research Analyst at BMO Capital Markets]

Thank you. That's helpful. Just following up on the turnover points, the turnover rates you mentioned with selectors and drivers, that sounds like quite substantial improvement there.

[Kelly Bania, Equity Research Analyst at BMO Capital Markets]

I was just curious if you can give some more historical perspective, how that would compare, I guess, beyond the last five years, which maybe are not quite normal, and then also if you can give an update on sales force turnover and where that is typically and where that is today, if anything to note there.

[Dave Flitman, CEO at US Foods]

Yeah, I'll take the last question on the sales force. Our sales force turnover is consistent and in line with historical levels. We've had no increase in turnover. In fact, we're adding to our headcount quite nicely. And to preempt any further questions in this area, we are not having any issues attracting strong sales talent to the company. People want to join this team because we're winning and consistently taking share.

[Dave Flitman, CEO at US Foods]

Back to the supply chain side of it, I pointed out it was the strongest performance in five years because if you go back to the pandemic, we had our challenges for the first couple of years coming out of the pandemic for a lot of reasons. The whole industry had those sort of challenges, and we've been systematically and consistently digging out of that over the past five years. And my point in tying a bow around the strength of the last five years, we don't need to talk about turnover anymore in supply chain. It's that consistent. It's at that low level. We're back to historical turnover. We've not had any issues staffing in any of our operations for a long time now. And so you probably won't hear me say a lot more in the future about turnover because it's no longer an issue.

[Kelly Bania, Equity Research Analyst at BMO Capital Markets]

Very helpful.

[Operator]

Thank you. Your next question comes from the line of Lauren Silberman from Deutsche Bank. You may go ahead.

[Lauren Silberman, Equity Research Analyst at Deutsche Bank]

Thank you very much. I wanted to follow up on the independent case growth. Can you just level-set expectations for where you're running in April? We've seen the low end of the 2%-5% guide, and you expect acceleration as you move through the quarter. What's driving that assumption? Do comps ease? Do you expect to gain incrementally more market share as you move through the quarter? Any color on that would be helpful.

[Dave Flitman, CEO at US Foods]

Yeah, great question. Lauren, good morning. Yeah, we're at the lower end of that range now, but I expect us to move closer to the mid and perhaps the highest.

[Dave Flitman, CEO at US Foods]

What gives me confidence in that, and that's why I made the point earlier that our net new account generation has been ramping up, and it was the strongest of the year in April. Just as a reminder, our growth in independent restaurants is predicated on our ability to generate new customers. And it always has been and always will be the lifeblood of our growth. And so I'm very encouraged by the momentum. It was hard with all the storms in January and February. Places weren't open. It's hard to generate new business if they're not serving existing customers. But that started to ramp back up again in March and accelerated in April, and I expect good things in May and June as well. So feel good about the underlying momentum and how we started the quarter versus Q1.

[Lauren Silberman, Equity Research Analyst at Deutsche Bank]

Great. Thank you for that.

[Lauren Silberman, Equity Research Analyst at Deutsche Bank]

And then if I could just ask about the competitive environment, are you seeing any increase in the competition, promotional intensity? And just historically, do you tend to see that fueled more by the smaller local competitors or the larger national players? Thank you.

[Dave Flitman, CEO at US Foods]

Sure. I really am not seeing a significant change, and I'll predicate that with the foundation of what I always say in this question is it's a very competitive industry. With the fragmented nature that we have with roughly 35%-38% of the share in the Big Three, it's still a highly fragmented industry. And so to your point, a lot of those smaller regional and even local competitors drive a lot of that competitive intensity. But what you've seen over the last decade in this industry is the Big Three have been and continue to take share, and I expect that will continue.

[Dave Flitman, CEO at US Foods]

Certainly, we're going to do our part.

[Lauren Silberman, Equity Research Analyst at Deutsche Bank]

Thank you very much.

[Dave Flitman, CEO at US Foods]

Thank you.

[Operator]

Your next question comes from the line of John Heinbockel with Guggenheim Securities. You may go ahead.

[John Heinbockel, Senior Managing Director at Guggenheim Securities]

Hey, Dave, what are you seeing with lines per account and penetration generally, right? And I would assume drop size is still declining, low single digit. Is that fair?

[Dave Flitman, CEO at US Foods]

Yeah. No, I think our lifeblood is the new account generation there, our ability to generate new business and penetration. The foot traffic challenges have shown up in penetration, which means less cases per line. Our lines per account are fairly stable. Our drop size is obviously in the first quarter were down just because the volume was down overall. But I really haven't seen any significant shift in how that's playing out. And we just got the Black Box data for April.

[Dave Flitman, CEO at US Foods]

It was still down, but it accelerated from March. It was down about 1.5%. I think we're kind of seeing that play out. But again, what I focus on, John, is our ability to generate new accounts. That's what's driving it. Obviously, the penetration now for 18 months has been a challenge with the foot traffic. It's getting better, but it's still negative. And I expect that will continue to be a challenge with us, hopefully less of a challenge going forward as our team works hard to penetrate that existing customer base.

[John Heinbockel, Senior Managing Director at Guggenheim Securities]

And do you still think, right, the historical relationship, right, of Salesforce expansion sort of equating to, right, to case growth, right? So if you're going to grow a mid-single digit, should you still, and I know it's 5%-8% is the long-term target, but when do we get back to that one-to-one relationship?

[Dave Flitman, CEO at US Foods]

And what's holding it back other than macro? I think it really is macro, John. And just again, that 5%-8% that we outlined last June, I've got a lot of confidence in a more normalized foot traffic environment, which is around 2% growth. We haven't seen that since I've been with the company here in two and a half years, and it's been even more pressured in the last 15 or 18 months. So to answer your question, I think we need to get back to that more normalized state to get back into that range. If you just think about what we did organically there in the first quarter, foot traffic down 3%. We needed to be up 2%. We're well in the middle of that range in a more normalized environment. So we're executing well. We're taking what the macro throws at us.

[Dave Flitman, CEO at US Foods]

But importantly, we just delivered industry-leading organic EBITDA growth and EPS growth in the weakest macro we've had since I've been here. That's why I've got so much confidence in this team and our ability to execute going forward.

[John Heinbockel, Senior Managing Director at Guggenheim Securities]

Thank you.

[Operator]

Your next question, your next question comes from the line of Mark Carden with UBS. You may go ahead.

[Matthew Rothway, Research Analyst at UBS]

Hi, this is Matthew Rothway. I'm on for Mark Carden. Thanks for taking our questions. I was hoping you could dig into, good morning, the trends in chains and healthcare. Chains were quite a bit weaker compared to last year's growth. Healthcare appears to have accelerated even further. How do you see those unfolding over the year? And then maybe any color as far as penetration or new accounts that you can share?

[Dirk Locascio, CFO at US Foods]

Good morning. This is Dirk. I'll take that.

[Dirk Locascio, CFO at US Foods]

Just on the chains, so our decline is not all that different than the broader Black Box traffic for the first quarter. So we saw the broader softness. I think in that case, our message is really no different. It continues to be about optimizing chain business. That's not where you're going to hear us talking about the focus. As Dave mentioned earlier, we continue to be focused on gaining share and driving growth from independents, healthcare, and hospitality, both from the biggest pool. Differentiated strategy shows up the most, and they're also more profitable. So that's going to be our continued focus. We are gaining share in all three of those, and we're very pleased with that. You highlighted healthcare. Healthcare we're extremely pleased with. That continues just very strong growth. And then on top of that, healthcare and hospitality even accelerated again in the quarter.

[Dirk Locascio, CFO at US Foods]

But healthcare, in addition to being the industry leader, we have a meaningful differentiation there from our service model to customers, to the technology we offer to make it easier for them, to some of the third-party partnerships that we have. So our expectation is that healthcare continues to grow at a very healthy rate. And we are quite confident that we can continue to gain share in all three of those customer types.

[Matthew Rothway, Research Analyst at UBS]

Thank you. And then as my follow-up, curious about your sales force hiring plans for the year. I think you guys did 5% last year. Do you see doing a similar amount or more or less? Thanks.

[Dave Flitman, CEO at US Foods]

No, we do. Our long-term strategy, we had 6% two years ago, 5% last year. Our target is mid-single digits. I think that's the right number for our company.

[Dave Flitman, CEO at US Foods]

It fits well in terms of leveraging that growth momentum, being able to absorb those new sellers, teaching them our US Foods way to sell, teaching them our brands, all of that. That mid-single digit is the right number for us, and you'll see us deliver it again this year.

[Operator]

Your next question comes from the line of Alex Slagle with Jefferies. You may go ahead.

[Alex Slagle, Equity Research Analyst at Jefferies]

Thanks. Good morning and congrats.

[Dave Flitman, CEO at US Foods]

Thanks, Alex.

[Alex Slagle, Equity Research Analyst at Jefferies]

Your gross profit per case momentum continues to be really impressive. So I just wanted to ask on the cost of goods vendor management initiative and the progress on these negotiations and I guess any thoughts on how tariffs might change things at all for better or worse. I would imagine suppliers still have the desire to drive growth, and that's probably even more acute.

[Alex Slagle, Equity Research Analyst at Jefferies]

But maybe all the noise and uncertainty also slows down or complicates the process if there's any color on how that's progressing.

[Dave Flitman, CEO at US Foods]

Yeah, I think the first part of your comment there is probably what's going to carry the day. To the extent there are growth challenges that ramp up given the tariff situation, they're even more willing to hitch their wagon to people who are delivering outsized growth, particularly in our industry. We have not seen any slowdown in those discussions, negotiations. We reiterated our confidence there this morning in that $260 million over the next three years. We're out of the gate strong this year. You've commented on the GP per case growth. It's been a consistent theme for us for a long time. Dave Poe and our procurement team do a very nice job in making those discussions win-win with our suppliers.

[Dave Flitman, CEO at US Foods]

And we'll continue to drive that and I think benefit from the outcome.

[Alex Slagle, Equity Research Analyst at Jefferies]

Got it. And then following up on the OpEx per case increasing a little bit, I guess that's sort of the inefficiencies, the weather, all that that happened in February. Maybe just some on your confidence of how that'll revert back to the previous trend, more modest growth.

[Dave Flitman, CEO at US Foods]

Yeah, I think you pointed to the challenge that all of us experienced in the first quarter. We lost 18 shipping days in 13 markets just due to shutdowns. You can't deliver if schools are closed, restaurants don't open, all that sort of stuff. You're round-tripping product. You've got increased spoilage when some of that happens. It just drives a lot of inefficiencies in the supply chain. That was clearly not a normal environment.

[Dave Flitman, CEO at US Foods]

But even having said that, look at the rate of GP per case growth versus the OPEX per case growth. It continues to fit into the range that we've told you we will deliver historically despite those macro challenges. And we're confident that'll continue.

[Alex Slagle, Equity Research Analyst at Jefferies]

Sure does. Thanks.

[Dave Flitman, CEO at US Foods]

Thank you.

[Operator]

Your next question comes from the line of Jacob Aiken-Phillips with Melius Research. You may go ahead.

[Jacob Aiken-Phillips, VP at Melius Research]

Hi, good morning, everyone.

[Dave Flitman, CEO at US Foods]

Good morning.

[Jacob Aiken-Phillips, VP at Melius Research]

So I wanted to ask about you mentioned about how you had the ability to moderate CapEx in the event of a downturn. I'm just curious about what you think about your current capacity and runway for growth of that capacity, as well as how you're investing in automation of some facilities and how that could impact your ability to reach your longer-term targets.

[Dave Flitman, CEO at US Foods]

Yeah.

[Dave Flitman, CEO at US Foods]

So first of all, we're investing in advance in several expansions right now across the company. To your point, we are starting up a semi-automated facility here outside of Chicago in Aurora in a few months. So we're excited about that. We'll learn a lot about the automation capability and the efficiencies that will provide to our operations. But just clearly, capacity is not. We are not capacity constrained. We can support all the growth that our sales teams can deliver, and we will continue to stay ahead of that well into the future.

[Operator]

Your next question.

[Jacob Aiken-Phillips, VP at Melius Research]

And then, sorry. And then just on M&A. On M&A, I mean, you said for CHEF'STORE, it's not the best environment to do a sale. But what about from the other side? Is there anything you can tell about the current acquisition environment?

[Dirk Locascio, CFO at US Foods]

Good morning. This is Dirk.

[Dirk Locascio, CFO at US Foods]

So really, the environment hasn't changed. I'd say the backdrop doesn't change a whole lot. Our ability to engage continues to look for opportunities. Our team continues to work their pipeline and engagement with others out there. So really no change overall.

[Operator]

Your next question comes from the line of Jeffrey Bernstein with Barclays. You may go ahead.

[Jeffrey Bernstein, Director at Barclays]

Great. Thank you very much. Dave, I'm just curious on the recent trends. You talk about improving consistently since February. I think most people thought February challenges were a combination of weather and the slowing macro. The weather headwinds have subsided, but seemingly the macro is not getting better. I'm just wondering whether you're surprised at all to see the bounce back to within your new target range despite the macro, whether maybe there's any changes you can call out in terms of consumer or restaurant behavior.

[Jeffrey Bernstein, Director at Barclays]

Obviously, you said the chains were a little bit slower. But again, considering the macro challenges, I am surprised to see such a consistent recovery going into the most recent couple of weeks. And then I had one follow-up.

[Dave Flitman, CEO at US Foods]

Yeah, Jeff. I think the macro has been a challenge for a while. The foot traffic challenges over the past three, four quarters have been there. I think the severe weather overlay just drove it in the tank for four or five weeks there in the middle of the second quarter or first quarter. But importantly, I think people love to eat out. And I continue to say this.

[Dave Flitman, CEO at US Foods]

If you're going to pull back in a tough macro environment, you may not buy a new car, remodel your kitchen, or go on a big vacation, but you're going to go enjoy a meal out with your family and friends once or twice a week. So I think that's inherent in what we've seen over a 50-year trend of food away from home growing faster than food from home. So that's the underlying piece of what I point to that's driving it. And again, we just got the Black Box data. So we saw, while still negative, we saw a rebound from the first quarter and even March in foot traffic in April. So I think that's behind part of it.

[Dave Flitman, CEO at US Foods]

And more importantly, though, our ability to continue to stay focused on generating new business and new accounts in our ramp-up that we've seen here over the past couple of months. And that is really what gives me the confidence in what we've talked about here for the increased strength in the second quarter.

[Dirk Locascio, CFO at US Foods]

And our focus internally just continues to be on what we can control the share gains. And you talked about it in independents. We also have the benefit of just the strong momentum in healthcare, hospitality on top of it. And you put those three together and just gives us a lot of confidence in, as Dave said, just achieving our outcome for the year and continuing to improve our results.

[Jeffrey Bernstein, Director at Barclays]

Got it.

[Jeffrey Bernstein, Director at Barclays]

My follow-up, Dirk, is just on the top two cash flow priorities that you regularly highlight, balancing between investing in the business first and then share repo. Just wondering, what are the greatest investments you see for 2025? Just want to make sure you're not potentially short-changing those investments. I know you're obviously excited about the new $1 billion share repurchase authorization. Just wondering how you think about balancing those two in an environment like this. Thank you.

[Dirk Locascio, CFO at US Foods]

Sure. The lens we always apply is if we have the right return type of projects, we're going to invest in those for the business. You've seen us step up CapEx. In fact, the last few years in 2025 is even a step up from 2024. We're definitely not short-changing the business.

[Dirk Locascio, CFO at US Foods]

We're continuing to invest in capacity for growth, semi-automation, as Dave just mentioned, fleet for growth, technology, so I'm highly confident that where we're investing in CapEx, it is for the right things to grow the business, but because our business is generating such a strong cash flow and growing, we are deploying that in a responsible way for accretive share repurchases, and that's really what I think is the thing we continue to highlight is not only do we have such strong organic EBITDA growth, so the earnings power of the business, but on top of that, we're leveraging that to, I mean, 26% EPS growth compared to others. I mean, that's quite strong. We're pleased with it.

[Dirk Locascio, CFO at US Foods]

And as you heard us talk about in our three-year outcome and algorithm, we believe that we can continue to grow and expect to continue to grow at a very healthy rate. So excited that we can invest in both and deploy such strong cash flow against both.

[Jeffrey Bernstein, Director at Barclays]

Thanks.

[Operator]

Again, if you would like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Peter Saleh with BTIG. You may go ahead.

[Peter Saleh, Managing Director at BTIG]

Yeah. Thanks. Just a couple of questions on my end. With respect to independent restaurant formation, are you seeing any changes in that segment? You're seeing more closures or restaurants reluctant to open given the tariff situation and the potential for higher, I guess, construction costs going forward?

[Dave Flitman, CEO at US Foods]

That's an interesting one, Peter, because restaurant formations have been declining a bit, actually, for the last 15 or 18 months.

[Dave Flitman, CEO at US Foods]

But, interestingly enough, independent restaurant closures have also declined. So it's an odd way to get to kind of a steady state, but I think that's about where it is, given it's close to a push in terms of formations versus closures. But we have seen a decline in formations over the last year or so.

[Peter Saleh, Managing Director at BTIG]

Thank you for that. And then just on the inflation outlook, it looks like it's a little bit more elevated than at least we initially anticipated. I would have thought on a softer macro environment, you would have seen less inflation, but it seems like we're seeing the opposite. Any thoughts on what's driving that inflation modestly higher?

[Dirk Locascio, CFO at US Foods]

Sure. Good morning, Peter. It's Dirk. It is really coming from protein and eggs. Those are the two biggest pieces that drive it. Grocery and the rest continues to be very modestly inflationary.

[Dirk Locascio, CFO at US Foods]

So there's really not a change in the trend. I would say as we went through Q1, we saw a little higher inflation earlier in the quarter, a little lower inflation later in the quarter. But it's a very similar trend. And I think it's important that you look at just that core grocery category, etc., and that it's very stable. So I think we're still sort of at the higher end, but in that 2%-3% range that we all talk about and therefore a manageable range.

[Peter Saleh, Managing Director at BTIG]

Thank you very much.

[Operator]

Your next question comes from the line of Rahul Krotthapalli with J.P. Morgan. You may go ahead.

[Rahul Krotthapalli, Equity Research at JPMorgan]

Hi. Good morning. I want to pick up on the GenAI tools you mentioned, Dave, that your Salesforce now has access to.

[Rahul Krotthapalli, Equity Research at JPMorgan]

Can you please elaborate on how critical this tool was in accelerating the generation of new businesses or accounts into April and how this is improving the performance and productivity of your employees? And the follow-up is, have you developed this one internally or worked with third parties? And where are the next areas in the business that you can improve performance or execution with technology upgrades like this?

[Dave Flitman, CEO at US Foods]

Yeah. I'll start and then I'll turn it over to Dirk because that group reports through Dirk, and he's very close to the work. But I'm very excited about it. We've talked about how we've applied GenAI to support the business in terms of things like labor planning, things like how we're driving productivity for our sales force, how we're generating the menus. Now, we just launched this one late last year.

[Dave Flitman, CEO at US Foods]

So I wouldn't point to anything substantial yet in terms of what that's delivering. But we are starting to see that productivity of sales force ramp up, as you would expect. But the whole goal of this is to increase the productivity of our sales force, helping to do what was historically manual work more automatically and giving them the right answer before they even get into the account and knock on the door. That's what gets me excited. And there's a bunch more that we can do in that area. And our sales team's excited about it.

[Dirk Locascio, CFO at US Foods]

Yeah. And really, I'll just add that this is a great example. We combine looking and using external AI capabilities where it exists in certain platforms and/or tools, and then others are internally developed, as you pointed out. In this case, this was developed by our team.

[Dirk Locascio, CFO at US Foods]

The team is pushing ourselves and pushing hard, working extremely closely within the business and the operators so that whatever we're developing in this space is helping deliver value in the business as opposed to just a tool that exists out there. So as I think Dave said in his prepared comments, we're just getting started and excited about the work that's been done and quite proud of the work that the team is doing to really push us to the forefront here.

[Rahul Krotthapalli, Equity Research at JPMorgan]

Thank you.

[Operator]

Your next question comes from the line of Andrew Wolf with CL King. You may go ahead.

[Andrew Wolf, SVP at CL King]

Thank you. Good morning. With the announced acquisition of Jake's Finer Foods, I think acquisitions helped case growth by about 1% for the total and for the independents.

[Andrew Wolf, SVP at CL King]

Is that sort of the with what you've announced so far, is that the right assumption to use for the year, about 1% from acquisition?

[Dirk Locascio, CFO at US Foods]

Good morning, Andrew. This is Dirk. It's going to be much less than that going forward because the first quarter still had the lapping of IWC that we bought outside of Nashville plus Jake's. IWC lapped, moved into organic after the first quarter. So the balance of the year from Jake's will be pretty negligible as you look ahead from there.

[Andrew Wolf, SVP at CL King]

Gotcha. The other question I have is on, could you just remind us how much of the sales mix is healthcare and hospitality? And I wanted to ask about the hospitality side. That's where I was kind of surprised to see the strength there given what's going on in the environment. Is there any special program going on?

[Andrew Wolf, SVP at CL King]

I mean, are you doing obviously healthcare? You have a lot of differentiation as well as scale. Could you sort of give us a little sense of—I mean, that was, in a sense, more surprising than the other part of it—than healthcare doing so well?

[Dave Flitman, CEO at US Foods]

Well, healthcare and hospitality, Andy, are over 25% of the business at this point and continuing to grow. That's why we're excited about it. And actually, hospitality, we've been gaining share for the past several quarters, and it's been growing nicely. And as we've talked about previously, we were over-indexed to lodging and hospitality, and we've systemically and consciously tried to branch out. That's why you heard me comment earlier about the recreation growth that we've had. We've got some targeted segments in there that we haven't historically been strong on.

[Dave Flitman, CEO at US Foods]

And really, the team's focused on driving growth there, and it's working out quite well. I would expect those share gains to continue into the future. Our team's really had some good success in also winning a number of new accounts. And that's just like it is for independents. It's a key contributor to growth in healthcare and hospitality. And the team's done a very nice job there. And a lot of work's still to come and continuing to grow those.

[Andrew Wolf, SVP at CL King]

Okay. That's it for me. Thank you.

[Dave Flitman, CEO at US Foods]

Thank you.

[Operator]

Your next question comes from the line of Jake Bartlett with Truist Securities. You may go ahead.

[Jake Bartlett, Senior Equity Research Analyst at Truist Securities]

Great. Thanks for taking the question. Mine was on your performance during the Great Recession. If you could just elaborate as to market share shifts at that time, I imagine US Foods and some of the other larger players would have gained share.

[Jake Bartlett, Senior Equity Research Analyst at Truist Securities]

But I just want to maybe confirm the dynamics that happened then on market share, on gross profits per case, and just some of the dynamics around maybe pricing and efficiencies that you got. Just a picture of what that looked like and maybe to give us comfort about what it could look like ahead if there is a downturn.

[Dirk Locascio, CFO at US Foods]

Sure. Good morning, Jake. This is Dirk. I would say, so from the share perspective, none of us had that data back then. So thankfully, we have it available over the last four or five years, but didn't back then. So I can't comment as much on that. I think what really the important part to take away from there is, unlike a lot of industries, when we talk about a slowdown, we were talking about down mid-single digits.

[Dirk Locascio, CFO at US Foods]

It just really shows the resiliency of the business and shows even, as Dave talked about, the last three or four decades. I mean, NPD, the work that they did that showed that people spend a pretty steady percentage of their income no matter the macroeconomic cycles that we're through. So those all contribute to it. So in those cases, you really that case is down mid-single digits. You see, in those cases, maybe a little more competitive, but based on very similar to what Dave said and we've talked about before, it's such a competitive industry to start with. You still see a pretty rational environment and competitive factors even in that scenario.

[Dirk Locascio, CFO at US Foods]

So I think that the thing that is different since then is, even specifically in our case, the differentiation, differentiated go-to-market we have with customers that wasn't in place back then, and also just our self-help portfolio and story that we have going on. Those are things that no matter what the backdrop is, we're going to continue to execute on. And that's why we have such high confidence in not only the earnings growth, but also the margin expansion piece that drives a lot of that.

[Jake Bartlett, Senior Equity Research Analyst at Truist Securities]

Great. I appreciate it. That's it.

[Operator]

That will conclude our question and answer session. And I will now turn the call over to Dave Flitman, the CEO, for closing remarks. You may go ahead, Dave.

[Dave Flitman, CEO at US Foods]

Thanks, Lacey. And thanks, everyone, for joining us today. Our team is executing well. We're excited about our future, and we'll deliver our outcomes in any macro.

[Dave Flitman, CEO at US Foods]

Have a great week.

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Mike Neese, SVP of Investor Relations
• Dave Flitman, CEO
• Dirk Locascio, CFO

Analysts

• Edward Kelly, Managing Director at Wells Fargo
• Kelly Bania, Equity Research Analyst at BMO Capital Markets
• Lauren Silberman, Equity Research Analyst at Deutsche Bank
• John Heinbockel, Senior Managing Director at Guggenheim Securities
• Matthew Rothway, Research Analyst at UBS
• Alex Slagle, Equity Research Analyst at Jefferies
• Jacob Aiken-Phillips, VP at Melius Research
• Jeffrey Bernstein, Director at Barclays
• Peter Saleh, Managing Director at BTIG
• Rahul Krotthapalli, Equity Research at JPMorgan
• Andrew Wolf, SVP at CL King
• Jake Bartlett, Senior Equity Research Analyst at Truist Securities