US Foods (USFD) Financials

US Foods’ recent financial statements show improving profitability and strong operating cash flow, but the gains come alongside rising debt and a thinner liquidity cushion. The company generated $10.5 billion of revenue in Q2 2026, up 4.5% from $10.1 billion in Q2 2025 and up from $9.0 billion in Q2 2023. Revenue has increased in each comparable second quarter provided, although the pace of growth has moderated from the earlier period.

Profitability has improved more consistently. Q2 2026 gross profit rose to $1.9 billion, compared with $1.8 billion in Q2 2025, while operating income more than doubled sequentially from $216 million in Q1 2026 to $443 million. Compared with Q2 2025, operating income increased 19%. The operating margin expanded to approximately 4.2% in Q2 2026 from 3.7% a year earlier and 3.6% in Q2 2023. Net income reached $275 million, or $1.24 per diluted share, versus $224 million, or $0.96 per diluted share, in Q2 2025.

Cash generation remains a major strength. Operating cash flow increased to $431 million in Q2 2026 from $334 million in Q2 2025, more than covering the $76 million of capital spending. Approximate quarterly free cash flow was therefore $355 million. However, US Foods continues to use substantial cash for debt refinancing, repayments and share repurchases, and total debt rose to approximately $5.2 billion at the end of Q2 2026.

• Revenue growth continues: Q2 revenue increased from $8.5 billion in Q4 2022 to $10.5 billion in Q2 2026, with Q2 revenue rising in each year from 2023 through 2026.
• Margins are trending higher: Q2 2026 gross margin was approximately 18.2%, compared with 17.6% in Q2 2025 and 17.7% in Q2 2023. Operating margin also reached a recent high of approximately 4.2%.
• Net income and EPS improved: Q2 net income increased 23% year over year to $275 million, while diluted EPS rose to $1.24 from $0.96. The improvement occurred despite a relatively stable diluted share count.
• Operating cash flow remains robust: Quarterly operating cash flow was $431 million in Q2 2026, up from $334 million a year earlier and well above the $205 million reported in Q4 2022.
• Capital spending is supported by internal cash generation: Q2 operating cash flow covered capital expenditures by approximately 5.7 times, leaving an estimated $355 million of quarterly free cash flow before financing activities.
• Share repurchases are reducing the share base: Weighted average diluted shares declined to 221 million in Q2 2026 from 233 million in Q2 2025 and 251 million in Q2 2023, supporting per-share earnings growth.
• Working-capital demands fluctuate: Changes in operating assets and liabilities contributed $29 million of cash in Q1 2026 but consumed $5 million in Q2. Accounts receivable remains large at $2.2 billion, making collections and inventory management important to future cash flow.
• Restructuring costs have generally remained modest: Quarterly restructuring charges ranged from a $1 million benefit to an $8 million expense in the periods provided, suggesting limited but recurring operational-related charges.
• Debt remains elevated: Total short- and long-term debt reached approximately $5.2 billion in Q2 2026, up from $4.7 billion in Q2 2024 and $4.8 billion in Q2 2025. Net debt was approximately $5.2 billion after considering $56 million of cash.
• Liquidity has weakened: The current ratio declined to approximately 1.14 in Q2 2026 from 1.29 in Q2 2024 and 1.34 in Q2 2023. Cash was only $56 million, while accounts payable stood at $2.8 billion.

Overall, the statements point to a business with steadily improving operating performance and meaningful cash-generation capacity. The main risks for investors are the company’s substantial leverage, low cash balance and continued use of cash for buybacks while debt remains high. Sustaining margin expansion and converting higher earnings into recurring free cash flow will be important for supporting further shareholder returns.