CHEF — The Chefs' Warehouse, Inc.

Summary of The Chefs' Warehouse Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Sales: Increased by 10.5% to $1.143 billion from $1.034 billion in Q4 2024.
• Organic Sales Growth: Up 9.7%, with specialty sales growing 6.4%.
• Gross Profit: Increased by 10.2% to $276.6 million; gross margin slightly decreased by 8 basis points to 24.2%.
• Adjusted EBITDA: Rose to $80.3 million from $68.2 million year-over-year.
• Net Income: GAAP net income was $21.7 million ($0.50 per diluted share), down from $23.9 million ($0.55 per diluted share) in Q4 2024.
• Adjusted Net Income: Increased to $29.9 million ($0.68 per diluted share) from $23.9 million ($0.55 per diluted share) in the prior year.
• Debt Metrics: Net debt was approximately $529.5 million, with a net debt to adjusted EBITDA ratio of 2.1 times.

2. Strategic Updates and Business Highlights

• Market Share Growth: Continued to gain market share with strong customer acquisition and unique item placements.
• Operational Efficiency: Improved gross profit dollars per route and adjusted EBITDA per employee increased by 13% year-over-year.
• Acquisitions: Italco Specialty Foods acquisition in Colorado was highlighted as a strategic investment.
• Facility Investments: Ongoing investments in distribution center capacity and facility consolidation were emphasized as key to future growth.

3. Forward Guidance and Outlook

• 2026 Guidance:
  • Estimated net sales between $4.35 billion and $4.45 billion.
  • Gross profit expected between $1.053 billion and $1.076 billion.
  • Adjusted EBITDA projected between $276 million and $286 million.
• Market Conditions: Management expressed cautious optimism, citing strong January performance despite February weather challenges.

4. Bad News, Challenges, or Points of Concern

• Gross Margin Pressure: Slight decline in gross profit margins due to inflationary pressures, particularly in the center of the plate category.
• Customer Growth Impact: Unique customer growth was affected by the attrition of non-core programs related to the Hardee's acquisition.
• Inflation Risks: Continued inflation in commodity prices, particularly in the center of the plate category, poses a risk to margins.

5. Notable Q&A Insights

• January Sales Performance: Despite seasonal challenges, January sales were strong, with February expected to bounce back after weather impacts.
• Operating Expense Leverage: Management indicated a focus on maintaining flat gross margins while achieving healthy operating expense leverage.
• M&A Environment: The management remains cautious but optimistic about potential acquisitions, emphasizing the importance of strategic fit and synergy.
• Salesforce Expansion: Continuous hiring for the sales team is a priority, with a focus on finding knowledgeable candidates to enhance customer engagement.

Overall, The Chefs' Warehouse demonstrated strong financial performance in Q4 2025, with a positive outlook for 2026 despite facing some inflationary pressures and operational challenges. The company remains committed to strategic growth through acquisitions and operational efficiencies.