Chefs’ Warehouse (NASDAQ:CHEF) executives said demand remained strong through the fourth quarter of 2025, supported by a “healthy environment” for the company’s core upscale casual to higher-end dining customers. Founder, Chairman and CEO Chris Pappas said the company continued to gain market share during the period, citing year-over-year organic volume growth, new item placements, and new customer acquisition.
Management also reiterated that comparisons are being affected by the elimination earlier in 2025 of two “non-core” programs in Texas that came with the 2023 Hardie’s acquisition. Pappas said the programs—one high-volume, low-dollar commodity poultry offering and a produce processing and packaging operation—represented about 1% of full-year revenue. Until those exits are fully lapped in the second quarter of 2026, the company is presenting certain price and volume metrics both as reported and adjusted to exclude the impact of the changes.
Fourth-quarter sales growth and operating metrics
Pappas highlighted several operating metrics from the company’s presentation, including:
- Organic net sales increased 9.7%.
- Organic specialty sales rose 6.4%, driven by unique placement growth of 4.2%, reported specialty case growth of 3.3%, and price inflation.
- Specialty case growth was 5.4% excluding the elimination of the Texas produce processing and packaging program.
- Unique customers increased 1.2% year over year; excluding the Texas commodity poultry attrition, growth would have been about 3.5%.
- Center-of-the-plate pounds were down 2.4% year over year; excluding the Texas commodity poultry exit, pounds growth would have been up 7.5%.
Management also pointed to continued efficiency gains. Pappas said trailing 12-month gross profit dollars per route in the fourth quarter of 2025 were 6.2% higher than full-year 2024 and 7.4% higher than 2023. Trailing 12-month adjusted EBITDA per employee increased 13% versus full-year 2024 and 27% versus 2023, while adjusted operating expenses as a percentage of gross profit dollars improved 176 basis points versus full-year 2024 and 200 basis points versus 2023.
Inflation, margins, and earnings results
Leddy said net inflation was 8.3% in the quarter, consisting of 3.4% inflation in the specialty category and 16.1% in the center-of-the-plate category versus the prior-year quarter. However, he noted reported inflation was affected by two factors: the Texas commodity poultry program attrition inflated the center-of-the-plate comparison, and specialty cross-sell related to further integration of Chefs’ Warehouse and Hardie’s elevated reported specialty inflation.
Excluding the commodity poultry attrition, Leddy said net inflation in center of the plate would have been 9.5% versus the reported 16.1%. Excluding the specialty cross-sell effect, specialty inflation would have been about 0.8% and overall company inflation about 4.3% year over year.
Gross profit increased 10.2% to $276.6 million from $251 million, while gross margin decreased about 8 basis points to 24.2%. Pappas said specialty gross margin improved about 45 basis points year over year, while center-of-the-plate margin declined about 50 basis points.
Selling, general and administrative expenses increased 8.9% to $225.2 million, which Leddy attributed primarily to higher compensation and benefits to support sales growth, higher depreciation from facility and fleet investments, and higher self-insurance-related costs. Adjusted operating expenses increased 7.4% and were 17.2% of net sales for the quarter.
Operating income was $43.2 million, down from $46.5 million a year ago. Leddy said the decline was driven primarily by a $10.5 million increase in other operating expenses, including an $8 million impairment charge related to a non-core customer relationship and a tangible asset, partially offset by higher gross profit.
GAAP net income was $21.7 million, or $0.50 per diluted share, compared to $23.9 million, or $0.55 per diluted share, in the prior-year quarter. On a non-GAAP basis, adjusted EBITDA was $80.3 million versus $68.2 million, while adjusted net income was $29.9 million, or $0.68 per diluted share, compared to $23.9 million, or $0.55 per diluted share, in the prior-year quarter.
Balance sheet, term loan repricing, and leverage
At quarter-end, Leddy said total liquidity was $280.5 million, consisting of $121 million in cash and $159.5 million of availability under the company’s asset-based lending facility.
He also said that subsequent to the end of the quarter, on Jan. 20, 2026, the company completed a repricing of its term loan maturing in 2029, reducing the fixed spread above SOFR from 3.0% to 2.5%.
As of Dec. 26, 2025, total net debt was approximately $529.5 million, and net debt to adjusted EBITDA was about 2.1x, according to management.
2026 outlook and early-year demand commentary
For full-year 2026, the company issued guidance calling for net sales of $4.35 billion to $4.45 billion, gross profit of $1.053 billion to $1.076 billion, and adjusted EBITDA of $276 million to $286 million.
Leddy added that for 2026 the company expects its convertible notes maturing in 2028 to be dilutive, with a fully diluted share count expected between approximately 46.0 million and 46.7 million shares.
During Q&A, management addressed demand trends following extreme winter weather in late January and early February. Pappas said January—typically the industry’s slowest month—was “very, very good” and “very strong.” He said the storm affected the first fiscal week of February, calling it a temporary impact, and noted the second week of February “bounced back really nicely.”
Asked about the implied flat gross margin at the midpoint of guidance and expected operating expense leverage, management said it tends to keep gross margin assumptions “fairly flattish” due to potential shifts in mix and category growth across markets. The company emphasized a focus on growing gross profit dollars faster than adjusted operating expenses, which it said supports operating leverage even amid potential margin variability.
Capital allocation, investments, and strategic priorities
Management said its capital allocation priorities for 2026 include maintaining “dry powder” for acquisitions, continuing to strengthen the balance sheet, and returning cash to shareholders opportunistically. Leddy said the company evaluates buybacks relative to other potential uses of capital such as acquisitions and deleveraging, and did not signal a “drastic” increase in buybacks. He noted the buyback program would require renewal, which management expects to address at an upcoming board meeting.
On investment priorities, Pappas cited continued focus on facilities and growth markets, including plans to move the Italco Food Products business in Colorado into a larger facility and invest to pursue the Denver market, which he described as an early-stage, long-term investment. He also said Texas remains an area of ongoing investment and synergy work, with multiple warehouses and efforts to further integrate the acquired businesses.
Pappas also provided an update on the company’s Middle East business, saying Chefs’ Warehouse has made significant investments in the region, that major capex from the prior year is largely complete, and that performance remains strong. Following a recent visit, he said he was pleased with the management team and the opportunity for “a very, very long road of positive growth.”
On technology and AI, Pappas said the company has long used advanced analytics—though it “used to just not call it AI”—and described these tools as embedded in daily operations to improve insights into customer behavior and support efficiency. He characterized the technology cycle as continually evolving and emphasized using tools to free sales teams to spend more time with customers.
In closing remarks, Pappas said he was proud of the company’s 2025 performance and encouraged by what the company saw in January and February, despite weather-related disruption early in February.
About Chefs’ Warehouse (NASDAQ:CHEF)
Chefs’ Warehouse, Inc is a specialty food distributor that supplies a broad range of high‐end ingredients and culinary products to professional chefs, restaurants, hotels, and other foodservice operators. Headquartered in Maspeth, New York, the company sources its portfolio from local artisans, boutique producers and leading global suppliers. Its core offerings include fresh and frozen proteins, specialty cuts of meat and seafood, handcrafted cheeses and charcuterie, seasonal produce, value‐added preparations, pantry staples and premium desserts and beverages.
The company operates a network of distribution centers strategically located in major metropolitan markets across North America.
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