The Chefs' Warehouse (CHEF) Q1 2025 earnings summary

Executive summary

• Net sales rose 8.7% year-over-year to $950.7 million in Q1 2025, driven by organic growth and increased specialty category activity, with GAAP net income of $10.3 million ($0.25 per diluted share), up from $1.9 million ($0.05 per share) in Q1 2024.

• Adjusted EBITDA increased to $47.5 million from $40.2 million year-over-year, and adjusted net income per share was $0.25, up from $0.15.

• Specialty sales rose 10.7% year-over-year, with organic specialty case count up 5.7%, unique customers up 4.5%, and placements up 7.7%.

• Digital platform adoption increased, with 58% of domestic specialty orders now online, up from 56% at year-end 2024.

• Attrition of low-margin, non-core customer business impacted sales by 0.7% year-over-year, mainly due to the exit of a commodity poultry program acquired in a previous acquisition.

Financial highlights

• Gross profit increased 7.9% to $226 million, with gross margin declining by 18 basis points to 23.8%.

• Operating income rose to $22.7 million from $16 million year-over-year.

• SG&A expenses increased 6.5% to $202.8 million, but as a percentage of sales, improved to 21.3% from 21.8%.

• Cash provided by operating activities was $49.6 million, up from $30.9 million in the prior year period.

• Adjusted operating expenses as a percentage of net sales were 18.8% for Q1 2025.

Outlook and guidance

• Full-year 2025 net sales are projected at $3.96–$4.04 billion, gross profit at $954–$976 million, and adjusted EBITDA at $234–$246 million.

• FY 2025 free cash flow expected at $60–100 million.

• Capital expenditures for fiscal 2025 are expected to be $40–50 million, excluding acquisitions.

• Guidance reflects conservatism due to macroeconomic uncertainty and strong prior-year comps, with only a slight increase to the lower end after Q1 strength.

• Management believes current liquidity, working capital, and credit availability are sufficient for operational and capital needs over the next twelve months.