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Chefs' Warehouse Earnings: Q1 2025 Delivers Growth Amid Tariff Uncertainty

  • Writer: Hardik Shah
    Hardik Shah
  • May 3
  • 3 min read
A chef serving up a good food

TLDR

  • Strong Sales Growth: Net sales rose 8.7% to $950.7M, driven by specialty product momentum and digital channel expansion.

  • Margin Resilience Despite Headwinds: Adjusted EBITDA increased 18% to $47.5M, as operating leverage offset inflation and mix challenges.

  • Strategic Flexibility on Tariffs: Management confident in diversified sourcing and ability to pass through or mitigate tariff-related costs.


Business Overview


Building on its record Q4 2024 revenue — as detailed in our previous update — The Chefs’ Warehouse is carrying strong momentum into 2025 with solid top-line growth and expanding digital reach.

The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) is a leading specialty food distributor serving 50,000+ locations across the U.S., Middle East, and Canada. Its extensive portfolio of 88,000+ products caters to fine dining restaurants, hotels, caterers, casinos, and gourmet retailers through domestic, international, and specialty channels.


Chefs' Warehouse Q1'25 Earnings


  • Revenue: Net sales rose 8.7% year-over-year to $950.7 million.

  • Net Income: GAAP net income increased to $10.3 million, or $0.25 per diluted share, compared to $1.9 million, or $0.05, a year ago.

  • Adjusted EBITDA: Grew 18% to $47.5 million from $40.2 million last year.

  • Gross Profit Margin: Slight decline of 18 basis points to 23.8%, pressured by product mix and inflation in commodities like chocolate and eggs.

  • SG&A: Expenses increased by 6.5%, primarily from compensation, facility investments, and distribution costs.


Forward Guidance


  • FY 2025 Targets:

    • Net Sales: $3.96B to $4.04B

    • Gross Profit: $954M to $976M

    • Adjusted EBITDA: $234M to $246M


  • Guidance reflects cautious optimism, balancing Q1 outperformance with macroeconomic and tariff-related uncertainties.


Operational Performance


  • Specialty Category Strength: Specialty product sales were up 10.7%, fueled by customer growth (+4.5%) and placements (+7.7%).

  • Center-of-the-Plate Adjustments: Organic pounds sold declined 1.3%, largely due to intentional attrition of low-margin, non-core commodity poultry accounts.

  • Digital Channel Momentum: Online ordering reached 58% penetration across domestic specialty locations, up from 48% at the end of 2023, driving efficiency and profitability.

  • Operational Leverage: Operating income improved to $22.7 million, or 2.4% of sales, from $16.0 million (1.7%) a year ago.


"Our digital investments continue to pay off — ~58% of our domestic specialty orders are now online, up from 48% just a year ago." — Chris Pappas, CEO

Market Insights


  • Tariffs and Inflation: Management views tariffs as manageable, citing diversified sourcing and supplier cooperation. Pricing power remains intact, with ability to pass costs or shift sourcing as needed.

  • Stable Demand Outlook: Despite macro uncertainties and isolated softness (e.g. Vegas weekdays), demand remains robust in key markets and segments including suburban dining and cruise lines.

  • Restaurant Formation: No slowdown observed in new restaurant openings, particularly in growth markets like Texas and Florida.


"We feel okay about tariffs… our category management team has gotten ahead, and we have alternative sources." — Chris Pappas, CEO

Strategic Initiatives


  • Supply Chain Optimization: Strategic exits from non-core, low-margin customers enhance route efficiency and long-term profitability.

  • Digital Transformation: Continued rollout of mobile and web ordering platforms domestically and internationally (including Middle East).

  • Facility Expansion: Northwest and New Jersey/Philadelphia projects are on track with minimal tariff impact expected on construction costs.

  • SKU Rationalization & Efficiency: Leveraging AI and data analytics to manage product offerings, streamline warehousing, and optimize distribution.


"We don't fire customers, but we're a for-profit business — clunky, low-margin business goes away over time." — Chris Pappas, CEO

Capital Allocation

  • Debt & Liquidity: Total liquidity stood at $278.9 million. Net debt to adjusted EBITDA at 2.4x, providing flexibility for growth and investment.

  • Shareholder Returns: No updates on dividends or buybacks; focus remains on reinvestment and maintaining a strong balance sheet.


The Bottom Line


Chefs' Warehouse delivered solid Q1 2025 results, driven by specialty product strength, operational leverage, and digital platform expansion. Despite tariff and macroeconomic headwinds, management remains confident in its diversified supply chain, pricing flexibility, and resilient end-markets. Strategic exits from low-margin accounts and ongoing facility and technology investments set the stage for continued profitable growth through 2025.


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