Chefs’ Warehouse Q3'25 Earnings: Strong Sales Momentum and Raised 2025 Outlook
- Hardik Shah
- Oct 29
- 3 min read
TL;DR
Revenue Strength: Net sales rose 9.6% to $1.02B, driven by specialty growth and new customer wins.
Margin Trends: Gross margin improved to 24.2%, with gains in specialty offsetting protein pressures.
Forward Outlook: Management raised full-year guidance, citing robust holiday demand and expansion momentum.
Business Overview
The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) is a leading distributor of specialty food products across the United States, the Middle East, and Canada, serving over 50,000 customers. Its portfolio exceeds 88,000 premium items, catering to independent restaurants, hotels, caterers, cruise lines, and specialty retailers. The company differentiates itself from broadline peers by focusing on chef-driven, high-touch service and premium “center-of-the-plate” offerings such as meats, seafood, and artisanal goods.
Chefs' Warehouse Q3'25 Earnings
For the third quarter ended September 26, 2025, net sales increased 9.6% to $1.02 billion, reflecting 7.7% growth in specialty sales and continued market share gains.
Organic performance: Specialty case count grew 3.2%, and unique item placements rose 5.3%.
Profitability:
Gross profit rose 10% to $247.2 million, with margin improving by 7 basis points to 24.2%.
Operating income grew 22% to $38.9 million, representing 3.8% of sales.
GAAP net income was $19.1 million ($0.44 per diluted share), up from $14.1 million.
Adjusted EBITDA increased 19.5% to $65.1 million, while adjusted EPS reached $0.50, up from $0.36.
“Business and demand trends improved sequentially through the third quarter and momentum continued into October,” said Christopher Pappas, Chairman and CEO. “Our divisions delivered strong revenue and profit growth while increasing relevance with chefs and operators.”
Forward Guidance
Given strong performance through October, Chefs’ Warehouse raised its 2025 full-year guidance:
Net sales: $4.085B–$4.115B
Gross profit: $987M–$995M
Adjusted EBITDA: $247M–$253M
“We feel comfortable at the upper end of our revised guidance range, implying 7–7.5% revenue growth in Q4 with healthy 10% EBITDA flow-through.” - Jim Leffy, CFO
Risks & Opportunities
Tailwinds: Holiday demand strength, improved Middle East operations, and integration of Italco Food Products (Denver).
Risks: Inflation in beef and poultry categories, macro uncertainty, and geopolitical volatility in overseas markets.
Operational Performance
Specialty Category: Margins rose 59 bps year-over-year, supported by premium mix and disciplined pricing.
Center-of-the-Plate Proteins: Volume fell 1.1% year-over-year due to the exit of a commodity poultry program, but excluding this, volume rose 9.6%.
Efficiency Gains: Adjusted operating expenses were 17.8% of net sales, reflecting improved cost discipline.
Facility & Fleet Investments: Contributed to higher depreciation but supported capacity growth.
Pappas added:
“We’re cautiously optimistic heading into the holiday season. Strong customer bookings and a resilient high-end dining segment point to a solid finish to the year.”
Market Insights
Chefs’ Warehouse continues to gain market share amid a fragmented distribution landscape. CEO Pappas highlighted steady double-digit growth in newer markets like Texas, Florida, and the Middle East, while mature markets such as New York and California maintain mid-single-digit growth.
The company benefits from exposure to fine dining and boutique establishments, which remain more resilient than mass-market segments. Inflation in proteins, particularly beef, remains elevated but is being effectively managed through pricing discipline and premium positioning.
Consumer Behavior & Sentiment
Chefs’ Warehouse caters to premium chefs and foodservice operators rather than mass consumers. Demand resilience stems from:
Strong tourism and domestic dining activity across key cities.
Stable bookings and robust holiday season expectations.
Continued expansion of customer base and product penetration across income tiers and dining formats.
Digital adoption now exceeds 60%, enhancing salesforce efficiency and deepening customer engagement through data-driven insights.
Strategic Initiatives
M&A: Completed the acquisition of Italco Food Products, a Denver-based specialty distributor, expanding presence in the Rockies and resort markets.
Technology: Ongoing investments in digital tools and AI-driven sales enablement to improve customer targeting and route efficiency.
Geographic Expansion: Building capacity in Qatar, Oman, and Dubai to meet rising Middle East demand.
Talent & Training: Enhanced salesforce education and performance tracking to sustain premium service standards.
Capital Allocation
Liquidity: $224.6M total liquidity, including $65M in cash and $159.5M availability under the revolving facility.
Net Debt: $575M, equating to 2.3× net debt-to-EBITDA, providing flexibility for strategic investments and selective acquisitions.
Share Repurchases: $15M in buybacks year-to-date; no dividend program announced.
The Bottom Line
Chefs’ Warehouse continues to outperform industry peers, leveraging a boutique distribution model focused on premium, chef-led accounts. Strong Q3 execution, disciplined expense control, and raised guidance signal confidence in sustained demand and pricing power heading into 2026.
Investors should watch:
Integration of Italco and potential new M&A in high-growth geographies.
Margin resilience amid protein inflation.
Continued share gains from consolidation among broadline competitors.
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