Chefs’ Warehouse Q3 Adjusted EBITDA Rises 26% as Sales Grow 11%

The Chefs’ Warehouse reported stronger third-quarter profitability as sales growth, expanding gross profit and operating efficiencies lifted adjusted EBITDA faster than revenue. The specialty food distributor also issued full-year 2026 guidance and outlined the balance-sheet impact of a $675 million term loan completed after the quarter.

For the 13 weeks ended Sept. 25, 2026, net sales increased 11.2% year over year to $1.14 billion. Gross profit dollars rose 15.0%, outpacing a 12.1% increase in selling, general and administrative expenses and an 11.0% rise in adjusted operating expenses.

Adjusted EBITDA climbed 26.3% to $82.2 million from $65.1 million a year earlier. GAAP net income increased to $29.6 million from $19.1 million, while adjusted net income available to common shareholders rose to $30.6 million from $22.7 million. Diluted adjusted net income per share was $0.66, compared with $0.50 in the prior-year quarter.

Organic growth and operating efficiency

Organic sales grew 10.3% from the third quarter of 2025. Specialty sales increased 8.4%, supported by a 4.4% increase in unique customers, 7.2% growth in placements and a 6.1% rise in specialty cases. Center-of-the-plate pounds increased 6.6% on an organic basis.

The presentation also indicated that distribution and workforce productivity continued to improve. For the 12 months through the third quarter, gross profit dollars per route in the U.S. and Canada, excluding Chefs Middle East, increased 6.7% from 2025. Adjusted EBITDA per employee rose 15%, while adjusted operating expenses declined to 72.0% of gross profit from 74.3%, an improvement of 224 basis points.

The company attributed its operating focus to facility and regional route consolidations, reduced transfers and greater use of existing capacity. These initiatives form part of a broader strategy that includes pricing, sourcing, cross-selling, inventory management and technology-driven efficiency.

2026 outlook and cash generation

For fiscal 2026, The Chefs’ Warehouse expects net sales of $4.56 billion to $4.61 billion, gross profit of $1.13 billion to $1.14 billion and adjusted EBITDA of $317 million to $321 million. The company projects fourth-quarter diluted shares outstanding of 43 million to 43.5 million and currently expects a range of 42 million to 43 million for 2027 modeling purposes.

Year-to-date free cash flow, defined as operating cash flow less capital expenditures, totaled $115.7 million. Full-year free cash flow is estimated at $150 million to $180 million.

Net debt declined to $448.5 million at the end of the third quarter from $478.5 million in the preceding quarter, reflecting an increase in cash and equivalents to $164.7 million. Trailing-12-month adjusted EBITDA reached $310.7 million, reducing net debt leverage to 1.4 times from 1.6 times.

The company did not repurchase shares or make unscheduled debt payments during the quarter. Its repurchase authorization had $57.6 million remaining, with the timing of future buybacks dependent on share price, market conditions and free cash flow generation.

Refinancing to increase fourth-quarter interest expense

After the quarter, The Chefs’ Warehouse closed a $675 million Term Loan B on Oct. 15. Proceeds were used to repay its 2029 term loan and settle its 2028 convertible notes. The convertible settlement consisted of $437 million in cash and 2.67 million shares.

The transaction is expected to increase fourth-quarter interest expense by $4 million to $6 million compared with the previous run rate, depending on Term SOFR rates. An additional $2.7 million of arrangement fees will be recorded in interest expense during the quarter. The company expects fiscal 2026 interest expense of $45.5 million to $46.5 million.

Following the refinancing, year-end net debt is expected to be between $550 million and $600 million, with leverage of 1.7 to 2.0 times. Management’s target leverage range remains 1.5 to 2.5 times.

Looking to 2030, the company set goals of $6.0 billion to $6.5 billion in revenue and $450 million to $520 million in adjusted EBITDA, implying an adjusted EBITDA margin of 7.5% to 8.0%. The plan assumes annual revenue growth of 7% to 10%, primarily organic, with moderate acquisition activity of about 1% annually. Planned investment areas include distribution capacity in New England, Texas, the Midwest and Las Vegas, possible entry into new markets, and deployment of AI-based technology across pricing, sales, operations, customer experience and back-office functions.

The company cautioned that its results remain exposed to changes in consumer discretionary spending, food and fuel price volatility, inflation and deflation in a low-margin distribution business, acquisition and expansion risks, supply or distribution disruptions, adverse weather in concentrated markets and access to financing. Management also noted that actual results could differ materially from its projections because several underlying assumptions are outside the company’s control.