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Chefs' Warehouse (CHEF) Q2 Revenue Up 8%

Core Insights - Chefs' Warehouse reported strong Q2 2025 results, with GAAP revenue of $1,034.9 million and Non-GAAP earnings per share of $0.52, exceeding analyst expectations [1][2] - The company modestly raised its full-year financial guidance, reflecting confidence in ongoing growth initiatives [1][10] Financial Performance - Q2 2025 Non-GAAP EPS was $0.52, up 30% year-over-year from $0.40 in Q2 2024 [2] - Revenue increased by 8.4% year-over-year, from $954.7 million in Q2 2024 to $1,034.9 million in Q2 2025 [2] - Net income rose to $21.2 million, a 36.8% increase from $15.5 million in Q2 2024 [2] - Adjusted EBITDA reached $65.4 million, up 16.4% from $56.2 million in the previous year [2] - Gross profit improved to $254.3 million, an 11.1% increase from $229.0 million in Q2 2024 [2] Business Model and Strategy - Chefs' Warehouse specializes in distributing high-end specialty foods, including proteins and kitchen staples, to fine-dining restaurants, hotels, and gourmet retailers [3] - The company offers over 88,000 unique products sourced from more than 4,000 suppliers globally, focusing on artisan and family-owned businesses [3] - Recent strategic initiatives include expanding the product catalog, investing in digital ordering systems, and enhancing supplier partnerships [4] Growth Drivers - Organic revenue growth was driven by increased demand for specialty foods, with a 3.5% increase in organic case count [5] - Unique customer relationships and product placements grew by 3.6% and 8.7%, respectively [5] - The exit from a low-margin commodity poultry program led to a 4.0% decline in organic pounds sold in that category, aligning with the company's focus on profitability [6] Profitability and Efficiency - Gross profit margin expanded by 59 basis points to 24.6%, with improved operating income as a percentage of revenue [7] - SG&A expenses rose by 9.7%, but higher profits from product mix and pricing contributed to stronger overall margins [7] - The company accelerated its online ordering system adoption, now handling approximately 58% of specialty customer orders in the US, up from 48% [8] Future Outlook - Management raised FY2025 revenue guidance to between $4.0 billion and $4.06 billion, with gross profit expectations of $964 million to $979 million [10] - Adjusted EBITDA is projected to be between $240 million and $250 million, reflecting strength in core categories and digital initiatives [10] - Key metrics to monitor include margin trends, SG&A expense ratios, and management of the company's $690 million long-term debt [11]