PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited): 4
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statements of Operations and Comprehensive Income 5
Condensed Consolidated Statements of Changes in Stockholders’ Equity 6
Condensed Consolidated Statements of Cash Flows 8
Notes to Condensed Consolidated Financial Statements 9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 17
Item 3. Quantitative and Qualitative Disclosures about Market Risk 22
Item 4. Controls and Procedures 22
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 22
Item 1A. Risk Factors 22
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 22
Item 3. Defaults Upon Senior Securities 23
Item 4. Mine Safety Disclosures 23
Item 5. Other Information 23
Item 1. Condensed Consolidated Financial Statements (unaudited):
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited · Amounts in thousands, except share data
| Line item | June 27, 2025 | December 27, 2024 |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | ||
| Accounts receivable, net of allowances ( in 2025, in 2024) | ||
| Inventories | ||
| Prepaid expenses and other current assets | ||
| Total current assets | ||
| Property and equipment, net | ||
| Operating lease right-of-use assets | ||
| Goodwill | ||
| Intangible assets, net | ||
| Other assets | ||
| Total assets | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Accounts payable | ||
| Accrued liabilities | ||
| Short-term operating lease liabilities | ||
| Accrued compensation | ||
| Current portion of long-term debt | ||
| Total current liabilities | ||
| Long-term debt, net of current portion | ||
| Operating lease liabilities | ||
| Deferred taxes, net | ||
| Other liabilities | ||
| Total liabilities | ||
| Commitments and contingencies | ||
| Stockholders’ equity: | ||
| Preferred Stock - par value, shares authorized, shares issued and outstanding at June 27, 2025 and December 27, 2024, respectively | ||
| Common Stock - par value, shares authorized, and shares issued and outstanding at June 27, 2025 and December 27, 2024, respectively | ||
| Additional paid-in capital | ||
| Accumulated other comprehensive loss | () | () |
| Retained earnings | ||
| Total stockholders’ equity | ||
| Total liabilities and stockholders’ equity |
See accompanying notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Unaudited · Amounts in thousands, except share and per share amounts
| Line item | Thirteen Weeks EndedJune 27,2025 | Thirteen Weeks EndedJune 28,2024 | Twenty-Six Weeks EndedJune 27,2025 | Twenty-Six Weeks EndedJune 28,2024 |
|---|---|---|---|---|
| Net sales | ||||
| Cost of sales | ||||
| Gross profit | ||||
| Selling, general and administrative expenses | ||||
| Other operating expenses, net | ||||
| Operating income | ||||
| Interest expense | ||||
| Income before income taxes | ||||
| Provision for income tax expense | ||||
| Net income | ||||
| Other comprehensive income (loss): | ||||
| Foreign currency translation adjustments | () | () | ||
| Comprehensive income | ||||
| Net income per share: | ||||
| Basic | ||||
| Diluted | ||||
| Weighted average common shares outstanding: | ||||
| Basic | ||||
| Diluted |
See accompanying notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Unaudited · Amounts in thousands, except share amounts
| Line item | Common StockShares | Common StockAmount | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury StockShares | Treasury StockAmount | Total |
|---|---|---|---|---|---|---|---|---|
| Balance December 27, 2024 | 40,248,884 | $402 | $399,111 | $(3,807) | $141,940 | — | — | |
| Net income | — | — | — | — | 10,288 | — | — | |
| Stock compensation | — | — | 4,121 | — | — | — | — | |
| Warrants exercised | 9,479 | — | — | — | — | — | — | — |
| Cumulative translation adjustment | — | — | — | 177 | — | — | — | |
| Common stock issued under stock plans, net of shares surrendered to pay tax withholding | 416,028 | 4 | (10,596) | — | — | — | — | (10,592) |
| Balance March 28, 2025 | 40,674,391 | $406 | $392,636 | $(3,630) | $152,228 | — | — | |
| Net income | — | — | — | — | 21,241 | — | — | |
| Stock compensation | — | — | 4,223 | — | — | — | — | |
| Common stock repurchased | (159,982) | (1) | (1,554) | — | (8,448) | — | — | () |
| Warrants exercised | 3,860 | — | — | — | — | — | — | — |
| Cumulative translation adjustment | — | — | — | 842 | — | — | — | |
| Common stock issued under stock plans, net of shares surrendered to pay tax withholding | 219,526 | 2 | (227) | — | — | — | — | (225) |
| Balance June 27, 2025 | 40,737,795 | $407 | $395,078 | $(2,788) | $165,021 | — | — |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (continued)
Unaudited · Amounts in thousands, except share amounts
| Line item | Common StockShares | Common StockAmount | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury StockShares | Treasury StockAmount | Total |
|---|---|---|---|---|---|---|---|---|
| Balance December 29, 2023 | 39,665,796 | $396 | $356,157 | $(1,832) | $99,951 | — | — | |
| Net income | — | — | — | — | 1,931 | — | — | |
| Stock compensation | — | — | 3,590 | — | — | — | — | |
| Common stock repurchased | — | — | — | — | — | (134,553) | (5,004) | () |
| Warrants exercised | 32,454 | 1 | (1) | — | — | — | — | — |
| Cumulative translation adjustment | — | — | — | (323) | — | — | — | () |
| Common stock issued under stock plans, net of shares surrendered to pay tax withholding | 75,105 | 1 | (7,074) | — | — | — | — | (7,073) |
| Balance March 29, 2024 | 39,773,355 | $398 | $352,672 | $(2,155) | $101,882 | (134,553) | $(5,004) | |
| Net income | — | — | — | — | 15,524 | — | — | |
| Stock compensation | — | — | 3,946 | — | — | — | — | |
| Common stock repurchased | — | — | — | — | — | (129,523) | (5,000) | () |
| Warrants exercised | 1,850 | — | — | — | — | — | — | — |
| Cumulative translation adjustment | — | — | — | (129) | — | — | — | () |
| Common stock issued under stock plans, net of shares surrendered to pay tax withholding | 30,512 | — | (255) | — | — | — | — | (255) |
| Balance June 28, 2024 | 39,805,717 | $398 | $356,363 | $(2,284) | $117,406 | (264,076) | $(10,004) |
See accompanying notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited · Amounts in thousands
| Line item | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|
| Cash flows from operating activities: | ||
| Net income | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 25,332 | 18,771 |
| Amortization of intangible assets | ||
| Provision for allowance for credit losses | ||
| Provision for deferred income taxes | ||
| Loss on debt extinguishment | ||
| Stock compensation | ||
| Change in fair value of contingent earn-out liabilities | — | (615) |
| Non-cash interest and other operating activities | ||
| Changes in assets and liabilities, net of acquisitions: | ||
| Accounts receivable | ||
| Inventories | () | () |
| Prepaid expenses and other current assets | () | |
| Accounts payable, accrued liabilities and accrued compensation | ||
| Other assets and liabilities | () | () |
| Net cash provided by operating activities | ||
| Cash flows from investing activities: | ||
| Capital expenditures | () | () |
| Cash paid for acquisitions, net of cash acquired | () | |
| Net cash used in investing activities | () | () |
| Cash flows from financing activities: | ||
| Payment of debt and other financing obligations | () | () |
| Payment of finance leases | () | () |
| Common stock repurchases | () | () |
| Surrender of shares to pay withholding taxes | () | () |
| Cash paid for contingent earn-out liability | () | |
| Borrowings under asset-based loan and revolving credit facilities | ||
| Payments under asset-based loan facility | () | |
| Net cash used in financing activities | () | () |
| Effect of foreign currency on cash and cash equivalents | 112 | 37 |
| Net change in cash and cash equivalents | () | () |
| Cash and cash equivalents-beginning of period | ||
| Cash and cash equivalents-end of period |
See accompanying notes to the condensed consolidated financial statements.
THE CHEFS’ WAREHOUSE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in thousands, except share and per share amounts)
Note 1 - Operations and Basis of Presentation
Description of Business and Basis of Presentation
The Chefs’ Warehouse, Inc. (the “Company”), and its wholly-owned subsidiaries, is a distributor of specialty food and center-of-the-plate products in the United States, the Middle East and Canada. The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.
The Company’s quarterly periods end on the thirteenth Friday of each quarter. Every six to seven years, the Company will add a fourteenth week to its fourth quarter to more closely align its year-end to the calendar year.
Consolidation
The unaudited condensed consolidated financial statements include all the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Unaudited Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements and the related interim information contained within the notes to such unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules of the Securities and Exchange Commission (“SEC”) for interim information and quarterly reports on Form 10-Q. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 27, 2024 filed as part of the Company’s Annual Report on Form 10-K (the “2024 Form 10-K”).
The unaudited condensed consolidated financial statements appearing in this Form 10-Q have been prepared on the same basis as the audited consolidated financial statements included in the Company’s 2024 Form 10-K, and in the opinion of management, include all normal recurring adjustments that are necessary for the fair statement of the Company’s interim period results. The year-end consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by GAAP. Due to seasonal fluctuations and other factors, the results of operations for the thirteen and twenty-six weeks ended June 27, 2025 are not necessarily indicative of the results to be expected for the full year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management’s estimates.
Note 2 – Summary of Significant Accounting Policies
Revenue Recognition
The following table presents the Company’s net sales disaggregated by principal product category:
| Line item | Thirteen Weeks EndedJune 27, 2025 | Thirteen Weeks EndedJune 28, 2024 | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|---|---|
| Center-of-the-Plate | % | % | % | % |
| Specialty: | ||||
| Dry Goods | % | % | % | % |
| Produce | % | % | % | % |
| Pastry | % | % | % | % |
| Cheese and Charcuterie | % | % | % | % |
| Dairy and Eggs | % | % | % | % |
| Oils and Vinegars | % | % | % | % |
| Kitchen Supplies | % | % | % | % |
| Total Specialty | % | % | % | % |
| Total net sales | $100% | $100% | $100% | $100% |
The Company determines its product category classification based on how the Company currently markets its products to its customers. The Company’s definition of its principal product categories may differ from the way in which other companies present similar information. Net sales by product category includes estimates of product mix for certain locations that are not yet fully integrated into the Company’s sales reporting system as of the reporting date.
Food Processing Costs
Food processing costs include, but are not limited to, direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities. Food processing costs included in cost of sales were $16,537 and $18,277 for the thirteen weeks ended June 27, 2025 and June 28, 2024, respectively, and $34,789 and $37,347 for the twenty-six weeks ended June 27, 2025 and June 28, 2024, respectively.
Share Repurchases
The Company has a share repurchase program that is executed through purchases made from time to time either in the open market or through private market transactions. During fiscal 2025, shares purchased were retired and returned to the status of authorized and unissued shares. During the twenty-six weeks ended June 28, 2024, shares purchased under the program were recorded at cost and held as treasury stock. During the third quarter of fiscal 2024, these shares were retired and returned to the status of authorized and unissued shares.
Recent Accounting Pronouncements
Induced Conversions of Convertible Debt Instruments: In November 2024, the Financial Accounting Standards Board (“FASB”) issued guidance which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within that fiscal year. Early adoption is permitted. The impact of this guidance is dependent on future induced conversions, if any, of the Company’s convertible debt instruments.
Disaggregation of Income Statement Expenses: In November 2024, the FASB issued guidance to require disclosure in the notes to the financial statements of certain categories of expenses that are included on the face of the income statement, including purchases of inventory, employee compensation and depreciation and amortization, as well as additional disclosure about selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods for fiscal years beginning after December 15, 2027 on a prospective basis. Early adoption is permitted. The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements, which is limited to financial statement disclosures.
Improvements to Income Tax Disclosures: In December 2023, the FASB issued guidance designed to improve the transparency and usefulness of income tax disclosures. The amendments include provisions to address the consistency of the income tax rate reconciliation and requirement to disaggregate income taxes paid by jurisdiction. The new disclosure requirements will be effective in the Company's Annual Report on Form 10-K for the fiscal year ending December 26, 2025. The impact of the guidance is limited to financial statement disclosures.
Note 3 – Net Income per Share
Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share adjusts basic net income per share for all the potentially dilutive shares outstanding during the period. When the Company’s convertible notes are dilutive, interest on the convertible notes, net of tax, is added back to net income in order to calculate diluted earnings available to common shareholders.
The following table sets forth the computation of basic and diluted net income per common share:
| Line item | Thirteen Weeks EndedJune 27, 2025 | Thirteen Weeks EndedJune 28, 2024 | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|---|---|
| Net income per share: | ||||
| Basic | ||||
| Diluted | ||||
| Weighted average common shares: | ||||
| Basic | ||||
| Diluted |
Reconciliation of net income per common share:
| Line item | Thirteen Weeks EndedJune 27, 2025 | Thirteen Weeks EndedJune 28, 2024 | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|---|---|
| Numerator: | ||||
| Net income | ||||
| Add effect of dilutive securities | ||||
| Interest on convertible notes, net of tax | 1,226 | 1,322 | 2,451 | 2,628 |
| Net income available to common shareholders | $22,467 | $16,846 | $33,980 | $20,083 |
| Denominator: | ||||
| Weighted average basic common shares outstanding | ||||
| Dilutive effect of unvested common shares | ||||
| Dilutive effect of stock options and warrants | ||||
| Dilutive effect of convertible notes | ||||
| Weighted average diluted common shares outstanding |
Potentially dilutive securities that have been excluded from the calculation of diluted net income per common share because the effect is anti-dilutive are as follows:
| Line item | Thirteen Weeks EndedJune 27, 2025 | Thirteen Weeks EndedJune 28, 2024 | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|---|---|
| Restricted share awards (“RSAs”) and restricted stock units (“RSUs”) | 215,454 | 160,273 | 259,505 | 286,769 |
Note 4 – Fair Value Measurements
Assets and Liabilities Measured at Fair Value
The Company’s contingent earn-out liabilities are measured at fair value. These liabilities were estimated using Level 3 inputs. The fair value of contingent consideration was predominantly determined based on a probability-based approach which includes projected results, percentage probability of occurrence and the application of a discount rate to present value the payments. A significant change in projected results, discount rate, or probabilities of occurrence could result in a significantly higher or lower fair value measurement. Changes in the fair value of contingent earn-out liabilities are reflected in other operating expenses, net on the condensed consolidated statements of operations.
Contingent earn-out liabilities of as of June 27, 2025 and December 27, 2024 are reflected as accrued liabilities on the Company’s condensed consolidated balance sheets. Contingent earn-out liability payments in excess of the acquisition date fair value of the underlying contingent earn-out liability are classified as operating activities on the Company’s condensed consolidated statements of cash flows and all other such payments are classified as financing activities.
Fair Value of Financial Instruments
The carrying amounts reported in the Company’s condensed consolidated balance sheets for accounts receivable and accounts payable approximate fair value due to their immediate to short-term nature. The fair values of the asset-based loan facility and term loan approximated their book values as of June 27, 2025 and December 27, 2024, as these instruments had variable interest rates that reflected current market rates available to the Company and are classified as Level 2 fair value measurements.
The following table presents the carrying value and fair value of the Company’s convertible notes and its unsecured note issued in connection with the acquisition of Oakville Produce Partners, LLC (“GreenLeaf”) in fiscal 2023 (“GreenLeaf Note”). The fair value of the Company’s 2028 Convertible Senior Notes was based on bid/ask quotes as of or near the balance sheet date. The fair value of the GreenLeaf Note as of December 27, 2024 was determined based upon observable market prices of similar debt instruments.
| Line item | Fair Value Hierarchy | June 27, 2025Carrying Value | June 27, 2025Fair Value | December 27, 2024Carrying Value | December 27, 2024Fair Value |
|---|---|---|---|---|---|
| 2028 Convertible Senior Notes | Level 2 | $287,500 | $448,500 | $287,500 | $365,556 |
| GreenLeaf Note | Level 2 | — | — | $5,000 | $5,070 |
Note 5 – Inventories
Inventories consist primarily of finished product and are reflected net of adjustments for shrinkage, excess and obsolescence to approximate their net realizable value totaling and at June 27, 2025 and December 27, 2024, respectively.
Note 6 – Property and Equipment
Property and equipment is net of accumulated depreciation and amortization of and at June 27, 2025 and December 27, 2024, respectively.
Note 7 – Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill are presented as follows:
| Carrying amount as of December 27, 2024 | |
| Foreign currency translation | |
| Carrying amount as of June 27, 2025 |
Other intangible assets are net of accumulated amortization of and as of June 27, 2025 and December 27, 2024, respectively. Amortization expense for other intangibles was and for the thirteen weeks ended June 27, 2025 and June 28, 2024, respectively, and and for the twenty-six weeks ended June 27, 2025 and June 28, 2024, respectively.
Note 8 – Debt Obligations
Debt obligations as of June 27, 2025 and December 27, 2024 consisted of the following:
| Line item | Weighted Average Effective Interest Rate at June 27, 2025 | Maturity | June 27, 2025 | December 27, 2024 |
|---|---|---|---|---|
| Senior secured term loans | 8.57% | August 2029 | $253,500 | $260,000 |
| 2028 Convertible senior notes | 2.77% | December 2028 | 287,500 | 287,500 |
| Asset-based loan facility | 6.45% | March 2027 | 100,000 | 120,000 |
| Finance leases and other financing obligations | % | Various | ||
| Unamortized deferred costs | () | () | ||
| Total debt obligations | ||||
| Less: current installments | () | () | ||
| Total long-term debt |
Senior Secured Term Loan Credit Facility
In June 2025, the Company entered into an amendment (“Thirteenth Amendment”) to its senior secured term loan agreement, which reduced the interest rate spread on its senior secured term loan facility. Arrangement fees of $525 and third-party transaction costs of $49 were expensed as incurred during the thirteen and twenty-six weeks ended June 27, 2025 and included in interest expense and other operating expenses, respectively, within the Company’s condensed consolidated statements of operations.
In March 2024, the Company entered into an amendment (“Eleventh Amendment”) to its senior secured term loan agreement, which reduced the interest rate spread on its senior secured term loan facility. As a result of this amendment, the Company incurred a loss on debt extinguishment of $50 during the twenty-six weeks ended June 28, 2024, which represents the portion of unamortized deferred financing fees attributable to the lender that exited the loan syndicate. Arrangement fees of $775 and third-party transaction costs of $91 were expensed as incurred during the twenty-six weeks ended June 28, 2024 and included in interest expense and other operating expenses, respectively, within the Company’s condensed consolidated statements of operations.
Additionally, during the twenty-six weeks ended June 27, 2025 and June 28, 2024, the Company made voluntary principal prepayments totaling $5,000 and $8,000, respectively, towards the senior secured term loan. In connection with the prepayments, the Company wrote-off unamortized deferred financing fees of $150 during the thirteen and twenty-six weeks ended June 27, 2025 and $77 and $316 during the thirteen and twenty-six weeks ended June 28, 2024, respectively, which were included in interest expense within the Company’s condensed consolidated statements of operations.
GreenLeaf Unsecured Note
The GreenLeaf Note matured on April 20, 2025, and the Company made the final principal payment of $5,000 during the twenty-six weeks ended June 27, 2025. Previously, the Company made a scheduled principal payment of $5,000 towards the GreenLeaf Note during the twenty-six weeks ended June 28, 2024. The GreenLeaf Note is presented at December 27, 2024 under the caption “Finance leases and other financing obligations” in the table above.
Convertible Notes
The net carrying value of the Company’s 2028 convertible senior notes as of June 27, 2025 and December 27, 2024 was:
| June 27, 2025Principal Amount | June 27, 2025Unamortized Deferred Costs | June 27, 2025Net Amount | December 27, 2024Principal Amount | December 27, 2024Unamortized Deferred Costs | December 27, 2024Net Amount | |
|---|---|---|---|---|---|---|
| 2028 Convertible Notes | $287,500 | $(4,011) | $283,489 | $287,500 | $(4,584) | $282,916 |
The components of interest expense on the Company’s convertible notes were as follows:
| Line item | Thirteen Weeks EndedJune 27, 2025 | Thirteen Weeks EndedJune 28, 2024 | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|---|---|
| Coupon interest | $1,707 | $1,893 | $3,414 | $3,786 |
| Amortization of deferred costs and premium | 287 | 333 | 573 | 666 |
| Total interest | $1,994 | $2,226 | $3,987 | $4,452 |
As of June 27, 2025, the Company had reserved of its asset-based loan facility for the issuance of letters of credit and funds totaling $163,388 were available for borrowing.
Note 9 – Stockholders’ Equity
Equity Awards
The following table reflects the activity of RSAs and RSUs during the twenty-six weeks ended June 27, 2025:
| Line item | Time-BasedShares | Time-BasedWeighted Average Grant Date Fair Value | Performance-BasedShares | Performance-BasedWeighted Average Grant Date Fair Value | Market-BasedShares | Market-BasedWeighted Average Grant Date Fair Value |
|---|---|---|---|---|---|---|
| Unvested at December 27, 2024 | 483,284 | $35.68 | 881,500 | $34.79 | 303,036 | $30.04 |
| Granted | 209,677 | 63.51 | 740,294 | 63.03 | 35,101 | 61.16 |
| Vested | (199,890) | 35.27 | (164,601) | 32.47 | (162,351) | 29.12 |
| Forfeited | (14,118) | 42.21 | (149,880) | 33.52 | — | — |
| Unvested at June 27, 2025 | 478,953 | $47.84 | 1,307,313 | $51.22 | 175,786 | $37.10 |
The Company granted 985,072 RSAs and RSUs to its employees and directors at a weighted average grant date fair value of $63.07 during the twenty-six weeks ended June 27, 2025. These awards are a mix of time-, market- and performance-based grants that generally vest over a range of periods up to five years. The Company recognized expense on its RSAs and RSUs totaling $4,223 and $3,946 during the thirteen weeks ended June 27, 2025 and June 28, 2024, respectively, and $8,344 and $7,536 during the twenty-six weeks ended June 27, 2025 and June 28, 2024, respectively. share-based compensation expense has been capitalized.
At June 27, 2025, the total unrecognized compensation cost for unvested RSAs and RSUs was $33,100 and the weighted-average remaining period was approximately 1.9 years. Of this total, $19,669 related to awards with time-based vesting provisions and $13,431 related to awards with performance- and market-based vesting provisions. At June 27, 2025, the weighted-average remaining period for time-based vesting and performance-based vesting RSAs and RSUs were approximately 1.8 years and 2.1 years, respectively.
Performance-Based Restricted Share Units
In February 2025, the Company’s Board of Directors approved a grant of a total of 541,375 performance-based restricted share units (“PSUs”) to certain of the Company’s officers and employees under the Company’s 2019 Omnibus Equity Incentive Plan. The PSUs, which have a four-year term from the date of grant, are subject to service and performance conditions and will only become vested and payable to the extent that a qualifying change in control occurs during the four-year period. The fair value of these awards was $22,235, which was determined using a Monte Carlo simulation in order to model a range of possible future stock prices for the Company’s common stock. No share-based compensation expense has been recorded in fiscal 2025 for these PSUs.
Share Repurchase Program
In November 2023, the Company announced a two-year share repurchase program in an amount up to . The remaining share purchase authorization was at June 27, 2025. The Company is not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.
Note 10 – Income Taxes
The Company’s effective tax rate was % and % for the thirteen weeks ended June 27, 2025 and June 28, 2024, respectively, and % and % for the twenty-six weeks ended June 27, 2025 and June 28, 2024, respectively. The effective tax rate for the twenty-six weeks ended June 27, 2025 reflects the annual effective tax rate estimated for the full fiscal year, adjusted for a discrete item related to a tax benefit from the vesting of stock awards during the period. The effective tax rate otherwise varies from the 21% statutory rate primarily due to state taxes and permanent adjustments.
As a result of a five year carryback allowed under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the Company carried back its 2020 federal income tax loss, which resulted in a income tax refund receivable of as of June 27, 2025. The receivable is reflected in prepaid expenses and other current assets on the Company’s condensed consolidated balance sheet.
Subsequent to the end of the second quarter of fiscal 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025. The Company is in the process of assessing the impact of this legislation on its financial statements. The current expectation is that OBBBA will not have a material impact on the Company’s estimated annual effective tax rate in 2025, but will impact the split between current taxes payable and deferred taxes.
The Organization for Economic Co-operation and Development (the “OECD”) introduced a framework under Pillar Two which includes a global corporate minimum tax rate of 15%. Some jurisdictions in which the Company operates have started to enact laws implementing Pillar Two, including Canada which enacted the rule in June 2024. The Company is monitoring these developments and currently does not believe the rules effective in fiscal 2025 will have a material impact on its consolidated financial statements.
Note 11 – Segment Information
The Company’s business consists of operating segments: East, Midwest and West that aggregate into reportable segment, foodservice distribution, which is concentrated primarily in the United States.
The accounting policies of the foodservice distribution segment are the same as those for the consolidated company. The Company’s chief operating decision maker, who is the Company’s chief executive officer, uses gross profit as the measure of profit or loss to assess segment performance and allocate resources.
Consolidated gross profit, reported on the statement of operations and comprehensive income, is used to evaluate whether to reinvest profits into the foodservice distribution segment or into other parts of the entity, such as for acquisitions or to repurchase its common shares. Additionally, gross profit is used to monitor budget versus actual results and in competitive analysis by benchmarking to the Company’s competitors. Consolidated total assets, reported on the balance sheet, is the measure of segment assets.
The following table presents information about the Company’s foodservice distribution segment:
| Line item | Thirteen Weeks EndedJune 27, 2025 | Thirteen Weeks EndedJune 28, 2024 | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|---|---|
| Net sales | ||||
| Less: | ||||
| Cost of sales - non-production costs (1) | ||||
| Cost of sales - food processing costs (2)(3) | ||||
| Cost of sales | ||||
| Gross profit |
(1) Non-production costs represent the net purchase price paid for products sold, plus the cost of transportation necessary to bring the product to the Company’s distribution facilities. Non-production costs include purchase incentives and product purchase credits from certain vendors.
(2) Food processing costs include but are not limited to, direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities.
(3) Food processing costs included and of depreciation expense for the thirteen weeks ended June 27, 2025 and June 28, 2024, respectively and and for the twenty-six weeks ended June 27, 2025 and June 28, 2024, respectively.
Note 12 – Supplemental Disclosures of Cash Flow Information
| Line item | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|
| Supplemental cash flow disclosures: | ||
| Cash paid for income taxes | ||
| Cash paid for interest, net of cash received | ||
| Cash paid for amounts included in the measurement of lease liabilities: | ||
| Operating cash flows from operating leases | ||
| Operating cash flows from finance leases | 2,360 | 895 |
| ROU assets obtained in exchange for lease liabilities: | ||
| Operating leases | ||
| Finance leases |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to the accompanying condensed consolidated financial statements and footnotes to help provide an understanding of our financial condition, changes in our financial condition and results of operations. The following discussion should be read in conjunction with information included in our Annual Report on Form 10-K for the fiscal year ended December 27, 2024 (the “2024 Form 10-K”) filed with the SEC. Unless otherwise indicated, the terms “Company”, “Chefs’ Warehouse”, “we”, “us” and “our” refer to The Chefs’ Warehouse, Inc. and its subsidiaries. All dollar amounts included in the tables in the following discussion are presented in thousands.
Business Overview
We are a premier distributor of specialty foods in the leading culinary markets in the United States, the Middle East and Canada. We offer more than 88,000 stock-keeping units (“SKUs”), ranging from high-quality specialty foods and ingredients to basic ingredients and staples and center-of-the-plate proteins. We serve more than 50,000 core customer locations, primarily located in our 23 geographic markets across the United States, the Middle East and Canada, and the majority of our customers are independent restaurants and fine dining establishments. We also sell certain of our center-of-the-plate products directly to consumers through our Allen Brothers subsidiary.
RESULTS OF OPERATIONS
| Line item | Thirteen Weeks EndedJune 27, 2025 | Thirteen Weeks EndedJune 28, 2024 | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|---|---|
| Net sales | $1,034,906 | $954,704 | $1,985,654 | $1,829,192 |
| Cost of sales | 780,567 | 725,702 | 1,505,320 | 1,390,754 |
| Gross profit | 254,339 | 229,002 | 480,334 | 438,438 |
| Selling, general and administrative expenses | 213,750 | 194,834 | 416,513 | 385,155 |
| Other operating expenses, net | 373 | 301 | 870 | 3,413 |
| Operating income | 40,216 | 33,867 | 62,951 | 49,870 |
| Interest expense | 10,715 | 11,690 | 20,968 | 24,934 |
| Income before income taxes | 29,501 | 22,177 | 41,983 | 24,936 |
| Provision for income tax expense | 8,260 | 6,653 | 10,454 | 7,481 |
| Net income | $21,241 | $15,524 | $31,529 | $17,455 |
Thirteen Weeks Ended June 27, 2025 Compared to Thirteen Weeks Ended June 28, 2024
Net Sales
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Net sales | $1,034,906 | $954,704 | $80,202 | 8.4% |
Net sales increased due to organic growth as there was no impact from acquisitions. Case count increased approximately 3.5% in our specialty category. In addition, unique customers and placements in our specialty category increased 3.6% and 8.7%, respectively, compared to the prior year quarter. Pounds sold in our center-of-the-plate category decreased 4.0% compared to the prior year quarter, primarily due to our exit from a non-core commodity poultry program in fiscal 2025. Estimated inflation was 5.0% in our specialty category and 10.8% in our center-of-the-plate category compared to the prior year quarter.
Gross Profit
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Gross profit | $254,339 | $229,002 | $25,337 | 11.1% |
| Gross profit margin | 24.6% | 24.0% |
Gross profit dollars increased primarily as a result of sales growth and price inflation. Gross profit margin increased approximately 59 basis points. Gross profit margins increased 59 basis points in the Company’s specialty category and increased 56 basis points in the Company’s center-of-the-plate category.
Selling, General and Administrative Expenses
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Selling, general and administrative expenses | $213,750 | $194,834 | $18,916 | 9.7% |
| Percentage of net sales | 20.7% | 20.4% |
The increase in selling, general and administrative expenses was primarily due to higher costs associated with compensation and benefits to support sales growth, higher depreciation expense driven by facility and fleet investments and higher self-insurance expense. Our ratio of selling, general and administrative expenses to net sales increased 30 basis points due to the higher costs, partially offsetting our sales growth.
Other Operating Expenses, Net
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Other operating expenses, net | $373 | $301 | $72 | 23.9% |
Other operating expenses, net increased by $0.1 million primarily due to a higher loss on asset disposals in the current quarter compared to the prior year quarter, almost entirely offset by lower third-party deal costs incurred in connection with business acquisitions and financing arrangements.
Interest Expense
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Interest expense | $10,715 | $11,690 | $(975) | (8.3)% |
Interest expense decreased primarily due to lower aggregate principal amounts of debt outstanding and lower interest rates in the current quarter compared to the prior year quarter.
Provision for Income Tax Expense
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Provision for income tax expense | $8,260 | $6,653 | $1,607 | 24.2% |
| Effective tax rate | 28.0% | 30.0% |
The Company’s effective tax rate was 28.0% and 30.0% for the thirteen weeks ended June 27, 2025 and June 28, 2024, respectively. The effective tax rate for the thirteen weeks ended June 27, 2025 reflects the annual effective tax rate estimated for the full fiscal year.
Twenty-Six Weeks Ended June 27, 2025 Compared to Twenty-Six Weeks Ended June 28, 2024
Net Sales
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Net sales | $1,985,654 | $1,829,192 | $156,462 | 8.6% |
Net sales increased due to organic growth as there was no impact from acquisitions. Case count increased approximately 4.5% in our specialty category. In addition, unique customers and placements in our specialty category increased 4.0% and 8.2%, respectively, compared to the prior year period. Pounds sold in our center-of-the-plate category decreased 2.7% compared to the prior year period, primarily due to our exit from a non-core commodity poultry program in fiscal 2025. Estimated inflation was 4.9% in our specialty category and 8.4% in our center-of-the-plate category compared to the prior year period.
Gross Profit
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Gross profit | $480,334 | $438,438 | $41,896 | 9.6% |
| Gross profit margin | 24.2% | 24.0% |
Gross profit dollars increased primarily as a result of sales growth and price inflation. Gross profit margin increased approximately 22 basis points. Gross profit margins increased 34 basis points in the Company’s specialty category and decreased 11 basis points in the Company’s center-of-the-plate category.
Selling, General and Administrative Expenses
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Selling, general and administrative expenses | $416,513 | $385,155 | $31,358 | 8.1% |
| Percentage of net sales | 21.0% | 21.1% |
The increase in selling, general and administrative expenses was primarily due to higher costs associated with compensation and benefits to support sales growth, higher depreciation expense driven by facility and fleet investments and higher self-insurance expense. Our ratio of selling, general and administrative expenses to net sales decreased 10 basis points due to sales growth combined with certain benefits derived from our investments in our facility and distribution operations.
Other Operating Expenses, Net
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Other operating expenses, net | $870 | $3,413 | $(2,543) | (74.5)% |
The decrease in other operating expense, net was primarily due to lower employee severance charges during the twenty-six weeks ended June 27, 2025 compared to the prior year period.
Interest Expense
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Interest expense | $20,968 | $24,934 | $(3,966) | (15.9)% |
Interest expense decreased primarily due to lower aggregate principal amounts of debt outstanding and lower interest rates in the current period compared to the prior year.
Provision for Income Taxes
| Line item | 2025 | 2024 | $ Change | % Change |
|---|---|---|---|---|
| Provision for income tax expense | $10,454 | $7,481 | $2,973 | 39.7% |
| Effective tax rate | 24.9% | 30.0% |
The Company’s effective tax rate was 24.9% and 30.0% for the twenty-six weeks ended June 27, 2025 and June 28, 2024, respectively. The effective tax rate for the twenty-six weeks ended June 27, 2025 reflects the annual effective tax rate estimated for the full fiscal year, adjusted for a discrete item related to a tax benefit from the vesting of stock awards during the period.
LIQUIDITY AND CAPITAL RESOURCES
We finance our day-to-day operations and growth primarily with cash flows from operations, borrowings under our senior secured credit facilities and other indebtedness, operating leases, trade payables and equity financing.
Indebtedness
The following table presents selected financial information on our indebtedness:
| Line item | June 27, 2025 | December 27, 2024 |
|---|---|---|
| Senior secured term loan | $253,500 | $260,000 |
| Convertible senior notes | 287,500 | 287,500 |
| Borrowings outstanding on asset-based loan facility | 100,000 | 120,000 |
| Finance leases and other financing obligations | 80,398 | 52,673 |
Financing Transactions
In June 2025, we entered into an amendment to our senior secured term loan agreement, which reduced the interest rate spread by 50 basis points on our senior secured term loan facility. Additionally, during the twenty-six weeks ended June 27, 2025 and June 28, 2024, we made voluntary principal prepayments of $5.0 million and $8.0 million, respectively, towards the senior secured term loan.
The GreenLeaf Note matured on April 20, 2025, and we made the final principal payment of $5.0 million during the twenty-six weeks ended June 27, 2025. Previously, we made a scheduled principal payment of $5.0 million towards the GreenLeaf Note during the twenty-six weeks ended June 28, 2024. The GreenLeaf Note is presented at December 27, 2024 under the caption “Finance leases and other financing obligations” in the table above.
In November 2023, we announced a two-year share repurchase program in an amount up to $100.0 million, targeting $25.0 million to $100.0 million of share repurchases by the end of fiscal 2025. During the twenty-six weeks ended June 27, 2025, we repurchased 159,982 shares of our common stock at an average purchase price of $62.51 per share. During the twenty-six weeks ended June 28, 2024, we repurchased 264,076 shares of our common stock at an average purchase price of $37.86 per share. The share repurchases were funded by our available cash. The remaining share purchase authorization was $72.6 million at June 27, 2025. We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.
Liquidity
The following table presents selected financial information on liquidity:
| Line item | June 27, 2025 | December 27, 2024 |
|---|---|---|
| Cash and cash equivalents | $96,866 | $114,655 |
| Working capital(1), excluding cash and cash equivalents | 346,710 | 327,992 |
| Availability under asset-based loan facility | 163,388 | 146,674 |
(1) We define working capital as current assets less current liabilities.
We expect our capital expenditures, excluding cash paid for acquisitions, for fiscal 2025 will be approximately $40.0 million to $50.0 million. We believe our existing balances of cash and cash equivalents, working capital and the availability under our asset-based loan facility, are sufficient to satisfy our working capital needs, capital expenditures, debt service and other liquidity requirements associated with our current operations over the next twelve months.
Cash Flows
The following table presents selected financial information on cash flows:
| Line item | Twenty-Six Weeks EndedJune 27, 2025 | Twenty-Six Weeks EndedJune 28, 2024 |
|---|---|---|
| Net cash provided by operating activities | $64,069 | $60,226 |
| Net cash used in investing activities | (22,325) | (33,438) |
| Net cash used in financing activities | (59,645) | (38,363) |
Our cash provided by operating activities is predominately driven by net sales to our customers. Our cash used in operating activities is primarily driven by our payments to suppliers for our inventory, employee compensation, payments to support our facilities, our distribution network, interest on our indebtedness, payments to tax authorities and other general corporate expenditures. Net cash provided by operations was $64.1 million for the twenty-six weeks ended June 27, 2025 compared to $60.2 million for the twenty-six weeks ended June 28, 2024. The increase in cash provided by operating activities was primarily due to sales growth and lower cash paid for interest, partially offset by a strategic pull-forward of certain inventory purchases.
Net cash used in investing activities was $22.3 million for the twenty-six weeks ended June 27, 2025, driven by capital expenditures.
Net cash used in financing activities was $59.6 million for the twenty-six weeks ended June 27, 2025 driven by $20.0 million of payments under our revolving credit facilities, $11.5 million of payments of term loan debt, $11.6 million paid for shares surrendered to pay tax withholding related to the vesting of equity incentive plan awards, $10.0 million used to repurchase our common stock and $6.5 million of finance lease payments.
Recent Accounting Pronouncements
Information related to new accounting guidance is included in Note 1 “Operations and Basis of Presentation” to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Our exposure to interest rate market risk relates primarily to our long-term debt. As of June 27, 2025, we had aggregate indebtedness outstanding of $353.5 million that bore interest at variable rates. A 100 basis point increase in market interest rates would decrease our after-tax earnings by approximately $2.5 million per annum, holding other variables constant.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 27, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended June 27, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are involved in legal proceedings, claims and litigation arising out of the ordinary conduct of our business. Although we cannot assure the outcome, management presently believes that the result of such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our condensed consolidated financial statements, and no material amounts have been accrued in our condensed consolidated financial statements with respect to these matters.
ITEM 1A. RISK FACTORS
There have been no material changes to our risk factors as previously disclosed in Part I, Item 1A. included in our Annual Report on Form 10-K for the year ended December 27, 2024. In addition to the information contained herein, you should consider the risk factors disclosed in our Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
Issuer Purchases of Equity Securities
| Line item | Total Numberof Shares Repurchased(1) | Average Price Paid Per Share | Total Number of Shares Purchased as Partof Publicly Announced Plansor Programs(2) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plansor Programs (in thousands)(2) |
|---|---|---|---|---|
| March 29, 2025 to April 25, 2025 | — | — | — | $82,617 |
| April 26, 2025 to May 23, 2025 | 3,768 | 59.73 | — | 82,617 |
| May 24, 2025 to June 27, 2025 | 160,022 | 62.51 | 159,982 | 72,617 |
| Total | 163,790 | $62.44 | 159,982 | $72,617 |
(1) Represents withholding of our common stock during the thirteen weeks ended June 27, 2025 to satisfy tax withholding requirements related to restricted shares of our common stock awarded to our officers and key employees resulting from either elections under 83(b) of the Internal Revenue Code of 1986, as amended, or upon vesting of such awards, in addition to shares purchased as part of a publicly announced program.
(2) In November 2023, we announced a two-year share repurchase program in an amount up to $100.0 million targeting $25.0 million to $100.0 million of share repurchases by the end of fiscal 2025.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements
During the quarter covered by this report, none of our directors and officers (as defined in Rule 16a-1(f) of the Securities Exchange Act, of 1934, as amended) adopted, terminated or modified the following Rule 10b5-1 or non-Rule
10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K). Our directors and officers (as defined in Rule 16a-1(f) of the Securities Exchange Act, of 1934, as amended) previously adopted the following Rule 10b5-1 or non-Rule
10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K) which became effective during the quarter covered by this report:
Name Title Type of Trading Arrangement Security Action Date of Action Duration of Trading Arrangement Aggregate Number of Securities Covered
Timothy McCauley Chief Accounting Officer Rule 10b5-1 Plan to Sell Common Stock Adoption March 13, 2025 Up to July 12, 2027 25,000
Each trading arrangement reported above is subject to a number of conditions, including as to the price at which, and the timing of when, purchases and/or sales may occur, and it is possible that any trading arrangement may not result in the purchase and/or sale of any or all of the aggregate number of securities covered by such trading arrangement during the term of the trading arrangement. Additionally, these trading arrangements are subject to modification or termination in accordance with applicable law.