Can Chefs' Warehouse Margin Expansion Continue Through 2026?
The Chefs' Warehouse, Inc. CHEF is benefiting from stronger operating leverage as higher sales volumes move through its distribution network and prior investments generate greater efficiency. Margin expansion has come from both gross profit improvement and operating expense leverage, making execution across pricing, procurement, logistics and capacity utilization central to profitability through the remainder of 2026.
The improvement was clear in the second quarter. Gross profit increased 15.2% year over year to $292.9 million, ahead of the 12.9% jump in net sales. Gross margin expanded approximately 49 basis points to 25.1%. Specialty gross margin improved 47 basis points, while center-of-the-plate gross margin increased 75 basis points. Adjusted EBITDA rose 34.6% to $88.1 million, with adjusted EBITDA margin up about 120 basis points year over year.
Expense leverage was another contributor. Adjusted operating expenses increased 8.4%, below the pace of sales growth, and represented 17.5% of revenues compared with 18.3% a year earlier. Adjusted operating expenses as a percentage of gross profit improved to 73.1% from 76.5%. Gross profit per route increased 5.6% on a trailing-12-month basis versus 2025, while adjusted EBITDA per employee rose 9%.
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The company has linked its margin progress to better utilization of invested capacity, facility and route consolidation, improving logistics, maturing sales teams and investments in pricing and procurement capabilities. Technology is also helping teams operate more efficiently. However, gross margin can fluctuate from quarter to quarter depending on product mix and inflation, so improvement may not be uniform.
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For 2026, CHEF expects net sales of $4.50 billion to $4.60 billion and adjusted EBITDA of $305 million to $315 million. The full-year outlook implies an adjusted EBITDA margin of about 6.8%, roughly 70 basis points above the prior year. With operating leverage already evident, the current guidance framework points to continued margin expansion in 2026, though seasonality, product mix and inflation can influence quarterly results.
This Zacks Rank #1 (Strong Buy) stock has surged 80% year to date against the industry’s decline of 4.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Laird Superfood, Inc. LSF, a consumer product company that develops, manufactures and markets plant-based, natural and functional food and beverage products, currently carries a Zacks Rank #2. LSF delivered an earnings surprise of 100% in the last reported quarter.
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This article originally published on Zacks Investment Research (zacks.com).
