Chefs' Warehouse (CHEF) has just posted another set of numbers for FY 2025, with Q3 revenue of US$1.0b and basic EPS of US$0.50, adding to a trailing twelve month picture that shows revenue of US$4.0b and EPS of US$1.94 as of Q3 2025. The company has seen revenue move from US$3.7b and EPS of US$1.26 on a trailing basis in Q3 2024 to US$4.0b and US$1.94 respectively in Q3 2025. Those higher earnings feed into a trailing net margin of 1.8% versus 1.3% a year earlier. This is setting the stage for investors to focus closely on how durable these margins look from here.

See our full analysis for Chefs' Warehouse.

With the latest figures on the table, the next step is to see how this earnings profile lines up with the most widely held narratives around Chefs' Warehouse and where the story might be shifting.

1.8% Net Margin On A US$4.0b Run Rate

• On a trailing basis, Chefs' Warehouse is earning US$74.6 million of net income on US$4.0b of revenue, which works out to a 1.8% net margin compared with 1.3% a year earlier.
• Analysts' consensus view ties a lot of their optimism to margin work, pointing to Texas integration, a shift away from low margin commodity products and more digital ordering. This sits against ongoing pressures from rising labor costs and supply chain volatility.
  • Supportive for the bullish side, trailing net income moved from US$47.6 million to US$74.6 million while revenue went from US$3.7b to US$4.0b, so earnings grew faster than sales even with margins still in the low single digits.
  • At the same time, consensus commentary flags higher compensation and self insurance costs and SG&A up 9.7% year on year, which helps explain why the margin is 1.8% rather than closer to the 2.5% level analysts expect in their forward assumptions.

Over the last year, that kind of incremental margin progress with room between 1.8% today and the 2.5% analysts are working with is exactly what bulls are debating against the cost pressures they see in the filings. 🐂 Chefs' Warehouse Bull Case

Earnings Growth Vs Slower Revenue Pace

• Trailing earnings grew 57.1% while revenue is expected to grow about 6.7% per year, so the recent EPS lift to US$1.94 on a trailing basis is being driven more by profitability than by very fast top line expansion.
• Consensus narrative expects premium products, cross selling and digital ordering to keep supporting growth, but even that constructive view acknowledges margin pressure from labor, acquisition integration and exposure to high cost urban markets.
  • Supportive of the bullish angle, analysts are forecasting around 13% annual earnings growth versus 6.7% revenue growth, which lines up with the recent step up in trailing EPS from US$1.26 to US$1.94 while revenue moved from US$3.7b to US$4.0b.
  • Challenging that enthusiasm, the same data highlights a five year earnings growth rate of 66.1% per year compared with 57.1% over the last year, so the pace that supported the early premium expansion story is already slower than its own history.

Premium Valuation With US$92.15 DCF Fair Value

• At a share price of US$64.15, Chefs' Warehouse trades on about 35x trailing earnings, above both the peer average of 30.4x and the US Consumer Retailing sector at 22.2x. A DCF fair value estimate of US$92.15 and an analyst target of US$77.13 both sit higher than today’s price.
• Bears focus on that premium P/E and the company’s higher debt level, while the more constructive narrative points to the combination of forecast 13% earnings growth and a valuation gap to both the DCF fair value and the analyst target.
  • For critics, paying 35x earnings when revenue growth is forecast at 6.7% per year and expected to trail the broader US market at 10.4% gives them a clear talking point that the stock is not priced like a slow grower.
  • On the other hand, supporters can point to the roughly US$28 gap between the US$64.15 share price and the US$92.15 DCF fair value, plus the smaller step up to the US$77.13 analyst target, as reasons they see valuation and earnings growth pulling in the same direction.

Skeptics who are watching that 35x P/E closely may want to see how the full bear case stacks up against the current earnings and valuation numbers. 🐻 Chefs' Warehouse Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Chefs' Warehouse on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Chefs' Warehouse research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Chefs' Warehouse pairs a low 1.8% net margin with a rich 35x P/E and higher debt, which leaves little room for comfort if conditions get tougher.

If that combination of thin profitability and premium pricing makes you cautious, consider shifting your attention toward 85 resilient stocks with low risk scores that aim to prioritise resilience and steadier downside protection.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.