Performance Food Group Q4 Earnings Call Highlights

Key Points

• Performance Food Group reported broad-based fiscal fourth-quarter growth: Net sales rose 6.4%, case volume increased 3.5%, net income climbed 23.4% to $162.3 million, and adjusted EBITDA grew 7.4% to $587.5 million.
• Foodservice gained share despite weak restaurant traffic, with independent restaurant case volume up 5.8%; the convenience segment delivered 10.4% EBITDA growth, while specialty sales increased 6.6%.
• Fiscal 2027 guidance calls for accelerating profitability: PFG projects $72.5 billion–$73 billion in sales and $2.125 billion–$2.225 billion in adjusted EBITDA, supported by customer wins, procurement savings, merger synergies and a 53rd fiscal week.

Performance Food Group NYSE: PFGC reported fiscal fourth-quarter growth in sales, gross profit and adjusted EBITDA, as the food distributor cited market-share gains across its foodservice, convenience and specialty businesses despite pressure on restaurant traffic and operating costs.

For the quarter, total net sales rose 6.4%, while total company case volume increased 3.5%. Gross profit increased 8.3%, including a $0.34 year-over-year increase in gross profit per case. Net income rose 23.4% to $162.3 million, and adjusted EBITDA increased 7.4% to $587.5 million, reaching the upper end of the range implied by the company’s prior full-year outlook.

Diluted earnings per share were $1.03, while adjusted diluted EPS rose 2.6% to $1.59. Chief Financial Officer Patrick Hatcher said the company’s effective tax rate was 26.8% in the quarter and is expected to return to its historical range of roughly 26% to 27% for fiscal 2027.

Foodservice independent growth outpaced restaurant traffic backdrop

CEO Scott McPherson said Performance Foodservice delivered 5.8% organic independent restaurant case growth in the fourth quarter and 5.9% growth for the full fiscal year. The result came as restaurant foot traffic was negative in every month of fiscal 2026, according to Black Box Intelligence, he said.

McPherson attributed the performance to new customer additions, wallet-share gains at existing accounts and investments in sales personnel, customer-facing technology and branded products. The company added independent accounts at roughly a 5% pace during the quarter, he said.

PFG-branded products represented about 54% of cases sold to independent restaurants during the quarter excluding Cheney Brothers, or just over 50% including Cheney. The company launched more than 580 branded stock-keeping units during fiscal 2026, bringing its portfolio to approximately 25,000 SKUs across more than 85 brand families.

Chain restaurant case volume declined slightly during the quarter, although McPherson said it continued to outperform reported restaurant traffic trends. He said the company expects similar chain-volume performance over the next two quarters before additional business tied to an expanded relationship with Jersey Mike’s begins entering its distribution network around the middle of fiscal 2027. PFG was awarded three of four regions included in the Jersey Mike’s request-for-proposal process, McPherson said.

Convenience segment delivered double-digit EBITDA growth

The convenience business, led by Core-Mark, remained a major source of profit growth. Segment EBITDA increased 10.4% in the fourth quarter, supported by gross-margin gains and operating-expense controls.

McPherson said Core-Mark grew sales across national, regional and independent customer accounts during fiscal 2026. National-store count increased 16%, supported by additions including Love’s Travel Stops & Country Stores and RaceTrac, driving 6.9% case growth in the national portfolio for the year.

The company also reported market-share gains in foodservice, candy, snacks and health-and-beauty categories. Those non-nicotine categories grew at a mid-single-digit rate in the fourth quarter, compared with an industry decline of nearly 6%, according to management.

Convenience case growth slowed to 3.4% in the fourth quarter from a higher rate in the prior quarter. McPherson said the deceleration reflected some competitive losses, higher gasoline prices and softer per-store case volume. He added that the company expects benefits from the Love’s and RaceTrac business to continue through the middle of fiscal 2027, while new wins and some customer losses are expected during the year.

Specialty sales accelerated, while cost pressures remain

The specialty segment, which includes Vistar, posted 6.6% sales growth in the fourth quarter. Management said sales momentum accelerated in each of the final three quarters of fiscal 2026, aided by new accounts and growth in vending, campus, travel and hospitality channels.

McPherson said specialty continued to face inflation in candy and snacks, a choppy consumer environment and elevated operating costs. The company expects those cost pressures to persist during the first half of fiscal 2027, although it expects continued sales momentum to support a stronger finish to the year.

Vistar also began shipping products to specialty grocery customers late in fiscal 2026 through collaboration with the foodservice organization. Management said the segment’s direct-to-business and consumer capabilities, fresh and frozen shipping, and delivery platform for smaller venues could provide additional long-term growth opportunities.

Fiscal 2027 guidance calls for EBITDA acceleration

PFG issued fiscal 2027 guidance for net sales of $72.5 billion to $73 billion and adjusted EBITDA of $2.125 billion to $2.225 billion. At the midpoints, the outlook represents 7.2% sales growth and 12.7% adjusted EBITDA growth. The guidance includes an estimated 2% benefit from a 53rd week in the fiscal fourth quarter.

• First-quarter fiscal 2027 net sales guidance: $17.9 billion to $18.1 billion.
• First-quarter adjusted EBITDA guidance: $510 million to $530 million.
• Expected companywide inflation for fiscal 2027: low- to mid-single digits.
• Full-year foodservice inflation assumption: about 2%.

Hatcher said the company expects EBITDA growth to accelerate as the year progresses, supported by customer wins, procurement efficiencies, reduced comparison pressure from costs associated with the Florence, South Carolina, facility, and continued merger-and-acquisition cost synergies. Management reiterated its expectation to meet or exceed the high end of its $120 million to $125 million procurement-synergy target by the end of fiscal 2028.

The company generated more than $1.4 billion in operating cash flow during fiscal 2026 and more than $1 billion in free cash flow. Capital expenditures totaled $384.1 million, and PFG expects fiscal 2027 capital spending to remain below its long-term target of 70 basis points of net revenue. Net debt ended the year just below the top of the company’s 2.5x to 3.5x leverage target range.

Management said it continues to evaluate strategic acquisitions, including the recently discussed Cash-Wa business, while also prioritizing debt reduction, growth investments and capacity expansion. Hatcher said interest expense is expected to remain relatively flat through most of fiscal 2027, with improvement anticipated toward the end of the year.

About Performance Food Group (NYSE:PFGC)

Performance Food Group Company NYSE: PFGC is a leading foodservice distribution company headquartered in Richmond, Virginia. The company operates through multiple segments, offering a broad range of products including fresh, frozen and dry foods, as well as non-food items such as supplies, paper goods and equipment. Performance Food Group serves a diverse customer base that encompasses independent and multi-unit restaurants, healthcare facilities, hospitality venues, schools, and other institutional customers.

Through its national broadline division, Performance Food Group provides next-day delivery of products sourced from both company-owned processing facilities and third-party suppliers.

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