Performance Food Group Company (PFGC) Earnings & Analysis

Latest quarter

Performance Food Group reported fourth-quarter revenue of $18.0 billion, below the consensus of $18.2 billion. Adjusted earnings per share were $1.59, also below the consensus of $1.62.

Revenue rose from $16.9 billion a year earlier. CFO Patrick Hatcher said sales grew across all three segments, with Foodservice contributing in particular. He said total company case volume increased 3.5% in the quarter, while product cost inflation was approximately 4.7%.

The company reported diluted earnings per share of $1.03, compared with $0.84 a year earlier. Gross margin rose to 12.0% from 11.8%, and operating margin rose to 1.80% from 1.58%. Hatcher attributed higher gross profit to customer and product mix, procurement initiatives and growth of the company’s brands.

Performance Food Group reported free cash flow of $225.4 million for the quarter, compared with $212.6 million a year earlier. For the full fiscal year, its filing attributed increased operating cash flow largely to higher cash-based operating income and income tax refunds, partly offset by advance inventory purchases.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Scott McPherson said Foodservice’s organic independent restaurant case volume grew 5.8% in the fourth quarter as the company added accounts and gained business from existing customers. He said its brands represented approximately 54% of cases sold to independent restaurants, excluding Cheney Brothers. In response to a question about sales penetration, McPherson credited salespeople and customer-facing technology for helping customers select more items, but said net new accounts remained the main driver of market share gains.

McPherson said chain restaurant case volume declined slightly in the quarter as the company moved past the onboarding of new accounts a year earlier. He expected similar results over the next two quarters, followed by additional business from an expanded Jersey Mike’s relationship in the second half of fiscal 2027.

In Convenience, McPherson said national account wins, including Loves and Racetrack, helped drive case growth. He told analysts that the company had also lost some customers over pricing, saying: “We have had a couple of competitive losses that I would say were just priced at a level where we weren’t going to stay there.”

Hatcher said the company experienced fourth-quarter deflation in cheese, poultry and eggs, alongside beef inflation. He attributed gross profit improvement to mix, procurement and brand growth. McPherson said negotiations with suppliers gave the company visibility into when procurement benefits would flow through its income statement.

On costs, Hatcher said higher diesel expense had a net impact of approximately $16 million in the fourth quarter. He said PFG entered a diesel fuel swap in early July for part of its exposure not covered by surcharges. Asked about the year ahead, he expected a similar or slightly smaller fuel headwind in the first quarter, with relief as the company moves through the year.

Hatcher said PFG invested $384.1 million in capital expenditures during fiscal 2026. McPherson said the company was also investing in sales technology, transportation and warehouse infrastructure.

Guidance

Hatcher expected quarterly adjusted EBITDA growth to accelerate through fiscal 2027, helped by new business, procurement efficiencies and comparisons with earlier operating expenses. He said the fuel headwind could become neutral or possibly a tailwind as the year progresses. McPherson expected Specialty’s operating cost pressures to persist in the first half, alongside continued sales momentum.