Performance Food Group Co (NYSE: PFGC)

$100.73 ▲ +1.07 (+1.07%)

As of Jun 10, 2026 04:00 PM

Sector: Consumer Defensive Industry: Food Distribution CIK: 0001618673

Market Cap 15.69 Bn

P/E 47.51

P/S 0.30

Div. Yield 0.00

ROIC (Qtr) 0.00

Total Debt (Qtr) 5.12 Bn

Revenue Growth (1y) (Qtr) 6.43

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About

Performance Food Group Company markets and distributes more than 250,000 food and food related products to customers across North America from 155 distribution centers to over 300,000 customer locations in the food away from home industry. The company employs approximately 43,000 associates who serve a diverse mix of customers including independent and chain restaurants, schools, business and industry locations, hospitals, vending distributors, office coffee service distributors, retailers, convenience stores, and theaters. The company generates...

Performance Food Group Company markets and distributes more than 250,000 food and food related products to customers across North America from 155 distribution centers to over 300,000 customer locations in the food away from home industry. The company employs approximately 43,000 associates who serve a diverse mix of customers including independent and chain restaurants, schools, business and industry locations, hospitals, vending distributors, office coffee service distributors, retailers, convenience stores, and theaters.

The company generates revenue primarily through the sale of food and food related products and the provision of value added services such as product selection, procurement, menu development, and operational strategy. Revenue is derived from distributing products to customers in the food away from home sector and related channels including convenience stores, vending operators, and institutional accounts.

The company operates through the following segments:

• Foodservice offers a broad line of products including custom cut meat and seafood as well as products tailored to specific menu requirements and operates a network of 89 distribution centers each managed by a local business team that understands regional market needs and empowers decision making on service delivery. The segment serves independent restaurants chain restaurants and other institutional food away from home locations. Independent customers include family dining bar and grill pizza and Italian Hispanic and fast casual establishments. Chain customers consist of multi unit restaurants with five or more locations such as fine dining family and casual dining fast casual quick serve restaurants hotels healthcare facilities and other multi unit institutional accounts. The segment also provides value added services in product selection procurement menu development and operational strategy and distributes a broad assortment ranging from center of the plate items such as beef pork poultry and seafood to frozen foods refrigerated products dry groceries disposables cleaning and kitchen supplies and related products. Sales are derived from both nationally branded products and the company's proprietary Performance Brands which typically generate higher gross profit per case.

• Convenience is one of the largest wholesale consumer products and foodservice distributors in the convenience retail industry offering a full range of products marketing programs and technology solutions to customer locations such as traditional convenience stores drug stores mass merchants grocery stores liquor stores and other specialty and small format stores that carry convenience products in the United States and Canada. The product offering includes cigarettes and other nicotine products candy snacks food including fresh products groceries dairy bread beverages general merchandise and health and beauty care products. Convenience operates a network of 39 distribution centers in the United States and Canada excluding two distribution facilities it operates as a third party logistics provider with 35 centers located in the United States and four located in Canada.

• Specialty formerly known as Vistar is a leading national distributor of candy snacks beverages and other food items operating a network of 27 distribution centers. The segment has built upon the national platform to broaden the channels served delivering to vending and office coffee service distributors as well as direct to customer locations including theaters and retail locations. Specialty also provides pick and pack capabilities using small parcel third party carriers to deliver direct to consumers for supplier partners and to customers whose order sizes are too small to be effectively served by the truck network. This capability combined with extensive inventory allows the segment to serve many distinct customer types and enhances the ability to procure a broad variety of products for customers.

The foodservice distribution industry is highly competitive with numerous national regional local and specialty distributors. Some competitors may possess greater scale and financial resources in certain markets while smaller distributors often join purchasing cooperatives and marketing groups to improve geographic reach private label offerings purchasing power cost efficiencies and to assemble delivery networks for national or multi regional distribution. The company does not typically have exclusive service agreements with customers who may switch to other distributors offering lower prices differentiated products or perceived superior service. Most purchasing decisions in the foodservice business are based on product quality and price and the distributor's ability to fill orders completely and accurately and to provide timely deliveries. Performance Food Group Company believes its competitive advantage stems from economies of scale in purchasing and procurement which enable it to offer a broad variety of products including proprietary Performance Brands at competitive prices. The company also benefits from extensive geographic coverage supply chain efficiency including an inbound logistics backhaul network best practices in warehousing transportation and risk management the ability to leverage scale in purchases of items and services not for resale such as trucks construction materials insurance banking relationships healthcare and material handling equipment and the ability to optimize its network so that customers are served from the most efficient distribution centers minimizing delivery cost. These efficiencies and economies of scale provide opportunities to improve operating margins.

The company serves a diverse customer base that includes independent and chain restaurants schools business and industry locations hospitals vending distributors office coffee service distributors retailers convenience stores theaters drug stores mass merchants grocery stores liquor stores and other specialty and small format outlets. No single customer accounted for ten percent or more of consolidated net sales in fiscal 2025 fiscal 2024 or fiscal 2023.

Investment thesis

Bull case

Performance Food Group’s second‑quarter net sales climbed 5.2 percent, a gain that was sustained across all three operating segments, signaling that the company’s diversified distribution model is still resonating with customers. The convenience arm’s 6.1 percent sales growth is particularly compelling, driven by the recent addition of more than 500 Love’s outlets and 600 racetrack locations, each of which brings higher‑margin foodservice traffic into the convenience network. These new accounts have already contributed materially to the segment’s 13.4 percent increase in adjusted EBITDA, and the company’s cost discipline suggests the margin upside will continue as the new distribution centers reach full capacity.
Organic independent case growth reached 5.3 percent, a figure that reflects robust market share gains in key categories such as chicken, burger, barbecue, and seafood. Management emphasized that independent account expansion has consistently outpaced chain activity, reinforcing the company’s positioning as the preferred partner for independent restaurants that value tailored service and high‑quality private‑brand products. The continued emphasis on independent growth aligns with a broader industry shift toward smaller, independent foodservice operators, which tend to offer higher profitability and less price sensitivity.
The specialty segment’s adjusted EBITDA margin expanded by 40 basis points despite a 30 percent decline in theater sales. This margin improvement demonstrates that the company’s productivity initiatives—such as inventory optimization and vendor consolidation—are mitigating the impact of sector downturns. As the theatrical distribution landscape recovers, specialty is likely to regain a larger share of its former revenue mix while maintaining the higher profitability achieved during the quarter.
Gross profit per case rose $0.20 from the previous year, underscoring the company’s success in managing cost inflation while sustaining selling price growth. Management reported total cost inflation at 4.5 percent, which is modest relative to industry averages, and a favorable cheese and poultry deflation offset by beef inflation has helped preserve gross margin levels. The company’s historical ability to shift pricing and mix in response to commodity volatility is a key competitive advantage in the low‑margin distribution space.
Operating cash flow grew $77 million year over year, providing a substantial free cash flow cushion of $264 million. The firm’s focus on debt reduction is evident in its choice to prioritize capital allocation toward the repayment of maturing debt rather than share repurchases. This strategy preserves liquidity for future acquisitions and infrastructure investments, ensuring that PFG can continue to capitalize on growth opportunities while maintaining a healthy balance sheet.

Performance Food Group’s second‑quarter net sales climbed 5.2 percent, a gain that was sustained across all three operating segments, signaling that the company’s diversified distribution model is still resonating with customers. The convenience arm’s 6.1 percent sales growth is particularly compelling, driven by the recent addition of more than 500 Love’s outlets and 600 racetrack locations, each of which brings higher‑margin foodservice traffic into the convenience network. These new accounts have already contributed materially to the segment’s 13.4 percent increase in adjusted EBITDA, and the company’s cost discipline suggests the margin upside will continue as the new distribution centers reach full capacity.
Organic independent case growth reached 5.3 percent, a figure that reflects robust market share gains in key categories such as chicken, burger, barbecue, and seafood. Management emphasized that independent account expansion has consistently outpaced chain activity, reinforcing the company’s positioning as the preferred partner for independent restaurants that value tailored service and high‑quality private‑brand products. The continued emphasis on independent growth aligns with a broader industry shift toward smaller, independent foodservice operators, which tend to offer higher profitability and less price sensitivity.
The specialty segment’s adjusted EBITDA margin expanded by 40 basis points despite a 30 percent decline in theater sales. This margin improvement demonstrates that the company’s productivity initiatives—such as inventory optimization and vendor consolidation—are mitigating the impact of sector downturns. As the theatrical distribution landscape recovers, specialty is likely to regain a larger share of its former revenue mix while maintaining the higher profitability achieved during the quarter.
Gross profit per case rose $0.20 from the previous year, underscoring the company’s success in managing cost inflation while sustaining selling price growth. Management reported total cost inflation at 4.5 percent, which is modest relative to industry averages, and a favorable cheese and poultry deflation offset by beef inflation has helped preserve gross margin levels. The company’s historical ability to shift pricing and mix in response to commodity volatility is a key competitive advantage in the low‑margin distribution space.
Operating cash flow grew $77 million year over year, providing a substantial free cash flow cushion of $264 million. The firm’s focus on debt reduction is evident in its choice to prioritize capital allocation toward the repayment of maturing debt rather than share repurchases. This strategy preserves liquidity for future acquisitions and infrastructure investments, ensuring that PFG can continue to capitalize on growth opportunities while maintaining a healthy balance sheet.

Bear case

The integration of Cheney Brothers has produced higher-than‑anticipated costs that are already weighing on the company’s profitability and are expected to persist into the next quarter. Management acknowledged that infrastructure investments and integration expenses are a “little bit higher than we anticipated,” a reality that has already reduced adjusted EBITDA in the current period and will continue to dilute margin gains until the synergies fully materialize. The risk that these integration costs may exceed forecasts threatens the company’s near‑term earnings momentum.
Cheese and poultry deflation has eroded the foodservice segment’s gross margin, a headwind that management flagged as “meaningful.” The company’s over‑indexation to these commodities has created a structural margin vulnerability, especially as the industry may see continued commodity price volatility. If this deflationary trend persists, it will constrain the company’s ability to maintain margin expansion in its largest revenue segment.
Specialty segment performance is under pressure from a persistent 30 percent decline in theater sales, a segment that historically contributes a meaningful portion of the company’s revenue and adjusted EBITDA. Management indicated that this drag will “persist” into the next quarter, suggesting that the specialty business is currently operating at a lower profitability level than historically. The continued weakness in theater sales could weigh on overall earnings unless the company can successfully pivot to other specialty channels.
The company’s effective tax rate rose to 28.8 percent, up from 25.2 percent last year, largely due to a decline in stock‑based compensation deductibility and increased foreign taxes. This higher tax burden reduces net income and dilutes earnings per share, and there is no indication that management anticipates a return to previous tax rates. Persistent higher effective taxes could erode shareholder value if not offset by improved operational performance.
Capital expenditures totaled $192 million in the first half, a level that represents 70 basis points of net revenue, and the company’s guidance for full‑year CapEx remains unchanged. While investments are focused on infrastructure maintenance, the high outlay relative to cash flow may constrain the firm’s ability to pursue new growth opportunities or return capital to shareholders through dividends or share buybacks. The prioritization of debt reduction over equity returns could reduce investor appeal.

The integration of Cheney Brothers has produced higher-than‑anticipated costs that are already weighing on the company’s profitability and are expected to persist into the next quarter. Management acknowledged that infrastructure investments and integration expenses are a “little bit higher than we anticipated,” a reality that has already reduced adjusted EBITDA in the current period and will continue to dilute margin gains until the synergies fully materialize. The risk that these integration costs may exceed forecasts threatens the company’s near‑term earnings momentum.
Cheese and poultry deflation has eroded the foodservice segment’s gross margin, a headwind that management flagged as “meaningful.” The company’s over‑indexation to these commodities has created a structural margin vulnerability, especially as the industry may see continued commodity price volatility. If this deflationary trend persists, it will constrain the company’s ability to maintain margin expansion in its largest revenue segment.
Specialty segment performance is under pressure from a persistent 30 percent decline in theater sales, a segment that historically contributes a meaningful portion of the company’s revenue and adjusted EBITDA. Management indicated that this drag will “persist” into the next quarter, suggesting that the specialty business is currently operating at a lower profitability level than historically. The continued weakness in theater sales could weigh on overall earnings unless the company can successfully pivot to other specialty channels.
The company’s effective tax rate rose to 28.8 percent, up from 25.2 percent last year, largely due to a decline in stock‑based compensation deductibility and increased foreign taxes. This higher tax burden reduces net income and dilutes earnings per share, and there is no indication that management anticipates a return to previous tax rates. Persistent higher effective taxes could erode shareholder value if not offset by improved operational performance.
Capital expenditures totaled $192 million in the first half, a level that represents 70 basis points of net revenue, and the company’s guidance for full‑year CapEx remains unchanged. While investments are focused on infrastructure maintenance, the high outlay relative to cash flow may constrain the firm’s ability to pursue new growth opportunities or return capital to shareholders through dividends or share buybacks. The prioritization of debt reduction over equity returns could reduce investor appeal.

Product and Service Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Food Distribution

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SYY	Sysco Corp	37.73 Bn	21.87	0.45	14.01 Bn
2	USFD	US Foods Holding Corp.	19.91 Bn	30.06	0.50	5.17 Bn
3	PFGC	Performance Food Group Co	15.69 Bn	47.51	0.30	5.12 Bn
4	CHEF	Chefs' Warehouse, Inc.	3.31 Bn	41.39	0.78	0.75 Bn
5	UNFI	United Natural Foods Inc	3.08 Bn	-79.20	0.10	0.01 Bn
6	ANDE	Andersons, Inc.	2.53 Bn	19.69	0.23	1.29 Bn
7	AVO	Mission Produce, Inc.	0.80 Bn	35.37	0.64	0.12 Bn
8	WILC	G Willi Food International Ltd	0.48 Bn	0.89	2.51	-

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Performance Food Group Co (NYSE: PFGC)

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Product and Service Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

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Research Tools

Developers

Performance Food Group Co (NYSE: PFGC)

About

Investment thesis

Bull case

Bear case

Product and Service Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

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