PFGC - Earnings call transcript Q4 2019 | Performance Food Group Company

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Operator

Good day, and welcome to the PFG Fiscal Year Q4 2019 Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by PFG's management and the question-and-answer session.

I would now like to turn the call over to Michael Neese, Vice President, Investor Relations for PFG. Please go ahead, sir.

Michael Neese

Thank you, Maria, and good morning, everyone. with PFG's Performance CFO. morning and Group's this Hope, Jim here George Food Holm, CEO; We're

The release. this We can GAAP XXXX non-GAAP of and back morning. these fiscal the a results be fourth discussed issued press items. the to of quarter found full-year release adjusted for non-GAAP results at The GAAP measures will measures include call regarding certain our results earnings and in reconciliation this corresponding the

the in Investor section can find release You earnings website our pfgc.com. Relations at our of

remarks contain projections. differ factors Our various review forward-looking and from materially finally, projections and section in acquisition And forward-looking in release announced statements XXXX fiscal our to for cautionary filings that not Please our forward-looking results. could outlook statements our the earnings SEC does earnings of today's cause release of Reinhart. our include recently and the statement results future the actual

like to the I'd to over call Now turn George.

George Holm

everyone, joining announcement will I discuss Reinhart, highlights back fourth and XXXX the and come Jim from your results. Thanks, few that discuss Michael. financial will our rationale results. full-year supports quarter thanks we strategic our a and today. Good our I'd our acquisition to over take for will morning, fiscal go like recent And call then detailed of questions.

pleased and Let’s execution. turn to our for a with our I'm team's successful results. PFG XXXX was year

to profitability year. high Our strong the led topline growth gross at case combined with of per for our increased end expectations the profit

objective to for sales to Vistar, by were case driven X% growth. $XX.X cases our net business acquisition. segments up X% increased in Vistar’s results and delivered X% our double-digit exceeding billion Core Foodservice strong the EBITDA year, growth XX.X% by led Eby-Brown Our financial independent the slightly Total of

increase an per The and as mix. of selling reflects price in net sales case a also result in inflation increase

sequentially from experienced our poultry year, help which meat. QX X.X% increase fuel inflation especially as to such topline. of and the Inflation center-of-the-plate the items did QX approximately we For in

exceeding segments, our up witnessed acquisitions. and theater, Let's segments. turn Eby-Brown. result the to a recent net process EBITDA The two strong as with our with We growth is integration expectations a strong going and case in of sales vending, corrections sales year channels retail and Vistar well had double-digits.

very several with the are We excited opportunities business this the about over next years.

to our Turning segment. Foodservice

We are continue trend expect into we this sequential first of our and quarter improvement to pleased with the year. this

We of is case independent first continuing are trend pleased flat the backdrop is the growth the with year. quarter. sales against independent into the growth same-store This single-digit well. as our This in for mid for quarter restaurants

Average up of in as case were rate inflation. still reasonable we prices a are single-digit low

The the solid. a We of continue has health to overall macro competitive independent believe industry. remains landscape is been very and restaurants

several share growth. growing our We continue be strategic successful have to in believe the of for are we Both on been off case past and investments solid growth our However, support years. to profitability long-term showing and objectives. our are and segments EBITDA track paying

Foodservice by the the EBITDA fact, grew quarter. In in segment double-digit its fourth

of we XXXX, our are fiscal year Core to Looking believe segments for ahead another growth. positioned

announced recently Our for continued strategic two acquisitions growth. future us position

who We growth. these to colleagues. earnings and solid to during another calls, our expect to goes quarter and one we'd year customers XXXX fiscal Each highlight be like beyond associate of serve above

and last the driver in XX moving may any honor, have quarter of our eligible Fame. the of have of Driver chargeable inducted shine associates five class Association Truck I'd the this not International to This with on To XXXX for least XX zero must Foodservice the of violations into at incredible like being years Hall be Distributors service the years. spotlight accidents

Harman, Scott acquired the Joe inductees Wesley Foodservice From Edwards, our we Holloway, Danial Richard Burton, recently Martin, Cheney, and Ashby, Billy Vistar, team, Dan Frias are White. and From Hagerman, Ronnie have Ronald and Gene Robert Terry Arnold, division, Ronald Raber. Osborne, Eby-Brown Nooney from the Bradford Robert are inductees Performance David our Elliott, Curtis,

states from XX customers California from across delivered hail and country Maine. the different to to associates These

for are these careers drivers We our and to dedicated organization local the incredibly thankful professional their teams. have

discuss will now to turn who Jim, call I over the financial fourth results. will the for our

James Hope

X.X%. Thank fourth results case volume a for included you, Total higher independent fourth X.X% increase quarter I'm growth expected. pleased in quarter with X.X% cases. in we Total George. underlying Good the increased our morning, everyone. volume came organic than of case

net billion Brand million grew taxes. acquisition Growth cases excise $XXX.X the quarter the sales Eby-Brown sales, growth to in of related Performance to year broad-based fourth and Eby-Brown, $XXX.X net prior The contributed $X.X million channels versus XX.X% for including tobacco including sales to Vistar's across period.

Excluding and sales in X.X%. in net was growth attributable sales notably vending, increased channels. coffee service corrections primarily net The in office most to Eby-Brown, increase the Vistar,

in We also increase inflation to an restaurant price per specifically in as result experienced also solid a was The food channel. increase net independent of sales mix. growth case case in in service, attributable and selling the

mix quarter. in is the Overall Gross profit the benefited customer million. we approximately year was the food $XXX.X from was inflation channels, quarter channel. Gross the grew including solid period for cost as prior XX.X% profit independent selling an fourth of X.X% compared per to improved case

have decline slightly margins XX.X% by quarter, margin been for tobacco. historically fourth a the prior-year lower Eby-Brown. was as who driven by $X.XX The gross the quarter Eby-Brown sales the Vistar's per the was case channels. net profit period. Gross The percentage to period. in experiences excluding was XX.X% Gross a as up led for compared increase Gross up profit of of margins strong gross prior-year versus was fourth also profit would result margin

Eby-Brown. increase the $XXX.X volume, including acquisitions quarter as in XX.X% of increased resulting in the fourth the also was due expenses operating case The and variable to quarter. Operating million expenses. expense by personnel result impact Operating in rose operational in to on expenses primarily expenses a recent increase the

X%. OpEx have grown Eby-Brown, would Excluding approximately

of decline declined in million. a a of Jobs the increase Net the to million expense result impact of a result Cuts fourth was tax income quarter for prior in increase The the tax X.X% Act. expense. primarily and was The income $X.X $XX.X year-over-year Tax primarily income

effective to in fourth rate tax the XX.X% was increased prior to in EBITDA the the compared XX.X% XX.X%, quarter quarter prior-year period. fourth the compared year in million The $XXX.X to period.

For to compared the material quarter, EBITDA period. adjusted rose to to our helped prior-year $XXX was EBITDA, to the but quarter XX% contribute million adjusted not Eby-Brown PFG. fourth

fourth EPS EPS year increased to fourth fiscal the the quarter compared XXXX, $X.XX Adjusted to prior to $X.XX quarter. diluted declined period. in Diluted of the X.X% in XX.X%

activities XXXX, a versus cash investments to decrease to prior fiscal working million operating $XXX.X cash Foodservice flow, in $XX.X Vistar from fourth year. largely million strategic Eby-Brown in from turning growth of segment. fund generated was PFG And driven operating and and the quarter decrease the activities by capital in in cash The in flow during flow

cash the $XXX.X million $XX.X from million, year. came flow free at down in prior Our

in For line PFG $XXX.X invested with in fiscal XXXX, versus capital prior million expenditures, year. capital spending

under with what on in certain to came of last net expecting were timing projects. was debt X.Xx came our spending the year. based adjusted which consistent And we in leverage Our at EBITDA

Eby-Brown be XXXX of to believe will to expect fiscal XX% outlook, our our adjusted to fiscal to a we Turning adjusted slightly that X% be this EBITDA accretive earnings acquisition EBITDA growth range million. year. $XXX.X over in XXXX We

basis adjusted We XXX are EBITDA projecting year. Eby-Brown for points the XXX of will growth to contribute

with long-term to projected is consistent EBITDA adjusted organic our and is grow X% XXXX XX% to outlook. Fiscal

We diluted XXXX over of diluted in adjusted adjusted grow expect EPS XX% range X% of $X.XX. fiscal a to to XXXX EPS

fund are incurred assumptions, expense fiscal Higher and to our includes to is expense XXXX amortization adjusted Reinhart. interest the this Eby-Brown effective to This higher in versus annual a Eby-Brown which reflected based interest excludes related depreciation the EPS due tax and outlook Vistar following year. debt our growth acquisition and the acquisitions, outlook on rate

$XXX of the expenditures between depreciation Organic X% million in range case case rate a to to $XX million. Interest range of million; range between amortization and effective million $XXX expense $XX to and with including approximately X% $XXX X% Capital million and growth $XXX approximately growth in An in on operations and million, a tax X%, Eby-Brown; of XX%; of to

higher automated the expenditures of ongoing projects. to automated We XXXX XXXX East estimate due fiscal recently fiscal capital growth, drive than timing Vistar’s The Vistar’s Retail although certain of facility the facility, automated pack in and prospects constructing pick facility and is volume. ground expansions which East includes and potential investment Pennsylvania, additional process to Eby-Brown we're Vistar's we're Retail future its early in second broke on about excited

in growth results EBITDA outstanding have EBITDA Foodservice’s XXXX two strong In dividends. source the now are another and course we solid be of years of to and our improvement Vistar a growth. We summary, continues financial last and over topline we of them the strategic believe in to with expect the year made growth businesses were investments solid. the sequential the our results. We're pleased topline paying

to turn George. the And going I'm with back that, to call

George Holm

Jim. Thanks,

Before Reinhart's about distribution our share your of met New and for excited and like three would in XX all with acquisition the why Investors in questions, transaction, are discuss weeks leadership strategic meeting announcement York we rationale Analysts Reinhart. with take I to the of I After centers. traveled to we you their with of

deal. organization. you and I'm even the further more missed month, I impressed compelling, industry. case would benefits Foodservice provide the transaction I and enhance financial strategic you portfolio will our quickly culture customer like strategic the believe last the of PFG call distribution of in the position In operations, their with their to with

model, combined second overall expands logistics. centered Foodservice is companies’ produce We platform protein operating differentiated distributor It the will believe attractive private distribution leading believe are distributor. our brand they market geographic regional largest food reach enhances density. label we scale. the our Reinhart Reinhart and and most U.S.; depth increases the around our the PFG’s enhance in private complimentary of the and transaction offerings private

We benefits. believe And expected and year. operations close the calendar The there compelling is to transaction the procurement, end will valuation with of opportunities synergy logistics. transaction has in finally, attracted financial the be by significant

to Excluding and depreciation transaction amortization. related

to benefits continue EPS anticipated with tax and expect double-digit in run year We synergies full rate three. accretion

had XXXX. So up, a to fiscal strong we wrap

another businesses to growth. and or the Eby-Brown associates I expectations. I our associates performing all welcome ahead of of Our that forward tremendous at business. thank our to look of want are growing for year

take we'd be to happy your that, With questions.

Operator

question Fargo. [Operator Kelly Edward Wells Instructions] Our of line first from the of comes

Edward Kelly

just guys. hoping some you're to on nice wanted you George, could I provide seeing competitive I update Good the what And environment. about was you to morning quarter. start and ask there. Hi curious to about increased whether Where that? I any earlier Cisco and week seeing from coming it's why? think this of some pockets you you're competition. of mean, obviously mentioned as just I'm

George Holm

don't a I I does you see when it think things extremely get do think just maybe in feel from been while for focused what it focus, everyone in quite different the And level past. that forever highly that the independent in have I very it's very as though Well, is areas competitive this it. been business. competitive. on get I of

Edward Kelly

field, Okay. this That's to don't in helpful. guess And you get the there’s been, some about mean, you question, but then ask I I I marketplace generally just I'm the with overall wanted interact growing consumer. they typically as consumer. of concern to about level your customers? on a hearing curious what from pulse the their your salesforce you're confidence. just from as the Maybe

George Holm

would our Well, confident. always people characterize I as

you're we really I if than maybe up good see bad it seen be might be Typically But might think seven that and what a is week three. similar. of the really growth, kind year-to-year single-digit pretty we've different, past. And swings to in a ends be mid it's case not consistent. wider as running week

our is cases independent faster had are that within we definite growing are is our quarter thing another than line growing. for One items base, our us where have

show difficult we're same-store see and some struggles continuing base within So dining customer for sales independent see that chains. times we're our least at does me for casual large that to to continuing the

Edward Kelly

And just you, one last Eby-Brown. George on one for

material your it would how mean, of had months capture I lot a you on of business. the could leverage there opportunity, side? I'm margin that it of bit accretive the an to possibly you seems C-Store it synergies? excited actually but as how decent Can a probably You I EBITDA years. can just a maybe color How that now. coming be And just relatively revenue Foodservice a that's you on growth quickly more be? like little about about that for would in the assume relationships are hasn't curious talk in-house few provide is kind been the and that to

George Holm

base division enough we'll be an with the the year. Well, We where in where shipments last of area, is put business there deliver into not Eby-Brown will trucks SKU Foodservice Foodservice if fiscal last within some an so where it year, we the they there'll what had facility. nine that beyond of convenience be delivering will – for impact weeks can much feel two situations have also Foodservice we be

Foodservice of cross-dock it be. distribution also what a We of will merging we're are to in out we're the where number into of delivering early Eby-Brown but SKUs the little at Eby-Brown then early doing we loads. bit increase where centers. the Performance those And and at we're SKUs stages But plan very of determining stages, handled the

Edward Kelly

Great. Thanks guys.

George Holm

Thanks.

Operator

Our of Jefferies. line Chris of Mandeville next question comes the from

Christopher Mandeville

that morning. I the Hey, with good the in clarification a net? Eby-Brown. sales, very gross $XXX Jim, off quickly not actually start The can contribution million, point on just was of quarter, sales

James Hope

number Yes. excise That's tobacco gross. have to And we gave. tax back you out the

Christopher Mandeville

of be considering. of seeing color the we be on in any then don't lastly, thinking how, in growth you some expansion additional is about you then this EBITDA any numbers given but Reinhart year as projects as stands, you And in we right incorporate factors should obviously just for as coming offer seasonality the Great. Eby Okay. well? there any what it Eby-Brown on have And cadence we can now, have how that other color additional sort should mind

George Holm

take go I'll Yes. and that. ahead

we're timeframe once I As in. first that is our we're than that less year better quarter-to-quarter. start. strong think lot off very the because EBITDA speaking a like our but halfway year-to-year we're in far say very quarter, And little to so always a will I cadence, looking we've consistent as a to less fourth again, been only quarter a

of us. north. as the goes, As to but is a we far are. summer it's the is real for than material a good seasonality Their Reinhart Reinhart, close heavy scheme Eby-Brown, different that time in in we business things, seasonality not far When the very with is

fourth are stronger. get Performance and than, first fiscal you the to to quarter and bit a when So third say, fiscal quarter, much our they quarter, weaker they're fiscal Foodservice, the little

Christopher Mandeville

Eby-Brown anything year? in the on for projects just then And the coming

George Holm

months. plan We the is Eby-Brown we'll centers a two. point over for all those distribution just really building mean – planned and that I do XX doing about couple on those this be at is next

Operator

question comes of Loop Wolf Capital of Markets. one Our from Andrew next

Andrew Wolf

With to X% the X% would mix get morning. X% to Thanks. you for regard growth, that? against if guidance what for you the sales Good are driving X% the the in of case to XXXX. in Could XXXX, be plan accelerate, discuss what organic above parts and

George Holm

Well, Vistar well. continues to grow

future. But across works. enough point. will think And a in Not businesses. tobacco be of pretty Foodservice And you business much right have the pretty – foreseeable to to I broad-based. if going this to obviously it's our we that single-digit for at that at mid look seasonality think that experience we think category. I portfolio our Eby with declining growing of don't I mean, our how I business their consistent pretty is Performance now, sure be growth area. expect areas in all continue are our

Andrew Wolf

on a is Can new or Got that the new is the to the sales come maturation it, kind and to terms sort of – people? going continuing that's rate you kind there that – to into okay. peaked contribution reached all, they've productivity their Is of they of George, in sales? too numbers of or of – comment

George Holm

and Yes. us. continue Well, help to feel that I add will going people to we're

growth the get it's I a they seeing in Our standpoint are to in that. from past. to well to gone per double. they've mean, gotten And we're the get volume, over we average up last the percentage for significantly certain as has difficult salesperson adjusting sales XX them a And years. that

them the write still where more tools, We're to time they volume. trying give have to

And position in and a are to people to to have reduction our have we're some that's in so the take they of what willing a out amount Some where and business. business that they're Andy just good get they handle, of time go we doing. adjust quality

Andrew Wolf

product tweaked, or up questions, programs have Got about And a Foodservice kind products quick in you channel, of on thanks. some follow bought supplies? that because ask foods things or a Eby-Brown, exist exactly it, some does different When have to for Vistar – or hotel of – a be Foodservice of think at the pantry and C-stores transferable or types be bit the C-stores created are at Vistar maybe C-store a just tweaked types I just some bought already could does questions. that or other if currently

George Holm

Foodservice to stocking Vistar concessions they're stock, of are of type most assortment products the doesn't and products Yes. a geared very the area. that wide Foodservice

what's we greater product now stocked much So our at a right we're make focusing our on of our that around what doing our branded best the we and Foodservice, have of to Foodservice do particularly and products. around will items right In lot Eby-Brown we time stock array and stocked Performance work customers there. Eby a and have what’s at to versus Performance involve at decisions

early it. the in feel good we're So but stages, with we

We think because pizza a the heavy of on future heavy great that's company on as have our and we focus just a Foodservice environment. a have we a focus convenience pizza into part is

Andrew Wolf

Thanks. it. Got

Operator

of comes Our Heinbockel Guggenheim question from next John line of Securities. the

John Heinbockel

think secondary So about Can sort absent Are you that then accelerate maybe to expansion, existing the George, year? you suppliers, past things competitors bit? to this good that accelerate like do accounts? right two penetration XX your growth some to of coming with some related of some maybe are And against, that accounts? salespeople productive other about months for that little way? Is rate these in a directionally as there of ways kind hiring you would who secondly, or price same of when think you when

George Holm

I investment. number, a say job is add always sales and than careful the the we and where you we would salespeople faster the with as big are. would I make. you far people position be a profession as It's a where to we in have to It say hires with start are want We'll that Yes. a

There's There's and lot of do. a a it's in that difficult lot a training to There's job. not to job that a of things that significant do amount weekend need you work. wants everybody of

tremendous say because for just finding, I grow competent the can it's that just said, for job. difficult us have So I'd force people limiting you for to is to, factor real a like quality, develop that us it's job. sales And our very a appreciation

as customers, training and and really with focus an impact penetration as an is lot is it's hard a company as they a adding account to most what down independent that if more there far as against pretty to As differentiation come to salespeople SKUs be it's think product in having a and of this margin of company, literally that. it tend our I to of a because, the our individual sticky and erosion exercise do don't you what Otherwise have business. in it has competitor kind you're you does It's cutting some product.

John Heinbockel

And Vistar guess if year-ago it than you and Foodservice. assume the right, it's then you're a going I growing growing? of size, both getting that was and that trend would been not on getting Is pay or process? it sort maybe you're at leverage secondly, I there? PFG faster for maybe driver say because look up, for of drop What leveraged

George Holm

more part our it's It's bigger to growth, business those one very continued line industry to today. would has larger get it today drop go same-store to impact takes it size have than back sales drop consistently. a an having we items as Our got of the And if sizes. because of up pleasing

a the order business. bit increased what's today good of driver our order. bigger that of a driving have of, so reduces getting But is that We larger pays, impact

is those to it of kind of important SKUs. that continue and really So kind to very that, belly extra but we business getting belly do

John Heinbockel

you. Thank Okay.

Operator

the of comes Suisse. question from of next Our Judah Credit Frommer line

Judah Frommer

the morning, for Good taking guys, thanks question.

small to back consistent kind different X, chains. as a some a both across pops store within there's in is for guys there pricing Independent. chains, of Cisco Independent much segments? mom it XX definition competition competition any know, going like to from second, segment seeing regional more of action call or it smaller it Just XX, the of I you Are those sounds the don't have do those And been opposed elevated you and

George Holm

have we Well, our very little to and they that reason how hit classify was a than better from it past. as been But of of very actually units exactly a competitive and growth we're I five It's always once customer competitive we customer with been classify it's a in type our slowest business. the them that doing and the we type competitions. area get part do of would

Judah Frommer

That Yes, go makes ahead. Okay. sense.

George Holm

once our the as an to And a fifth hit them redefine then definition And last definition unit, Yes. the regional around they real that independent. years. our just is we've for XX as been we consistent opposed

Judah Frommer

see chocolate then factor coming That's switching helpful. expectations segment some expectations that Vistar candy year? the How this does price And of we the into Okay. to increases. for kind this or for year, did

George Holm

channel see a increase. We it’s Well, to least separate separate But and in time a for can prices at not a at prices those largest price degree increased and the tend to also we when that impact box our a demand SKU like have a vending been money some vending It short this at happens. point. period to make is least. of

Judah Frommer

Okay. That's Thanks. helpful.

Operator

Jeffrey from of Our comes of Barclays. next question the Bernstein line

Jeffrey Bernstein

you questions. Couple much. Thank very of Great.

topic. of sales you and age. seeing the the independents, provide seems you the on wondering transfer you color if some the can maybe dining like maybe are independents versus mentioned just chains I'm the It casual on commented that I First flat chains health comps. know maybe struggling,

independents? impacted Just both keeps big your wondering to and be what momentum that you what to be challenge for strong differentiation seems between what believing chains and not there's by you're any if them the the keeps a or going

George Holm

chains, board, case. give do it the case the counts we struggling the great to probably except and we a but to dropped that And them. category. much give we about can all are a the continuing them The Well, not across support is can not there, see big Yes. degree it's

We really market where high don't high even be independent, ourselves consider very in share. successful. market any the share have have we With we to don't market a a

job can feel And we to just So we new continuing to accounts. show add done a area then and been what that's that help items last growth late continues see to same-store we growth. accounts business particularly as and for mid to a this sales of good single-digit kind one of and that's offset us continue to existing of big type our lack through we've line decline

there putting in the world, still ones fast some out that out smaller really casual, growth. that then And there chains great are chain are QSR are even

So winners There a not have it's situation are to are enough of where accounts. everybody some is down. fortunate some flat to those we and significant today

Jeffrey Bernstein

Understood. terms similar August talk sales and restaurants And you listen then to what year, year. in past interesting the start the seem trends, encouraged just July in slowdown saw to it. this or yet to about of It's month explanation choppy there’s they not much I the mean, so, earlier to a with for

why I'm not? why seeing whether So maybe just something similar wondering, and you're or one,

George Holm

said, a I to and start, even half quarter. it's like very not off we're a strong Well,

our get tends to try to have it of continues kind choppy excited because back week-to-week. get a being the by I would to to ahead not really that. the But a it's back it's that customers it's growth new I would as market And SKUs also items. So little soft. new with hate characterize I and a And getting to couple of too is, we're where be growth equalizes good when everything. get followed week We weeks say we

Jeffrey Bernstein

I just thoughts increased that And front, what into your proteins? sequentially on basket you then wondering the your XXXX, a commodity commodity from anticipating and inflation, further accelerating mentioned lastly inflation is think as forecasting XQ. for on basket some on maybe Understood. I'm fiscal just whether you're XQ

George Holm

a reasonable the fair direction anywhere a I moving And this when Yes. to We in they see we have categories you X% number. and and that of been same range X% product a still year. model think in that is think number between X%,

Jeffrey Bernstein

you Thank Got much. very it.

George Holm

growth we to Yes. case pretty look dollar between growth than inflation. we're is We delta and at have what a inflation. got sales experiencing And greater today a exhaustive

seems So little center higher a plate. items more the little bit our business more to moving be case a towards and cost bit of

those that a kind for of why So that's numbers gap us. there's between

Jeffrey Bernstein

said, Like a have X% you for think to do how you labor? inflation COGS? basket relative labor Do you COGS similar X%, of about like to forecast

George Holm

a labor Yes. talk specific but I are continuing we as wouldn't to you about at that a would want slight to number, I tell look headwind.

really a to done up that labor. Foodservices of is the at I I'll think still ability I great But job it a stepped that. their think managing. And and manage Company's labor leave challenge

Jeffrey Bernstein

Great. Thank you.

Operator

BMO question from comes next Our Kelly of the Bania line of Capital.

Kelly Bania

good Thanks Hi, for questions. my morning. taking

Just and and of improved PFG there growth like maybe some that talked talk new the now independence your drive as ability loss what to maybe you industry you about some right differentiating and feel Can how of the you're about business. in you just driving is kind outperformance?

George Holm

share. Well, one thing a that helps have low is we

the have make good that you off just you for that invested to calls good I to and product service. and us. And think and I need have put think pretty heavily in as we've I'll benefit. So that's paying a people

expenses, that that rather will in have less at look a to on. I best mean, an people return try in we'd but growth than our as investment X% get we

far we're most that all out that's I our so – in all for markets And that working don't anyone us. that know approach But else. different is from

Kelly Bania

Okay. That's about outlook. but you as little fiscal a maybe think XXXX bit the on labor, we touched just helpful. And

and your of in of what's other areas freight the over years? those kind last plan fuel couple for Just of been that have pressures some and

George Holm

lives company to continue food those distribution as And in be a pressures. things world. that Yes. Like that

it and we year. about that feel believe guidance and see clear manage And to I continue any don't confident the we I changes how gave We dramatic to is this well. next-year up lines it. pretty

Kelly Bania

just same-store then and that of Okay. of little the can wins more a That's that growth just in kind outlook terms one bit new us break sales, that for customer high in down fiscal helpful. And on you then for a single-digit maybe again, XXXX? Vistar,

George Holm

markets bulk the place The just of And to Yes. of and that micro it's think the is of customer micro will the big wins. growth. their We percentage probably new vending the of in continue growth take bulk feel kitchens. and we it area

we're user, good customers, the is But to talking those since that. have business, good two not don't areas insight our other and Vending find of end Although, have that growth. think from pretty business we we their I they into to really just flat

Theater, we're channels tends goes our industry within is the sales. and mirror they SKU sort going pretty share. business, don't far us the to of that's to our a that new have expanding of as part as businesses a wider a help where but helping growth with base big theaters put great really as much But we what it's

And that is to of help Retail that that one And and built we next we convenience pick give big little day will business for also and course, and that East sales. us get to geography will service a help going can a us. give business we pack as be wider our feel our

Operator

question the of comes next from Chris of Mandeville line Jefferies. Our

Christopher Mandeville

Can Hey, long-term little of there the guys Jim thanks though quite for CapEx follow-ups. from given just the in speaking seem Reinhart confident light SEC? and in expectations? you maybe being you're back just or George, that pushed you as

James Hope

of I the level announcement have on long-term talked was anything reasonable are we made ordinary CapEx see believe the maintenance they and and The don't out a Yes. that as in for expectations about CapEx I day that's the fair for Reinhart we them long-term. the

CapEx We will our appropriately. budget and into blend them manage them

Christopher Mandeville

Okay.

whole along X% being as the lines business PFG? appropriate is a So for the in of totality, sales of something maybe

James Hope

correct. That's

Christopher Mandeville

is remedy a pronounced per account basis? manner? And any thinking that does size I that segment. their than matter if a things? given in guess on the a of can it them some somewhat more Okay. issue And and is altering concept is then something just maybe just factor your guess compensation Or the might that just the bit whatever how you a recent be of simply of it, penetration about can alter accounts force like I a remind what of they PFG or X.Xx. team, us, function know given on if not being versus productive I necessarily that less George, the facilities little are tour less servicing enough seeing drop simply of there, has And limiting correctly, you use then on one sales business. recall

George Holm

very biggest base, will growth think the have. that going probably Not is they focus they we'll to having that should available out that's don't is very, base that - It's SKU that that really high be have biggest the advantage increasing them the that get that of to unlike need that to think are they is just just have biggest benefit some thing be that I from level segment. facilities sell. sub-scale items or focus. just for put The important to and us, the focused key SKU the us the I on

Christopher Mandeville

Okay. Thanks guys.

Operator

we And one have for time Ladies gentlemen, and more question.

question Our final Summers come from will line Bob of of Buckingham. the

Robert Summers

morning, Great. Good guys.

last it And start cost? relief relates the some we on update thoughts, side. inbound you from can next the an if inflation, quarters. demand get And fever. in, plate to that were of do effects the see on us us on think give I at I'm over wondering particularly inflation the of terms to what freight Just curious continued what remind knock starting you center destruction? quarter as deeper level couple on expectation then in that to the a of maybe African swine of little dig is

James Hope

I exciting nothing there. feel inflation it. pretty on Look good about Yes.

don't and as protein freight pressure. well feel coming I in the change. to event you're we're from area have like on of ability lot cost managing we we're confident an what part On our cycles saw little I handle there. in anything freight bit big any is the costs positioned a still freight different based see On not as look ebbs right, past years. continue describing you're absent a have they're we putting concerning doing and inbound of freight two but to flows well. that of the standpoint. and relief, of a seeing cycle both I I'm think momentum we And in overly a

Robert Summers

the I a some have there provide thoughts to, opportunity more then regarding that update acquisition provided that was curious can the or might've And this compelling Okay. how there? discussions And what touched capabilities contract been you Eby, earlier, on it but set any you? as incremental think of kind behind I'm are little gone. the the Is

George Holm

tobacco this that think in this at think that but the this point. only and we're in instance know part us with one early and real one one business. point I account, more need has at instance helpful, about been helped I it to just we It's of But

Robert Summers

Okay. Thank you.

George Holm

Thanks.

Operator

I'd was question. back Neese Michael over to remarks. floor or additional like final our that closing the turn And to for any

Michael Neese

Thank you, Maria, and have a great day.

Operator

Thank you, call. conclude conference does ladies today's and gentlemen, this

You may now disconnect.

Performance Food (PFGC) 14 Aug 192019 Q4 Earnings call transcript