PFGC - Earnings call transcript Q4 2024 | Performance Food Group Company

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Operator

Good day, and welcome to PFG's Fiscal Year Q4 2024 Earnings Conference Call. [Operator Instructions]

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

Bill Marshall

Thank you, and good morning. Holm, and George CFO. Hatcher, with here PFG's Patrick CEO; PFG's We're the of issued morning which quarter in this press can Relations our found We release fourth regarding a pfgc.com. website our at XXXX fiscal be Investor section results,

these unless period results The During same will are can comparing in fiscal include measures this adjusted call XXXX. items. The non-GAAP GAAP stated, results our earnings otherwise of the corresponding we non-GAAP the release. for the to certain GAAP reconciliation found call be results on back and today, in the the to of results discussed measures in

As a to we metrics adjusted XXXX, reminder, EBITDA from of EBITDA in fiscal quarter the our reporting first updated segment prior the metric.

in and differ results forward-looking and various review filings and projections. release Our factors today's results. section Please SEC could this the projections actual our cautionary future release cause remarks statements to forward-looking statements forward-looking earnings for statements materially that the from in call contain of our earnings and on our

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

George Holm

for morning, you and thank call our Thanks, Bill. Good today. everyone, joining

to our some business and we of with a on We the earlier anticipated of the start fiscal of then good addition we to from Brothers chance cover comments discussion I M&A in have as outlook the state our the acquire Cheney our results call. announcements and morning, the the our hopefully, can back then ensure acquisition you come format had XXXX. a our Patrick today. topic, agreement industry. including a of we impact and reported for To touch on to for will made adjusting review material to closing long-term strategy. financials, are this including part will transaction, will I activity, all this deal review each of our

Cheney to very look fiscal Santiago, is July. also for food transactions only that year closed the an early Caribbean. a not ahead in X strength, PFG in our an distributor a fiscal to Today, definitive States. also are A XXXX, United leading day we but equally to of Foodservice out expanding deal Puerto disclosed presence leading upon strong announced This Brothers. acquire and exciting closed Southeastern we expected our the bright and in to Rico distributor as These into in a adding the in our purchase service Jose our Southeast broadline agreement build

to all-cash agreement Let's acquire Cheney. Last agreement transaction we Cheney in start definitive approximately night, our an $X.X for into with acquire to billion. a entered

transaction very by well that we across organization. smaller facilities. culture this revenue. shareholder net success expect impressed and followed I is will of a region, authorities, States We years will and on our been term. have first Patrick our the the add facilities management within Southeast be for year United Cheney over for Florida. closing we'll specialty fiscal and and Cheney the the known if and PFG generates the the $X led broadline additional the region the experienced annual a X company ability transaction, have in its held financial adjusted with The regulatory diluted Southeast more privately with by several is of in excellent the by value in long food strength in moment. The service business. after to to one broadline largest Cheney will team believe provide distributors accretive an execute impact approved EPS details many end and fit in is win drive billion for particularly

distributors most for United the under grown leadership, broadline one his the helm at in of over has the Foodservice Russell and company into XX States. has privately And Five of been the Cheney years. held successful

As the have organizations goal. past, results quickly our of together success rooted to in work Reinheart, are Core-Mark come M&A Merchants, success all company. how in single towards is for generating our the have which you a know, in we including and nice We had efforts believe this

We facility expect add X Carolina line South fit and We be are construction food Cheney Of located and Florida quickly additional towards with with will to legacy to similar with the nicely our resorts, country Cheney in a clubs in focus X Carolina. facilities, distribution facilities in believe export. and North broad market platform. service remaining our under restaurants, business the independent

and expand The that fill facilities in The Cheney Performance than of we business. facilities broad unique utilize to offering and different are a distribution state-of-the-art have to build while capacity. Cheney position a are base capacity serve customer our having expect our and additional quickly additional business. Foodservice to scale importantly, and facilities

facilities. Reinheart, anticipate are with Southeast to economics Foodservice faster and of to the than region Florida growing growth, demographics important the we performance resources an of and and our Cheney that in taking acceleration Core-Mark, Cheney and distribution of most As all existing sales Merchants we Cheney additional capacity combining plan By and an is States. organization, continue operate market United advantage the the with with legacy profitability. centers,

the family-owned Caribbean broadline strong release, and comes also deal. with in entry first nicely Rico. market an PFG's headquartered of the and This into earnings with our Santiago dovetails Jose Santiago, attractive disclosed In Cheney distributor the we market growth. sales is Jose purchase Puerto position a

our They are management operations. We extremely with PFG PFG with ground the are impressed to welcomed running organization their team collaborating hit and the and already have business. already have our

be and believe immediately. Jose total PFG's to margins earnings, accretive to relative flow cash small we will Santiago While business,

very believe PFG Southeastern territories. the growth States X the deals and together, Caribbean for of position United we well the Taken these future

on will I Patrick? provide financial that, will With who Patrick, it over turn and performance outlook. to more our detail

Patrick Hatcher

Thank morning, George, and you, good everyone.

the financial transactions we have items fiscal and number from X outlook As just cover, XXXX to our impact strong described. our XXXX mentioned, of fiscal including George a results, George on the

able XXXX through growth our sales We control, fiscal tight high closed leverage driving to organization bottom line cost strong leverage our and First, on OpEx were note. a growth.

XX.X% we end quarter our in resulted accelerated EBITDA to we adjusted The and As quarter, profitable the margin a EBITDA of results. better-than-expected third fourth year-over-year range exceeding growing improvement the fiscal growth with provided in on focus guidance quarter, in testament returns. adjusted top anticipated, significantly the the and

GFG's broad and Food-away-from-home once provide resilience. unique And achieved channel again, results. diversification and record the we

our new a line growth X growth quarter chain case we across In volume chain Our the modest of of business in contributed business segments. between quarter results. X.X% case increases restaurant within driven during the fourth profit growth reported of X.X% all X.X% of onboarded growth case business fiscal fiscal both in we to the restaurant all X business the and quarter. that help the fiscal largely should in segments. and fourth Case increased which was particular, reflecting chain Total in Foodservice result This top continue by inflation margins. business was to additional of new the middle new fiscal quarter, independent wins, X.X% fourth the gains balance business and XXXX added business for case addition our

X% inflation, X.X% nicotine. in particularly of for a brought inflation Vistar in inflation will was Our on cost XXXX. and believe inflation by business the Foodservice that and including is ongoing in Convenience and at company Total similar Vistar, also be quarter, the better fiscal Foodservice, X.X% inflation accounts driven pace period. X% of reflection in We inflation new several convenience this

of on While should low a line and forward. produce moderate, having price purchasing in impact more are going candy inflation high absolute snacks, behavior, pace single-digit remain points an top the particularly bottom better and consumer and results

benefit top fourth fourth positive shift. drive case compared quarter. year's the was saw particularly gross the the we Gross the to segment. In period. the to XXXX, our company single-digit increased X.X% profit We gross from particularly also gross profit mix additional per the fiscal a in inflation improvement lift addition fiscal to line of quarter that due inflation, up profit, in margin prior to $X.XX in will Total in Foodservice continuation low believe as

line able adjusted fixed guidance growth the ahead and did keeping of produce expenses expectations. our growth segment an segments was fiscal to Convenience true was quarter. our EBITDA providing of This job which in Our low, leverage driving particularly fourth excellent cost XX% segment, bottom operating

also but expanded quarter, segment combination EBITDA control. of adjusted profit of margins cost growth in reflecting EBITDA and flat solid a expansion XX%, XX Foodservice the tight was adjusted gross basis experienced Vistar year-over-year. The by adjusted EBIT points

for these the profit We fiscal build moment guidance results expect I strong address a in in when I'll year. to our review which upon XXXX fiscal

just XX.X%, fourth $X.XX, improvement diluted nearly while quarter per of earnings fiscal share EBITDA million, $XXX.X share $XXX guidance $X.XX, reported we the increased approximately announced per last to an end up of XX% above of year-over-year. fourth the XXXX, in of the quarter a fiscal was quarter. top net increase earnings was the income year-over-year. XX.X% Diluted XX.X% adjusted In Adjusted million, PFG

Our effective income percent period, fourth tax partially as year's in in by offset an in XX.X% mainly last an XX% comparable due tax in taxes the rate increase quarter and was to income down of rate credits compared of fiscal increase foreign state to income. a

million management. fiscal year of Our compared of increase a generated performance flow free combination fiscal cash working financial the year. of operating PFG position increase million diligent last course $XXX million $XXX $X.X flow, a to full a capital billion, and remains PFG very generated operational of $XXX XXXX. cash Through significant strong. We're flow generating the through of approximately XXXX from over cash

items with sheet We as value-creating Strong the has and position. allowed financial we opportunities and are performance balance current flow today. announced for pleased management our cash such capital

our looked we about long-term activities excited fund growth leverage long our M&A transactions funding expansion these bottom returns continue and repurchases X we our After to and our to reduction. in for business. of During support then I expected in to a areas will and top to support invest the and investment organic Today, more announce activity, fiscal financial behind These to fleet. discuss capital deals to at our expect the XXXX, over growth. X CapEx, share growth, of deployment, term moment. impact we are line mostly attractive are generate capacity

public, conditions, news acceleration currently complete share this authorization. on believe we program $XXX remaining we million anticipate share repurchase We our on could million an over of our the Depending we repurchase With marketplace have year. within activity. this fiscal also $XXX

expect We activities. end of to Cheney half these which deal our to cash top leverage anticipate close of maintain transaction. we strong X.X flow. leverage closes, remaining sheet pay then We will continue or to fund to above our slightly to lower range, with the range Once until the X.Xx move of down available in leverage will that the balance that the we a

guidance our fiscal to for Turning XXXX.

in For be of expect net to the billion $XX the full sales we billion. fiscal $XX range to year,

this billion, $X.X at X EBITDA be the years of adjusted to long-term to is Day billion Investor of range discussed expect $X.X to $X.X the billion we ago. range We $X.X upper in end billion the our

achieving X We are past our success a progressed, fiscal how with with to above EBITDA expect early years pleased of the our we year target continue. end long-term XXXX lower the projection, this adjusted X-year have

net XXXX, be first $XX.X fiscal quarter a quarters with million fiscal and rates billion to EBITDA growth first the final of of billion fiscal we the For expect both adjusted X the in $XXX a several than anticipate we in $XX.X EBITDA in to XXXX sales to sales Due $XXX timing quarter. range, factors, higher to adjusted in range. million

things in guidance. our A note few to

With we full of of believe we included the the ranges. Jose still that guidance without from Santiago. First, benefit Jose year's the ranges have said, we benefit addition in would Santiago be a within stated our

calendar included we not once to expect closed, and update XXXX. expect to projections financial has benefit which Cheney have occur We that deal during sometime from any our

important for we today an of summarize, our fourth the quarter are strong very strong day a Not fiscal To announcing results, is only fiscal culmination company. XXXX.

XXXX. setting and goals also financial ambitious are achievable fiscal for We

transaction, recently the sales have which track is PFG's record growth. into territory their and continue of Santiago We Foodservice expected Jose expands closed Caribbean excellent the to

management is we the the accelerate along Additionally, expected team largest Foodservice strong strength U.S. outstanding and acquire with another sales to provide in held in to are on privately growth. platform Foodservice Cheney the market, associates distributors Cheney, one of Florida and profit the our path to our

some thoughts now would with like results close our to it I back and industry. George, turn to about who will

George Holm

recognize has challenges is the important consumer external broader company. the our As Patrick and for We mentioned, our day it landscape. truly environment an industry various for that

solidify looks As challenges the work existing customers as and our to for to stable opportunities build market long-term these always, at performance. platforms PFG with in position potential and

historically have success of We biggest difficult. some get when seen our times

Today different. is no

fiscal where we strong XXXX, would for As in as gains which performance reflected profit from you into our not significant in excellent to fiscal can leaned as areas of see efficiencies momentum, adjusted this, the fiscal top the line have XXXX EBITDA produce and example have Convenience and is like, we performance. double-digit operating an growth year. we is our built outlook margin growth is for

In business margin. higher-than-average with share our micro picking most the up new in and Vistar is market Foodservice, expanding independent of we markets. chain market, at of growing are into some and a areas e-commerce restaurants exciting including customers the

pleased how are with closed to fiscal XXXX our We and fiscal we XXXX. into our momentum continue expect

We expect outlets future growth. Investor Jose additional our Santiago believe all Adding and We scale company's Santiago long-term and should the Cheney to and to spring for to Jose plans from our provides the X teams the for provide PFG diversified synergies. of Day share our approach welcoming family. Cheney opportunities of only and host these in segments. Food-away-from-home and excited I'm excited an late growth our amplify the to are and We for market advantages

for We happy you your your to interest in take we'd questions. today. Thank that, Food And time with be appreciate your Group. Performance

Operator

We'll BMO with Bania Capital. Instructions] take from first Kelly [Operator question our

Kelly Bania

for strong to but of if then Cheney, just the in of quite inventory could about is the gross the segment or in support? margin, then what, particularly terms margin drivers and this each maybe within understand that business and wanted just gross guess, I 'XX wondering note detail about help one gains? and fiscal regarding unpack for was I anything, another on you us the quarter. one a drivers more the magnitude I And different if ask maybe was --

Patrick Hatcher

we're impacts, that gross to Kelly, the thanks I the QX, will I'll at as are maybe going and in experienced there what for was that's start be there normalizing much Patrick. gains some jump impacts inventory there inventory something be the than feel the the will be we but question. This case is is Quarter-to-quarter, continue what well. may in margin it's we really, with of George XXXX some 'XX. well. look gains significantly, in and and finding to as manageable more again, maybe But

Foodservice cheese the gains much gains in related we we like quarter, QX particularly. have In did than our some But poultry. didn't specifically, impact see that, really mainly in to and over-indexing other inventory things from

control each how mentioned margin we've We And EBITDA in saw as are really of a performed as really OpEx gross pleased well. expansion great profit. with segment then before, their

of drivers growth Some of around gross really the profit our were in independent cases.

brands, Our Foodservice and Food growth in and performance Convenience.

are drive So add on do want again, George, all we're the anything? really don't I that things profit the you things gross that that And know, focusing help to expansion.

George Holm

had it's growing just better Kelly, quite those the a in and for areas. story same that's we've that really higher-margin while,

is certainly but with we to we're that up pleased example better. We're I X.X% with you type think same margins that much of industry market challenged our and that seeing case Foodservice, significant to Convenience get pleased And making expect we great it. for where gotten declines past. get right running the fairly a That happen. we've in when store that we with see continue Foodservice business, is are we're now. to growth, the aren't in shares continuing Then are to the of nicotine

we of kind end comparisons where we So year, fiscal in through well quarter as January case way in were of second and our first We one had X.X softened. year, our of the we X upside year, this through work. go sticks hockey those then the growth. will Last the were the above it down quarter,

similar so will to So like. take But July, it place. looks QX of what in we're looks opposite that that far, this year hopeful pretty the

Kelly Bania

just very bit margin. Okay. little past of helpful. higher maybe Cheney then deals on [indiscernible] Looks Brothers. valuation a higher like And a little more That's bit a also but

So there private the strong maybe facilities a valuation? of quite the looks understand mind as can margin like supports in a maybe just you the mix help state-of-the-art valuation? just and factors us are efficient. you your us have profile the help can understand higher business, very and that don't they But label It

George Holm

feel for full a they Yes. that paid Well, paid we We turn price. than that feel we Reinheart for and about a price, we that did Core-Mark. deserve full and more we

it's facilities. case big faster. part all strictly as are well. that's that's They company, full-scale market fairly I is the always earnings. including that difference accounts distribution national that a flat And of a growing Reinheart, for more think is growing the ahead handle earnings have built company broadline, us well-run capacity, of a need Cheney in centers, have of many been X It's extremely faster. but for it fairly the the And and flat, with where

far EBITDA line. run as as facilities margins our margin. a a under the significantly double margin, what corporation. But as have are that just actually looked in than it's total And just We type EBITDA if which few is a go, it's you that scaled higher much we pretty of X% certainly at broadline

So upside I some think there's there.

might with does their for in that I have products will some upside choice, we we think and earn to that management, exist fit that operate the probably we business, not on products, convince to their work those be branded to We have But our have do sales, ours. some them. the go brands. way and

but I them. increased an will I think some brand margin think coming it will while, for take portfolio a there gains from be

of I if paid range. and look that note would we you XXx that those Reinheart at and both also Core-Mark in

And we've intact. XXX. did company back that XXX just And if company that from that our as practice, is that has took of you taken go end XXXX. acquisition fiscal with kept December ended, year we you EBITDA to Reinheart, our If the at

we numbers X.Xx would be that that EBITDA. of today's you if today's paid So EBITDA took

you of and that combination in the acquisitions, multiple. XXXX, and on down actually market closed a if taken current of we paid for core which September those X took what we Core-Mark, And we've EV Xx to

post-synergies. real through not multiple XX area those confident the procurement, like XX that. do a and cutting in by a We're We with do way So people, come really that don't some things. logistics, the synergies some we

we're said, guide. So a paid. price they I price, what I and paid real we full the of also we the confident think I think deserve Like in

Operator

Alex We'll next Slagle from question with take Jefferies. our

Alexander Slagle

just Cheney, Thanks, growth congrats, the EBITDA of with little exciting Santiago. know On I this opportunity sort Cheney more have good I profile, it's And talk customer bit then density an history. in maybe morning. to importance you're you thinking and of ability And on guess growth ask to might that I trigger like to a Southeast could kind the of driving the an or how just how that? of getting to closer greater through and to gains accelerate kind share wanted the

George Holm

Well, are for centers their us. great in distribution locations

Our Orlando Tampa, current Miami. ones in and are

We've current that broad kind do Our than base entirely an stepped facilities line successful. of do great and all it efforts of different well. but Cheney. type They have been in into people's with business almost spite customer not some our

as the we we brand what ], day-to-day Chief Officer world. very we'll Foodservice these Reinheart as Performance with was did at and Operating said, [ similar And the businesses Hoskins the main to companies kind separate Cheney it's separate together of he I run Craig portfolios. person put So report business and and will like our mostly Reinheart. into President, The

Patrick Hatcher

largely they're on really focused that independent hotels one things and about export. so sales. restaurants, and restaurants, Alex, but of Cheney growth It's is on well add clubs on especially the I'll the were a little just as profile, And crunch as attractive

think growing or they're growth and at a the clip. a for think huge look history, nice -- in we really there's at we their us, when rates So also we opportunity past

and is to them separately George saying, continue to going keep as have growing. them operate we're So

George Holm

those acute They're but in nature, are, ] within small independent accomplishment They those really do of do they're very chain our but they the chain not is extremely we'll people management business, in resorts, they're type today. continue in businesses not they're that that the term, catering broad And business And which hotels pursue and to type restaurant business. not well. there. that us, a the like chain clubs utilize in are and distribution line the or And long restaurants. markets, job Spine of with lodging health good centers country or different in much -- into [ But where well care, of not to do and brand of do either contract very business. we'll we

Alexander Slagle

holding And to it. quarter accruals related question the tobacco over? Got just gains a inventory pricing on on color release? have on any profit you the Vistar Convenience rolling and that gotten you business, and benefits And might just convenience on the how were the

Patrick Hatcher

Yes.

On a big the inventory gains, the quarter. again, really to not impact

Vistar little in nudgeable. actually Foodservice actually slight I mentioned, look down and decline. at When mainly. there pretty year-over-year, As you some were Convenience, a there's It's

I to increases said, be to we inventory QX. in slight massive any back But have have not last we're as might gains. past should talking of So pretty again, it some normal. normal, about We year-over-year really where get kind impact that, this expect we think didn't year. We

Convenience at that gross job as look results, of they cost job cost the amazing obviously, control, mentioned, and did George profit of control. excellent an you again When really and

that a to we out, mostly increase saw called really And part that they but of just a due was EBITDA, small was performance. those to related it of that, a accruals. to portion So nice operating

George Holm

Convenience to that's this with same-store haven't I softness type unique actually Convenience. mention declines. we seen of in some that also sales time for They want see sales same-store

up business as little it much as we environment. maybe picked from standpoint. in excited showing front what new a different have the of in we're Convenience So we would But us up a isn't about that bit

for have as together progress what about and the last we of Convenience. warehouse this Core-Mark's, just we as this they in we're a expense lot arms By merging week, way, just did And getting an during a was Convenience. also, coming made, Foodservice job last amazing around up and their record and EV far delivery of had Convenience year, excited

Alexander Slagle

Great. Thanks. Congrats.

Operator

Edward from We'll Kelly Wells with Fargo. our next take question

Edward Kelly

hoping on us -- today. on EBITDA, bit type could Santiago on that stuff for deal, provided [indiscernible], billion $X.X color mentioned you multiple guidance I of clarify same the range. want excluding give congrats that. the still sales, you purchase assume the $X.X mean Cheney. little I my to more was you a And still the news and to the your within synergies just price you the I be within would that billion range. then And

Patrick Hatcher

Yes, that. I'll take

it We're So into with excellent leadership our one, closely again, business a as and focus. a also strong think then this and as they've and we're the relate just ability on us -- metrics disclosing the the sales-driven we have working they're fit Santiago, deal. teams geographies about high-growth and since acquisition Caribbean. strategic really that excited is, areas to really financial They Caribbean to comes around close. been is cultural about the rationale expand gives Jose the all the any and surrounding not the very really with This

Edward Kelly

mean for still Can within that [indiscernible]? the I range excluding the that you you'd you just say year that Santiago, confirm, Patrick, be the when

Patrick Hatcher

last Yes, apologize. forgot the part your of question. to I absolutely answer I

the of the remains range Santiago. or yes, without that So same with X.X to X.X,

George Holm

tremendous And both a going. facilities branded Santiago, up great make and islands they kind building. What this as think Jose very those get an to a have other an of between spent gives really the that product both announcement path Cheney. money to Santiago any I good with mentioned overwhelmed what Cheney and but happened with us it's problem and it that opportunity could just Puerto warehouse, mean sure facility I with we excellent and hurricane, I to get gives to some with it Jose had us Rico a to also wouldn't Cheney that's through into that similar have Santiago, Jose those we of the get of have company, get

Edward Kelly

then you, just And Great. a George. follow-up for

that the 'XX, volume as maybe the mentioned through you in about guidance side might that the a growth year expectation were within of [indiscernible] drive around progresses? like and You think particularly fiscal have case and year. Can for sort more talk hobby, just you implying bit the I like little improvement you about trends you case think what volume the improving

George Holm

at achieve in XX% because just as Yes. barely what Foodservice we the gains last this for situation in to the the case we're least look there that macro still is We growth better we of got fiscal independent we would get. macro We X% consistent, to I'd like that snuck at year. business. They're we at information year, that according into our very half to fiscal running. certainly the second look the need a And share

So long improve. our we don't have concerns goals around does the macro as as hitting

with we Now standpoint, do were quarters very from bit year, for growth of slower obviously, this growth a business no was a our spite good quarter better. in with history. we had so case we sales inflation, a we helped about sales fiscal little got of additional up have But X coming of this

of with independent But goal in fact, some think business. national running X% of help I off growth. from gap that account case fill we the So our XX% will have, to

Operator

Will Heinbockel Guggenheim with take question our next Securities. John from

John Heinbockel

sales And with issues you a think force level philosophy managing up with some I think you'd was Because start than your right? to have to higher in I were like. normally the want now this I macro, George, that. gotten guys on that there expanding

you think I you X%. think folks what better growth right like possible would of you'd now, any tweaks invest When amount I do case any driving than not just that been for macro, onboarding you and have tweaks? Because just a right? those to to make today you're look right make, X% that more Is -- Xx. you the the at

George Holm

we're a continuing degree, we to To have. follow the same always playbook

a the can And part think the a to they goes not we We're that as of our another bit, Within also we more certainly XX% in month. those than to of to and do. our and had increase made slight of in And training number quite now, we will come X.X% increase more We've push get back we salespeople. nudge kind it moving We up. say group we're people, the seen we've best intense. to us our we've is in do not help we normally large territory do. I big Now right in a don't that involuntary, on up that are people But system, this reach turnover, would when that forward. little are done voluntary splits groups. that trying

such our We average mix in salesperson and increase does compensation. in just an in what had business

have our it's more a business more full helpful for much we having calls there new people. on out than effective customers, and experienced less without people book experienced us they're making making our So new now certainly that calls of those of

John Heinbockel

driven, then Where X table sales DCs, you you on So is cases can they're productivity decent. when think some bring Cheney, do And about which in rate to per those maybe the other force, the follow-up the they you the which productivity right? think labor right, most at key mile stand the you do KPIs, a And brand? where their pretty of out? growing, than think probably private of

George Holm

real for be Yes, their part, figure a company. that's aggressive. fairly warehouse very making And been communicating competitive their very, those has But out we've similar similar. their most their to got sales-focused and a delivery leadership pride there. they being force numbers decisions and going very the great We sales take leadership in are with to being actually us, us kind lot of and to

opportunity also think make And We fit. it's the similar doing. all brands, are I convince that of and will it's currently don't really and which with see world, their there there, anything be in they're progress our getting broadline I it's is a us well run. good will world to about their just very than us, changing them versus broadline aggressive ability our what better The to really KPIs a getting but that world.

Operator

We'll next take from Andrew CL question Wolf King. our with

Andrew Paul Wolf

up Just on cadence follow of sales. to the wanted

pretty is companies, up? get things to [indiscernible] case industry and kind of more a sequentially the for be June think that you had Certainly, of a you the something you stability in July. latter quarter down? case to have at to part I I what where of growth. ticked were of it just in you from the with June in well sense you slowed where just to follow leveled known things And went quarter. said is things that Or seems the things of that Does did who the similar up data-wise certainly mean but you wanted July

George Holm

flat Yes, to quarter. last

seen get a the bit we've this sales our it's We [indiscernible]. [indiscernible]. ability seen People to little and and strengthening seen before, from a We've to go like out little come But and a back. always tends slow a market, same-store it in have definitely for business. standpoint, new

Andrew Paul Wolf

turn up into kind cadence, quarter? film you of more Vistar this based like of lease of who going but that folks Vistar that theater not movie cycle, you movie business, the cycle. other just to turn And more sell -- kind some on to Do expect the do is

Patrick Hatcher

the But was in what sorry, Andrew, name the certainly, improvement I we Yes, Patrick. so in Vistar with last out terms forgot and quarter it's of to we're Wolverine seeing theater. Deadpool, for last movie. see a releases I mean, really the improve. of expect tough We did do X in theater. quarter content and of nice some and

think the better is But as expect quarter, be particular, little to so area. calendar show that I them quarter certainly, we we improve, into fourth content bit do to year, get going this results of better. in a the in the definitely

George Holm

comment pricing. reduction and on in candy increases, got categories. a And price snacks. a increases gradually typically back. volume then there's long particularly all We've when some there's it been and big the history, comes those there's across with I'll of And

slowness of with some that's up. Vistar the convenience do prices think That channels industry really lot all are the where I their affects also to facing. got that in is a the

we they're hope and are perking and a So how seeing theater confidence and up from Vistar those managed, people that, standpoint, just in we of businesses to we that X a lot up. have adjust holds

Andrew Paul Wolf

Got just it. questions And X on a acquisitions. of couple the

an it's auction? have a negotiated. similar guess Reinheart First, on congratulations. know on a but of Or well did Was the this, been background, I your disclose might people other that that of like active was buy. kind to Cheney reputation -- Bros, to you I with businesses, would having done given about been was lot more -- little it you more

much seems would sales And mean, there's I as I growth This is least. good well well very Is just I -- your strategically, synergies growth you ask more strategically, and earnings is where but financial coming wanted real this remarkably power a here. then beat, Reinheart, were -- expect, some and general it a an so the this acquisition here. much like to just as it's is outlook, as -- was also on it, impetus just the probably at about it this

you rationale? Is main paid led of sort growth, strategic that's I up little think the with it bit. why that a you

George Holm

as our short how Okay. long buy Well, to this took quite as tried it in involved there Certainly been was time. during of time came prized People an But a one first, have for process. far to It's together. asset else and as while. Brothers. we It period know, a no a auction. Cheney not it wasn't business a

going we for of they've where As fearless than future, Reinheart, Reinheart, customer be reason time. we value. They've with felt pretty centers that money was a putting backing the a very they fast-growing distribution probably lot base a That's far although feel as a the into up it bring been the full more company price. worth also and will been new long territories and a

the growth. it's KPIs them, But the to anything continue that's for we it's it's playbook it's probably see businesses. their our And where run. for There get just X vehicle I upside We'll best think We business. is, run in are bring any different that to use. very to well into we'll operate the a we can don't but them growth brands business same as to us. let try us, magic that from We'll strengths that have separately.

Patrick Hatcher

I Southeast it we a add, in faster just region, presence I faster our growing the about I'll U.S. that's remarks. much talked and We really more Andrew, it's region demographics. faster just or having the the about excited mean, in than the than we're mean this the economy, region,

a lot has of growth potential. definitely it So

Andrew Paul Wolf

it's [ and for Southeast ] asking population Florida to center less. just and of if Rico, Ed's the the look they the you about distribution I into and can Great. revisit it And center, Jose Puerto way won up is Santiago meaningfully Carolina. that sort distribution at One deal.

were that it you per whether less it is way, that it's to to it little sense facility what get should and look we a trying sales productive just probably it's with at if bought Brothers. less just than of maybe or Cheney fair a to here little a So we haircut productive proportionality we're a because say on straight-line some

Patrick Hatcher

the run strong, of it's it Puerto Rico outside KPIs really variable mean actually growth I are has also potential It's a -- and the media organization. No. opportunities area.

would say it's actually I strong very KPI So a organization.

Andrew Paul Wolf

hear glad I productivity. was [indiscernible]. asking more to about sales I'm

Patrick Hatcher

No.

expansion but a you're if tourism of looking popular it's it, about at population, a think had that area. area. So also lot very They've you in

So a lot and they of sales productivity lot sales a have of opportunities.

George Holm

independent, sales they I'm give we you feel XX-person that not a strong do have entirely force. a

Operator

We'll take UBS. with question our from Carden next Mark

Mark Carden

M&A. So opportunity to opportunity the out. given one laid guys sounds nice that start It another really you like Cheney a on with growth

has there respect given Would open the anything the in Western push just the emerged? capacity that something pursue opportunity pursuing Foodservice white forward, pretty you changed on to to does this geography this U.S., look few how right out years? for expansion in the your you. your with on thinking a remains Or anything wide As space if region timing impact

George Holm

way if We would something the if find a I to and we very itself. get desire in that would obviously think opportunity presented we be it get done could going a opportunistic West. It's

Patrick Hatcher

Cheney Yes. the after down the Mark, our outside very quickly be will our top even flow. just of cash we closed look mentioned if on debt with our just I'll you range. the add, paid end or And deal, we've historically, I

to something continue but look So we'll be so ready if we'll comes around, at things.

Mark Carden

follow-up, makeup Is the you something lower a Just called that business, of Convenience on warehouses, personnel out Great. guys the your there. just thoughts that? consolidated And expenses. What's primarily then some as else?

Patrick Hatcher

sorry, you a it I'm missed for second. it, out cut Mark, repeat that? could me I on

Mark Carden

Sure.

terms in personnel out guys Just with called of the lower some you business, expenses. Convenience

from? is Just primarily coming where this

George Holm

That's really got productivity. delivery to and do with warehouse

Patrick Hatcher

Yes.

running an taken efficiently, a we've they're excellent out labor profiles. the So temp and taken We've their lot labor. job labor. of the just they've managing of They all really overtime just done --

Operator

Silberman Lauren with question next from our Deutsche Bank. take We'll

Lauren Silberman

growth, start thoughts with the customer Just churn, be new how have much Can wanted increasing coming what on the Are appears business. environment? promotional you environment. let you to is from share? any you seeing composition Foodservice given versus an in any change promotional wallet to of customer the acquisition case And

George Holm

with little same-store a with seeing pretty Yes. and business. little sales We're softer better new good consistency, a

see extremely And But that's said probably you I growth the negative an competitive. be competitive any it's been than more would industry industry I same, I think it before, around right think more in to that very we're competitive. start say I -- have consistent. continued share always as gains on the world, But when our to normal. gets today's

back, I to of think confidence the So competitive continue we be have lot a a industry industry. but will that will very come it

Lauren Silberman

specific all doing? that other increase To manifest or And distributors competitiveness? competition that segments? yourself seeing you things across the are any Are

George Holm

for that part, looking that right? situation are, now, makes negative would new most mean get accounts everybody accounts say And the the I very -- new it's same-store I and running is competitive sense, to right accounts. a for it's sales.

thing out looking but So same that's a irrational. think for the by business. means but before, little it's just again, -- other would are competitive And no more than people I I

Patrick Hatcher

And Lauren, funnel at the of just looking you you you the Cheney look I'll They at opportunities of really a with and independents Convenience, they're business add, working start or when that we're outside Vistar there. have sales get or on. out the pleased lot

margin higher business, New business.

with have funnel. sales from So pleased do what a segments really able from been that we're to the standpoint,

Lauren Silberman

were it with The piece side, like of new on And down a to wins. X% looks I Great. business just it. volumes X% follow-up, Convenience sales guess, the

are magnitude as same-store the 'XX additional help try growth underlying got So I in base sales you Convenience? the any through presumably, color growth that business alluded in fiscal worse of in and to. growth unpack think Can from the you XQ, wins which you think on new to

George Holm

at look the business declines, you there X% same-store Well, same-store sales if $XX running to that's got you billion sales close a declines.

of up the amount tremendous business to make same-store takes it issues. for So

Convenience we you are, can we've brought us help business those in -- going we area. into independent of into numbers I convenience know don't year. number as stores But fiscal what just And been deeper think also, brought amount the we've get selling, of on exactly certainly we're get we've which to significant new back running with. the increases I a is on really that So to this

Patrick Hatcher

gaining the Yes. because see profit. business, so on higher-margin gross doing. what And it's you're mix same-store really benefit. nicotine it do to hard declines, that's you in see the that But Lauren, We're business, of bringing the better

Operator

We'll Jeffrey take our next Bernstein question Barclays. from with

Jeffrey Bernstein

question the just was on growth. independent Great. case first My

to for come improving further at consumer seems July. within independent confirmed It to we are industry and did quarter, in perspective fiscal said But yourselves stable that strengthening. people X% 'XX, rather perhaps like macro or now for level it's target. think case something than mentioned think about a a needing growth you the fourth expecting enjoy macro most you I easing X% from also lower in your I the and the for that I slow trends think guidance

that half on So alone done how macro And the compares second be in headwinds I'm your purely or the just reaccelerate growth year, persist? the not your can then wondering to I about follow-up. a if you have you can were whether of case guidance, think whether

George Holm

people what there. eating can eat that. historic always standpoint, as gains, that Yes. know it's gains increase we economy X% found But far growth now. are a started going, got once the growth, that The some growth have normal more organic had marketplace. ball At macro more, out if didn't the had above be making the always case crystal continues, always be goes from right as our we've no stable things about doubt going where share then but give a difficult of current we're type again, don't has don't but people we that more recession. would going during we're the almost and to to we I great certainly mean share well out us, pretty we really I color the to in for again. And as business

Jeffrey Bernstein

materially would it growth fiscal and down? fiscal fiscal you've is this going kind or there that -- I guide an Understood. have and change trend continue Investor reasonable said spring. And algorithm the rates then up would to either possibility prior know X-year material current over seeing past if Just that you're years you're the beyond as long-term seen shifts of in to I the year, assume the couple we 'XX? Day you're year? Or the wondering in gaze beyond of Is at that, the any think least you

Patrick Hatcher

not Yes. Investor That's a that great question. We're to you the to what release Day. at to going just do hit did it the lower I really I'm want will we comment previous end reemphasize years. excited with share X-year on we guide, our after today, of but X

for to And in this you growth next the with -- share really our able ability our to X think year be next and we're the to then given we're results, guidance ready we've been really shows confidence that pleased achieve. years generate with come we'll So we've the spring. we strong this

George Holm

also deal mentioned capacity. I good from a of added Foodservice we've Yes. standpoint, a

some years giving more us growth. going next about good few it's up. We always, this bodes have year. feel that real And us, for in the We well, and has coming fiscal

Reinheart. in the said to of we I to of like think should Cheney what is to be with be have game get and with said, people -- plan Jose what we that. their that confidence similar help able group Santiago a results Convenience, We today. and a at going I big is lot to I least somewhat did And

Jeffrey Bernstein

just the bps X.X%. Foodservice know inflation in inflation or to this lastly XX topic. from to XXX And close on I quarter, it. accelerated Got the

if Convenience I greatest fiscal it 'XX. I the in was you And X% up think to range specific wondering was kind mentioned to obviously don't share that is expect Just you which X% drivers. you maybe And inflation that outsized. the into could store, Convenience. of maybe stay think it But on

fiscal for the 'XX. Just would be wondering outlook what convenience channel in specific your

Patrick Hatcher

Yes.

I the were, Foodservice, really on on are cheese things drivers So poultry. and said, some like

similar experience out be range, in like do then here. of some also they've kind to the Convenience 'XX. disinflation, the a will to And feel be we Foodservice but we Vistar, are. They expect for to to little that's X% expect in bottom We going typically that X% be continued higher. to

We we continue we're things tobacco. at have for targeting total increases to we're digits the kind of around single But those at them do They price expect to in X% XXXX. what that's and but middle get X%. probably obviously looking be them to of where of is from type company, kind

Operator

Morgan from We'll Harbour Brian take our next with question Stanley.

Brian Harbour

cover customer your does the might in you Just difference George, Florida territory mentioned it, of they into kind can -- North but comment the expand versus and kind Florida, of just same footprint? yourselves do Georgia? current have and between Cheney of today? roughly the difference it up you kind what's Or

George Holm

go Florida Yes. their out Lucie North North of handled Florida out to Well, Port Saint they of and facility, Southern up Georgia. we

the state. and commercial So I non-restaurant more type area than of country and independent as like state, their that quite we're that say a base successful is of hotels coverage difference are. there. clubs, resorts the would with we But as far said, of business. the most both Very, customer in in the I very

only the time. that Florida that a pizza company the is in Our lot very Miami, seafood is this at [indiscernible] do Italian Latin. was bought bought, of we PFG in a before heavy company We business PFG

subscale the pizza we're a Coast, when beyond liner. of Italian With we've it's broad mostly still Italian to West piece you a capability as I of classify product a In built kind seafood, seafood. So but heavy get Orlando, emphasis. heavy would us

Brian Harbour

sense. Makes

productivity. to the on specific continued warehouse other side, kind the right I better and on actions OpEx are that see helping now? of know Any operating Just you've of expense driver kind side

Patrick Hatcher

OpEx And leverage. then making that it's safety focused working sure I also, Yes. they're really just mean and really smart. just associates and on the we're

to better think labor of seen pressure sure all dissipate. the of that keep the And in and and and doing so seen a we contract a labor wage the just managing that combination I everyone But job all, just it's making minimal. had we've -- force earlier we labor a much temp

Operator

JPMorgan. from Casella with our take Carla question next We'll

Carla Casella

pro although X opportunities? you the X hold nice more for will here. Are -- transactions. for having continue leverage you the gave you acquisitions put look if wondering And I'm your forma just or M&A on then you to

Patrick Hatcher

Yes.

we at the we be high range once on be X.Xx end we'll So -- X.X believe we'll that to range just just Cheney, is to the our -- of X.X end of of above slightly We'll excess paying exact timing. to And on the quickly. we we're things, again, debt very way it, very continue are good at then looking have the at potentially capacity. depending down close

especially So we'll continue to they're as mentioned, look at going strategic, opportunities, if very George forward.

Operator

Securities. next our with Bartlett take question we'll Jake And from Truist

Jake Bartlett

is for environment macro the how with guidance. of recession read-through mean if then way things your Day, macro frame normal, on Is the a to guidance in maybe we on a I a high stay terms your low in outlook that meaning end, your to of outlook framed range? was go fair and of plays the in kind kind -- Is the that you'd -- there be the better 'XX, X-year at with that the environment. current that At pressures the that is terms into you that a Investor there slight Mine but of improve, you end. your environment

Patrick Hatcher

gate And been provided. of our macro. Jake, little discussion about why some of I the through than about a into what QX the and we really, see lot guidance we've a that the that's would the we we QX talked QX really there's that and being say out certainly, guidance, slower incorporated that's we've softness. But said

a how think And things. at of so you we're gives I that general looking sense

Jake Bartlett

other mentioned Okay. differences, pieces new What it's as line? comparisons And maybe What major timing be whether we and cadence. and cadence But you the then timing cost should with top the for go throughout moving that early Cheney other mindful we big the will in Convenience, the really year? the drive that are there, call, the you've some bottom mentioned accounts big of that input? are kind both impacts wins at of is

Patrick Hatcher

to again, Well, Olympics at they restaurants. not and the wrap QX. just in keep Olympics to The thing, out tends also up, had an there's home one people viewership. incredible just

to in a with election And of we've a media that concept some drive on for seen concepts, message the traffic. little the general, do, get to the media we of coming also, foot drive our rely out foot if to up always that concepts heavy traffic our difficulty elections that. So spend there's your in bit and you're

other of we've really, we've nothing those the Outside those there's think two of outside heard the guidance most issues, that things. in I things, of included

George Holm

cautious. amount try Yes, of give into get we Would we we account to our try field. take And real in tremendous to a people everything input the then guidance. when from be

I we with we're a And guidance. any than a better of in we've long the a it given. position we shares upside we that through We've We macro, improve. quarters. think don't if ball guys cautious would crystal for think have to be with it macro expect improve, we gone through The that the do. are, very good understand you our but we're it. we guidance if And being doesn't slow just continue I to history the have it's gain going X

we confidence a which way have to guidance get we in number. but the So around a

Jake Bartlett

in do some into seeing Convenience of what as to that thought just feel path to business what that? has it proven whether pressures forward? business and state term you path Convenience the think unique historically, trends little would about headwinds? I the more a George, inflated just the have -- business? kind Convenience you And intermediate of Great. it's terms view a But near on do the passage of the the than go the detail the the improving, could out Or we its the environment. in are more guys term the time? macro business What's the how the business, in little be macro of What's maybe being in drivers you to you of what

George Holm

of a boxes getting a And the where lot better sell the we at there. we're are margins it Foodservice out better lot Well, and of of part better. stores,

the where area a I price all don't price deal business confidence. sensitivity basically faced when gives big think in of conscious, working price me time account. into Vistar significant And -- very purchases but having of sell So of price now. right they're food that And we're people can not the they're there's And the that through they there's are through that increases. purchases, I good sensitivity, And our everything take Core-Mark and that. way a still they have

nicotine won't we growth we're in good see We growth It's but the in to just see will time look at and a be, growth healthy in for healthy it as store a long Foodservice. and very certainly business. to going continue been good

Patrick Hatcher

in And that Jake, all as share. just about, we're market in I'll add, categories seeing key we talked we Convenience, are the we're taking

focused is Foodservice we're that operating are So the well, areas and growing very in and the Food the on that which we're space. fastest,

Operator

And time. at this questions there line no the are further on

call to turn the closing any I'll Marshall for remarks. Bill back So

Bill Marshall

Thank you for joining our call today.

please questions, contact If Investor you us have Relations. at any follow-up

Operator

does program. This participation, you conclude your at time. any today's you disconnect Thank and for may

Performance Food (PFGC) 14 Aug 242024 Q4 Earnings call transcript