PFGC - Earnings call transcript Q2 2025 | Performance Food Group Company

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Operator

Good day and welcome to PFG's Fiscal Year Q2 2025 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. We're here with George Holm, PFG's CEO; Patrick Hatcher, PFG's CFO; and Scott McPherson, PFG's COO. at release which regarding the can section our press second XXXX Investor a of results, quarter be website issued this our morning fiscal Relations We pfgc.com. found in

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

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

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

George Holm

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

build will details the will quarter. the turn year. This early who and I segment our quarter, touch and the active remained growth the acquisitions. company morning, accomplishments, Santiago Scott, Our with through new I'm positioned avenues believe are high-level upon of to very call growth our to review integrating while fiscal the some through I the then well to during underlying our will accelerate for business results review Brothers. targeted we pleased of half Cheney fiscal second business our momentum and in adding results back continuing upon over the trends our and industry of both for José

fiscal position, the financial XXXX. our key priorities review of for will and balance Patrick guidance Finally,

an influencing our the industry with and performance. results second begin quarter of factors overview Let's

particular, combination from stepping X% an the case see In reported steady the organic in improving of organic quarter the in to market a through growth quarter, quarter. independent up in in pleased fiscal we consumer volume underlying gains backdrop. share grew the our an restaurant first fiscal second and are our X.X% We acceleration

December, year-over-year to the difficult prior Keep differences in includes was in mind, due case this combined, calendar our to restaurant November a over X%. comparison October up primarily year. and In organic independent volume result compared

volume to but including move is foodservice the business. due with through teams. I X% case easier of our the to can year by part from comparisons, our My we strength independent excellent confidence also achieve growth January, our 'XX, reaccelerated in macro. the several continue case reflecting believe we of factors, some help fiscal As underpinned work underlying

organization increased We through continue of targeted build and force talented our of hiring have sales salespeople to hiring. the pace

theater across our particular, following growth Turning a the picked channels. grew channel. corrections broad Business calendar and Theater to fiscal for X.X% the content. of the the high for the in long-term second in is coffee Total growth channels encouraging the reflecting final the by the quarter quarter up second sales with itself movie year, to fiscal vending, office This year. of modestly the cases quarter. in in start demand saw was revenue box challenging Vistar months Vistar In and strong positive health services segment. case many office

top consumer building momentum of quarter, to is half both business easier and a due discussed back convenience lines. anticipate sentiment year our for we the fiscal bottom comparisons. Similarly, Vistar we As better year-over-year improving on last the and

been earnings to discussed and industry candy calls, largely the has in challenged, inflationary significant have snacks. we prior on convenience As due pressure

have but outpace single-digit volume market key win large by categories share compared candy growth. low of However, industry driver Foodservice also we to Core-Mark's other remained non-nicotine and ability peers. to a categories performance, into performance convenience key encouraged boosted remains and through our

both from included hard on our been perform acquisition business we beginning the continues have the legacy Cheney Cheney quarter, Jose results the numbers Early Santiago Brothers. well, at closed and our date. integration the has our team closing their work in Brothers to fiscal teams As in welcoming second on

have recovery PFG deal, by of years. Southeast when without I been months high past in substantial been for expectations success the consumer. discussed hurricanes weather, and announced their part in for not from we have to including results have made many have that the Cheney The we admired As I months progress since early am very and say a have we impacted the pleased that been they particularly and have markets few strong. slow the becoming challenges,

at through is proving to brisk be continues and grow team challenges to at managing a Brothers Cheney these the formidable However, pace.

well. Jose the we remain joined important early be results. and will Jose strong pleased Santiago Santiago's believe provides Rico growth. for Puerto with year, organization This we the position an increasingly PFG market fiscal in performed excellent an has and platform market

see seasonal patterns the to Santiago Brothers season. excited future holds. that slightly have selling different what winter strong PFG legacy are than mind We with and Jose both Keep in Cheney

contribution we As a in result, to quarter. our nice top and lines, bottom third our fiscal particularly expect

quarter had from of fiscal our all three with Taken business second PFG excellent together, an contribution segments.

greatly now food-away-from-home dividends call which to and of Scott to Our long provides McPherson. we thrilled areas expertise beginning effective to the continues opportunity growth diversification turn December, Scott's promotion we year. to believe PFG. strategy Operating announced he the high-level brought the the to to unique and significant through management term, at acquisition, We is were of pay Chief we welcome Scott calendar across like value for over team to PFG. I'd the In market the has the Core-Mark Officer to our

of of Scott XXXX, was giving him in our business Officer, And our and XXXX Operations role Core-Mark Field industry. will the Scott three responsibility oversee business his Vistar for segments. influence organization In COO, all running to strengthen the to assumed segments Chief named segment. in across and oversight continue addition In our

questions of which division during join from role call. VP the I business Craig which the your Multifoods Customized Operating to CEO take Group the additional Operating Chief also operations. highly Q&A provide Distribution of later first was our enough then the Sales organization. our Craig call contributions Craig assumed before Scott PFG. Chief cannot He the Vistar. into as has made portion division available of became Performance our Performance He asked to Hoskins. our be to of ascending XXXX, Foodservice I've also and Officer our to in and of speak insight President to served about will earnings our years also Scott acquisition, CEO the was X as Officer our

into Chief Development excellent Scott Craig as did our his have an Craig new I'm Officer. job to onboarding thrilled role.

closely we integrate those this and into Cheney as December, in announced will with PFG. we Brothers Santiago As in role, Jose organizations work Craig

I'll now McPherson. call over turn Scott the to

Scott McPherson

performance, everyone. the operational you, excited of today's Thank market George, share into growth call that join record and I'm initiatives good of the will insights some track PFG and and some broader to maintain execution. help long morning, and our our

want go jump mile. journey growth, a I space. the extra the why always to has is became they to target the a and the easiest transition, that years. over not COO quickly Coming role approach to welcomes in on knowledge it that embraces and change organization. of through broader people talent in, this but and leverage the to created reflect inspires I the Before well-run This company betterment possess culture acquisition for We my companies past PFG excels X evident

set the across our In I've exceed sanitation ourselves. I entire dedication to this a become PFG our want years year, driver, and had will for During PFG seen platform. few our firsthand Arias year million-mile segment, opportunity business specialist day, and we our dedicated as accident-free. associates work to to that Luiz organization the examples the of that is X high instrumental different. I've eclipse expectations the started interact the Vistar bring our in every over talented XX a make highlight associates with mark the Jose with advancing to to past CDL associates which ago, a ability

Core-Mark day and Ali the PFS, It's Ali of inspire Jose, Jasmine honors. come Changemaker was associates of Marciano, Our XX,XXX that to was succeed. industry's every with Forum a to convenience, Foodservice the top like XXXX And the individuals a work Dan of women recipient passion named Jasmine at top to one Award. SVP in Women's our HR,

our across results, our business. by expense quarter, had deeper operating Foodservice control. volume Foodservice Brothers an second to Both a for take into top Cheney line our driven independent with these the improvement three and Santiago growth Jose and chain solid and nicely let's Now segments, case segment. starting outstanding margin and bottom performance producing look accounts, contributed double-digit

strong. our underlying organic X% increases acquisitions, business two momentum X% was case in independent of quarter. these business single-digit the case of and case benefit total Foodservice produced approximately low chain in growth Organic our for the growth out Stripping

signs in accounts. performance top even the half new our due of see to some growth pleased anticipate wins the business are of chain adding the stabilization of to challenged more better and and from line business second We year

pick accounts. continue to We up independent also new

Our independent growth in full X% X% total the accounts With December calendar difficult organic rate across was was independent driven by penetration said, and the comparison, up case in quarter that growth October excluding penetration as new flat. was a in and foodservice November.

seeing to be our account channel. sales to While the of we independent brands nearly stabilization. performance, independent brands early for total continue we're levels driver. back signs of of a XX% growth not PFG's certainly Within are restaurant business, normalized company-owned These in significant

to to great last business the X% new key value added strategy our gross which sales year. growth going quarter. key to as period independent brand increased As drive due our will customers, help Also to to margins independent we've faster same over headcount drove sales strategic is in the increase enhance initiative margin attract discussed nearly and associates, forward. they compared talented in provide From performance portfolio positive quarter, and key growth, Expansion shift be continuing brands the customer the mix associates quality a second sales a we XXX to our high force continue of more chain profitable case our growth perspective, our past, with retention. a along as profit our is growth. In

gross for to metrics, as a leading the reducing efficiency, shrink adjusted workforce industry Our segment, quarter. In our Convenience remain leverage our XX.X% fundamentals underlying and including focus the profit anticipated. produced performance, EBITDA on in challenged growth operating to us

carton share bottom sales positive total volume declines the in have declines in combination growth account were impact these results. in to a had The market our a though line top resulted categories. cigarette product minimal period, and the line a key in drag industry performance, on However, gains new outpacing of

second growing for with roll at key a foodservice continues a offerings pace Our mid-single-digit fiscal convenience convenience customers, growth our food out becoming a In the team cases at quarter, clip. which sales increased single-digit is story. service of new the to high in part

number The some programs of turnkey coming in accounts, the double-digit our of the is since of X from we growth of largest including growth steadily X grown this beginning service. foodservice top has convenience fiscal Importantly, sold accounts sales XXXX.

basis. produced Core-Mark much We are there progress made has adjusted late May, more in up since road. a which our XX.X% efforts performance double-digit on with our come we will has the proud acquired, progress second for the Convenience to in is the EBITDA purely These believe another segment strong Core-Mark down being Day growth. At made the profit quarter team will of the Investor highlight and organic cover

made in in to from also in low be Vistar's coffee segment. industry largest the vending increases vending case year-over-year. reporting. corrections office markets, for growth channel, and offset Vistar's some legacy which some micro The dynamics. business we second continue quarter Vistar Finally, produced difficult saw services, channels, included progress theater channel our case increases machine Case single-digit the largest including despite growth declines by vending, of

the market only industry, theater is about but had a for also optimistic despite which not and micro a channel, profit the a growth are strong for competition ultimately for heightened in Vistar. The We higher wider quarter area product allows realization assortment business the market.

third see pleased the all near-term the box and projections. pressures a quarter. it with box a competitive slate channel. With do the content some due is in lighter positive high-quality strong results volatility health is our We long-term This for that sign office to we office in fiscal and included to of expect are believe said,

contributed three the second strong all segments a and together, is bright. Taken outlook quarter

power now We stand-alone forces the Patrick, broad the we financial and our spectrum outlook. the with is business are of to results joining who accounts. I are but pleased serve our each generate will at our performance segment, even turn call review to when with over will more Patrick? excited

Patrick Hatcher

to excited financial and of from I'm share details you, second Thank of XXXX. the quarter fiscal half Scott. first some our

adjusted shareholder robust continue As flow financial of to into we business the EBITDA George have X and sales came driving laid of drive upper ago. sheet our is results. months our well, to performance. guidance Scott use out strong value. our Furthermore, detailed, in long-term we executing and end quarter Both This another balance and operational our ranges translated above cash

quarter. highlights Let's in sales from net some review the our quarter. X.X% grew PFG's fiscal second total

the Our both result Jose of was aided Santiago Brothers. addition by Cheney and

three benefits, the cases excluding all case growth quarter. organic in total acquisition independent period. of our the In produced However, in segments particular, XX.X% were up restaurant the positive

were Excluding the acquisition independent X% the organic for up cases benefit, quarter.

independent We pleased are was case differences. difficult prior calendar from X an our with despite to December a result, the organic growth quarters acceleration which comparison due very

As November, growth case our and George October X%. combining was independent described, than organic more

comparison that would business. faster growth We third optimistic we Early underlying was our independent impacted though restaurant note by to offset weather we quarter, tough remain easy fiscal start due saw respect in calendar to of regions our the with choppy various across case to January in growth, an a to including States. due year, factors, of by last number the United unusual somewhat weather XXXX a

reported range. Sequential cost January than was quarter, We expectation our Looking Vistar optimistic the quarter, roughly in X% note the for in we holding high range which inventory a volume categories first balance Total modest nicotine cost produced roughly single-digit fiscal the for cheese in with the long-term which gain the we is rates. and lower variances. in benefit Cost inflation convenience quarter. Foodservice would company mind inflation other down year-over-year quarter, normal about pricing, XXXX. experienced inflation the inflation in of typically is cigarette poultry, of in is inflation Keep inflation and past second year-over-year for three the foodservice. of year, X.X%. typically of quarter, X.X% of was in while sequentially in cost that within to though typically mid- the X% noise, slightly are the inflationary our the second by gain the was X.X% elevated convenience in prices boosted line the month and for moving smallest inflation holding largest beef,

from Given excellent our company and though second compared gain year's quarter quarter year. adjusted to the the channels. Convenience back another challenges producing of fiscal increased of continued are traffic modeling control, cost by the performance EBITDA growth projections, profit and year-over-year XX.X% foot and XX.X% in segment over Foodservice impacted Convenience gross of adjusted profit little Foodservice to we impact representing year-over-year, fiscal quarter, per positive the in segments. double-digit gross growth customer-specific Both produced profit half very Total continues prior to our as period. We've holding $X.XX XX.X% EBITDA case and in current be increase a the the Vistar's the quarter, some turned in see lower respectively.

of increased We quarter Adjusted will EBITDA results of continue second the million. net to XX.X% in half income to anticipate of the Vistar's In $XXX second back was fiscal of improve XXXX, in share an announced PFG reported year. while fiscal we quarter. Diluted $XX.X the per adjusted quarter last share million, the $X.XX, above diluted improvement year-over-year. guidance the earnings fiscal the earnings high per X.X% $X.XX, was end

effective the closer higher Our the back rate historical was second anticipate tax to fiscal We rate in tax half XX.X% year, range. quarter. a of fiscal in our the

PFG XXXX, operating $XXX the of delivered for position PFG and capital our financial $XXX to of flow In After fiscal adjusting generated about free X million. of months first flow. cash cash of million expenditures, cash performance. flow Turning $XXX million

capital drive the first in price performance job year the potential categories. in the and to have managing cash strong anticipation in invested working of did Still, selectively candy inventory those flow half the an the increases tobacco excellent team period. We in through of of

per remained investments several steady and levels maintain quarters rate a approximately of spending similar other fleet over legacy quarters capital with quarter. X the Our the facilities, fairly to maintain million expect In technology. growth we the next of business, over first of to level our run our year a spending in fiscal $XXX

important capital high additional are then Santiago. of the projects projects support layer and a rate typically some capital generate Jose long-term will expense Brothers Cheney We growth These and to of return. in our both to company at growth

second $X fiscal early acquisition, approximately facility closed ABL quarter, by which the the billion During our Cheney to down Brothers in we October. fund drew

in over top last leverage ABL pushes as we quarter, the reduction range use at will to repurchases target at to highlighted of facility. is of this future. within move us M&A best our we we to current and X.Xx this of believe As look available the prioritize discussed this the back the additional in above our debt very end position in several liquidity net and comfortable target X.Xx expect the our our to time with leverage opportunistically Still, share next We short feel our November, the quarters. We range. our leverage capital term and

of very continue. standards M&A is will strategy. acquisition In to time, high PFG we high-quality our share we to apply pipeline component opportunities. At that same and Opportunistic a repurchases fact, our has successful our diligence the to drive and robust. remain expect capital of growth, also due acquisitions history allocation target important an robust typical

M&A, near and we term. prioritize fewer we for in debt the reduction will likely out As look shares value-creating repurchase

higher of we decisions conditions, share capital based in levels envision are of marketplace on allocation future. However, return the our all and buybacks to a

fiscal Turning to our XXXX. guidance for

billion discussed expect on billion be the from we is $XX.X increase billion $XX range range, net fiscal which $XX full million billion to $XXX within year, For quarter. a ends now both last $XX.X sales we to a to the

fiscal the year. sales the been anticipate half to we this favorably, trending net and have of back Our in continue

an now EBITDA year range our of previously billion the see to in also $X.XXX billion, end forecast. target. upside to We of the disclosed XXXX profit to to adjusted bottom $X.X be increase full We anticipate our

to business adjusted sales results both outlook increased on based EBITDA from Cheney three underlying Our outlook consumer strong and of segments, our Jose a strong both early is and Santiago. and improved modestly fundamentals Brothers

third quarter to in of range billion million $XX.X we the EBITDA anticipate $XX.X a be sales For a $XXX to to billion XXXX, with adjusted in net $XXX range. million

can our has Brothers seasonal As addition our quarter see experienced. helps projections, and out smooth both Santiago third of volatility business you historically Jose some the from Cheney

fiscal a stronger earlier, built growth mentioned Cheney typically geographies. To and George Jose quarter start and top the Santiago strong experience to both due lines. As bottom to upon better-than-anticipated summarize, with months both second their on Brothers PFG winter XXXX

financial we substantial Our which behind is reduction. strong, growth and position are investing flow, generating debt are cash initiatives we and

We both to share additional activity long-term both believe we achieve roles also integrations deals. repurchase Cheney are on play and and shareholder Santiago are for in pace of M&A targets financial Brothers and Jose will set out these we well, value. The the going creating important

We for to are half allowing the increase the our guidance. full optimistic fiscal back of year us year,

spanning hiring growth. Thank Food model channels with business a questions. diverse that your provides of and Performance that, your George, Group. range we be teams take would actively are And interest our wide time appreciate talented you Our today. for to away-from-home to growth salespeople your capture in this pursuing, We and food I opportunities are happy Scott

Operator

[Operator Instructions] first Capital. take Bania from BMO And Kelly our question with we will

Kelly Bania

segments contributing more consumer stabilization you segments accounts. to the in that little for could on the can broad-based you some the the specifics of M&A? And you just curious comment the in and across or signs was some that into about that three challenged Just bit of stabilization the signs fold made maybe of outlook. comments of kind if Is are about higher sales depth a which more

foodservice, elaboration I think any regard to that but there? in was

Scott McPherson

is this Yes. Kelly, Scott.

We're about happy to that up how We're on order sales continue thing look headcount second in about And the feel independent on in is per accounts On with lines growth. our up. really AM accounts our about up we X%. other trends new obviously, good our the X%. really go piece, existing

position. we're the in like little back feel we a swings really So good if a bit, macro

a accounts, was past. from rebound our a I'd bit that chain what The seen which chains of in national other our say as little well, thing up space the the we've food in optimistic were was is

as the continue expect we ahead, solid macro to that in of a feel back convenience, side, we Go just like pipe I really take On really would year. the say both we as And and Patrick. convenience the outperform those, we finish half and we well in to share out of continue. have the

Patrick Hatcher

going continued easier challenges Yes, see I this say we're the up in some of to fiscal rest that against would we're year, Vistar some although comparisons.

that channels be growth, So the will this fiscal. standpoint, good will laggard but growth we see from rest several of of of some a that kind sales the our show

Kelly Bania

can cost past, segments been sense. us you there was organization the the And also wrong. Can doesn't goods and That It a that of procurement cost of Okay. that? that elaborate efficiencies. on tell comment just doing optimization makes work as like has seem in on just goods much optimization about should focus you and I'm maybe about of you're But impact? which the a

Scott McPherson

about lot cost months, segments harder but this has goods also it's Yes, us we as across that's play. sales that the something gain driving to in always traction, helped say of over optimization. which I we've XX talked collaborating would been I is would maybe Scott. a some but in Kelly, both say in XX in been worked past always the growth, been much, that So, haven't something something has

focus definitely just of continue something our focused growing part on to margins. we're We'll around and So strategy on.

Operator

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

Edward Kelly

on the momentum business wanted sort thoughts business. and I like of start on to the just your of Foodservice underlying

business. grew I curious You the the was EBITDA help of with us underlying this well could EBITDA, very obviously, you quarter. growth if

deals, I out you X% take maybe the about case think on growth growth. of organic kind thinking mid-single-digit if like EBITDA

think performance. how and about right you Just curious if that's that

forward, to the X% growth to get back then year, looking need probably X% for X% independent organic you half. the in to to And do

confidence Just that in your color outlook. on

George Holm

get was marketplace was. traffic, appears increase where internal look It's reduction going probably and Yes, X% our from a outside X% we it correct. a measurements, take about least to which in our maybe information how you're the independent And is probably there back X% the at company, at of to what in we half.

So running back X% that that normal, X% to yet. do get better. to we to We in just if got have in not increase cases. expect that that I would be would it better, in and we comparisons we QX, our be bad We thought pretty in easier and would both thought we years. have but growth to January had January looks weather seen similar

So for that thing to a were we much help SKUs see gives do I we're job probably our that this that that, backdrop little growing bad us just and need we're well faster industry of going to some But I think, the see fact able or also. the year, our bodes year, items a a little to weather, better overcoming that's would that from But the rate than us for a get say what macro X% to just for today. other see growing is better lot confidence of we us we're line coming. Also, than the cases. signs we at that our

not So penetrating the just the buying they ago. product much as of a customer. we're year better were They're within as

that I underlying very performing digit, gives as to more without two a our industry performing the close EBITDA, would vibrant. And quite confidence, by some And as bit without the get say those that are really would not Cheney Cheney. is exceptional. way, Jose but was then and And So well. should Santiago we mentioned by Patrick, were little too, far call double I us as

Edward Kelly

you quick gains. Great. a just And holding wanted inventory follow-up. to I about ask then

then guidance, Was color on second year-over-year benefit you that quarter the any could curious -- the then not in at provide this if you change a not there's inventory you after all? And of said Just ahead -- said tobacco in that terms in material that holding think and I think and back there. gains the you half. material But increases. anticipating you is you're price invested candy what said I of

that guidance increases versus I those price if happen? is opportunity, So guess,

Patrick Hatcher

address Yes. questions. Patrick. Thanks, Ed. I'll those This is

gains of of the as year, do But really about in quarter, not stress, did QX half expect full want very these in inventory did holding the back There's some holding see total minimal. to to nothing substantial invest mentioned. to and So we do I outsized of all the we are holding benefit manageable. And between gains. them. the inventory. for we second But we year, We any the experience QX for be expect gains, gains,

that, there's differences. than little a and So relatively quarter-to-quarter really manageable it's But other immaterial.

Operator

from question our with We'll John Heinbockel take Guggenheim. next

John Heinbockel

you A when independent big say, that pick from? basis more if opportunity. And So competitor growth, are sort XXX the a right, that of -- plate, Where do center things most are curious per seems like it center that's you points Where that down, you you right? comes actually think specialty Or think you lines, or couple it is break case I'm -- another think into optimistic? growth, cases new up you penetration on up XXX market in you -- or the store non-fresh? more pick the about, share? can of you case eating if is in because not of line? then let's do more accounts, lines

George Holm

we're on than customers doing about case reliant better as a points X% growth. we're of Lines, new Well, we're still We're fairly more go. new in as couple far doing customers. running

for a I get mean more of would has So market part the they us would stronger. that to using, is the already say that, cases going course, little start that be if of buying and of they're upside what to

there. make I think well have comments Scott standpoint, going of couple we'll accounts. I'm and continue with new we'll do do line continue to to a well also a from to

Scott McPherson

I No, George. agree,

as primarily at new of look accounts our now I the think being I the driver right growth.

macro we I feel think like extremely we we've that's done really, see well. really pick the well penetration. with up, positioned as And same-store us

John Heinbockel

talk don't up X most the know, lineup it your really what since with business I years, these you like to well C-stores But next, look lines are right, you maybe out over the -- know Scott, the I look you, lengthy. out the for And so X a then lot well. curious, opportunity maybe of want. product to the because win store contracts, right, I'm seem just over to RFPs next know you convenience would

I move as there's up. to an top those think on So would line dial RFPs come meaningfully the opportunity

Scott McPherson

you offer make independents some really convenience And create great worked points, an we've No, also that's combine strength the to I as think our to compelling but to in John. national foodservice hard well. customers, chain our and really to

point your We our fair feel years, hard our as of a share worked years. compelling win we contracts feel really X our to a segments top pipeline. some have are to on to X We like drivers, of offer, available. strong most are So them jointly and really those going come we across create like line we're

George Holm

mentioned also we're in doing is but actually operator handle, particularly we the the that of assortment of can out Performance should Core-Mark where that faster business, than and foodservice broader freezer well cooler within a Foodservice, in I even Core-Mark. growing using items we're in

products our are in and those delivered trucks Foodservice being Performance show Foodservice Performance on sales. So up

Operator

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

Mark Carden

next Mexico ultimately how how you or potential for you about start, impact Canada? seen And to do into point go in about quarters are the example. the outlook recently, inflation thinking off then prices the tick if effect at think few So We've tariffs over really this foodservice? egg on

Patrick Hatcher

going expecting thinking segment really latter for we is year. what the Mark, Patrick. half to inflation, the what we're by forward this saw we're and Yes, is QX of in On experience

really for those similar more year. we very And that's the low to to can in to just the be. And and digits. inflation, in in think really single that's the and again, that's digits. mid-single So be We digits good of place a industry. half we're back for what are foodservice This good mid-single for convenience the this manage -- for projecting low us, it's those

this. of back largely you can't about if question predict think and take a I countries, type around discussion We just It's certainly but similar of kind this holistically, to happen, to the those organization. obviously Now going going lot step on the things. a think cost we tariffs, on there's tariffs But inflation. potentially a which to goods, which of increase pass-through going products, what's of of view we're

it. we're it's so it how that's a view, details of because And now, we little a but don't any simplistic right viewing on have bit

how much it, we'll handle we're going to just So manage pretty inflation, that's like it. and

Mark Carden

helpful. Southeastern but volume it's given for independent an able storms? at you January, hold did understand from to small in And its January. footprint? That's then And the acceleration Great. quantify, in the just case how a talked Cheney impact you then least I are guys winter up month, about

Patrick Hatcher

important is important as very in year, the certainly it January not month least how Yes. the a impacts sales as results. far

be quarter So February about to I and the for going as more goes. think far it's as third March us,

a that in recovered still still West they mean, did to Now has experienced and closed of they sales Cheney, and Coast, impacted impact the job. through many we restaurants seem hurricanes, the primarily down. with all have very They're But dealing by obviously way hurricanes, just growth where their been great very all, Florida, are their and I great, work this. on some quickly.

Operator

will We from Alex Slagle take our with Jefferies. next question

Alexander Slagle

potential related a immigration had of there. was Mark of views the to lines I new the PFG of lot but the and enforcement unknowns a implications to mean, the I there, getting maybe and initial just follow-up maybe sort administration. your what specifically again, under industry curious actions potential for along the

Patrick Hatcher

Patrick Alex, again. it's Yes.

obviously it's just very think important. I

All of that predict but But go immigration this as don't we we to the our just moment. impact obviously to company, impacts are on our what's to see at employees well. really an documented, there with we can't the speak and can't going

where So, yes, are. we that's

Alexander Slagle

makes sense. That Yes.

Scott McPherson

record on temp we've one We're just in maybe that. And position and where a overtime expense. now tag low got kind right to of

strong is in of workforce want culture kind where great performance we've feel like be. and people really created Our is shape. to work a Safety

about really a navigate able we being tough environment. So in good feel to

Alexander Slagle

your wanted as Are seeing build of anything certain a customer and new changes industry. any focus higher slowing closures signs or to obviously environment on ago the acquisition. on in the views and formation from you also ask still new facing regions for tough years traffic we restaurant costs past I on and further I guess move the

George Holm

new Yes, coming there continues be obviously, to restaurants, around.

COVID much pretty I think the effect is gone. of

casual gone from not dark dining been have think but maybe considerable amount open. chain those particularly restaurants. to I a vibrant, of there's And of that of closings restaurants most

think occupied buildings and restaurant. eventually well by I purpose are single those as So a will be

growing of there's units some are and continued restaurants. right So we're are the and I now brisk putting selling in at those. independent And chains some fast increase that see a up particularly pace, then

Operator

We'll take Research. from Aiken-Phillips our Jacob question next with Melius

Jacob Aiken-Phillips

Congrats, Scott.

about you ask trailing low the Last like the when Cheney. quarter million with I little guidance prorate a bit seems $XXX million, I more like little understand raised volatility wanted $XXX a So which And hurricanes. to numbers. you XX-month is there some

were as thinking if you just still for about you're quarter? last So the contribution Cheney same curious

Patrick Hatcher

this Patrick. Yes, is Jacob,

of again, really at up mean, the in sales were as guidance bottom was by then I factors, the we million, both half felt conservative mentioned, top we with where because we on by we've that up things bottom of looking we maybe little we year. end. lot our about seen area more we on mentioned different on we guidance, the And million. how would good the and comments. And the a $XX as the earlier I On $XXX first performed the And improve, a call the and say brought end EBITDA, we're took

in we've terms So And raise. raise. again, in a mentioned, in and choppiness tighter. things. the still were EBITDA And comfortable been a there, of months and early another and -- a improvement to numbers feeling guidance. we there's there's a probably the X a little other you got it's January as about some really year few had the feel we beat clean beat little but And we the It's very

really feel we to results, So and our about adjust continue accordingly. we'll good

George Holm

running they before moving they're performing And particularly with That around going add us forward we But to hiring. happen. be concern aggressive well we were should EBITDA anything they're with really Yes, Cheney. continue investments running that expense I very Cheney And in think to And that because line. that salespeople. gives in of very, said, they're I higher want said, on to that. that than that making very still being obviously, ratios wise don't see we're any people, some

Jacob Aiken-Phillips

Cheney? any compared to for business. And private learnings the have label underpenetrated about talk on you the then could you I PFG know legacy it's like pretty

to into last maybe said and you think implement you're PFG there. to keep XX% their quarter, want products want you I which looking what products you and

George Holm

that Yes. Santiago themselves. in where product. to is that They those market. us of while, Part part. structure we a well our organic don't of we in independent would number brand, I to for want And their going I get the brands can on process they've of some Jose that. of also there's own, both with you typically has what of in percentage determining lower had, was that those. Then different marketed had acquisitions. envision to number Rico, way And also are a Puerto acquisitions an items. acquisitions. going forward market of without exclusivity to the gave and our disrupt to a our Rico of move our a Jose Puerto be with brands our that Cheney's there, the you to ourselves we well The reasons but for it's and our go-to-market do go They're be when to and we're there's a we're It's those how two percentage continuing in brands those have suspect exclusivity Santiago, certainly which any of strategy that law national have brand branded want is good doing to it it consider we with always than with for they

Jacob Aiken-Phillips

the quarter. Congrats on

George Holm

Thanks.

Operator

Barclays. question from Jeffrey with take our will we next And Bernstein

Jeffrey Bernstein

Two questions.

one, just to outlook. first the The clarify consumer just keen I'm your view. on broader

you November seeing think and rest improvement But for that yet. trends confident of the year. maybe and you're in I you October to you I mentioned were come it encouraging, the not think seem mentioned

otherwise. doesn't has just in you're you that you anticipating, little from as level had indicators there then see confidence it does a your guidance I whether mentioned like confident one metrics leading because to view seem I'm or consumer But you of what improve some the So And as are you follow-up. wondering of bit that help if need the consumer.

George Holm

going I bit question to forward. backwards here I'm the look little answer before a Yes. going

look October that's changed because very you easy had it difficult at but and a year-to-year, If comparisons, low Thanksgiving encouraging, where was month. had comparisons from and November December November, very

for it's but project back. think to was real real just we something which So to ways know today. for because I to in us that which It's I number October's second we use hard the and month October reasons more reflective half we're of expecting more from we forward, year a is feel weather use of if this year. that clear number, so year. But improvement is look is can is that the probably marketplace, and the we that put market. we also there, affected And by think, effective have some January, heavily we don't at that. encouragement that gives last a give

thing have And area, business noncompetes. And with aggressively to fiscal people of is this hire continued rest in, it, the off more out, we national other we've in marketplace. too, got much some but we the more account coming the in We've then coming on got year. going this

it. So together, good you real with things we those just feel put

the convenience challenged today. at look of we when Then part that's very segment the business, a

well. do accounts. several We've added new to continue We

sizable. that several some are and have board We pretty on coming

we good about real So there. feel growth the

couple a good a of very growth that business, growth we leverage we in And and to when happening points. couple to that's of in path great get earnings what's the percentage that of in tobacco in we're on world, growth. points to consider Now can you feel couple growth. a points

Jeffrey Bernstein

year Understood. M&A I pay Clearly, are you're your looking mentioned And and elevated levels up know busy time, same the leverage down. then is Scott, think to robust. it's so. just mentioned at been the on that following the I commentary. a very pipeline you or And you But

opportunity gauge think is? you itself. the about And that just the could were especially present near what wondering, to share an So to big level you leverage with appetite in does Coast temper the trying first, M&A if Just for how further it if opportunity? that term, West

Patrick Hatcher

expect Yes, X.Xx, stated, obviously, Jeffrey, outside between range. goal be as that several next X.Xx mean, we've range within quarters. that within back is Leverage, and leverage our Patrick. And and the it's to I we leverage we're we obviously, mentioned,

it's that did I comment on we're focus mean, right always We very is looking. obviously, leverage. on well. now, In George active. reducing mean, terms as But I comment can of that this our additional M&A,

George Holm

have so like certainly Yes. have We this of would to time talking many lot about opportunities we leverage. today. spend We lower a because

think is growing. We Jose appealing along I and But company think things. should We're I our pass -- organization very opportunity up makes come want debt Santiago an lower. handle I you'll an our those should we be cautious don't public our we've we've have XX we're responsibly. want structure. And more I same I you we think M&A with like like us also and we'll to balance that add levels than an about that we've for now handling Cheney. mean, years, a it At been pipeline the but effectively. don't of how leverage dealt trying much as today, that then from time, to They that higher us, dealt when keep see capital often. M&A opportunity our to to that continued ever but very with leverage

type by in higher, business the this we're company of going and high we're for leverage a that Now are. our of I'm means. to understand sure not that not want leverage a is not we that that make type any But that people to sending signal just get the I

Jeffrey Bernstein

just level what that clarify you versus X.Xx? is today X.Xx to leverage the Can

Patrick Hatcher

It's high Yes. in the Xs.

Unknown Analyst

Hello?

George Holm

Hello.

Patrick Hatcher

Good morning.

Unknown Analyst

Yes. the introduction. I didn't hear

George Holm

we Yes, ahead. didn't too. Go

Unknown Analyst

of kind of rate? couple on about pace a personnel the the sales wanted of of it Brothers? is think Is seems should you Like putting sales do how the follow-ups, like salespeople. -- Or increased playbook into you So hiring more increased, to rate I kind opportunistic? intentional it of if Reinhart will, why we Cheney that

Scott McPherson

Andrew, this take Scott. I'll is that.

our of as as with fine-tuning about bringing in and of AMs that meeting nationally have every right away always target The the meeting by we're mid- that now couple great far and have single-digit Let that X%. our from and process, our people just I to those that, highly range, a saying encouraged we process, focus came back hiring been ago what really of the was on of availability walked hiring company. Historically, high we've to street we year. training start Sales I hiring me VP from weeks

about growth right we that. good So And feel really, our what's fueling now. that's

at same-store you basically flat. look comps If are

up new Our stores AM up is our are X%, headcount but X%.

growth. really that's case driving so what's And our

So opportunistic and up look we'll on street trained them hire the great growth. continue and be continue AMs get drive case to to to and

George Holm

pretty those we that a Yes. hard a say growth number consistent And in to decisions. and kind have we salespeople the will have cadence make try also of a But of consistent I'll there.

number companies we have. managing should So brakes would I salespeople. have a if we today, say more into have have who really be people that are little need that of And and I the would tapping the then were bit on to they and I it, salespeople, they dig behind

and we can we better. to nudge have But we them any these to and field, decisions desire the made to really we don't we have cadence. So change a talk and real good that. Yes, try -- train are are in

doing a So organization. you're big it when across

commonality some what around to try we get we So there do.

at larger our of person you and one time time. four, hire many legacy Roma of they make get more companies, going at companies, than to a to they're as as maybe Some training. it more And our eight five operate collaborative to people seldom type probably bring one where in

maybe kind have what little level going continue they I ground I of to this far what So can increases there But with world that are guess, as from people rules, this. from tell in we right now, us, a we're aren't our they tell the salespeople. as more confidence in doing X%, think

Unknown Analyst

whether got really sort have of you of that at industry Has all? versus train you of coming to folks from shifted that's a folks sense proportion up? the the Do Okay.

George Holm

are now, Right entirely from that the almost industry. it's Yes. people

Andrew Paul Wolf

Okay.

like one by like the gaining driven newer, fits sounds starts. in that just programs sales the know foodservice Or salespeople that on convenience foodservice effective -- follow-up are just kind do of you've selling? of better and have more -- underline a into I to what had kind nice channel. Is traction? Just more that and better you because want pretty I uptick

Scott McPherson

really into convenience. have we pathways two Andrew, Yes,

food that through with supply PFG's the ability and And bring came One channel. solutions of to Core-Mark food advantage think is to convenience convenience. biggest those I of is turnkey our the acquisition

in of innings I still they then and array think pathway convenience into solutions, job, growing making and to that in And again, that's the channel, our there. And category a that's we're so turnkey our broad a really capability traditional And having but good it having and do convenience fastest-growing is products continue early second our that's significantly. of through a just convenience, the broadline, focus.

having on. both kind still hitting and sides success, we're it's and of so And early think from nice I it

Unknown Analyst

good. That's

is I'm that focused it's sure -- and and in vendors everybody direction. So the

lot of So it incremental like a just movement. sounds it's

Scott McPherson

of been Yes. on it. focus there's No, a lot

Operator

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

Brian Harbour

prior quarter think depreciation as is I good? interest Just aren't amortization. a do And range expect have rate right and maybe you think a that sort have variable that, do calibrated have you like cleanup if for just expense and the term on interest maybe question, know people that on necessarily expense? appreciate near of rate don't you'd I I some debt, you but you sense. On

Patrick Hatcher

it's come has a a Brian, question, of I this up Patrick. couple times. and It's Yes. great know

first of that's of you think acquisition baseline depreciation. interest our the change October use in definitely and really Cheney forward. a $X for would the good the expense X we to billion. -- interest numbers end closed as I if expense. down both drew the what's obviously, driving And say going I That's mentioned, after we QX that quarter, are and when we ABL Brothers the in

Brian Harbour

Okay.

is When two the of quarter? good. is of about the unusual I of that? the kind gap Sounds on organic drove you sort there independent versus also, contribution just sort in forward? second of sort expect that anything that going look should case Or at we inorganic those growth Could comment

George Holm

QX, little quite more Jose course, Yes, That's will a not right That's Cheney's will at get have will impact. narrow -- that spread as narrow another then of are busier. bit of February, would lapped and with the And again the we we a Santiago next have Jose for be may and time in in And particularly into bit. them. Cheney weeks big of March a months the QX Cheney. Santiago there QX. peak spread for fiscal both really the fiscal the still of year year, year, it beginning Yes, of we'll in XX probably

Operator

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

Jake Bartlett

Mine midpoint in the more on EBITDA was [ increased guidance. from the the raised was same by by but the XXXX than XXXX ] second beat sales just amount. quarter, (sic) the was And

So half you essentially, the that -- of year but really beat, didn't the EBITDA. on beat you back raise included

incremental some just some there I'm Are some understand profit less drove So in that trying maybe we that. to expect pressures, what reason back the flow-through should for half?

Patrick Hatcher

at things look the confident a for by we're are there the million, line, a EBITDA some when time, out always EBITDA, saw on segments look again, on That saw then to macro to how thanks choppiness we And in there again, really make you the at on bottom what the $XX confidence opportunity. million question. Jake, performing When are confident more in of leave sales at increase $XXX top we that we January. little in lot bottom. mean, their and to felt little and But we same Yes, bit the our gives performance. both raise I in top sure again, we raised being it also, prudent. the numbers the a we're us more

next you. So quarter, numbers, at again, some and updated continue come hopefully with we'll to for closely. in confidence in we'll up of guidance And look again, the this our lots

Jake Bartlett

your drivers And the the top increase your did. has up? then expectations, gone guidance. that just it like I it. in just likely of well is probably seems on inflation line Got I And prior a cost question expectations, versus as It had guess product

extent case the inflation expected of line really So I'm just to is being growth? wondering higher underlying whether than or it's increased kind guidance product top what cost

Patrick Hatcher

accounts obviously, really underlying and Jose alluded in we've we really Scott that -- it's it bit. strong the We to saw growth. Each both a a segments national perform. It's Cheney well. But performance talked convenience. pipeline, the strong performed quite foodservice was a and with to, And as No, latter. really really in and about case foodservice have of the really in continue then

are all confidence giving these we things also us balance seen only the results giving but great -- So in year. not have of year-to-date, us the

Jake Bartlett

Jose just Cheney it can can All quarter? of drivers understand sense You've then sales right. out you but them. big it's the a the mentioned building for and to third Santiago give what us was question third versus organic for and quarter. in on percentage growth Trying asked before, a to as that quarter the so just come frame the And really a we of kind in EBITDA

Patrick Hatcher

It's probably should Yes. something we don't I'm at have number fingertips. have calculated. we sorry, that our

Scott McPherson

I our smallest typically, it's can you, of What quarter where for have quarters tell one their QX, Jake, Yes. largest historically, would been is it performance.

Operator

take we with Peter And Saleh our will from next question BTIG.

Peter Saleh

ask questions of were Most but did and business. asked want chain my the on answered, to I

and on you're I Can in changed seeing a there. improvement I you maybe the what some recent what's seen follow-up. And just then have chains think past? you've elaborate in

Scott McPherson

Yes.

Scott. is this Peter, So

out One drive account of I we've I'd So wasn't where had with better performing. of out shift definitely, are is much seeing we thing think a really had that performing we on traded three them four helping bit account well, say business. we've national little chains things the we've great that for is a national a some And to our business account double-digit other is business that really performing national or chains. and there's growth that going -- have of couple

of So mix a customers national portfolio. little the shift across our in

So really I feel how that's progressing. good about

a had you said you second one? And

Peter Saleh

out expect know just on But synergies that laid those just on the bit maybe side? should commented see of we the quarters little of Cheney start fruition, follow-up. to then to And a synergies and a Jose particularly I several were Yes. you when curious Cheney the on some come Santiago. to ago, Brothers seasonality

Patrick Hatcher

very synergies since doing an in obviously Yes. and recently you the Brothers. I that we'd We well purchased excellent efforts we post can is $XX of It's swing, million And tell third together. working early the Both very full announce this integration the of Peter, really are just have we acquisition. at Patrick. year are job. are But teams did Cheney end

cadence. synergies will So I the come the would later expect that in

we'll year you that's see some the have first the detail for and but right But year, X. we'll synergies in more all see synergies X now. in we So

Operator

our final Casella question take we Carla And JPMorgan. with Instructions] will [Operator from

Carla Casella

couple Just quick a of follow-ups.

like about billion looks debt You couple and of drawn on paydown the me focus, a to talked there's being the over it revolver.

maturity? at now ahead So is of which par out XX down? that the what are consider you would focusing you're paying taking on callable bonds, Or

Patrick Hatcher

will pay focus. to as certainly we'll it's at the focus But question. tend great our right be we ABL, as Carla, a Yes, down those now 'XX use our initial ABL to the Obviously, main well. look but bonds

Carla Casella

disclose Okay. of kind business? now still much then at target Did Great. more have it. missed if Brands And how And foodservice of a level, represent your opportunity may -- you if I there's Performance there's products it's there?

George Holm

brands. is give of percentage outside independent our percentage Well, not brands progress what meaningful. typically most as distributor many use business, are restaurants we -- we would our our the are get of of of and business some don't what the you number We chain a but business, made there, that's overwhelming brands. our restaurant of that call the independent all our When I

business very brand. distributor the or do we that to in feeding contract in lodging and health care tend So little use

runs So around right it XX%.

it think was XX.X% I last quarter.

We we think are do reduced a from right and Brothers have it of But Santiago. we march now. Jose there. up XX% do being add that's we companies our good think We can that number. We that, in several for over as see Cheney once that recalibrates

So we if Roma those get of room improvement. And into you are many do for see companies, legacy that XX%. over there's our

Carla Casella

independent that's Okay. and of XX.X% business. That's XX% all Great. the And correct.

George Holm

correct. That's

Operator

closing any to at time. for this further There questions the call turn no back Bill I'll are remarks.

Bill Marshall

joining you Thank today. for our call

out any If please reach to Relations. follow-up Investor you questions, have

Operator

participation. And you your you. today's this program. Thank Thank does for conclude

You disconnect at any may time.

Performance Food (PFGC) 5 Feb 252025 Q2 Earnings call transcript