Performance Food Group Reports 3.2% Net Sales Growth, Decline in Net Income for Q3 2024

Performance Food Group Company (PFGC) reported its financial results for the three months ended September 28, 2024, showing a notable increase in net sales but a decline in net income compared to the same period in the previous fiscal year. Net sales reached $15,415.5 million, reflecting a 3.2% increase from $14,938.6 million for the three months ended September 30, 2023. This growth was driven by a 2.6% increase in total case volume and a 5.0% inflation in product costs.

Gross profit for the quarter was $1,764.2 million, up 6.1% from $1,662.9 million in the prior year. However, net income decreased to $108.0 million, down 10.5% from $120.7 million in the same quarter last year. Basic earnings per share fell to $0.70 from $0.78, while diluted earnings per share decreased to $0.69 from $0.77.

The company’s total assets increased to $14,396.5 million as of September 28, 2024, up from $13,392.9 million as of June 29, 2024. This growth was primarily attributed to acquisitions, including the recent purchase of Cheney Bros., Inc. for $2.1 billion, which was financed through borrowings under the ABL Facility. Long-term debt rose to $3,926.0 million from $3,198.5 million during the same period.

Operating expenses increased by 7.1% to $1,537.0 million, driven by a $41.9 million rise in personnel expenses. Adjusted EBITDA for the quarter was $411.9 million, a 7.3% increase from $383.8 million in the prior year.

Segment performance varied, with the Foodservice segment reporting net sales of $7,692.1 million, a 5.7% increase from the previous year. The Vistar segment saw a 2.8% increase in sales to $1,285.7 million, while the Convenience segment experienced a modest 0.4% increase to $6,363.7 million.

Cash flow from operating activities was $53.5 million, down from $87.1 million in the prior year, primarily due to advanced inventory purchases. The company also reported significant cash used in investing activities of $669.8 million, largely due to the acquisition of Cheney Bros.

PFGC continues to focus on strategic acquisitions and expanding its customer base, with $181.1 million remaining available under its share repurchase program, which was authorized for up to $300 million. The company’s financial position remains robust, with excess availability under its ABL Facility increasing to $3,930.5 million as of September 28, 2024.