February 05, 2025 RICHMOND, Va.–(BUSINESS WIRE)–Performance Food Group Company BB #:137847 today announced its second quarter and first six months fiscal 2025 business results.
“Our solid business performance continued through the fiscal second quarter, resulting in strong sales and Adjusted EBITDA growth, exceeding the upper end of our guidance on both measures,” said George Holm, PFG’s Chairman & Chief Executive Officer.
“Our organic business, along with recent acquisitions, contributed significantly to our exceptional case growth in Foodservice. All three of our business segments have maintained a solid foundation, consistently winning new business and driving growth opportunities. Our integration of José Santiago and Cheney Brothers has gone well, and we are excited about the value and expertise those two organizations bring to PFG. Overall, I am very pleased with our business which continues to successfully execute our strategy to maximize value for our shareholders.”
Second-Quarter Fiscal 2025 Highlights
- Total case volume increased 9.8%
- Total Independent Foodservice case volume increased 19.8%
- Organic Independent Foodservice case volume increased 5.0%
- Net sales increased 9.4% to $15.6 billion
- Gross profit improved 14.4% to $1.8 billion
- Net income decreased 45.8% to $42.4 million
- Adjusted EBITDA increased 22.5% to $423.0 million[1]
- Diluted Earnings Per Share (“EPS”) decreased 46.0% to $0.27
- Adjusted Diluted EPS increased 8.9% to $0.981
1 This earnings release includes several metrics, including Adjusted EBITDA, Adjusted Diluted Earnings per Share, and Free Cash Flow, that are not calculated in accordance with Generally Accepted Accounting Principles in the U.S. (“GAAP”). Please see “Statement Regarding Non-GAAP Financial Measures” at the end of this release for the definitions of such non-GAAP financial measures and reconciliations of such non-GAAP financial measures to their respective most comparable financial measures calculated in accordance with GAAP.
Second-Quarter Fiscal 2025 Financial Summary
Total case volume increased 9.8% for the second quarter of fiscal 2025 compared to the prior year period. Total organic case volume increased 2.1% for the second quarter of fiscal 2025 compared to the prior year period. Total organic case volume benefited from a 5.0% increase in organic independent cases, including growth in Performance Brands cases, and growth in cases sold to Foodservice’s Chain business. Total independent case volume increased 19.8%.
Net sales for the second quarter of fiscal 2025 grew 9.4% to $15.6 billion compared to the prior year period. The increase in net sales was driven by recent acquisitions, including the acquisition of Cheney Bros., Inc. (“Cheney Brothers”), an increase in cases sold including a favorable shift in mix of cases sold, and an increase in selling price per case as a result of inflation. Overall product cost inflation for the Company was approximately 4.6%.
Gross profit for the second quarter of fiscal 2025 grew 14.4% to $1.8 billion compared to the prior year period. The gross profit increase was driven by recent acquisitions, cost of goods sold optimization through procurement efficiencies, as well as a favorable shift in the mix of cases sold, including growth in the independent channel.
Operating expenses rose 17.2% to $1.7 billion in the second quarter of fiscal 2025 compared to the prior year period. The increase in operating expenses was primarily driven by recent acquisitions, an increase in personnel expense primarily related to wages, commissions, and benefits, and an increase in professional fees primarily related to recent acquisitions, partially offset by a decrease in fuel expense primarily due to lower fuel prices in the second quarter of fiscal 2025 as compared to the prior year period. Depreciation and amortization increased $39.2 million in the second quarter of fiscal 2025 compared to the prior year period primarily as a result of recent acquisitions and an increase in transportation equipment under finance leases.
Net income for the second quarter of fiscal 2025 decreased $35.9 million year-over-year to $42.4 million. The decrease was primarily a result of a $38.8 million increase in interest expense and a $15.1 million decrease in operating profit, partially offset by a $19.1 million decrease in income tax expense. The effective tax rate in the second quarter of fiscal 2025 was approximately 25.2% compared to 29.9% in the second quarter of fiscal 2024. The effective tax rate for the second quarter of fiscal 2025 differed from the prior year period primarily due to an increase in deductible discrete items related to stock-based compensation, a decrease in state and foreign taxes, and an increase in federal credits, partially offset by an increase in non-deductible expenses.
For the quarter, Adjusted EBITDA rose 22.5% to $423.0 million compared to the prior year period.
Diluted EPS decreased 46.0% to $0.27 per share in the second quarter of fiscal 2025 compared to the prior year period. Adjusted Diluted EPS increased 8.9% to $0.98 per share in the second quarter of fiscal 2025 compared to the prior year period.
Second-Quarter Fiscal 2025 Segment Results
Foodservice
Second-quarter fiscal 2025 net sales for Foodservice increased 18.2% to $8.4 billion compared to the prior year period. The increase in net sales was driven by recent acquisitions, an increase in selling price per case as a result of inflation, and case volume growth, including growth in our independent and Chain business. Total case growth for Foodservice was 15.0% in the second quarter of fiscal 2025 compared to the prior year period. Securing new and expanding business with independent customers resulted in total independent case growth of 19.8% for the second quarter of fiscal 2025 compared to the prior year period. Organic independent case growth was 5.0% in the second quarter of fiscal 2025 compared to the prior year period. For the second quarter of fiscal 2025, independent sales as a percentage of total Foodservice sales were 40.1%.
Second-quarter fiscal 2025 Adjusted EBITDA for Foodservice increased 29.4% to $289.9 million compared to the prior year period. The increase was the result of an increase in gross profit, partially offset by an increase in operating expenses for the second quarter of fiscal 2025 compared to the prior year period. Gross profit contributing to Foodservice’s Adjusted EBITDA increased 22.8% driven by recent acquisitions, a favorable shift in the mix of cases sold, and growth in cases sold, including more Performance Brands products sold to our independent customers. Operating expenses impacting Foodservice’s Adjusted EBITDA increased 20.8% primarily as a result of recent acquisitions and an increase in personnel expenses, partially offset by a decrease in fuel expense, compared to the prior year period.
About Performance Food Group Company
Performance Food Group is an industry leader and one of the largest food and foodservice distribution companies in North America with more than 150 locations. Founded and headquartered in Richmond, Virginia, PFG and our family of companies market and deliver quality food and related products to over 300,000 locations including independent and chain restaurants; businesses, schools and healthcare facilities; vending and office coffee service distributors; and big box retailers, theaters and convenience stores. PFG’s success as a Fortune 100 company is achieved through our more than 40,000 dedicated associates committed to building strong relationships with the valued customers, suppliers and communities we serve. To learn more about PFG, visit pfgc.com.
February 05, 2025 RICHMOND, Va.–(BUSINESS WIRE)–Performance Food Group Company BB #:137847 today announced its second quarter and first six months fiscal 2025 business results.
“Our solid business performance continued through the fiscal second quarter, resulting in strong sales and Adjusted EBITDA growth, exceeding the upper end of our guidance on both measures,” said George Holm, PFG’s Chairman & Chief Executive Officer.
“Our organic business, along with recent acquisitions, contributed significantly to our exceptional case growth in Foodservice. All three of our business segments have maintained a solid foundation, consistently winning new business and driving growth opportunities. Our integration of José Santiago and Cheney Brothers has gone well, and we are excited about the value and expertise those two organizations bring to PFG. Overall, I am very pleased with our business which continues to successfully execute our strategy to maximize value for our shareholders.”
Second-Quarter Fiscal 2025 Highlights
- Total case volume increased 9.8%
- Total Independent Foodservice case volume increased 19.8%
- Organic Independent Foodservice case volume increased 5.0%
- Net sales increased 9.4% to $15.6 billion
- Gross profit improved 14.4% to $1.8 billion
- Net income decreased 45.8% to $42.4 million
- Adjusted EBITDA increased 22.5% to $423.0 million[1]
- Diluted Earnings Per Share (“EPS”) decreased 46.0% to $0.27
- Adjusted Diluted EPS increased 8.9% to $0.981
1 This earnings release includes several metrics, including Adjusted EBITDA, Adjusted Diluted Earnings per Share, and Free Cash Flow, that are not calculated in accordance with Generally Accepted Accounting Principles in the U.S. (“GAAP”). Please see “Statement Regarding Non-GAAP Financial Measures” at the end of this release for the definitions of such non-GAAP financial measures and reconciliations of such non-GAAP financial measures to their respective most comparable financial measures calculated in accordance with GAAP.
Second-Quarter Fiscal 2025 Financial Summary
Total case volume increased 9.8% for the second quarter of fiscal 2025 compared to the prior year period. Total organic case volume increased 2.1% for the second quarter of fiscal 2025 compared to the prior year period. Total organic case volume benefited from a 5.0% increase in organic independent cases, including growth in Performance Brands cases, and growth in cases sold to Foodservice’s Chain business. Total independent case volume increased 19.8%.
Net sales for the second quarter of fiscal 2025 grew 9.4% to $15.6 billion compared to the prior year period. The increase in net sales was driven by recent acquisitions, including the acquisition of Cheney Bros., Inc. (“Cheney Brothers”), an increase in cases sold including a favorable shift in mix of cases sold, and an increase in selling price per case as a result of inflation. Overall product cost inflation for the Company was approximately 4.6%.
Gross profit for the second quarter of fiscal 2025 grew 14.4% to $1.8 billion compared to the prior year period. The gross profit increase was driven by recent acquisitions, cost of goods sold optimization through procurement efficiencies, as well as a favorable shift in the mix of cases sold, including growth in the independent channel.
Operating expenses rose 17.2% to $1.7 billion in the second quarter of fiscal 2025 compared to the prior year period. The increase in operating expenses was primarily driven by recent acquisitions, an increase in personnel expense primarily related to wages, commissions, and benefits, and an increase in professional fees primarily related to recent acquisitions, partially offset by a decrease in fuel expense primarily due to lower fuel prices in the second quarter of fiscal 2025 as compared to the prior year period. Depreciation and amortization increased $39.2 million in the second quarter of fiscal 2025 compared to the prior year period primarily as a result of recent acquisitions and an increase in transportation equipment under finance leases.
Net income for the second quarter of fiscal 2025 decreased $35.9 million year-over-year to $42.4 million. The decrease was primarily a result of a $38.8 million increase in interest expense and a $15.1 million decrease in operating profit, partially offset by a $19.1 million decrease in income tax expense. The effective tax rate in the second quarter of fiscal 2025 was approximately 25.2% compared to 29.9% in the second quarter of fiscal 2024. The effective tax rate for the second quarter of fiscal 2025 differed from the prior year period primarily due to an increase in deductible discrete items related to stock-based compensation, a decrease in state and foreign taxes, and an increase in federal credits, partially offset by an increase in non-deductible expenses.
For the quarter, Adjusted EBITDA rose 22.5% to $423.0 million compared to the prior year period.
Diluted EPS decreased 46.0% to $0.27 per share in the second quarter of fiscal 2025 compared to the prior year period. Adjusted Diluted EPS increased 8.9% to $0.98 per share in the second quarter of fiscal 2025 compared to the prior year period.
Second-Quarter Fiscal 2025 Segment Results
Foodservice
Second-quarter fiscal 2025 net sales for Foodservice increased 18.2% to $8.4 billion compared to the prior year period. The increase in net sales was driven by recent acquisitions, an increase in selling price per case as a result of inflation, and case volume growth, including growth in our independent and Chain business. Total case growth for Foodservice was 15.0% in the second quarter of fiscal 2025 compared to the prior year period. Securing new and expanding business with independent customers resulted in total independent case growth of 19.8% for the second quarter of fiscal 2025 compared to the prior year period. Organic independent case growth was 5.0% in the second quarter of fiscal 2025 compared to the prior year period. For the second quarter of fiscal 2025, independent sales as a percentage of total Foodservice sales were 40.1%.
Second-quarter fiscal 2025 Adjusted EBITDA for Foodservice increased 29.4% to $289.9 million compared to the prior year period. The increase was the result of an increase in gross profit, partially offset by an increase in operating expenses for the second quarter of fiscal 2025 compared to the prior year period. Gross profit contributing to Foodservice’s Adjusted EBITDA increased 22.8% driven by recent acquisitions, a favorable shift in the mix of cases sold, and growth in cases sold, including more Performance Brands products sold to our independent customers. Operating expenses impacting Foodservice’s Adjusted EBITDA increased 20.8% primarily as a result of recent acquisitions and an increase in personnel expenses, partially offset by a decrease in fuel expense, compared to the prior year period.
About Performance Food Group Company
Performance Food Group is an industry leader and one of the largest food and foodservice distribution companies in North America with more than 150 locations. Founded and headquartered in Richmond, Virginia, PFG and our family of companies market and deliver quality food and related products to over 300,000 locations including independent and chain restaurants; businesses, schools and healthcare facilities; vending and office coffee service distributors; and big box retailers, theaters and convenience stores. PFG’s success as a Fortune 100 company is achieved through our more than 40,000 dedicated associates committed to building strong relationships with the valued customers, suppliers and communities we serve. To learn more about PFG, visit pfgc.com.
