Financial Performance - Net sales for the three months ended September 27, 2025, increased to $17,075.9 million, up 10.8% from $15,415.5 million for the same period in 2024[19] - Gross profit for the same period rose to $2,016.6 million, representing a 14.3% increase compared to $1,764.2 million in the prior year[19] - Operating profit was $224.7 million, slightly up from $215.3 million, indicating a growth of 6.5% year-over-year[19] - Net income decreased to $93.6 million, down 13.3% from $108.0 million in the previous year[19] - Adjusted EBITDA rose by $68.2 million, or 16.6%, to $480.1 million for the first three months of fiscal 2026 compared to $411.9 million in the prior year[115] - Basic earnings per common share for the three months ended September 27, 2025, was $0.60, down from $0.70 for the same period in 2024[84] Assets and Liabilities - Total assets as of September 27, 2025, were $18,351.8 million, an increase from $17,881.2 million as of June 28, 2025[17] - Total liabilities increased to $13,778.3 million from $13,408.8 million, reflecting a rise of 2.7%[17] - The company reported long-term debt of $5,636.8 million as of September 27, 2025, an increase from $5,388.8 million as of June 28, 2025[3] - The company’s total shareholders' equity increased to $4,573.5 million as of September 27, 2025, up from $4,472.4 million[17] - As of September 27, 2025, total lease liabilities amounted to $2,664.9 million, with operating lease obligations at $998.1 million and finance lease obligations at $1,666.8 million[66] Cash Flow and Investments - Cash and restricted cash at the end of the period was $46.4 million, down from $50.3 million a year earlier[26] - The company reported a net cash used in operating activities of $145.2 million for the three months ended September 27, 2025, compared to a net cash provided of $53.5 million in the same period last year[26] - Cash used in investing activities totaled $78.0 million in the first three months of fiscal 2026, significantly lower than $669.8 million in the same period of fiscal 2025[150] - The company had total purchase obligations of $324.6 million as of September 27, 2025, including $198.3 million for capital projects[145] Debt and Interest - Interest expense for the quarter was $104.4 million, significantly higher than $66.8 million in the prior year, marking a 56.3% increase[19] - Interest expense rose by $37.6 million, or 56.3%, to $104.4 million, primarily due to increased average borrowings[123] - The average interest rate on borrowings under the ABL Facility was 5.78% as of September 27, 2025, slightly down from 5.86% as of June 28, 2025[5] Acquisitions - The company acquired Cheney Bros., Inc. for $2.0 billion, financed through borrowings under its asset-based revolving credit facility[4] - The Cheney Brothers Acquisition contributed $852.5 million to net sales in the first three months of fiscal 2026[127] Taxation - The Company's effective tax rate was 23.0% for the three months ended September 27, 2025, compared to 26.5% for the same period in 2024[71] - The effective tax rate for the first three months of fiscal 2026 was 23.0%, down from 26.5% in the prior year, due to increased deductible items and tax credits[124] Segments Performance - The Foodservice segment reported an Adjusted EBITDA of $324.4 million for Q3 2025, up from $274.6 million in Q3 2024, indicating a growth of about 18.1%[96] - The Convenience segment's Adjusted EBITDA increased to $121.0 million in Q3 2025 from $105.3 million in Q3 2024, marking a growth of approximately 14.9%[96] - The Specialty segment's Adjusted EBITDA rose to $94.0 million for Q3 2025, compared to $83.2 million in Q3 2024, representing an increase of about 13.5%[96] Operational Insights - The company continues to monitor macroeconomic factors, including inflationary pressures and supply chain disruptions, which could impact future sales and profitability[103] - The company serves both independent and multi-unit customers in the restaurant industry, distributing a broad range of food and food-related products across North America[8] - The company emphasizes cross-segment collaboration to enhance customer service and operational efficiency, leveraging its diverse segments[101] Shareholder Actions - The company authorized a share repurchase program for up to $500 million, replacing a previous $300 million program, with $500 million remaining available for repurchases as of September 27, 2025[2] - The company repurchased a total of 247,843 shares of common stock during the first quarter of fiscal 2026 at an average price of $100.30 per share[171] Compliance and Controls - There were no material changes in the company's internal control over financial reporting during the fiscal quarter ended September 27, 2025[165] - The company's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of the end of the reporting period[164] - The company is subject to various legal proceedings but believes that adequate provisions have been made to avoid material adverse effects on its financial position[168]

Core Insights - Performance Food Group Company (PFGC) reported first-quarter adjusted earnings per share of $1.18, missing the analyst consensus estimate of $1.21 [1] - Quarterly sales reached $17.076 billion, reflecting a 10.8% year-over-year increase, surpassing the Street view of $16.879 billion [1] Financial Performance - Net sales increased due to recent acquisitions, higher case volumes, and inflation-driven price increases, with overall product cost inflation at approximately 4.4% [2] - Total case volume rose by 9.4%, with Independent Foodservice case volume increasing by 16.6%, including a 6.3% organic growth [3] - Gross profit grew by 14.3% to $2 billion compared to the prior year, primarily driven by acquisitions [3] - Adjusted EBITDA increased by 16.6% to $480.1 million compared to the prior year [3] Segment Performance - Foodservice segment sales increased by 18.8% to $9.1 billion, with total case growth of 15.6% [4] - Convenience segment sales rose by 3.5% to $6.6 billion [4] - Specialty segment net sales decreased by 0.7% to $1.3 billion, driven by a decline in cases sold, despite growth in certain channels [5] Outlook - The company expects second-quarter sales between $16.40 billion and $16.70 billion, exceeding the analyst estimate of $16.462 billion [6] - Fiscal year 2026 sales outlook has been raised to $67.5 billion–$68.5 billion, surpassing the previous range and exceeding the $67.321 billion estimate [6] - PFGC shares are trading higher by 1.29% to $98.03 at the time of publication [6]

Core Insights - Performance Food Group (PFGC) reported revenue of $17.08 billion for the quarter ended September 2025, marking a year-over-year increase of 10.8% and exceeding the Zacks Consensus Estimate by 1.21% [1] - The earnings per share (EPS) for the same period was $1.18, slightly up from $1.16 a year ago, with an EPS surprise of 1.72% compared to the consensus estimate [1] Revenue Breakdown - Convenience revenue reached $6.59 billion, surpassing the average estimate of $6.52 billion, reflecting a year-over-year change of +3.5% [4] - Intersegment Eliminations reported revenue of -$183.5 million, better than the estimated -$194.22 million, with a year-over-year change of +0.8% [4] - Corporate & All Other revenue was $250.2 million, below the average estimate of $266.52 million, indicating a year-over-year decline of -2.3% [4] - Specialty revenue totaled $1.28 billion, slightly below the estimated $1.32 billion, showing a year-over-year decrease of -0.7% [4] Stock Performance - Over the past month, shares of Performance Food have returned -4.2%, contrasting with the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Total net sales grew by 10.8% in Q1 2026, driven by strong trends across all operating segments and the addition of Cheney Brothers [32][33] - Adjusted EBITDA increased by 16.6% to $480.1 million, with all three operating segments contributing to the strong performance [35][38] - Gross profit increased by 14.3%, with a gross profit per case increase of $0.32 compared to the prior year's period [35] Business Line Data and Key Metrics Changes - Foodservice segment saw total cases up by 15.6%, with organic independent case growth of 6.3% [25][26] - Convenience segment achieved 3.5% sales growth, benefiting from inflation and strong relative volume performance in key categories [27][28] - Specialty segment's net sales declined by 0.7%, but adjusted EBITDA grew by 13% due to improved operating leverage [30][31] Market Data and Key Metrics Changes - Cost inflation for the company was approximately 4.4% for the quarter, with foodservice inflation at 2.5% [33][34] - Specialty segment experienced a year-over-year cost inflation increase of 3.8%, primarily due to candy price inflation [34] Company Strategy and Development Direction - The company is focused on capturing profitable market share wins and executing operationally across all segments [26][31] - Investments in people and technology are prioritized to support growth, with a 6% increase in foodservice sales force headcount [21][32] - The company is committed to debt reduction and evaluating strategic M&A opportunities to drive growth and shareholder value [36][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining strong performance through fiscal 2026, with a robust pipeline of potential new business [31][38] - The company is well-equipped to handle inflationary scenarios, expecting rates to remain in the low to mid single-digit range throughout 2026 [34][35] - Management noted that while there are challenges in the restaurant channel, the diversified structure provides consistent performance across various economic scenarios [30][31] Other Important Information - The company is raising its sales guidance for the full year, projecting net sales between $67.5 billion and $68.5 billion [37] - The effective tax rate for Q1 was 23%, with expectations to remain close to historical ranges for 2026 [35] Q&A Session Summary Question: How did independent case growth progress by month? - Management noted consistent growth through Q1, with a strong October, but some softening in the last few weeks due to external factors [44] Question: Any impacts from uncertainty related to hiring? - Management stated that the commission structure has been effective in attracting talent, and hiring remains within a comfortable range [48][50] Question: Can you provide updates on progress with smaller chains? - Management highlighted strong growth in regional accounts and emphasized the importance of food service in the convenience segment [60] Question: What are the expectations for independent case growth in Q2? - Management remains optimistic about achieving a target of 6% for the full year, driven by independent account wins [73] Question: Can you elaborate on the profitability of the specialty segment? - Management indicated that improved operating leverage and a favorable mix of business contributed to strong profitability despite a challenging backdrop [90] Question: Are there any concerns regarding inflation impacting guidance? - Management reiterated expectations for low to mid single-digit inflation, with no significant concerns at this time [114]

Core Insights - Performance Food Group (PFGC) reported quarterly earnings of $1.18 per share, exceeding the Zacks Consensus Estimate of $1.16 per share, and showing a slight increase from $1.16 per share a year ago, resulting in an earnings surprise of +1.72% [1] - The company achieved revenues of $17.08 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.21% and increasing from $15.42 billion year-over-year [2] - Performance Food has surpassed consensus EPS estimates two out of the last four quarters and topped consensus revenue estimates three times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.12 on revenues of $16.49 billion, while for the current fiscal year, the estimate is $4.98 on revenues of $67.34 billion [7] - The estimate revisions trend for Performance Food was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Food - Natural Foods Products industry, to which Performance Food belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Performance Food's stock performance [5]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Performance - Total net sales increased by 10.8% to $17.1 billion in Q1 fiscal 2026, driven by recent acquisitions and case volume growth[7] - Adjusted EBITDA rose 16.6% to $480.1 million in Q1 fiscal 2026, reflecting strong operational performance[11] - Gross profit improved by 14.3% to $2.0 billion, supported by acquisitions and pricing improvements[8] - Operating profit increased to $224.7 million from $215.3 million, indicating a growth of 6.5% year-over-year[30] - Net income decreased by 13.3% to $93.6 million, primarily due to increased operating expenses[10] - Net income for the three months ended September 27, 2025, was $93.6 million, down from $108.0 million, representing a decrease of 13.3%[30] - Basic earnings per share (EPS) decreased to $0.60 from $0.70, a decline of 14.3%[30] - Diluted earnings per share (GAAP) decreased to $0.60, down 13.0% from $0.69 in the same quarter last year[41] Sales and Revenue Guidance - For Q2 fiscal 2026, the company expects net sales between $16.4 billion and $16.7 billion[21] - Full fiscal year 2026 net sales guidance increased to a range of $67.5 billion to $68.5 billion[22] - Net sales for the three months ended September 27, 2025, were $17,075.9 million, an increase of 10.8% compared to $15,415.5 million for the same period in 2024[30] - Total net sales rose by 10.8% to $17,075.9 million, up from $15,415.5 million year-over-year[47] - Foodservice segment sales increased by 18.8% to $9,146.1 million, while Convenience segment sales grew by 3.5% to $6,586.9 million[47] Expenses and Cash Flow - Operating expenses rose by 15.7% to $1.8 billion, influenced by recent acquisitions and higher personnel costs[9] - The company reported negative free cash flow of $224.1 million in Q1 fiscal 2026, compared to negative free cash flow of $43.0 million in the prior year[13] - Free cash flow (Non-GAAP) was negative at $(224.1) million, compared to $(43.0) million in the prior year[44] - Interest expense increased significantly by 56.3% to $104.4 million from $66.8 million year-over-year[41] Assets and Liabilities - Total assets as of September 27, 2025, were $18,351.8 million, an increase from $17,881.2 million as of June 28, 2025[31] - Total liabilities increased to $13,778.3 million from $13,408.8 million, indicating a rise in financial obligations[31] - Cash and restricted cash at the end of the period was $46.4 million, down from $86.7 million at the beginning of the period[32] Tax and Other Financial Metrics - The effective tax rate for Q1 fiscal 2026 was approximately 23.0%, down from 26.5% in the prior year[10] - Adjusted EBITDA (Non-GAAP) increased by 16.6% to $480.1 million compared to $411.9 million for the three months ended September 28, 2024[41] - Segment Adjusted EBITDA for Foodservice improved by 18.1% to $324.4 million, and for Convenience, it rose by 14.9% to $121.0 million[47] - The company reported a change in LIFO reserve of $24.5 million, a 92.9% increase compared to $12.7 million in the previous year[41] - Corporate & All Other segment reported a loss of $(59.3) million, worsening by 15.8% from $(51.2) million in the prior year[47]

Core Viewpoint - Wall Street anticipates flat earnings for Performance Food Group (PFGC) compared to the previous year, with a focus on revenue growth impacting stock price [1][3] Earnings Expectations - The upcoming earnings report is expected to show earnings of $1.16 per share, unchanged from the year-ago quarter, with revenues projected at $16.87 billion, reflecting a 9.4% increase [3] - A positive stock movement is likely if actual results exceed these expectations, while a miss could lead to a decline [2] Estimate Revisions - The consensus EPS estimate has been revised down by 1.5% over the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Performance Food is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +3.58% [12] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive reading indicates a likely earnings beat, especially when combined with a Zacks Rank of 2 [10][12] - Historical performance shows that Performance Food has beaten consensus EPS estimates only once in the last four quarters, with a recent surprise of +6.90% [13][14] Conclusion - Performance Food is positioned as a strong candidate for an earnings beat, but investors should consider additional factors before making investment decisions [17]

Industry Overview - Health and fitness companies are experiencing consistent demand due to increasing global awareness of health issues and the significance of physical fitness, driven by rising lifestyle-related diseases and a focus on preventive healthcare [1][10] - The industry's growth is supported by diverse revenue streams, including subscriptions, product sales, and services, making it appealing to long-term investors [2] Company Highlights Doximity Inc. (DOCS) - Doximity is a cloud-based digital platform for medical professionals in the U.S., covering over 80% of U.S. doctors and 60% of advanced practitioners, with a 95% subscription-based revenue model [7] - The company is expanding in a total addressable market of $18.55 billion and has integrated generative AI, enhancing product stickiness and physician utility [8] - Doximity's AI tools have seen a 5x usage growth year-over-year, supporting physicians in managing clinical documentation [9] - Expected revenue and earnings growth rates are 11.2% and 7%, respectively, for the current year [11] Planet Fitness Inc. (PLNT) - Planet Fitness is a leading franchisor and operator of fitness centers in the U.S., benefiting from higher royalties, new club openings, and member acquisitions [12] - The company ended Q2 with approximately 20.8 million members and over 2,762 clubs, achieving an 8.2% year-over-year increase in same-club sales [13] - Expected revenue and earnings growth rates are 10.2% and 13.1%, respectively, for the current year [14] United Natural Foods Inc. (UNFI) - United Natural Foods has shown strong growth supported by wholesale momentum and demand for natural and organic products, with strategic initiatives driving efficiency and cost savings [15][16] - The company has an expected revenue growth rate of 2.5% and earnings growth rate of over 100% for the current year [17] Peloton Interactive Inc. (PTON) - Peloton is evolving from a connected fitness brand to a broader wellness platform, leveraging commercial partnerships to drive growth [18] - The company has seen momentum in its Peloton for Business segment, with partnerships enhancing brand visibility [19] - Expected revenue and earnings growth rates are -1.1% and over 100%, respectively, for the current year [21] Performance Food Group Co. (PFGC) - Performance Food Group markets and distributes a wide range of food products, serving various sectors including restaurants and healthcare facilities [23][24] - The company has an expected revenue growth rate of 6.4% and earnings growth rate of 11.2% for the current year [25]

Core Insights - Performance Food Group Company will host a webcast to discuss its first-quarter fiscal 2026 results [1] Company Summary - The webcast will provide insights into the company's financial performance for the first quarter of fiscal year 2026 [1]