On August 14, 2024, Performance Food Group Co (PFGC, Financial) released its 8-K filing reporting its fourth-quarter and full-year fiscal 2024 results. Performance Food Group Co is the third-largest U.S. food-service distributor behind Sysco and US Foods, with a 9% market share. PFG's food-service business provides customized food products and services to independent and chain restaurants, and institutional customers. The acquisitions of Eby-Brown and Core-Mark enabled PFG to tap into the convenience store segment, offering convenience products, marketing programs, and technology solutions. The firm's Vistar business is a national distributor of candy, snacks, and beverages to various channels.
Quarterly Performance Highlights
For the fourth quarter of fiscal 2024, Performance Food Group Co reported:
- Total case volume increased by 1.1%
- Net sales increased by 2.2% to $15.2 billion
- Gross profit improved by 4.7% to $1.7 billion
- Net income increased by 10.9% to $166.5 million
- Adjusted EBITDA increased by 18.4% to $456.2 million
- Diluted EPS increased by 11.5% to $1.07
- Adjusted Diluted EPS increased by 27.2% to $1.45
Full-Year Fiscal 2024 Highlights
For the full fiscal year 2024, the company reported:
- Total case volume grew by 1.6%
- Net sales increased by 1.8% to $58.3 billion
- Gross profit improved by 5.2% to $6.6 billion
- Net income increased by 9.7% to $435.9 million
- Adjusted EBITDA increased by 10.5% to $1.5 billion
- Diluted EPS increased by 9.8% to $2.79
- Adjusted Diluted EPS increased by 10.8% to $4.30
- Operating Cash Flow of $1.2 billion
- Free cash flow of $767.4 million
Financial Achievements and Challenges
Performance Food Group Co's financial achievements are significant in the Retail - Defensive industry. The increase in net sales and gross profit highlights the company's ability to grow despite market challenges. The rise in net income and Adjusted EBITDA indicates strong operational efficiency and profitability. However, the company faces challenges such as increased operating expenses due to higher personnel costs and maintenance expenses. Additionally, the decline in sales in the Convenience and Vistar segments poses a concern.
Income Statement and Balance Sheet Summary
| Metric | Q4 FY2024 | Q4 FY2023 | FY2024 | FY2023 |
|---|---|---|---|---|
| Net Sales | $15,189.2M | $14,865.2M | $58,281.2M | $57,254.7M |
| Gross Profit | $1,747.2M | $1,668.3M | $6,577.1M | $6,254.9M |
| Net Income | $166.5M | $150.1M | $435.9M | $397.2M |
| Diluted EPS | $1.07 | $0.96 | $2.79 | $2.54 |
Cash Flow and Capital Spending
In fiscal 2024, PFGC provided $1.2 billion in cash flow from operating activities, a significant increase from $832.1 million in the prior year. The company invested $395.6 million in capital expenditures, up $125.9 million from the previous year. Free cash flow for fiscal 2024 was $767.4 million, compared to $562.4 million in fiscal 2023.
Share Repurchase Program
In November 2022, the Board of Directors authorized a share repurchase program for up to $300 million of the company’s outstanding common stock. During fiscal 2024, PFGC repurchased and retired 1.3 million shares for a total of $78.1 million. As of June 29, 2024, approximately $210.6 million remained available for additional share repurchases.
M&A Activity
Performance Food Group Co announced its intention to acquire Cheney Bros., Inc. for approximately $2.1 billion in cash. The acquisition is expected to close in calendar 2025. Additionally, in July 2024, PFGC acquired José Santiago, Inc., expanding its geographic reach in the Caribbean.
Segment Results
For the fourth quarter of fiscal 2024:
- Foodservice net sales increased by 4.6% to $7.7 billion, with Adjusted EBITDA rising by 14.1% to $311.8 million.
- Vistar net sales decreased by 1.8% to $1.2 billion, with Adjusted EBITDA slightly decreasing by 0.1% to $85.5 million.
- Convenience net sales decreased by
Explore the complete 8-K earnings release (here) from Performance Food Group Co for further details.
