Performance Food Group (PFGC, Financial) had a busy day, reporting Q4 results, initial FY25 outlook, and announcing two acquisitions. The food distributor serves over 175,000 foodservice locations with products ranging from snacks and beverages to vending machines and dining menu items.
- PFGC exceeded Q4 earnings expectations with an adjusted EPS of $1.45, a 27% year-over-year increase. This was driven by better-than-expected margins and a 1.1% growth in case volume, particularly in its Foodservice segment. Total revenue rose 2.3% year-over-year to $15.2 billion, aligning with analyst forecasts.
- Although elevated prices impacted consumer behavior, especially for candy and snacks, PFGC expects ongoing disinflation to boost future top and bottom-line numbers throughout FY25.
- PFGC announced the acquisition of Cheney, a major U.S. foodservice distributor, for $2.1 billion in cash. Cheney focuses on independent restaurants, resorts, and country clubs in Florida, generating over $3.0 billion in annual revenue. The acquisition is expected to be accretive to PFGC's adjusted EPS by the end of the first fiscal year following the closing in 2025.
- PFGC also completed its purchase of José Santiago, a foodservice distributor in the Caribbean, last month. This acquisition strengthens PFGC's presence in the Southeast U.S. and is expected to be immediately accretive to earnings, cash flow, and margins.
- Looking ahead, PFGC projects FY25 revenue of $60.0-61.0 billion, a 3.8% year-over-year increase at the midpoint. The Cheney acquisition is not included in this guidance, with updates expected upon closing. PFGC also has over $200 million remaining for share repurchases, anticipated to be completed within FY25.
Investors have responded positively to PFGC's announcements, including its Q4 earnings report. The acquisitions of Cheney and José Santiago align well with PFGC's business model. Despite inflationary pressures, PFGC delivered steady quarterly numbers, similar to peers like Sysco (SYY, Financial) and US Foods (USFD, Financial). While economic challenges persist, PFGC's strength in Foodservice is a promising sign for the future.
