Performance Food Group Company — First-Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Net sales increased 5.5% year-over-year to $18.0 billion, driven by organic case volume growth, recent acquisitions, and a 3.4% overall product cost inflation.
• Gross profit rose 8.5% to $2.2 billion, attributed to vendor rebates, favorable mix shifts toward the independent channel, and recent acquisitions.
• Net income increased 38.4% to $129.5 million, up $35.9 million from the prior year, primarily due to higher gross profit and lower interest expense.
• Adjusted EBITDA grew 10.0% to $528.0 million.
• Diluted EPS increased 36.7% to $0.82, while Adjusted Diluted EPS rose 11.9% to $1.32.
• Operating expenses increased 6.9% to $1.9 billion, driven by acquisitions, personnel costs, and higher fuel expenses, partially offset by gains on fuel hedges and lower professional fees.
• Net cash used in operating activities improved to $89.3 million from $145.2 million in the prior year period, largely due to inventory purchase timing.
• Free cash flow was negative $143.2 million, an improvement from negative $224.1 million in the prior year period.
• Capital expenditures decreased 31.9% to $53.9 million from $78.9 million in the prior year period.
• The effective tax rate was 25.2%, compared to 23.0% in the prior year period.

Guidance and Future Outlook:

• For the second quarter of fiscal 2027, the company expects net sales between $17.0 billion and $17.2 billion and Adjusted EBITDA between $490 million and $510 million.
• For the full fiscal year 2027, the company reiterates guidance for net sales between $72.5 billion and $73.0 billion and Adjusted EBITDA between $2.125 billion and $2.225 billion, including the impact of a 53rd week.
• Management acknowledges a challenging macroeconomic environment but expresses confidence in continuing market share gains and executing strategic priorities.

Business Segments and Product Lines:

• Foodservice: Net sales increased 5.0% to $9.6 billion; total case volume grew 4.2%, with independent case volume up 7.8% and organic independent case volume up 5.5%. Adjusted EBITDA rose 13.4% to $367.9 million. Independent sales as a percentage of total Foodservice sales increased to 43.0% from 41.6%.
• Convenience: Net sales increased 5.4% to $6.9 billion, driven by new chain customers and price increases, partially offset by a mix shift from cigarettes to alternative nicotine products. Total cases sold increased 4.1%. Adjusted EBITDA rose 3.8% to $125.6 million.
• Specialty: Net sales increased 10.3% to $1.4 billion, driven by price increases and volume growth in vending, grocery retail, entertainment, and office supply channels, partially offset by retail declines. Total cases sold increased 4.3%. Adjusted EBITDA decreased 4.8% to $89.5 million due to higher operating expenses.
• The Specialty segment reclassified sales channels to align with management evaluation, presenting the former value channel as grocery retail and combining theater, concessions, and hospitality into entertainment.

Market and Competitive Landscape:

• The company reported continued market share gains across its businesses.
• Total case volume increased 4.2%, with total organic case volume increasing 2.5%.
• The independent Foodservice channel continues to grow, generating higher gross profit due to additional services provided.

Risks and Challenges:

• Key risks include inflation, commodity volatility, fuel price fluctuations, and labor costs.
• Potential impacts from cybersecurity incidents, technology disruptions, and AI integration delays.
• Intense competition and the potential for group purchasing organizations to increase market activity.
• Declining sales volume of cigarettes and tobacco products.
• Risks associated with acquisitions, including integration challenges and costs.
• Regulatory changes regarding e-vapor products and other alternative nicotine products.
• Exposure to extreme weather conditions and potential product recalls or liability claims.

Management Commentary and Tone:

• Scott McPherson, President and CEO, stated the company started fiscal 2027 with solid momentum, delivering strong sales and profit growth.
• Management credited execution on efficiency initiatives for gross margin expansion and double-digit Adjusted EBITDA and EPS growth.
• The tone was confident regarding the ability to gain market share and deliver results despite macroeconomic challenges.

Other Key Points:

• As of September 26, 2026, $498.5 million remained available for share repurchases under the $500 million program, which expires on May 27, 2029.
• The company distributed food and food-related products to over 350,000 locations with more than 150 locations and over 44,000 associates.
• Adjusted EBITDA outlook excludes certain non-recurring items such as losses on early debt extinguishments, restructuring charges, and acquisition-related legal fees.
• A conference call with the investment community was held on November 4, 2026, at 9:00 a.m. Eastern Time.