Why Performance Food Shares Are Gaining Today

Performance Food Group Co PFGC reported Q4 FY23 sales growth of 1.9% Y/Y to $14.87 billion, missing the consensus of $15.07 billion.

Net sales benefitted from a positive channel mix, higher cases sold, and increased selling price per case due to inflation.

Net sales for Foodservice decreased 1.1% Y/Y to $7.3 billion, Vistar increased 18.3% Y/Y to $1.2 billion, and Convenience rose 2.3% Y/Y to $6.3 billion.

Total organic case volume grew 1.8% Y/Y, led by a 7.6% Y/Y increase in organic independent cases, higher Performance Brands cases, and growth across Vistar’s channels.

Gross profit increased 12.0% Y/Y to $1.7 billion, aided by a favorable shift in the cases sold mix and improved independent channel. Operating expenses rose 5.2% Y/Y to $1.4 billion.

Adjusted EBITDA grew 7.9% Y/Y to $385.2 million in the quarter. 

Adjusted EPS increased 6.5% Y/Y to $1.14, in line with the consensus.

The company held $20 million in cash and equivalents as of July 1, 2023. Operating cash flow totaled $832.1 million at the end of the year.

Repurchase: In Q4, the company bought back shares worth $11.2 million. As of July 1, 2023, the company had approximately $288.8 million worth of shares remaining available for share repurchases.

Outlook: The company expects Q1 FY24 net sales of $14.7 billion-$15.0 billion (consensus $15.22 billion) and adjusted EBITDA of $360 million-$380 million.

For FY24, PFGC expects net sales of $59 billion-$60 billion (consensus $59.97 billion) and adjusted EBITDA of $1.45 billion-$1.5 billion.

The company reiterated its previously announced 3-year net sales and adjusted EBITDA targets, expecting annual net sales of $62 billion - $64 billion and adjusted EBITDA of $1.5 billion - $1.7 billion in fiscal 2025.

Price Action: PFGC shares are trading higher by 8.2% at $62.19 on the last check Wednesday.