Top-line Revenue Growth
Total net sales grew 6.4% year-over-year in the fiscal third quarter, driven by contributions from all three operating segments with particular strength in Convenience.
Performance Food Group
· PFGC
May 6th, 2026
Summary
- Earnings Call Date:
- 2026-05-06
- Change Since:
- +14.59%
- Next Earnings Date:
- 2026-08-19
Earnings Call Sentiment
PositiveThe call presented a majority of positive operational and financial developments—broad-based top-line growth (6.4% sales), improved adjusted EBITDA (+6.6% to $410.6M), strong cash flow (> $1B operating cash flow YTD), and solid segment execution (notably Convenience and independent Foodservice case growth). Several actionable near-term challenges were acknowledged, including integration and transition costs at Cheney Brothers, inflationary pressures (particularly in Convenience and Specialty), a March fuel-related headwind (~$7.3M), and Specialty’s negative EBITDA in the quarter. Management tightened full-year guidance while reiterating confidence in achieving multi-year targets and highlighted strategic M&A and capacity investments that should support 2027 acceleration. Overall, positive results and strong cash generation outweigh the transitory and segment-specific headwinds discussed on the call.
Company Guidance
Performance Food Group tightened full-year FY2026 guidance to sales of $67.7–$68.0 billion and adjusted EBITDA of $1.90–$1.93 billion (previously $67.25–$68.25B and $1.875–$1.975B), and reiterated its three‑year targets for FY2028 of $73–$75 billion in sales and $2.3–$2.5 billion of adjusted EBITDA. The Q3 backdrop that informed this outlook included total net sales up 6.4%, total cases +4.4%, independent restaurant cases +6.5%, Convenience organic case growth +8.3% (Convenience revenue +8.7%), gross profit up 6.4% with gross profit per case +$0.20, adjusted EBITDA of $410.6 million (+6.6%), net income $41.7 million (‑28.5% YoY), diluted EPS $0.27 and adjusted diluted EPS $0.80 (+1.3%). Inflation in Q3 ran about 4.5% companywide (Foodservice 1.5%, Specialty 5.1%, Convenience 7.9%), and management expects inflation to remain in the low‑ to mid‑single‑digit range for the rest of FY2026; the company also disclosed a ~$7.3 million gross fuel/mileage headwind in late Q3 (surcharge timing adjusted in April/May). Year‑to‑date operating cash flow exceeded $1 billion (up ≈$245 million), CapEx was ~ $266 million through nine months with full‑year CapEx expected below the long‑term target of 70 bps of net revenue, nine‑month free cash flow improved (~$312 million increase), share repurchases totaled $1.2 million at an average $83.11, and the Q3 effective tax rate was 25.4% with a full‑year rate expected near ~27%.
Adjusted EBITDA and EPS Improvement
Adjusted EBITDA increased 6.6% to $410.6 million. Adjusted diluted EPS was $0.80, up 1.3% year-over-year, demonstrating operating leverage despite some below-the-line headwinds.
Strong Independent Case and Account Growth
Foodservice independent case volume accelerated to 6.5% growth (above the 6% benchmark) with net new account growth of ~5.4% and a 100 basis point differential between new account growth and total case growth, indicating improved penetration of existing accounts.
Convenience Segment Outperformance
Convenience delivered 8.3% organic case growth and 8.7% total revenue growth in the quarter, and reported an outstanding 34.1% adjusted EBITDA performance for the period; Core Mark successfully onboarded major customers (Love’s and RaceTrac).
Specialty Revenue Growth and Channel Expansion
Specialty (Vistar) achieved 1.1% case growth and a 5.3% revenue increase year-over-year, with continued expansion into e-commerce fulfillment, specialty grocery and campus retail channels.
Improved Gross Profit Per Case
Total company gross profit increased 6.4%, with gross profit per case improving by $0.20 versus the prior year, credited to favorable mix, procurement initiatives and brand execution.
Strong Operating Cash Flow and Free Cash Flow Improvement
For the first nine months of fiscal 2026, the company generated over $1 billion of operating cash flow (up ~ $245 million year-over-year) and materially increased free cash flow (up ~$312 million YoY), supporting investment and capital priorities.
Capital Investment Discipline and Capacity Build
Invested ~$266 million in CapEx in the first nine months with an expectation that full year CapEx will be below the long-term target (~70 bps of net revenue). Opened a new state-of-the-art broadline distribution facility in Florence, SC to add capacity.
Tightened Full-Year Guidance and Multi-Year Targets
Tightened fiscal 2026 guidance to sales of $67.7B–$68.0B and adjusted EBITDA of $1.90B–$1.93B, and reiterated track toward Investor Day three‑year targets (fiscal 2028 sales $73B–$75B; adjusted EBITDA $2.3B–$2.5B).
Strategic M&A and Geographic Expansion
Closed acquisition of Cash‑Wa (broadline distributor in Kearney, NE) to expand western presence; M&A pipeline described as robust and focused on broadline Foodservice targets.
Operator
Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Good day, and welcome to Performance Food Group Company's Fiscal Year Q3 2026 Earnings Conference Call. I would now like to turn the call over to Bill Marshall, Senior Vice President, Investor Relations for Performance Food Group Company. Please go ahead, sir.
Bill Marshall
Thank you, and good morning. We are here with Scott E. McPherson and H. Patrick Hatcher. We issued a press release this morning regarding our 2026 fiscal third quarter results, which can be found in the Investor Relations section of our website at pfgc.com. During our call today, unless otherwise stated, we are comparing results to the results in the same period in fiscal 2025. Any reference to 2025, 2026, or specific quarters refers to our fiscal calendar unless otherwise stated. The results discussed on this call will include GAAP and non-GAAP results adjusted for certain items.
The reconciliation of these non-GAAP measures to the corresponding GAAP measures can be found at the back of the earnings release. Our remarks on this call and in the earnings release contain forward-looking statements and projections of future results. Please review the cautionary forward-looking statements section in today's earnings release and our SEC filings for various factors that could cause our actual results to differ materially from our forward-looking statements and projections. With that, I would now like to turn the call over to Scott.
Scott E. McPherson
Excited to share our...
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