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Performance Food Group PFGC Q3'25 Earnings: Independent Strength, Margin Gains, & Updated Guidance

  • Writer: Hardik Shah
    Hardik Shah
  • 1 day ago
  • 3 min read

TL;DR

  • Strong volume and sales growth: Total case volume +10%, net sales +10.5% YoY; Independent Foodservice volume up 20%, reflecting acquisition benefits.

  • Profit pressure despite margin expansion: Net income fell 17%, but Adjusted EBITDA rose 20%, showing solid cost controls and mix shift.

  • Guidance trimmed modestly: FY25 Adjusted EBITDA range narrowed; positive trends in April and May support confidence into year-end.


Business Overview


Performance Food Group (PFGC) is a leading foodservice distribution company operating three primary segments:

  • Foodservice (largest): National brands, proprietary "Performance Brands," sold to independent/chain restaurants and institutions.

  • Specialty (formerly Vistar): Candy, snacks, beverages for vending, office coffee, theaters, and other channels.

  • Convenience: Food, beverages, and tobacco distributed to convenience stores across North America.


PFG serves over 300,000 customer locations from more than 150 distribution centers across the U.S.


Performance Food Earnings - Q3 2025

  • Net Sales: $15.3B (+10.5% YoY)

  • Gross Profit: $1.8B (+16.2% YoY)

  • Net Income: $58.3M (-17.2% YoY)

  • Adjusted EBITDA: $385.1M (+20.1% YoY)

  • Diluted EPS: $0.37 (-17.8% YoY)

  • Adjusted Diluted EPS: $0.79 (-1.3% YoY)


9M FY25

  • Net Sales: $46.4B (+7.6% YoY)

  • Adjusted EBITDA: $1.22B (+16.2% YoY)

  • Free Cash Flow: $494.4M

"While our fiscal third-quarter results were not as strong as anticipated, our company is executing well and consumer trends in early Q4 are encouraging." – George Holm, CEO

Forward Guidance

  • Net Sales FY25: Narrowed to $63.0B–$63.5B (previously $63B–$64B)

  • Adjusted EBITDA FY25: Lowered upper range to $1.725B–$1.75B (previously $1.725B–$1.8B)


"We are prepared for a range of scenarios... Our balance sheet and cash flow allow us to take advantage of market dislocation." – Patrick Hatcher, CFO

Operational Performance


Foodservice

  • Net sales +19% to $8.4B

  • Independent case volume +20% (+3.4% organic)

  • Adjusted EBITDA +29% YoY

Strong growth driven by acquisitions (Cheney Brothers, José Santiago), independent customer momentum, and favorable case mix.


Specialty

  • Net sales flat at $1.1B

  • Adjusted EBITDA +6.9% YoY

Theater and value channels weak; however, vending and office coffee offset declines.


Convenience

  • Net sales +1.8% to $5.7B

  • Adjusted EBITDA +5.4% YoY

Outperformed industry despite category softness; new account wins and foodservice growth cited as key drivers.


Market Insights

  • Inflation remained manageable (~4.9% total, 3.7% Foodservice).

  • No significant tariff impacts yet, though management remains vigilant.

  • Independent restaurant trends rebounded strongly in April and May.

  • Convenience showed improvement in April, aided by foodservice programs and new customer wins.


"Our broad and diverse business has proven resilient... We remain laser focused on driving growth, expanding margins and leveraging technology." – Scott McPherson, COO

Strategic Initiatives


  • Salesforce investment: +8% headcount YoY to drive share gains.

  • Acquisitions: Integration of Cheney Brothers and José Santiago on track.

  • Proprietary brands focus: 53% of independent Foodservice volume from Performance Brands.

  • Convenience foodservice programs: Still early innings; strong growth runway.


Capital Allocation

  • Share Buybacks: $10.6M repurchased in Q3 (0.2M shares at $76.82 average price).

  • Debt Management: Began reducing ABL borrowings.

  • CapEx: $332.7M YTD; Q4 spend expected to increase as typical.

  • M&A Pipeline: Described as "robust," with active evaluation underway.


The Bottom Line


PFG delivered solid growth in Q3 driven by acquisitions, independent customer expansion, and procurement efficiencies, despite a volatile macro environment and soft February. April and early May results point to a strong Q4 finish. While modestly trimming full-year guidance, management remains confident in long-term growth potential through salesforce expansion, proprietary brand focus, convenience foodservice penetration, and M&A. With a strong balance sheet and a diversified business model, PFG appears well positioned to navigate macroeconomic headwinds while continuing to capture share.


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