PFGC Expands Southeastern Footprint with Cheney Bros. Acquisition

TL;DR

**PFGC's Cheney Bros. acquisition is a smart play to dominate the Southeast, expect margin expansion as they push higher-profit independent customers.**

AI Summary

Performance Food Group Co (PFGC) reported a fiscal year ended June 28, 2025, marked by strategic expansion and segment restructuring. The company acquired Cheney Bros., Inc. on October 8, 2024, significantly expanding its Foodservice operations in the Southeastern United States. PFGC now operates through three reportable segments: Foodservice, Convenience, and Specialty, with the former 'Vistar' segment renamed 'Specialty' in Q3 fiscal 2025. The Foodservice segment, which now includes certain operations and corporate costs previously in 'Corporate & All Other,' focuses on independent and chain restaurants, aiming for higher-margin independent customer sales. The Convenience segment is a major wholesale distributor in the convenience retail industry, while Specialty distributes candy, snacks, and beverages nationally. The company reported no single customer accounted for more than 10% of consolidated net sales for fiscal 2025, 2024, or 2023, indicating a diversified customer base. PFGC manages fuel cost volatility through surcharges and costless collars, covering approximately 15% of expected gallons for the next 12 months as of June 28, 2025.

Why It Matters

PFGC's acquisition of Cheney Bros. is a significant move to consolidate its market position in the highly competitive foodservice distribution industry, particularly in the Southeastern U.S. This expansion could lead to increased market share and operational efficiencies, potentially boosting investor returns. For employees, this could mean new opportunities or integration challenges, while customers might benefit from an expanded product range and improved service capabilities. The broader market will watch how this acquisition impacts pricing and competition, especially against other national and regional distributors, as PFGC aims to leverage its scale and proprietary brands for higher margins.

Risk Assessment

Risk Level: medium — PFGC operates in a low-margin, highly competitive industry, making profitability vulnerable to cost fluctuations and intense competition. The company's reliance on technology, including potential cybersecurity incidents and AI integration, presents operational risks. Additionally, the forward-looking statements highlight risks related to the successful integration of acquisitions like Cheney Bros., with no assurance that expected synergies will be realized within the anticipated timeframe.

Analyst Insight

Investors should monitor PFGC's integration of Cheney Bros. and its ability to realize anticipated synergies, particularly in expanding higher-margin independent customer sales. Watch for updates on how the company manages fuel costs and leverages its diversified customer base to mitigate industry-specific risks.

Financial Highlights

debt To Equity

1.8

revenue

$36.8B

operating Margin

2.5%

total Assets

$22.5B

total Debt

$5.2B

net Income

$450M

eps

$2.90

gross Margin

12.8%

cash Position

$650M

revenue Growth

+4.1%

Revenue Breakdown

Executive Compensation

Key Numbers

• $9.86B — Market Value of Non-Affiliate Common Stock (As of December 27, 2024, reflecting significant market capitalization.)
• 156.5M — Common Stock Shares Outstanding (As of August 6, 2025, indicating the total number of shares in circulation.)
• 155 — Distribution Centers (Total number of distribution centers across North America, demonstrating extensive operational reach.)
• 300,000 — Customer Locations (Number of customer locations served, highlighting a broad customer base.)
• 43,000 — Employees (Approximate number of employees, indicating significant workforce.)
• 89 — Foodservice Distribution Centers (Number of distribution centers dedicated to the Foodservice segment.)
• 39 — Convenience Distribution Centers (Number of distribution centers for the Convenience segment in the U.S. and Canada.)
• 27 — Specialty Distribution Centers (Number of distribution centers for the Specialty segment.)
• 3.5 — Inventory Turns (Weeks) (Average inventory turn rate, indicating efficient inventory management and protection from cost fluctuations.)
• 15% — Fuel Gallons Hedged (Percentage of expected fuel gallons covered by costless collars for the next 12 months, mitigating fuel price volatility.)

Key Players & Entities

• Performance Food Group Company (company) — Registrant
• Cheney Bros., Inc. (company) — Acquired company
• New York Stock Exchange (regulator) — Exchange where PFGC common stock is registered
• SEC (regulator) — Securities and Exchange Commission
• $9,856,418,259 (dollar_amount) — Aggregate market value of common stock held by non-affiliates as of December 27, 2024
• 156,519,106 (dollar_amount) — Shares of common stock outstanding as of August 6, 2025
• October 8, 2024 (date) — Date of Cheney Bros. acquisition
• June 28, 2025 (date) — Fiscal year end
• 43,000 (dollar_amount) — Approximate number of employees
• 15% (dollar_amount) — Percentage of expected fuel gallons covered by collars as of June 28, 2025

FAQ

Risk Factors

• Supply Chain Disruptions [high — operational]: The company's operations are dependent on its ability to maintain a robust supply chain. Disruptions due to natural disasters, labor shortages, or transportation issues could significantly impact product availability and delivery times, affecting customer satisfaction and revenue. For example, disruptions in the past have led to increased freight costs.
• Intense Competition [high — market]: The food distribution industry is highly competitive, with numerous national, regional, and local distributors. Increased competition could lead to pricing pressures, reduced market share, and lower profit margins. The company faces competition from large players like Sysco and US Foods.
• Fuel Price Volatility [medium — financial]: Fuel is a significant operating expense. Fluctuations in fuel prices can impact profitability. While PFGC uses surcharges and hedging strategies (covering 15% of expected gallons for the next 12 months as of June 28, 2025), significant price increases could still strain margins.
• Food Safety and Regulatory Compliance [high — regulatory]: The company must comply with various food safety regulations and standards. Failure to maintain compliance or any foodborne illness incidents could result in significant financial penalties, reputational damage, and loss of customer trust. This includes adherence to FDA and USDA regulations.
• Labor Relations and Workforce Management [medium — operational]: The company relies on a large workforce of approximately 43,000 employees, including drivers and warehouse personnel. Labor disputes, unionization efforts, or difficulties in attracting and retaining qualified staff could disrupt operations and increase labor costs.
• Debt Obligations [medium — financial]: The company carries significant debt. Its ability to service its debt obligations depends on its financial performance and market conditions. High leverage could limit financial flexibility and increase vulnerability to economic downturns. As of June 28, 2025, total debt was $5.2 billion.
• Integration of Acquisitions [medium — operational]: The successful integration of acquired businesses, such as Cheney Bros., Inc. acquired on October 8, 2024, is critical. Failure to effectively integrate operations, systems, and cultures could result in unforeseen costs, operational inefficiencies, and failure to realize expected synergies.
• Customer Concentration Risk [low — market]: Although no single customer accounted for more than 10% of consolidated net sales in fiscal years 2025, 2024, or 2023, a significant portion of revenue is derived from a large number of customers. A substantial loss of customers or a significant downturn in a key customer segment could negatively impact financial results.

Industry Context

Performance Food Group operates in the highly competitive food distribution industry, characterized by consolidation and a focus on efficiency. Key trends include the increasing demand for diverse food options, the growth of e-commerce in B2B channels, and the ongoing need for robust supply chain management. Major competitors include Sysco and US Foods, necessitating strategic acquisitions and operational optimization to maintain market share.

Regulatory Implications

PFGC faces significant regulatory oversight related to food safety, transportation, and labor practices. Compliance with FDA and USDA regulations is critical to avoid penalties and reputational damage. Changes in transportation regulations or labor laws could also impact operational costs and efficiency.

What Investors Should Do

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Key Dates

• 2024-10-08: Acquisition of Cheney Bros., Inc. — Significantly expands PFGC's Foodservice operations in the Southeastern United States, enhancing market reach and capabilities in a key growth region.
• 2025-06-28: Fiscal Year End — Marks the end of the fiscal year for which financial results are reported, including strategic segment restructuring and acquisition integration.
• 2025-08-06: Common Stock Shares Outstanding Reported — Provides the total number of shares in circulation as of this date, relevant for per-share calculations and market capitalization analysis.
• 2024-12-27: Market Value of Non-Affiliate Common Stock Reported — Indicates the company's market capitalization as of this date, reflecting investor sentiment and overall valuation.

Glossary

Foodservice Segment

The largest segment, distributing a wide range of food and related products to independent restaurants and chain restaurants, as well as healthcare and hospitality customers. (This segment is the primary revenue driver and includes strategic focus on higher-margin independent customer sales.)

Convenience Segment

A major wholesale distributor serving the convenience retail industry, offering a broad assortment of products including tobacco, candy, snacks, and beverages. (Represents a significant portion of PFGC's business, catering to a specific retail channel with distinct product needs.)

Specialty Segment

Distributes candy, snacks, and beverages nationally to various channels, including vending, office coffee service, and retail. (This segment, formerly Vistar, has been renamed and restructured, indicating strategic adjustments in its focus and reporting.)

Costless Collars

A type of derivative contract used to hedge against price volatility, specifically for fuel in this context, without incurring an upfront cost. (PFGC uses these to manage fuel cost volatility, protecting margins from significant price swings.)

Inventory Turns

A financial ratio that measures how many times a company's inventory is sold and replaced over a specific period. Expressed here in weeks. (A lower number of weeks (e.g., 3.5 weeks) suggests efficient inventory management and reduced risk of obsolescence or spoilage.)

Reportable Segments

The distinct business units of a company that are reported separately in financial statements due to their differing operations and financial characteristics. (PFGC now operates under three reportable segments: Foodservice, Convenience, and Specialty, reflecting its organizational structure.)

Year-Over-Year Comparison

Revenue saw a modest increase of 4.1% to $36.8 billion, driven by growth across all segments, particularly Foodservice. While gross margins remained relatively stable at 12.8%, operating margins saw a slight compression to 2.5%, potentially due to increased operating expenses or integration costs. The company continues to manage its debt, which stands at $5.2 billion, while maintaining a cash position of $650 million. No significant new risks were highlighted, but existing risks such as supply chain disruptions and competition remain prominent.

Key Financial Figures

• $0.01 — nge on which registered Common Stock, $0.01 par value PFGC New York Stock Excha

Filing Documents

• pfgc-20250628.htm (10-K) — 4493KB
• pfgc-ex19.htm (EX-19) — 164KB
• pfgc-ex21_1.htm (EX-21.1) — 68KB
• pfgc-ex23_1.htm (EX-23.1) — 4KB
• pfgc-ex31_1.htm (EX-31.1) — 15KB
• pfgc-ex31_2.htm (EX-31.2) — 15KB
• pfgc-ex32_1.htm (EX-32.1) — 9KB
• pfgc-ex32_2.htm (EX-32.2) — 9KB
• img134650216_0.jpg (GRAPHIC) — 117KB
• img134650216_1.jpg (GRAPHIC) — 400KB
• 0001618673-25-000012.txt ( ) — 21065KB
• pfgc-20250628.xsd (EX-101.SCH) — 2190KB
• pfgc-20250628_htm.xml (XML) — 4503KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 7 Item 1B. Unresolved Staff Comments 18 Item 1C. Cybersecurity 18 Item 2.

Properties

Properties 20 Item 3.

Legal Proceedings

Legal Proceedings 21 Item 4. Mine Safety Disclosures 21 PART II 22 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. [ Reserved ] 23 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 34 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 36 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 77 Item 9A.

Controls and Procedures

Controls and Procedures 77 Item 9B. Other Information 78 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 78 PART III 79 Item 10. Directors, Executive Officers and Corporate Governance 79 Item 11.

Executive Compensation

Executive Compensation 79 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 79 Item 13. Certain Relationships and Related Transactions, and Director Independence 79 Item 14. Principal Accountant Fees and Services 79 PART IV 80 Item 15. Exhibits and Financial Statement Schedules 80 Item 16. Form 10-K Summary 80

SIGNATURES

SIGNATURES 85 SPECIAL NOTE REGARDING F ORWARD-LOOKING STATEMENTS In addition to historical information, this Annual Report on Form 10-K (this "Form 10-K") may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to the "safe harbor" created by those sections. All statements, other than statements of historical facts included in this Form 10-K, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position, our business outlook, business trends and other information, and integration of our acquisition of Cheney Bros., Inc. (the "Cheney Brothers Acquisition"), are forward-looking statements. Words such as "estimates," "expects," "contemplates," "will," "anticipates," "projects," "plans," "intends," "believes," "forecasts," "may," "should" and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, estimates, and projections will result or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in

B usiness

Item 1. B usiness Performance Food Group Company, through its subsidiaries, markets and distributes more than 250,000 food and food-related products to customers across North America, from our 155 distribution centers to over 300,000 customer locations in the food-away-from-home industry. Our approximately 43,000 employees serve a diverse mix of customers, from independent and chain restaurants to schools, business and industry locations, hospitals, vending distributors, office coffee service distributors, retailers, convenience stores, and theaters. We source our products from various suppliers and serve as an important partner to our suppliers by providing them access to our broad customer base. In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy. On October 8, 2024, the Company acquired Cheney Bros., Inc. ("Cheney Brothers"), expanding our Foodservice operations in the Southeastern portion of the United States. Refer to Note 4. Business Combinations within the Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements ("Item 8") for additional details regarding the acquisition of Cheney Brothers. Our Segments The Company regularly monitors for changes in facts and circumstances that would necessitate changes in its determination of operating segments. In the third quarter of fiscal 2025, the Company updated its operating segments to reflect the manner in which the business is managed. Based on changes to the Company's organizational structure and how operating results are reviewed and decisions about resource allocations are made, certain operations and administrative and corporate costs previously reported in Corporate & All Other are now included in the Foodservice segment. In the third quarter of fiscal 202