Performance Food Group (PFGC) reported a strong start to fiscal 2026, underpinned by a diversified, multi-segment footprint and meaningful margin expansion. Revenue rose 10.8% year over year to $17.08 billion, aided by the Cheney Brothers acquisition and robust Foodservice independent-case growth (organic Foodservice top line +7.7% and total Foodservice sales +18.8% driven by Cheney and organic momentum). Gross profit rose 14.3% to $2.02 billion with gross margin improving to approximately 11.81%, reflecting favorable mix, low-single-digit inflation in Foodservice and procurement efficiencies. Operating income reached $224.7 million and EBITDA stood at $421.3 million (reported), with adjusted EBITDA of $480.1 million (up 16.6% YoY). Net income was $93.6 million and diluted EPS was $0.60; adjusted diluted EPS was $1.18. Importantly, management guided upward for 2026: second-quarter net sales guidance of $16.4–$16.7 billion with adjusted EBITDA of $450–$470 million and full-year net sales guidance of $67.5–$68.5 billion with adjusted EBITDA of $1.9–$2.0 billion, reinforcing confidence in multi-year growth targets (3-year plan: $73–$75 billion in sales and $2.3–$2.5 billion in adjusted EBITDA in 2028).
The quarter featured meaningful segment contributions across Foodservice, Convenience (Core-Mark onboarding and Love's/RaceTrac expansion) and Specialty (margin-led profit expansion despite slower candy/snack demand). Management highlighted the benefits of the PFG 1 initiative—driving collaboration across segments to accelerate revenue and margin gains—and reiterated ongoing investments in people and technology, including a ~6% headcount increase in Foodservice salesforce. Net working capital optimization and inventory investments contributed to negative operating cash flow ($-145.2 million) and a free cash flow of $-224.1 million, with capex of about $79 million (capex target ~70 basis points of net revenue for 2026).
Overall, PFGC presents a resilient, diversified platform with favorable near-term momentum and a clear, long-range plan anchored in acquisitions, channel expansion (Core-Mark, Love's, RaceTrac), and cross-segment collaboration. Investors should monitor inflation dynamics, integration traction (Cheney Brothers), working capital cadence, M&A activity, and the sustainability of segment mix-driven margin progression.