Performance Food Group Co (PFGC)
SIC breadcrumb: Wholesale Trade > Wholesale Trade - Nondurable Goods > SIC 5141 Wholesale-Groceries, General Line
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1618673. Latest filing source: 0001618673-25-000012.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 63,298,900,000 | USD | 2025 | 2025-08-13 |
| Net income | 340,200,000 | USD | 2025 | 2025-08-13 |
| Assets | 17,881,200,000 | USD | 2025 | 2025-08-13 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-08-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001618673.json. Derived margins are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 16,761,800,000 | 17,619,900,000 | 19,743,500,000 | 25,086,300,000 | 30,398,900,000 | 50,894,100,000 | 57,254,700,000 | 58,281,200,000 | 63,298,900,000 | |
| Net income | 68,300,000 | 96,300,000 | 198,700,000 | 166,800,000 | -114,100,000 | 40,700,000 | 112,500,000 | 397,200,000 | 435,900,000 | 340,200,000 |
| Operating income | 202,200,000 | 211,000,000 | 253,500,000 | 283,300,000 | -99,000,000 | 200,700,000 | 327,400,000 | 765,800,000 | 826,400,000 | 816,300,000 |
| Gross profit | 2,010,000,000 | 2,124,800,000 | 2,292,800,000 | 2,513,000,000 | 2,869,200,000 | 3,525,200,000 | 5,256,400,000 | 6,254,900,000 | 6,577,100,000 | 7,416,600,000 |
| Diluted EPS | 0.70 | 0.93 | 1.90 | 1.59 | -1.01 | 0.30 | 0.74 | 2.54 | 2.79 | 2.18 |
| Assets | 3,455,400,000 | 3,804,100,000 | 4,000,900,000 | 4,653,500,000 | 7,719,700,000 | 7,845,700,000 | 12,378,000,000 | 12,499,000,000 | 13,392,900,000 | 17,881,200,000 |
| Liabilities | 2,652,600,000 | 2,878,600,000 | 2,865,600,000 | 3,355,300,000 | 5,709,100,000 | 5,739,600,000 | 9,078,500,000 | 8,753,500,000 | 9,266,000,000 | 13,408,800,000 |
| Stockholders' equity | 802,800,000 | 925,500,000 | 1,135,300,000 | 1,298,200,000 | 2,010,600,000 | 2,106,100,000 | 3,299,500,000 | 3,745,500,000 | 4,126,900,000 | 4,472,400,000 |
| Net margin | 0.57% | 1.13% | 0.84% | -0.45% | 0.13% | 0.22% | 0.69% | 0.75% | 0.54% | |
| Operating margin | 1.26% | 1.44% | 1.43% | -0.39% | 0.66% | 0.64% | 1.34% | 1.42% | 1.29% |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001618673.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q3 | 2022-04-02 | 0.15 | reported discrete quarter | ||
| 2022-Q2 | 2022-12-31 | 0.46 | reported discrete quarter | ||
| 2023-Q3 | 2023-04-01 | 13,771,300,000 | 80,300,000 | 0.51 | reported discrete quarter |
| 2023-Q4 | 2023-07-01 | 14,865,200,000 | 150,100,000 | derived Q4 = FY annual - nine-month YTD | |
| 2023-Q1 | 2023-09-30 | 0.77 | reported discrete quarter | ||
| 2023-Q2 | 2023-12-30 | 14,295,700,000 | 78,300,000 | 0.50 | reported discrete quarter |
| 2024-Q3 | 2024-03-30 | 13,857,700,000 | 70,400,000 | 0.45 | reported discrete quarter |
| 2024-Q4 | 2024-06-29 | 15,189,200,000 | 166,500,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-09-28 | 15,415,500,000 | 108,000,000 | 0.69 | reported discrete quarter |
| 2025-Q2 | 2024-12-28 | 15,638,200,000 | 42,400,000 | 0.27 | reported discrete quarter |
| 2025-Q3 | 2025-03-29 | 15,306,300,000 | 58,300,000 | 0.37 | reported discrete quarter |
| 2025-Q4 | 2025-06-28 | 16,938,900,000 | 131,500,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2025-09-27 | 17,075,900,000 | 93,600,000 | 0.60 | reported discrete quarter |
| 2026-Q2 | 2025-12-27 | 16,444,700,000 | 61,700,000 | 0.39 | reported discrete quarter |
| 2026-Q3 | 2026-03-28 | 16,290,000,000 | 41,700,000 | 0.27 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001193125-26-209011.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited Consolidated Financial Statements and the Notes thereto included in Item 1. Financial Statements (“Item 1”) of this Form 10-Q and the audited Consolidated Financial Statements and the Notes thereto included in Item 8. Financial Statements and Supplementary Data of the Form 10-K. In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates, and beliefs and involve numerous risks and uncertainties, including those described in Item 1A. Risk Factors of the Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Form 10-Q. Our Company We market and distribute food and food-related products to customers across North America from our over 150 locations to over 300,000 customer locations in the “food-away-from-home” industry. We offer our customers a broad assortment of products including our proprietary-branded products, nationally branded products, and products bearing our customers’ brands. Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, and groceries to candy, snacks, and beverages. We also sell disposables, cleaning and kitchen supplies, and related products used by our customers, as well as cigarettes and other nicotine products. 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. Based on the Company’s organizational structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company has three reportable segments: Foodservice, Convenience, and Specialty. Our Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit chain restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments. Our chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Convenience segment distributes candy, snacks, beverages, cigarettes, other tobacco products, food and foodservice related products and other items to convenience stores across North America. Our Specialty segment distributes candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, and other channels and utilizes third-party carriers to deliver direct to consumers for our supplier partners and to our customers whose order sizes are too small to be served effectively by our fleet network. We believe our diverse segments provide substantial opportunities for cross-segment collaboration to better serve our customers, including business development, procurement, operational best practices such as the use of new productivity technologies, and supply chain and network optimization, as well as shared corporate functions such as accounting, treasury, tax, legal, information systems, and human resources. Key Factors Affecting Our Business Our business, our industry and the economy are subject to a number of macroeconomic conditions triggered by developments beyond our control, which can result in reduced demand for our products. The Company and our industry may face challenges related to geopolitical dynamics and other events, which can drive economic volatility, market uncertainty, inflationary pressure, supply chain disruptions, or lower disposable incomes, negatively affecting consumer confidence and discretionary spending. We continue to actively monitor the impacts of the evolving macroeconomic and geopolitical landscape, including rapidly evolving tariff and global trade policies and recent geopolitical events (such as the military conflict in the Middle East), on all aspects of our business. Although we have seen little impact from tariffs on our results during the first nine months of fiscal 2026, rapidly evolving tariff and global trade policies and geopolitical dynamics have continued to cause uncertainty throughout the first nine months of fiscal 2026. On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Although U.S. Customs and Border Protection is developing refund procedures for tariffs previously paid under IEEPA, significant uncertainty remains regarding potential tariff refunds and replacement tariffs under other statutes. The timing and amount of any recovery are uncertain and, therefore, we are unable to estimate the financial effects of potential tariff refunds, if any, at this time. The situation continues to evolve, and further legislative, regulatory, or judicial developments may affect the ultimate outcome and the availability or timing of any refunds. The scope and duration of existing and new tariffs imposed under alternate authorities and the resulting future impact on general economic conditions and our future financial position, liquidity, and results of operations likewise remains uncertain. Additionally, recent hostilities and geopolitical tensions, such as the conflict in the Middle East, have contributed to significantly higher fuel prices. To the extent increasing fuel expenses are not able to be offset by (i) fuel collar derivatives and/or (ii) diesel fuel surcharges (which are generally recognized on a one-month lag behind changes in fuel prices), prolonged high fuel prices could adversely affect our business, financial condition, or results of operations. Further, sustained macroeconomic challenges, whether due to tariffs, rising fuel prices, or otherwise, could negatively affect consumer discretionary spending decisions within our customers’ establishments, which could negatively impact our sales and profitability. 27 We believe that our performance is principally affected by the following key factors: • Changing demographic and macroeconomic trends. Excluding the peak years of the COVID-19 pandemic, the share of consumer spending captured by the food-away-from-home industry has increased steadily for several decades. The share increases in periods of increasing employment, rising disposable income, increases in the number of restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income households, and an aging population base that spends more per capita at foodservice establishments and is adversely impacted when these factors move in the opposite direction. The foodservice distribution industry is also sensitive to national and regional economic conditions, such as changes in consumer spending, changes in consumer confidence, changes in the rate of inflation and fuel prices, supply chain disruptions, and labor shortages. • Food distribution market structure. The food distribution market consists of a wide spectrum of companies ranging from businesses selling a single category of product (e.g., produce) to large national and regional broadline distributors with many distribution centers and thousands of products across all categories. We believe our scale enables us to invest in our Performance Brands, to benefit from economies of scale in purchasing and procurement, and to drive supply chain efficiencies that enhance our customers’ satisfaction and profitability. We believe that the relative growth of larger foodservice distributors will continue to outpace that of smaller, independent players in our industry. • Our ability to successfully execute our segment and corporate strategies and implement our initiatives. Our performance will continue to depend on our ability to successfully execute our segment and corporate strategies and to implement our current and future initiatives. The key strategies include focusing on independent sales and Performance Brands, pursuing new customers for our three reportable segments, expansion of geographies, utilizing our infrastructure and technology to gain further operating and purchasing efficiencies, and making strategic acquisitions. How We Assess the Performance of Our Business In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures used by our management are discussed below. The percentages on the results presented below are calculated based on rounded numbers. Case Growth Case volume represents the volume of products sold to customers during a given period of time. Case growth is calculated by dividing the increase (decrease) in the case volumes sold year-over-year by the number of cases sold in the prior year. We define a case as the lowest level of packaged products as received from our suppliers, with one case containing several individually packaged units of the same product. Where individual packaged units are sold separately, case volume is calculated using the case equivalent quantity sold. Case growth provides useful information to management and investors in evaluating sales performance and as an indicator of gross margin performance. In our assessment of sales performance, management utilizes total case growth, as well as organic case growth, which excludes acquisition-related growth until the acquired business has been reflected in our results of operations for at least 12 months. While overall case growth reflects a key component of sales growth, case growth by customer type provides additional context around gross profit performance. Management also reviews case volume growth by customer type, with distinction between Foodservice independent and chain customers, as this provides a measure of gross profit performance due to the pricing strategies and product mix differences associated with each customer type. Net Sales Net sales is equal to gross sales, plus excise taxes, minus sales returns; minus sales incentives that we offer to our customers, such as rebates and discounts that are offsets to gross sales; and certain other adjustments. Our net sales are driven by changes in case volumes, product inflation that is reflected in the pricing of our products, mix of products sold and acquisitions. Gross Profit Gross profit is equal to our net sales minus our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of supplier consideration), inbound freight, and remittances of excise tax. Cost of goods sold generally changes as we incur higher or lower costs from our suppliers and as our customer and product mix changes. Adjusted EBITDA Management measures operating performance based on our Adjusted EBITDA, defined as net income before interest expense, interest income, income and franchise taxes, and depreciation and amortization, further adjusted to exclude certain items that we do not consider part of our core operating results. Such adjustments include certain unusual, non-cash, non-recurring, cost reduction, or other adjustment items permitted in calculating covenant compliance under our ABL Facility and indentures (other than certain pro forma adjustments permitted under our ABL Facility and indentures governing the Notes due 2029, Notes due 2032, and Notes due 2034 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). Under our ABL 28 Facility and indentures, ou [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with the audited Consolidated Financial Statements and the Notes thereto included in Item 8. Financial Statements and Supplementary Data (“Item 8”) of this Form 10-K. In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates, and beliefs and involve numerous risks and uncertainties, including those described in Item 1A. Risk Factors. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Form 10-K.
The following includes a comparison of our consolidated results of operations, our segment results and financial position for fiscal years 2025 and 2024. For a comparison of our consolidated results of operations, segment results and financial position for fiscal years 2024 and 2023, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended June 29, 2024, filed with the SEC on August 14, 2024, which remains materially consistent with the recast prior period results disclosed herein reflecting the updates made to our reportable segments in the third quarter of fiscal 2025 discussed below.
Our Company
We market and distribute over 250,000 food and food-related products to customers across the United States from approximately 155 distribution facilities to over 300,000 customer locations in the food-away-from-home industry. We offer our customers a broad assortment of products including our proprietary-branded products, nationally branded products, and products bearing our customers’ brands. Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, and groceries to candy, snacks, and beverages. We also sell disposables, cleaning and kitchen supplies, and related products used by our customers, as well as cigarettes and other nicotine products. 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.
Based on the Company’s organizational structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company has three reportable segments: Foodservice, Convenience, and Specialty. Our Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit chain restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments. Our chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Convenience segment distributes candy, snacks, beverages, cigarettes, other nicotine products, food and foodservice related products and other items to convenience stores across North America. Our Specialty segment distributes candy, snacks, beverages, and other food items nationally to vending, office coffee service, theater, retail, and other channels and utilizes third-party carriers to deliver direct to consumers for our supplier partners and to our customers whose order sizes are too small to be served effectively by our truck network. We believe our diverse segments provide substantial opportunities for cross-segment collaboration to better serve our customers, including business development, procurement, operational best practices such as the use of new productivity technologies, and supply chain and network optimization, as well as shared corporate functions such as accounting, treasury, tax, legal, information systems, and human resources.
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 Item 8 for additional details regarding the acquisition of Cheney Brothers.
The Company’s fiscal year ends on the Saturday nearest to June 30th. This resulted in a 52-week year for fiscal 2025, 2024, and 2023. References to “fiscal 2025” are to the 52-week period ended June 28, 2025, references to “fiscal 2024” are to the 52-week period ended June 29, 2024, and references to “fiscal 2023” are to the 52-week period ended July 1, 2023.
Key Factors Affecting Our Business
Our business, our industry and the economy are influenced by a number of general macroeconomic factors, including, but not limited to, reduced demand for our products related to unfavorable macroeconomic conditions triggered by developments beyond our control, including geopolitical dynamics and other events that trigger economic volatility or negatively affect consumer confidence and discretionary spending. We continue to actively monitor the impacts of the evolving macroeconomic and geopolitical landscape, including rapidly evolving tariff and global trade policies, on all aspects of our business. The Company and our industry may face challenges related to uncertain economic conditions and heightened uncertainty in the financial markets, inflationary pressure, an uncertain political environment, supply chain disruptions, and lower disposable incomes due to macroeconomic conditions. Although rapidly evolving tariff and global trade policies caused increased uncertainty in the second half of fiscal 2025, we saw little impact to our results in fiscal 2025. However, the extent and duration of the tariffs and the resulting future impact on general economic conditions and our future financial position, liquidity, and results of operations remains uncertain. Sustained macroeconomic
24
challenges, whether due to tariffs or otherwise, could negatively affect consumer discretionary spending decisions within our customers’ establishments, which could negatively impact our sales and profitability.
We believe that our performance is principally affected by the following key factors:
•
Changing demographic and macroeconomic trends. Excluding the peak years of the COVID-19 pandemic, the share of consumer spending captured by the food-away-from-home industry has increased steadily for several decades. The share increases in periods of increasing employment, rising disposable income, increases in the number of restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income households, and an aging population base that spends more per capita at foodservice establishments and is adversely impacted when these factors move in the opposite direction. The foodservice distribution industry is also sensitive to national and regional economic conditions, such as changes in consumer spending, changes in consumer confidence, changes in the rate of inflation and fuel prices, supply chain disruptions, and labor shortages.
•
Food distribution market structure. The food distribution market consists of a wide spectrum of companies ranging from businesses selling a single category of product (e.g., produce) to large national and regional broadline distributors with many distribution centers and thousands of products across all categories. We believe our scale enables us to invest in our Performance Brands, to benefit from economies of scale in purchasing and procurement, and to drive supply chain efficiencies that enhance our customers’ satisfaction and profitability. We believe that the relative growth of larger foodservice distributors will continue to outpace that of smaller, independent players in our industry.
•
Our ability to successfully execute our segment strategies and implement our initiatives. Our performance will continue to depend on our ability to successfully execute our segment strategies and to implement our current and future initiatives. The key strategies include focusing on independent sales and Performance Brands, pursuing new customers for our three reportable segments, expansion of geographies, utilizing our infrastructure to gain further operating and purchasing efficiencies, and making strategic acquisitions.
How We Assess the Performance of Our Business
In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures used by our management are discussed below. The percentages on the results presented below are calculated based on rounded numbers.
Case Growth
Case volume represents the volume of products sold to customers during a given period of time. Case growth is calculated by dividing the increase (decrease) in the case volumes sold year-over-year by the number of cases sold in the prior year. We define a case as the lowest level of packaged products as received from our suppliers, with one case containing several individually packaged units of the same product. Where individual packaged units are sold separately, case volume is calculated using the case equivalent quantity sold. Case growth provides useful information to management and investors in evaluating sales performance and as an indicator of gross margin performance. In our assessment of sales performance, management utilizes total case growth, as well as organic case growth, which excludes acquisition-related growth until the acquired business has been reflected in our results of operations for at least 12 months. While overall case growth reflects a key component of sales growth, case growth by customer type provides additional context around gross profit performance. Management also reviews case volume growth by customer type, with distinction between Foodservice independent and chain customers, as this provides a measure of gross profit performance due to the pricing strategies and product mix differences associated with each customer type.
Net Sales
Net sales is equal to gross sales, plus excise taxes, minus sales returns; minus sales incentives that we offer to our customers, such as rebates and discounts that are offsets to gross sales; and certain other adjustments. Our net sales are driven by changes in case volumes, product inflation that is reflected in the pricing of our products, mix of products sold, and acquisitions.
Gross Profit
Gross profit is equal to our net sales minus our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of supplier consideration) and inbound freight. Cost of goods sold generally changes as we incur higher or lower costs from our suppliers and as our customer and product mix changes.
Adjusted EBITDA
Management measures operating performance based on our Adjusted EBITDA, defined as net income before interest expense, interest income, income and franchise taxes, and depreciation and amortization, further adjusted to exclude certain items that we do
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not consider part of our core operating results. Such adjustments include certain unusual, non-cash, non-recurring, cost reduction, or other adjustment items permitted in calculating covenant compliance under our ABL Facility and indentures (other than certain pro forma adjustments permitted under our ABL Facility and indentures governing the Notes due 2027, Notes due 2029, and Notes due 2032 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). Under our ABL Facility and indentures, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and making restricted payments is tied to ratios based on Adjusted EBITDA (as defined in the ABL Facility and indentures). Our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies.
Adjusted EBITDA is not a measure of operating income, operating performance, or liquidity presented in accordance with , or required by, GAAP and is subject to important limitations. We use this measure to evaluate the performance of our business on a consistent basis over time and for business planning purposes. In addition, targets based on Adjusted EBITDA are among the measures we use to evaluate our management’s performance for purposes of determining their compensation under our incentive plans. We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties, including our lenders under the ABL Facility and holders of our Notes due 2027, Notes due 2029, and Notes due 2032, in their evaluation of the operating performance of companies in industries similar to ours.
Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example, Adjusted EBITDA:
•
excludes certain tax payments that may represent a reduction in cash available to us;
•
does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future;
•
does not reflect changes in, or cash requirements for, our working capital needs; and
•
does not reflect the significant interest expense, or the cash requirements, necessary to service our debt.
In calculating Adjusted EBITDA, we add back certain non-cash, non-recurring, and other items as permitted or required by our ABL Facility and indentures. Adjusted EBITDA among other things:
•
does not include non-cash stock-based employee compensation expense and certain other non-cash charges;
•
does not include acquisition, restructuring, and other costs incurred to realize future cost savings and enhance our operations; and
•
does not include items outside of the ordinary course of the Company's operations and not indicative of ongoing performance.
We have included below reconciliations of Adjusted EBITDA to the most directly comparable measure calculated in accordance with GAAP for the periods presented.
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Results of Operations and Adjusted EBITDA
The following table sets forth a summary of our results of operations and Adjusted EBITDA for the periods indicated:
Fiscal Year Ended
Fiscal 2025
Fiscal 2024
(In millions, except per share data)
June 28, 2025
June 29, 2024
July 1, 2023
Change
%
Change
%
Net sales
$
63,298.9
$
58,281.2
$
57,254.7
$
5,017.7
8.6
1,026.5
1.8
Cost of goods sold
55,882.3
51,704.1
50,999.8
4,178.2
8.1
704.3
1.4
Gross profit
7,416.6
6,577.1
6,254.9
839.5
12.8
322.2
5.2
Operating expenses
6,600.3
5,750.7
5,489.1
849.6
14.8
261.6
4.8
Operating profit
816.3
826.4
765.8
(10.1
)
(1.2
)
60.6
7.9
Other expense, net
Interest expense
358.4
232.2
218.0
126.2
54.3
14.2
6.5
Other, net
(0.9
)
(2.6
)
3.8
1.7
65.4
(6.4
)
(168.4
)
Other expense, net
357.5
229.6
221.8
127.9
55.7
7.8
3.5
Income before income taxes
458.8
596.8
544.0
(138.0
)
(23.1
)
52.8
9.7
Income tax expense
118.6
160.9
146.8
(42.3
)
(26.3
)
14.1
9.6
Net income (GAAP)
$
340.2
$
435.9
$
397.2
$
(95.7
)
(22.0
)
38.7
9.7
Adjusted EBITDA
$
1,766.9
$
1,506.1
$
1,363.4
$
260.8
17.3
142.7
10.5
Weighted-average common shares outstanding:
Basic
154.8
154.4
154.2
0.4
0.3
0.2
0.1
Diluted
156.4
156.0
156.1
0.4
0.3
(0.1
)
(0.1
)
Earnings per common share:
Basic
$
2.20
$
2.82
$
2.58
$
(0.62
)
(22.0
)
$
0.24
9.3
Diluted
$
2.18
$
2.79
$
2.54
$
(0.61
)
(21.9
)
$
0.25
9.8
We believe that the most directly comparable GAAP measure to Adjusted EBITDA is net income. The following table reconciles Adjusted EBITDA to net income for the periods presented:
Fiscal Year Ended
(In millions)
June 28, 2025
June 29, 2024
July 1, 2023
Net income (GAAP)
$
340.2
$
435.9
$
397.2
Interest expense
358.4
232.2
218.0
Income tax expense
118.6
160.9
146.8
Depreciation
455.3
355.2
315.7
Amortization of intangible assets
262.6
201.5
181.0
Change in LIFO reserve (1)
88.1
62.3
39.2
Stock-based compensation expense
47.8
41.9
43.3
Loss (gain) on fuel derivatives
0.2
(1.8
)
5.7
Acquisition, integration & reorganization expenses (2)
87.8
23.7
10.6
Other adjustments (3)
7.9
(5.7
)
5.9
Adjusted EBITDA (Non-GAAP)
$
1,766.9
$
1,506.1
$
1,363.4
(1)
Includes increases in the last-in-first-out (“LIFO”) reserve of $6.6 million for Foodservice and $81.5 million for Convenience for fiscal 2025 compared to increases of $3.8 million for Foodservice and $58.5 million for Convenience for fiscal 2024 and a decrease of $19.2 million for Foodservice and an increase of $58.4 million for Convenience for fiscal 2023.
(2)
Includes professional fees and other costs related to in-progress, completed, and abandoned acquisitions, costs of integrating certain of our facilities, and facility closing costs.
(3)
Includes a $3.8 million gain on the sale of a Foodservice warehouse facility for fiscal year 2025 and an $8.1 million gain on the sale of a Foodservice warehouse facility for fiscal year 2024, as well as amounts related to favorable and unfavorable leases, litigation-related accruals, severance, franchise tax expense, insurance proceeds due to hurricane and other weather related events, foreign currency transaction gains and losses, gains and losses on disposals of other fixed assets, and other adjustments permitted by our ABL Facility.
27
Consolidated Results of Operations
Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024
Net Sales
Net sales growth is primarily a function of acquisitions, case growth, pricing, including product inflation/deflation, and a changing mix of customers, channels, and product categories sold. Net sales increased $5.0 billion, or 8.6%, in fiscal 2025 compared to fiscal 2024.
The increase in net sales was driven by recent acquisitions, including the Cheney Brothers Acquisition, an increase in cases sold, including a favorable shift in mix of cases sold, and an increase in selling price per case as a result of inflation. Total case volume increased 8.5% during fiscal 2025 compared to fiscal 2024. Total organic case volume increased 2.1% in fiscal 2025 compared to the prior fiscal year. Total organic case volume benefited from a 4.6% increase in organic independent cases sold during fiscal 2025, including growth in Performance Brands cases and growth in cases sold to Foodservice's chain business. The overall rate of product cost inflation was approximately 4.7% for fiscal 2025.
Gross Profit
Gross profit increased $839.5 million, or 12.8%, in fiscal 2025 compared to fiscal 2024. The increase in gross profit was primarily driven by recent acquisitions, including the Cheney Brothers Acquisition, cost of goods sold optimization through procurement efficiencies, as well as a favorable shift in the mix of cases sold, including growth in the independent channel. Independent customers typically receive more services from us, cost more to serve, and pay a higher gross profit per case than other customers.
Operating Expenses
Operating expenses increased $849.6 million, or 14.8%, for fiscal 2025 compared to fiscal 2024. The increase in operating expenses was primarily driven by recent acquisitions, including the Cheney Brothers Acquisition, a $191.4 million increase in personnel expenses primarily related to wages and salaries, commissions, and benefits, a $53.5 million increase in depreciation expense mainly driven by an increase in transportation equipment under finance leases, a $34.3 million increase in professional fees and outside services primarily related to recent acquisitions, and a $28.0 million increase in insurance expense primarily related to workers’ compensation and vehicle liability compared to the prior year. These increases were partially offset by a $31.9 million decrease in fuel expenses primarily due to lower fuel prices for fiscal 2025 compared to the prior fiscal year.
Net Income
Net income decreased $95.7 million, or 22.0%, for fiscal 2025 compared to fiscal 2024 driven by an increase in depreciation and amortization and interest expense primarily related to recent acquisitions, partially offset by a decrease in income tax expense and gross profit contributions from recent acquisitions. The increase in interest expense was primarily the result of an increase in the average borrowings, including finance lease obligations, during fiscal 2025 compared to the prior fiscal year.
The Company reported income tax expense of $118.6 million for fiscal 2025 compared to $160.9 million for fiscal 2024. Our effective tax rate for fiscal 2025 was 25.8% compared to 27.0% for the prior fiscal year. The effective tax rate differed from the prior year primarily due to an increase in benefit from stock-based compensation and an increase in income tax credits net of valuation allowance established, partially offset by an increase in non-deductible expenses and an increase in state taxes as a percentage of income.
Segment Results
In the third quarter of fiscal 2025, the Company updated its operating segments to reflect the manner in which the business is managed. The Company continues to have three reportable segments: Foodservice, Convenience, and Specialty (formerly Vistar). Management evaluates the performance of these segments based on various operating and financial metrics, including their respective sales growth, and Segment Adjusted EBITDA, which is the Company’s GAAP measure of segment profit. Segment Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, depreciation, and amortization and excludes certain items that the Company does not consider part of its segments’ core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives. The presentation and amounts for the fiscal years ended June 29, 2024 and July 1, 2023 have been recast to reflect these segment changes. See Note 19. Segment Information of the consolidated financial statements in this Form 10-K.
Corporate & All Other is comprised of unallocated corporate overhead and certain operations that are not considered separate reportable segments based on their size.
28
The following tables set forth net sales and Adjusted EBITDA by reportable segment and the reconciling items for Corporate & All Other and eliminations for the periods indicated (dollars in millions):
Net Sales
Fiscal Year Ended
Fiscal 2025
Fiscal 2024
June 28, 2025
June 29, 2024
July 1, 2023
Change
%
Change
%
Foodservice
$33,646.1
$29,061.5
$28,527.5
$4,584.6
15.8
$534.0
1.9
Convenience
24,507.5
24,177.0
24,119.6
330.5
1.4
57.4
0.2
Specialty
4,905.0
4,789.8
4,549.3
115.2
2.4
240.5
5.3
Total Segments
$63,058.6
$58,028.3
$57,196.4
$5,030.3
8.7
$831.9
1.5
Corporate & All Other
955.0
909.2
663.5
45.8
5.0
245.7
37.0
Intersegment Eliminations
(714.7)
(656.3)
(605.2)
(58.4)
(8.9)
(51.1)
(8.4)
Total net sales
$63,298.9
$58,281.2
$57,254.7
$5,017.7
8.6
$1,026.5
1.8
Segment Adjusted EBITDA
Fiscal Year Ended
Fiscal 2025
Fiscal 2024
June 28, 2025
June 29, 2024
July 1, 2023
Change
%
Change
%
Foodservice
$1,221.6
$982.2
$924.5
$239.4
24.4
$57.7
6.2
Convenience
407.3
363.6
328.8
43.7
12.0
34.8
10.6
Specialty
348.2
340.6
325.3
7.6
2.2
15.3
4.7
Total Segments
$1,977.1
$1,686.4
$1,578.6
$290.7
17.2
$107.8
6.8
Corporate & All Other
(210.2)
(180.3)
(215.2)
(29.9)
(16.6)
34.9
16.2
Total Adjusted EBITDA
$1,766.9
$1,506.1
$1,363.4
$260.8
17.3
$142.7
10.5
Segment Results—Foodservice
Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024
Net Sales
Net sales for Foodservice increased $4.6 billion, or 15.8%, from fiscal 2024 to fiscal 2025. This increase in net sales was driven by recent acquisitions, an increase in selling price per case as a result of inflation, and case volume growth, including growth in our independent and chain business. The Cheney Brothers Acquisition contributed $2.7 billion to net sales in fiscal 2025. Total case growth for Foodservice was 12.7% from fiscal 2024 to fiscal 2025. Total independent case growth was 16.9% in fiscal 2025 compared to the prior fiscal year driven by recent acquisitions. Securing new and expanding business with independent customers resulted in organic independent case growth of 4.6% in fiscal 2025 compared to the prior fiscal year. For fiscal 2025, independent sales as a percentage of total segment sales were 40.6%.
Segment Adjusted EBITDA
Adjusted EBITDA for Foodservice increased $239.4 million, or 24.4%, from fiscal 2024 to fiscal 2025. This increase was the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Foodservice’s Adjusted EBITDA increased $805.6 million, or 19.7% in fiscal 2025 compared to the prior fiscal year. The increase in gross profit was driven by recent acquisitions, including the Cheney Brothers Acquisition, a favorable shift in the mix of cases sold, and growth in cases sold, including more Performance Brands products sold to our independent customers. The Cheney Brothers Acquisition contributed $485.0 million to Foodservice’s gross profit impacting Adjusted EBITDA in fiscal 2025.
Operating expenses impacting Foodservice’s Adjusted EBITDA increased by $566.9 million, or 18.2%, from fiscal 2024 to fiscal 2025. Operating expenses increased compared to the prior fiscal year primarily as a result of recent acquisitions, including the Cheney Brothers Acquisition, a $144.1 million increase in personnel expenses primarily related to salaries and wages, benefits, and commissions, and an increase of $21.0 million in insurance expense primarily related to workers' compensation and vehicle liability, partially offset by a $21.8 million decrease in fuel expense primarily due to lower fuel prices, compared to the prior fiscal year. The Cheney Brothers operating expenses impacting Foodservice's Adjusted EBITDA were $365.6 million in fiscal 2025.
Depreciation of fixed assets and amortization of intangible assets recorded in this segment increased from $294.4 million in fiscal 2024 to $448.5 million in fiscal 2025. Depreciation of fixed assets and amortization of intangible assets increased in fiscal 2025
29
as a result of recent acquisitions, including the Cheney Brothers Acquisition, and an increase in transportation equipment under finance leases. Total depreciation and amortization related to Cheney Brothers was $83.4 million in fiscal 2025.
Segment Results—Convenience
Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024
Net Sales
Net sales for Convenience increased $330.5 million, or 1.4%, from fiscal 2024 to fiscal 2025. The increase in net sales for Convenience was driven by higher selling prices per case due to continued inflation, an acquisition completed in the fourth quarter of fiscal 2025, and year-over-year organic case volume growth of 0.6%.
Segment Adjusted EBITDA
Adjusted EBITDA for Convenience increased $43.7 million, or 12.0%, from fiscal 2024 to fiscal 2025 as a result of an increase in gross profit, partially offset by an increase operating expenses. Gross profit contributing to Convenience’s Adjusted EBITDA increased $68.1 million, or 4.3%, for fiscal 2025 compared to the prior fiscal year primarily due to inventory holding gains and pricing improvement from procurement efficiencies. Operating expenses impacting Convenience’s Adjusted EBITDA, increased $22.8 million, or 1.9%, for fiscal 2025 compared to the prior fiscal year primarily as a result of a $15.1 million increase in personnel expenses related to wages, salaries, and benefits, a $9.7 million increase in insurance expense, and a $4.9 million increase in outbound freight expense. This increase in operating expenses was partially offset by a $8.0 million decrease in fuel expense compared to the prior fiscal year.
Depreciation and amortization of intangible assets recorded in this segment increased from $153.5 million in fiscal 2024 to $157.7 million in fiscal 2025 as a result of an increase in transportation equipment under finance leases.
Segment Results—Specialty
Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024
Net Sales
Net sales for Specialty increased $115.2 million, or 2.4%, from fiscal 2024 to fiscal 2025. The increase in net sales was driven primarily by growth in the vending channel and an acquisition in the second quarter of fiscal 2024. Total organic case volume growth for Specialty for fiscal 2025 was 1.4%, as growth in the vending, office coffee service, and value channels was partially offset by declines in theater cases sold compared to the prior fiscal year.
Segment Adjusted EBITDA
Adjusted EBITDA for Specialty increased $7.6 million, or 2.2%, from fiscal 2024 to fiscal 2025 as a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Specialty’s Adjusted EBITDA increased $32.6 million, or 3.8%, in fiscal 2025 compared to fiscal 2024, primarily driven by an acquisition in the second quarter of fiscal 2024, procurement-related cost improvements, and inventory holding gains. Operating expenses impacting Specialty’s Adjusted EBITDA increased $25.4 million, or 5.0%, for fiscal 2025 compared to the prior fiscal year primarily driven by $18.1 million of expenses related to an acquisition in the second quarter of fiscal 2024, $4.7 million in variable operational expenses as a result of a shift in channel mix, and a $4.4 million increase in occupancy costs primarily associated with building expansions, partially offset by a $3.3 million reduction in lease expense as the segment has transitioned to finance leases for fleet equipment and a $2.9 million decrease in fuel expense compared to the prior fiscal year.
Depreciation and amortization of intangible assets recorded in this segment increased from $49.9 million in fiscal 2024 to $54.6 million in fiscal 2025 due primarily to an acquisition in the second quarter of fiscal 2024.
Liquidity and Capital Resources
We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our ABL Facility, operating and finance leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our ABL Facility or with the net proceeds from the issuances of senior notes. Our borrowing levels are subject to seasonal fluctuations, as well as procurement and acquisition activities. We borrow under our credit facility or pay it down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.
As market conditions warrant, we may from time to time seek to repurchase our securities or loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such repurchases may be funded by incurring new debt, including additional borrowings under our ABL Facility. In addition, depending on conditions in the credit and capital markets and other factors,
30
we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness, make investments or acquisitions or for other purposes. Any new debt may be secured debt.
We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. To add stability to interest expense and manage our exposure to interest rate movements, we enter into interest rate swap agreements. These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments. As of June 28, 2025, $150.0 million of the outstanding ABL Facility balance is currently hedged under interest rate swaps, which results in 68% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.
In November 2022, the Board of Directors authorized a share repurchase program for up to $300 million of the Company’s outstanding common stock. Under this share repurchase program, during the fiscal year ended June 28, 2025, the Company repurchased and subsequently retired 0.8 million shares of common stock, for a total cost of $57.6 million or an average cost of $75.53 per share. During the fiscal year ended June 29, 2024, the Company repurchased and subsequently retired 1.3 million shares of common stock, for a total cost of $78.1 million or an average cost of $58.83 per share. During the fiscal year ended July 1, 2023, the Company repurchased and subsequently retired 0.2 million shares of common stock, for a total cost of $11.2 million or an average cost of $56.06 per share.
On May 27, 2025, the Board of Directors authorized a new share repurchase program for up to $500 million of the Company’s outstanding common stock. This authorization replaces the previously authorized $300 million share repurchase program. The new share repurchase program has an expiration date of May 27, 2029. Repurchases of the Company’s outstanding common stock will be made in accordance with applicable securities laws and may be made at management’s discretion from time to time in the open market, through privately negotiated transactions or otherwise, including pursuant to Rule 10b5-1 trading plans. The share repurchase program may be amended, suspended or discontinued at any time at the Board’s discretion, and does not commit the Company to repurchase any specified number of shares of its common stock. The actual timing, number and value of the shares to be purchased under the program will be determined by the Company at its discretion and will depend on a number of factors, including the performance of the Company’s stock price, general market and other conditions, applicable legal requirements and compliance with the terms of the Company’s outstanding indebtedness. As of June 28, 2025, $500 million remained available for additional share repurchases under the program.
Our contractual cash requirements over the next 12 months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 8. Debt and Note 12. Leases, respectively, within the Notes to Consolidated Financial Statements included in Item 8. As of June 28, 2025, the Company had total purchase obligations of $276.8 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. Included in the total purchase obligations above are commitments of $170.9 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings under the ABL Facility to fulfill these commitments. Amounts due under these agreements were not included in the Company’s consolidated balance sheet as of June 28, 2025.
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
We believe that our cash flows from operations and available borrowing capacity will be sufficient to meet our anticipated cash requirements over the next 12 months and beyond, to maintain sufficient liquidity for normal operating purposes, and to fund capital expenditures.
At June 28, 2025, our cash balance totaled $86.7 million, including restricted cash of $8.2 million, as compared to a cash balance totaling $27.7 million, including restricted cash of $7.7 million, at June 29, 2024.
Operating Activities
Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024
During fiscal 2025 and fiscal 2024, our operating activities provided cash flow of $1,210.1 million and $1,163.0 million, respectively. The increase in cash flows provided by operating activities in fiscal 2025 compared to fiscal 2024 was largely driven by higher cash-based operating income, partially offset by changes in the timing of advanced purchases of inventory.
31
Investing Activities
Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024
Cash used in investing activities totaled $3,089.0 million in fiscal 2025 compared to $682.7 million in fiscal 2024. These investments consisted primarily of net cash paid for recent acquisitions of $2,596.4 million and $307.7 million for fiscal years 2025 and 2024, respectively, along with capital purchases of property, plant, and equipment of $506.0 million and $395.6 million for fiscal years 2025 and 2024, respectively. In fiscal 2025, purchases of property, plant, and equipment primarily consisted of outlays for warehouse improvements and expansions, warehouse equipment, transportation equipment, and information technology. The following table presents the capital purchases of property, plant, and equipment by segment.
Fiscal Year Ended
(In millions)
June 28, 2025
June 29, 2024
July 1, 2023
Foodservice
$
382.7
$
260.1
$
191.8
Convenience
59.0
43.7
46.3
Specialty
33.3
53.8
18.0
Corporate & All Other
31.0
38.0
13.6
Total capital purchases of property, plant and equipment
$
506.0
$
395.6
$
269.7
Financing Activities
During fiscal 2025, our financing activities provided cash flow of $1,937.9 million, which consisted primarily of $1,194.2 million in net borrowings under our ABL Facility and $1.0 billion in cash received from the issuance and sales of the Notes due 2032, partially offset by $188.0 million in payments under finance lease obligations and $57.6 million in repurchases of common stock.
During fiscal 2024, our financing activities used cash flow of $472.6 million, which consisted primarily of $275.0 million in cash used for the repayment of the Notes due 2025, $122.2 million in payments under finance lease obligations, and $78.1 million in repurchases of common stock.
The Company's financing arrangements as of June 28, 2025 are described in Note 8. Debt within the Notes to Consolidated Financial Statements included in Item 8. As of June 28, 2025, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2027, the Notes due 2029, and the Notes due 2032.
Total Assets by Segment
Total assets by segment discussed below exclude intercompany receivables between segments.
Total assets for Foodservice increased $4,218.7 million from $7,052.4 million as of June 29, 2024 to $11,271.1 million as of June 28, 2025, primarily due to recent acquisitions within the segment as well as an increase in property, plant, and equipment under finance leases.
Total assets for Convenience increased $195.9 million from $4,080.9 million as of June 29, 2024 to $4,276.8 million as of June 28, 2025. During this time period, the segment increased its inventory due to advanced purchases to take advantage of preferred pricing, as well as a recent acquisition, increased its property, plant, and equipment through additional transportation equipment under finance leases, and increased its cash and accounts receivable. The increases in assets year-over-year were partially offset by a decrease in intangible assets due to normal amortization and a decrease in prepaid expenses related to cigarette inventory.
Total assets for Specialty increased $67.8 million from $1,519.1 million as of June 29, 2024 to $1,586.9 million as of June 28, 2025. During this time period, the segment increased its inventory due to advanced purchases to take advantage of preferred pricing, increased its accounts receivable, and increased its property, plant, and equipment through additional transportation equipment under finance leases. These increases were partially offset by a decrease in intangible assets due to normal amortization.
Critical Accounting Policies and Estimates
Critical accounting policies and estimates are those that are most important to portraying our financial position and results of operations. These policies require our most subjective or complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. Our most critical accounting policies and estimates include those that pertain to the allowance for doubtful accounts receivable, inventory valuation, insurance programs, income taxes, vendor rebates and promotional incentives, and acquisitions, goodwill and other intangible assets.
32
Accounts Receivable
Accounts receivable are comprised of trade receivables from customers in the ordinary course of business, are recorded at the invoiced amount, adjusted for any discounts granted to customers, and primarily do not bear interest. Accounts receivable also includes other receivables primarily related to various rebate and promotional incentives with our suppliers. Receivables are recorded net of the allowance for credit losses on the accompanying consolidated balance sheets. We evaluate the collectability of our accounts receivable based on a combination of factors. We regularly analyze our significant customer accounts, and when we become aware of a specific customer’s inability to meet its financial obligations to us, such as bankruptcy filings or deterioration in the customer’s operating results or financial position, we record a specific reserve for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record reserves for bad debt for other customers based on a variety of factors, including the length of time the receivables are past due, macroeconomic considerations, and historical experience. If circumstances related to specific customers change, our estimates of the recoverability of receivables could be further adjusted.
Inventory Valuation
Our inventories consist primarily of food and non-food products. The Company values inventories at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method, weighted average cost method, and last-in, first-out ("LIFO") method. For its LIFO based inventory, the Company utilizes the link chain technique of the dollar value method. FIFO was used for approximately 55.6%, LIFO was used for approximately 38.2%, and weighted average costing was used for approximately 6.2% of total inventories at June 28, 2025. We adjust our inventory balances for slow-moving, excess, and obsolete inventories. These adjustments are based upon inventory category, inventory age, specifically identified items, and overall economic conditions.
Insurance Programs
We maintain high-deductible insurance programs covering portions of general and vehicle liability and workers’ compensation. The amounts in excess of self-insured levels are fully insured by third-party insurance carriers, subject to certain limitations and exclusions. We also maintain self-funded group medical insurance. We accrue our estimated liability for these deductibles, including an estimate, calculated with the assistance of third party actuaries, for incurred but not reported claims, based on known claims and past claims history. The estimated short-term portion of these accruals is included in Accrued expenses on our consolidated balance sheets, while the estimated long-term portion of the accruals is included in Other long-term liabilities. The provisions for insurance claims include estimates of the frequency and timing of claims occurrence, as well as the ultimate amounts to be paid. These insurance programs are managed by a third party, and the deductibles for general and vehicle liability and workers compensation are primarily collateralized by letters of credit, restricted cash, and cash held by the insurance carrier that offsets the insurance accruals.
Income Taxes
We follow Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740-10, Income Taxes—Overall, which requires the use of the asset and liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. The Company takes current and future expirations into consideration when evaluating the need for valuation allowances against deferred tax assets. A valuation allowance is provided when it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Future tax benefits, including net operating loss carryforwards, are recognized to the extent that realization of such benefits is more likely than not. Investment tax credits are recognized as a reduction of income tax expense. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and expirations of statutes of limitations. Such adjustments are reflected in the tax provision as appropriate. Income tax calculations are based on the tax laws enacted as of the date of the financial statements.
Vendor Rebates and Other Promotional Incentives
We participate in various rebate and promotional incentives with our suppliers, either unilaterally or in combination with purchasing cooperatives and other procurement partners, that consist primarily of volume and growth rebates, annual and multi-year incentives, and promotional programs. Consideration received under these incentives is generally recorded as a reduction of cost of goods sold. However, as described below, in certain limited circumstances the consideration is recorded as a reduction of operating expenses incurred by us. Consideration received may be in the form of cash and/or invoice deductions. Changes in the estimated amount of incentives to be received are treated as changes in estimates and are recognized in the period of change.
Consideration received for incentives that contain volume and growth rebates, annual incentives, and multi-year incentives are recorded as a reduction of cost of goods sold. We rationally allocate the consideration for these incentives to each underlying transaction that results in progress by the Company toward earning the incentives. If the incentives are not probable and reasonably estimable, we record the incentives as the underlying objectives or milestones are achieved. We record annual and multi-year
33
incentives when earned, generally over the agreement period. We use current and historical purchasing data, forecasted purchasing volumes, and other factors in estimating whether the underlying objectives or milestones will be achieved. Consideration received to promote and sell the supplier’s products is typically a reimbursement of marketing costs incurred by the Company and is recorded as a reduction of our operating expenses. If the amount of consideration received from the suppliers exceeds our marketing costs, any excess is recorded as a reduction of cost of goods sold.
Acquisitions, Goodwill, and Other Intangible Assets
We account for acquired businesses using the acquisition method of accounting. Our financial statements reflect the operations of an acquired business starting from the completion of the acquisition. Goodwill and other intangible assets represent the excess of cost of an acquired entity over the amounts specifically assigned to those tangible net assets acquired in a business combination. Other identifiable intangible assets typically include customer relationships, trade names, technology, non-compete agreements, and favorable lease assets. Goodwill and intangibles with indefinite lives are not amortized. Intangibles with definite lives are amortized on a straight-line basis over their useful lives, which generally range from two to twelve years. Annually, or when certain triggering events occur, the Company assesses the useful lives of its intangibles with definite lives. The gross cost and accumulated amortization of intangible assets are removed when the recorded amounts are fully amortized and the asset is no longer in use or the contract has expired. Amortization expense is recognized in operating expenses on the consolidated statements of operations.
Certain assumptions, estimates, and judgments are used in determining the fair value of net assets acquired, including goodwill and other intangible assets, as well as determining the allocation of goodwill to the reporting units. Accordingly, we may obtain the assistance of third-party valuation specialists for the valuation of significant tangible and intangible assets. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but that are inherently uncertain. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates and profitability), economic barriers to entry, a brand’s relative market position, and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur that could affect the accuracy or validity of the estimates and assumptions.
We are required to test goodwill and other intangible assets with indefinite lives for impairment annually or more often if circumstances indicate. Indicators of goodwill impairment include, but are not limited to, significant declines in the markets, industries, and customers that buy our products, changes in the estimated future cash flows of its reporting units, changes in capital markets, and changes in its market capitalization.
We perform a qualitative assessment (commonly referred to as “step zero”) to determine whether further quantitative analysis for impairment of goodwill is necessary. In performing step zero for our goodwill impairment test, we are required to make assumptions and judgments, including but not limited to: the evaluation of macroeconomic conditions as related to our business, industry and market trends, and the overall future financial performance of our reporting units and future opportunities in the markets in which they operate. If impairment indicators are present after performing step zero, we would perform a quantitative impairment analysis to estimate the fair value of goodwill.
During fiscal 2025, fiscal 2024, and fiscal 2023, we performed the step zero analysis for our goodwill impairment test and no further quantitative impairment test was deemed necessary for our reporting units within our reportable segments. Based on our assessment, there were no impairments recorded in fiscal 2025 or fiscal 2024. There was an immaterial impairment of goodwill related to reporting units within the Corporate & All Other segment for fiscal 2023.
Recently Issued Accounting Pronouncements
Refer to Note 3. Recently Issued Accounting Pronouncements within the Notes to Consolidated Financial Statements included in Item 8 for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on the Company’s consolidated financial statements.