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Performance Food Group Co - Stock Quote PFGC

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Morningstar's Performance Food Group Co Stock Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Performance Food Group Books Another Solid Quarter, but Valuation Is Unappetizing

Analyst Note

| Rebecca Scheuneman, CFA |

We think no-moat Performance Food Group (PFG) is performing well in the current environment. Excluding the Core-Mark acquisition, third-quarter sales advanced 24% driven by 8.3% case volumes and 13.6% inflation, essentially in line with our forecast. In the food-service segment (51% of period sales) PFG continues to expand its market share per management, despite narrow-moat Sysco’s push into Italian eateries, where PFG has a stronghold. It appears that consumers are experiencing pizza fatigue after heavy consumption during the pandemic as growth in this market slowed in the quarter. We suspect the slowdown could also be attributed to inflation, given the steep rises in wheat and dairy prices. But the overall food-service market remained strong during the quarter. Per Census Bureau data, while a spike in COVID-19 cases caused some softness in January, food-service sales have been strong since February, with no sign of consumers reverting to at-home dining in the face of accelerating inflation. This applies to PFG’s convenience store segment as well (43% of sales), a channel where sales have historically been hindered by higher gas prices. While sales have remained resilient to date, the trend bears watching.

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Performance Food Group Co's Company Profile

Business Description

Performance Food Group is the third- largest U.S. food-service distributor, with 9% market share and a heavy presence along the Eastern seaboard, the Southeast, and the Midwest. PFG's food-service business (expected to be 51% of fiscal 2022 sales) has its largest exposure to national and regional restaurant chains (50% of segment revenue), followed by independent restaurants (36%) and other channels (15%) such as healthcare facilities, hotels, and schools. The firm's Vistar segment (49% of sales) is a national distributor of candy, snacks, and beverages to convenience stores, vending and office coffee service distributors, theaters, sporting arenas, and correctional facilities.

Contact
12500 West Creek Parkway
Richmond, VA, 23238
T +1 804 484-7700
Sector Consumer Defensive
Industry Food Distribution
Most Recent Earnings Mar 31, 2022
Fiscal Year End Jul 2, 2022
Stock Type Slow Growth
Employees 23,000