PFGC

Performance Food Group is a top-tier US food-away-from-home distributor — over 250,000 products to 300,000+ customer locations across Foodservice, Convenience and Specialty segments. Scale is its moat: FY2025 revenue grew 8.6% to $63.3B and gross profit rose 12.8% to $7.42B, helped by the October 2024 Cheney Brothers acquisition that expanded Foodservice in the Southeast. The business is steadily cash-generative, with $1.21B of operating cash flow (+4.0%).

But food distribution is structurally low-margin, and the trend is the wrong way at the bottom line. Operating margin is just 1.3% and net margin 0.5%; despite the revenue and gross-profit gains, operating income slipped 1.2% to $816M and net income fell 22.0% to $340M ($2.18 diluted EPS, -21.9%), as depreciation/amortization jumped 29.0% to $718M and interest costs rose with the debt taken on for Cheney Brothers. That acquisition pushed long-term debt up 68.5% to $5.39B and total liabilities up 44.7%, lifting liabilities/equity to 3.00x — a meaningful step-up in financial risk for a thin-margin business.