Performance Food Group Q1 Results Top Estimates

(RTTNews) - Performance Food Group Co. (PFGC) reported Wednesday results for the first quarter that surpassed analysts' expectations, influenced by the acquisition of Reinhart Foodservice. While the company reported a loss for the quarter particularly due to a drop in operating profit and increased interest expense, it exhibited double-digit growth in net sales.

"Our Foodservice segment once again outperformed the industry, particularly in the independent restaurant channel," said George Holm, CEO.

He added that the integration of Reinhart has progressed smoothly and Vistar, despite its exposure to some of the hardest hit channels, has remained profitable due to strength in the convenience store channel.

For the first quarter, Performance Food Group reported a net loss of $0.7 million or $0.01 per share, compared to net income of $36.1 million or $0.34 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter stood at $0.25, compared to $0.57 per share in the year-ago quarter.

Net sales for the quarter increased 12.9 percent to $7.05 billion from $6.24 billion in the same quarter last year. On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share on net sales of $6.99 billion for the quarter. Analysts' estimates typically exclude special items.

The increase in net sales was primarily attributable to the acquisition of Reinhart, partially offset by the effects of the ongoing COVID-19 pandemic. Reinhart contributed $1.46 billion to net sales.

Foodservice net sales grew 28.1 percent to $5.04 billion, while Vistar net sales declined 13.2 percent to $2.01 billion from last year.

Gross profit improved 14.6 percent to $815.5 million, led by the acquisition of Reinhart, partially offset by the current environment surrounding the outbreak of COVID-19. Gross margin as a percentage of net sales also improved 20 basis points to 11.6 percent.

Total case volume grew 8.9 percent with the inclusion of Reinhart Foodservice and a 28.0 percent increase in independent cases.

Looking ahead, the company did not to provide fiscal 2021 financial guidance at this time after it withdrew it in mid-March in view of the spread of coronavirus that led to the deterioration of the macroeconomic environment.