Vending

COVID-19 clips Q4 sales for Vistar, PFG

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August 12, 2020

Performance Food Group Co., the parent company of Vistar, the nation's only national vending products distributor, saw net sales decline by 2.1% from $5.9 billion last year to $5.8 billion for the fourth quarter ending June 27, 2020, with COVID-19 losses partially offset by the acquisitions of Eby-Brown Co. LLC and Reinhart Foodservice.

Performance Food Group's revenue surpassed analyst predictions by $230 million, but fell short of expected GAAP earnings per share by $0.73 cents with a $1.19 loss, according to Seeking Alpha.

The fourth quarter of fiscal 2020 resulted in a net loss of $151.2 million compared to net income of $63.2 million in the prior year's fourth quarter. The decline was primarily a result of the $326.1 million decrease in operating profit and a $20.7 million increase in interest expense, partially offset by a $130.9 million decrease in income tax expense.

Diluted loss per share was $1.19 in the fourth quarter of fiscal 2020, compared to diluted earnings of $0.60 cents in the prior year period. Adjusted diluted loss per share was $0.86 cents in the fourth quarter compared to $0.77 cents in the prior year period.

The company's stock price remained on its upward trajectory since falling from $53.52 in February, reaching $35.12 today.

"Our weekly sales trends have improved significantly from the March lows and we are seeing notable market share gains in many of our key markets," George Holm, chairman, president and CEO, said in a prepared statement. "While our fiscal fourth quarter was challenging, I am pleased with our business recovery and momentum."

Net sales for Vistar decreased 8.1% to $1.8 billion for the fourth quarter, compared to the prior year period. The acquisition of Eby-Brown contributed an additional $376.8 million to net sales for the fourth quarter of fiscal 2020, including an additional $93.9 million related to excise taxes, as compared to the prior year period.

Fourth-quarter EBITDA for Vistar decreased 313.8% to negative $110.3 million versus the prior year period. Gross profit decline of 35.2% for the fourth quarter of fiscal 2020 compared to the prior year period was fueled by the current economic environment due to COVID-19.

Vistar recorded a total of $11.1 million of inventory write-offs in the quarter due to the impact of COVID-19 on its operations, which is an increase of $10.4 million over the prior year period.

The acquisition of Eby-Brown contributed an additional $376.8 million to net sales for Performance Food Group for the fourth quarter, including an additional $93.9 million related to excise taxes, as compared to the prior year period, while the acquisition of Reinhart Foodservice contributed $1.16 billion to net sales for the fourth quarter of fiscal 2020.

The company recorded a net loss of $114.1 million for fiscal 2020 compared to net income of $166.8 million for the prior year. The decline in net income was primarily attributable to a $382.3 million decrease in operating profit along with a $51.5 million increase in interest expense, partially offset by a $159.6 million decrease in income tax expense.

Net sales for foodservice in the fourth quarter increased 0.8% to $4 billion, compared to the prior year period. The growth was driven by the acquisition of Reinhart, which also drove an increase in cases sold. The acquisition of Reinhart contributed $1.17 billion to net sales for the fourth quarter.

Fourth-quarter EBITDA for foodservice decreased 79.6% to $27 million compared to the prior year period. Gross profit for foodservice increased 0.7% in the fourth quarter of fiscal 2020 compared to the prior year period as a result of the Reinhart acquisition.

Due to the continued macroeconomic environment uncertainty relating to the COVID-19 pandemic, PFG will not be providing fiscal 2021 financial guidance at this time.

For an update on how the coronavirus pandemic is affecting convenience services, click here.