Vending

Performance Food Group improves Q3 2021 sales and earnings, COVID clips Vistar sales

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May 5, 2021

Performance Food Group, which owns Vistar, reported net sales rose 2.9% from $7 billion in Q3 2020 to $7.2 billion for Q3 2021, ending March 27, 2021 according to an earnings release.

The third quarter of fiscal 2021 resulted in a net loss of $7.6 million compared to a net loss of $40.2 million in the prior year period. The improvement was primarily a result of the $40.8 million increase in operating profit, partially offset by a $1.9 million increase in interest expense and a $15.8 million decrease in income tax benefit.

Loss per share was 6 cents in the third quarter of fiscal 2021 compared to a loss per share of 35 cents in the prior year period, on both a basic and diluted basis.

Adjusted diluted EPS decreased 67.2% from 58 cents in Q3 2020 to 19 cents per share in Q3 2021.

The increase in net sales was primarily attributable to the effects of the novel coronavirus pandemic, which had a more significant impact in the third quarter of the prior year. The increase in net sales also reflects an increase in selling price per case as a result of inflation and mix. Overall food cost inflation was approximately 3.5%.

Operating expenses declined 1.9% to $809.3 million in the third quarter of fiscal 2021 compared to the prior year period. The decline in operating expenses was primarily due to reductions in personnel expenses, fuel expense, insurance expense, travel expenses, professional fees and contingent consideration accretion expense compared to the prior year period.

Additionally, in the third quarter of fiscal 2021, the company recorded a benefit of $6.0 million related to reserves for expected credit losses as compared to bad debt expense of $21.3 million for the third quarter of 2020.

Third-quarter net sales for foodservice increased 4.8% from $4.9 billion in Q3 2020 to $5.2 billion in Q3 2021. Net sales growth was driven by growth in cases sold as certain states began to ease COVID-19 restrictions, as well as an increase in selling price per case as a result of inflation.

Net sales for Vistar decreased 1.8% from $2.05 billion in Q3 2020 to $2.01 billion in Q3 2021, driven primarily by the continued economic effects of the COVID-19 pandemic.

The $7.2 billion in quarterly revenue surpassed analyst estimates by 3.4%, while the 19 cents EPS missed analyst estimates of 28 cents per share, according to Zacks.

Shares traded at $55.07 today against a 52-week range of $19.63-$59.89.

"Our company's strong momentum and recovery has continued into calendar 2021," George Holm, PFG's chairman, president and chief executive officer, said in the press release. "As we expected, the pace of rebuilding our workforce accelerated to support sales trend improvement.

"Despite a strong January and February in the year ago period, our businesses experienced independent cases growth of 6.3% in the quarter and a 2.9% increase in net sales compared to the prior year. Reflecting on everything that has occurred over the past 12 months, this is truly a wonderful accomplishment."

For the fiscal fourth quarter of 2021, PFG expects net sales to be at least $8.2 billion and Adjusted EBITDA is expected to be at least $185 million. This outlook includes the impact of a 53rd week, which occurs in the fiscal fourth quarter of 2021.

Net sales for the first nine months of fiscal 2021 was $21.1 billion, an increase of 9.2% versus the comparable prior year period, primarily attributable to the acquisition of Reinhart, which includes an additional six months of sales for fiscal 2021, partially offset by the effects of the COVID-19 pandemic. The acquisition of Reinhart contributed $4.2 billion to net sales for the first nine months of fiscal 2021 compared to $1.4 billion of net sales for the prior year period.

Net income decreased 74.9% to $9.3 million for the first nine months of fiscal 2021 compared to the prior year period.

Diluted EPS decreased 79.4% to 7 cents per share in the first nine months of fiscal 2021 compared to the prior year period. Adjusted Diluted EPS decreased 54.3% to 79 cents per share in the first nine months of fiscal 2021 compared to the prior year period.

For an update on how the coronavirus pandemic has affected convenience services, click here.