Performance Food Group, Vistar lift Q2 2022 sales on Core-Mark acquisition, COVID recovery

Performance Food Group, which owns Vistar, the nationwide wholesale vending product distributor, reported improved sales for Q2 2022 due to the Core-Mark acquisition, declining impact of COVID and other factors, according to an earnings release.

Net sales grew 87.6% from $6.8 billion in Q2 2021 to $12.8 billion in the quarter ending Jan. 1, 2022. The increase in net sales was primarily attributable to the acquisition of Core-Mark, an increase in selling price per case as a result of inflation, and the declining adverse effects of the novel coronavirus pandemic, which had a more significant adverse impact in the second quarter of the prior year.

The acquisition of Core-Mark contributed $4.2 billion of net sales for the second quarter of fiscal 2022. Overall cost inflation was approximately 12.5%.

• Net income declined 52.3% from $17.6 million to $8.4 million in the comparative quarters. The decline was primarily a result of the $3.1 million decrease in operating profit and a $7.1 million increase in interest expense, partially offset by a $4.3 million decrease in income tax expense.
• Earnings per share on both a basic and diluted basis fell from 13 cents to 5 cents.
• Adjusted EPS rose from 35 cents to 57 cents.
• Vistar increased sales 54.3% from $587.9 million to $907.3 million in the comparative quarters, driven primarily by the improving economic conditions due to the declining effects of the COVID-19 pandemic.
• Foodservice sales increased 27.2% to $6.2 billion compared to the prior year period, driven by growth in cases sold due to the declining effects of the COVID-19 pandemic on the restaurant industry, and an increase in selling price per case as a result of inflation.
• Convenience store sales increased 318.6% to $5.7 billion compared to the prior year period, primarily attributable to the acquisition of Core-Mark.
• The company's sales for the first half of fiscal 2022 was $23.2 billion, an increase of 67.2% versus the comparable prior year period.
• Net income decreased 22.5% to $13.1 million for the first half of fiscal 2022 compared to the prior year period, primarily a result of the $12.3 million increase in interest expense, partially offset by a $9.3 million increase in operating profit and a $2.2 million decrease in income tax expense.

Shares traded today at $51.06 against a 52-week range of $38.82-$59.89.

The $12.84 million in quarterly revenue was in line with analyst expectations, while the non-GAAP EPS of 57 cents beat expectations by 9 cents, according to Seeking Alpha.

"Our foodservice segment produced another quarter with strong sales and profit results," George Holm, chairman and CEO, said in a press release. "And we have seen meaningful progress at Vistar, with sequential improvement in both sales and margins."

For the fiscal third quarter of 2022, PFG expects net sales to be in a range of $12.9 billion to $13.1 billion.

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