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What changed in Performance Food Group Co's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Performance Food Group Co's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+352 added−367 removedSource: 10-K (2025-08-13) vs 10-K (2024-08-14)

Top changes in Performance Food Group Co's 2025 10-K

352 paragraphs added · 367 removed · 261 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

44 edited+29 added−29 removed13 unchanged
Biggest changeThrough our Learning Management System, we deliver a variety of required and optional on-demand learning opportunities linked to an associate’s role with the Company, including modules tied to safety and compliance, such as our Code of Business Conduct. Additionally, our segments provide segment specific training opportunities that align and compliment the overall learning and organizational development strategy.
Biggest changeOur Learning Management System delivers a wide range of on-demand courses tailored to an associate's role, including compliance training, leadership development, and safety modules. Additionally, our segments offer specialized training aligned with both operational needs and the broader company strategy. Health, Safety and Wellness. Keeping our associates safe and healthy is a responsibility we take seriously.
Regulation Our operations are subject to various laws and regulations relating to, among other things, the manufacturing, processing, packaging, storage, distribution, advertising, and labeling of our products, including regulation by state and local health departments, the U.S. Department of Agriculture (the “USDA”), and the U.S.
Our operations are subject to various laws and regulations relating to, among other things, the manufacturing, processing, packaging, storage, distribution, advertising, and labeling of our products, including regulation by state and local health departments, the U.S. Department of Agriculture (the “USDA”), and the U.S.
These benefits include time off through paid vacation, sick days, holidays, and personal time, as well as family leave; insurance offerings such as disability insurance, life insurance and healthcare; and 6 financial benefits such as a 401(k) plan with a company match, an Employee Stock Purchase Plan, adoption assistance, education assistance, scholarship program for children of associates, flexible spending accounts, and health savings accounts.
These benefits include time off through paid vacation, sick days, holidays, and personal time, as well as family leave; insurance offerings such as disability insurance, life insurance and healthcare; and financial benefits such as a 401(k) plan with a company match, an Employee Stock Purchase Plan, adoption assistance, education assistance, a scholarship program for children of associates, flexible spending accounts, and health savings accounts.
Our Performance Brands typically generate higher gross profit per case than other brands. Nationally branded products are 4 attractive to chain, independent, and other customers seeking recognized national brands in their operations and complement sales of our Performance Brand products.
Our Performance Brands typically generate higher gross profit per case than other brands. Nationally branded products are attractive to chain, independent, and other customers seeking recognized national brands in their operations and complement sales of our Performance Brand products.
We have established and continue to maintain comprehensive, prevention-based controls 7 across the food supply chain that are both verified and validated, as required by the FDA regulations implementing FSMA.
We have established and continue to maintain comprehensive, prevention-based controls across the food supply chain that are both verified and validated, as required by the FDA regulations implementing FSMA.
Our approximately 37,000 employees serve a diverse mix of customers, from independent and chain restaurants to schools, business and industry locations, hospitals, vending distributors, office coffee service distributors, retailers, convenience stores, and theaters. We source our products from various suppliers and serve as an important partner to our suppliers by providing them access to our broad customer base.
Our approximately 43,000 employees serve a diverse mix of customers, from independent and chain restaurants to schools, business and industry locations, hospitals, vending distributors, office coffee service distributors, retailers, convenience stores, and theaters. We source our products from various suppliers and serve as an important partner to our suppliers by providing them access to our broad customer base.
Convenience's product offering includes cigarettes, other tobacco products, alternative nicotine products, candy, snacks, food, including fresh products, groceries, dairy, bread, beverages, general merchandise and health and beauty care products. Convenience operates a network of 39 distribution centers in the U.S. and Canada (excluding two distribution facilities it operates as a third-party logistics provider).
Convenience's product offering includes cigarettes and other nicotine products, candy, snacks, food, including fresh products, groceries, dairy, bread, beverages, general merchandise and health and beauty care products. Convenience operates a network of 39 distribution centers in the U.S. and Canada (excluding two distribution facilities it operates as a third-party logistics provider).
We seek to increase the mix of our total sales to independent customers because they typically use more value-added services, particularly in the areas of product selection and procurement, market trends, menu development, and operational strategy and also use more of our proprietary-branded products (“Performance Brands”), which are our highest margin products.
We seek to increase the mix of our total sales to independent customers because they typically use more value-added services, particularly in the areas of product selection and procurement, market trends, menu development, and operational strategy and also use more of our proprietary-branded products (“Performance Brands”), which are our higher margin products.
Additionally, we offer an Employee Assistance Program that provides professional support for associates and their family members to balance the stress of personal and professional demands at home, in the office, in distribution centers and on the road. Diversity and Inclusion.
Additionally, we offer an Employee Assistance Program that provides professional support for associates and their family members to balance the stress of personal and professional demands at home, in the office, in distribution centers and on the road.
Some of our chain customers, particularly those with national distribution, develop exclusive stock keeping units (“SKU”) specifications directly with suppliers and brand these SKUs. We purchase these SKUs directly from suppliers and receive them into our distribution centers, where they are mixed with other SKUs and delivered to the chain customers’ locations. Vistar .
Some of our chain customers, particularly those with national distribution, develop exclusive stock keeping units (“SKU”) specifications directly with suppliers and brand these SKUs. We purchase these SKUs directly from suppliers and receive them into our distribution centers, where they are mixed with other SKUs and delivered to the chain customers’ locations. 3 Convenience .
Although in the aggregate these trademark and trade names are material to our results of operations, we believe the loss of a trademark or trade name individually would not have a material adverse effect on our results of operations. The Company does not have any material patents or licenses.
Although in the aggregate these trademark and trade names are material to our results of operations, we believe the loss of a trademark or trade name individually would not have a material adverse effect on our results of operations. We do not have any material patents or licenses.
The Foodservice segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional “food-away-from-home” locations. Independent customers predominantly include family dining, bar and grill, pizza and Italian, and fast casual restaurants.
The Foodservice segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional food-away-from-home locations. Independent customers predominantly include family dining, bar and grill, pizza and Italian, Hispanic, and fast casual restaurants.
The FDA Food Safety Modernization Act (the “FSMA”) requires that the FDA impose comprehensive, prevention-based controls across the food supply chain, further regulates food products imported into the United States, and provides the FDA with mandatory recall authority. The FDA has finalized regulations implementing the FSMA, which have significantly expanded our food safety requirements.
The FDA Food Safety Modernization Act (the “FSMA”) imposes comprehensive, prevention-based controls across the food supply chain, further regulates food products imported into the United States, and provides the FDA with mandatory recall authority. The FDA has finalized FSMA regulations for implementation, which have significantly expanded our food safety requirements.
Convenience offers a full range of products, marketing programs and technology solutions to approximately 50,000 customer locations in the United States and Canada. The Convenience segment's customers include traditional convenience stores, drug stores, mass merchants, grocery stores, liquor stores and other specialty and small format stores that carry convenience products.
Convenience offers a full range of products, marketing programs and technology solutions to customer locations including traditional convenience stores, drug stores, mass merchants, grocery stores, liquor stores and other specialty and small format stores that carry convenience products in the United States and Canada.
Department of Labor, and relating to the protection of the environment and the safety and health of personnel and the public. These include requirements regarding the use, storage, and disposal of solid and hazardous materials and petroleum products, including food processing wastes, the discharge of pollutants into the air and water, and worker safety and health practices and procedures.
These include requirements regarding the use, storage, and disposal of solid and hazardous materials and petroleum products, including food processing wastes, the discharge of pollutants into the air and water, and worker safety and health practices and procedures.
Foodservice operates a network of 78 distribution centers, each of which is run by a business team who understands the local markets and the needs of its particular customers and who is empowered to make decisions on how best to serve them. This segment serves over 175,000 customer locations.
Foodservice operates a network of 89 distribution centers, each of which is run by a business team who understands the local markets and the particular needs of its customers and who is empowered to make decisions on how best to serve them.
The distribution model also includes “pick and pack” capabilities utilizing small parcel third-party carriers and Vistar’s SKU variety to sell to customers whose order sizes are too small to be served effectively by our delivery network, and to fulfill directly to consumers for our supplier partners.
The distribution model also includes “pick and pack” capabilities utilizing small parcel third-party carriers to deliver direct to consumers for our supplier partners and to our customers whose order sizes are too small to be served effectively by our truck network.
We are also subject to regulation by state authorities for the accuracy of our weighing and measuring devices. Our suppliers are also subject to similar regulatory requirements and oversight. Our customers include several departments of the U.S. federal government, as well as certain state and local governmental entities. These customer relationships subject us to additional regulations applicable to government contractors.
Our suppliers are also subject to similar regulatory requirements and oversight. 6 Our customers include several departments of the U.S. federal government, as well as certain state and local governmental entities. These customer relationships subject us to additional regulations applicable to government contractors. Labor and Employment.
A number of our facilities have ammonia- or freon-based refrigeration systems, which could cause injury or environmental damage if accidentally released, and many of our distribution centers have propane or battery powered forklifts.
A number of our facilities have ammonia- or freon-based refrigeration systems, which could cause injury or environmental damage if accidentally released, and many of our distribution centers have propane or battery powered forklifts. Transportation. The Surface Transportation Board and the Federal Highway Administration regulate our trucking operations.
Pricing Our pricing to customers is either set by contract with the customer or is priced at the time of order. If the price is by contract, it is either based on a percentage markup over cost or a fixed markup per unit, and the unit may be expressed either in cases or pounds of product.
If the price is by contract, it is either based on a percentage markup over cost or a fixed markup per unit, and the unit may be expressed either in cases or pounds of product.
The information we file with the SEC or contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference herein and is not part of this Form 10-K. 8 Website and Social Media Disclosure We use our website (www.pfgc.com) and our corporate social media platforms as channels of distribution of company information.
The information we file with the SEC or contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference herein and is not part of this Form 10-K.
Our filings with the SEC are available to the public on the SEC’s website at www.sec.gov. Those filings are also available to the public on, or accessible through, our website for free via the “Investors” section at www.pfgc.com.
Available Information We file annual, quarterly, and current reports, proxy statements and other information with the SEC. Our filings with the SEC are available to the public on the SEC’s website at www.sec.gov. Those filings are also available to the public on, or accessible through, our website for free via the “Investors” section at www.pfgc.com.
In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy. On September 1, 2021, we completed the acquisition of Core-Mark Holding Company, Inc. ("Core-Mark").
In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy. On October 8, 2024, the Company acquired Cheney Bros., Inc.
Our supplier base consists principally of large corporations that sell their national brands, our Performance Brands, and sometimes both. We also buy from smaller suppliers, particularly on a regional basis, and particularly those that specialize in produce and other perishable commodities. Many of our suppliers provide sales material and sales call support for the products that we purchase.
Many of our suppliers provide products to each of our reportable segments, while others sell to only one segment. Our supplier base consists principally of large corporations that sell their national brands, our Performance Brands, and sometimes both. We also buy from smaller suppliers, particularly on a regional basis, and particularly those that specialize in produce and other perishable commodities.
Certain of our competitors may have greater scale and financial and other resources than we do in certain markets. Smaller distributors often align themselves with other smaller distributors through purchasing cooperatives and marketing groups to enhance their geographic reach, private label offerings, overall purchasing power, cost efficiencies, and to assemble delivery networks for national or multi-regional distribution.
Smaller distributors often align themselves with other smaller distributors through purchasing cooperatives and marketing groups to enhance their geographic reach, private label offerings, overall purchasing power, cost efficiencies, and to assemble delivery networks for national or multi-regional distribution.
The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts.
Website and Social Media Disclosure We use our website (www.pfgc.com) and our corporate social media platforms as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts.
We reduce usage by designing more efficient truck routes and by increasing miles per gallon through on-board computers that monitor and adjust idling time and maximum speeds and through other technologies. We seek to manage fuel prices through diesel 5 fuel surcharges to our customers and through the use of costless collars.
We seek to minimize the effect of higher diesel fuel costs both by reducing fuel usage and by taking action to offset higher fuel prices. We reduce usage by designing more efficient truck routes and by increasing miles per gallon through on-board computers that monitor and adjust idling time and maximum speeds and through other technologies.
Item 1. B usiness Performance Food Group Company (“we,” “our,” “us,” “the Company,” or “PFG”), through its subsidiaries, markets and distributes more than 250,000 food and food-related products from 144 distribution centers to over 300,000 customer locations across North America.
Item 1. B usiness Performance Food Group Company, through its subsidiaries, markets and distributes more than 250,000 food and food-related products to customers across North America, from our 155 distribution centers to over 300,000 customer locations in the food-away-from-home industry.
In response to associate feedback, we have introduced numerous initiatives to strengthen the associate experience, including day-one benefits, education assistance, leadership training program, career pathing, and enhanced communications.
In response to associate feedback, we have introduced numerous initiatives to strengthen the associate experience, including enhanced onboarding with day-one benefits, expanded education assistance, new leadership training programs, clearer career pathways, and better communication tools.
Our seafood operations are also specifically regulated by federal and state laws, including those administered by the National Marine Fisheries Service, established for the preservation of certain species of marine life, including fish and shellfish. Our processing and distribution facilities must be registered with the FDA biennially and are subject to periodic government agency inspections.
Our seafood operations are also specifically regulated by federal and state laws, including those administered by the National Marine Fisheries Service and the National Shellfish Sanitation Program, established for the preservation of certain species of marine life, including fish and shellfish.
State and/or federal authorities generally inspect our facilities at least annually. The Federal Perishable Agricultural Commodities Act, which specifies standards for the sale, shipment, inspection, and rejection of agricultural products, governs our relationships with our fresh food suppliers with respect to the grading and commercial acceptance of product shipments.
The Federal Perishable Agricultural Commodities Act, which specifies standards for the sale, shipment, inspection, and rejection of agricultural products, governs our relationships with our fresh produce suppliers with respect to the grading and commercial acceptance of product shipments. We are also subject to regulation by state authorities for the accuracy of our weighing and measuring devices.
We believe that most purchasing decisions in the foodservice business are based on the quality and price of the product and a distributor’s ability to fill orders completely and accurately and to provide timely deliveries.
We believe that most purchasing decisions in the foodservice business are based on the quality and price of the product and a distributor’s ability to fill orders completely and accurately and to provide timely deliveries. 4 We believe we have a competitive advantage through economies of scale in purchasing and procurement, which allow us to offer a broad variety of products (including our proprietary Performance Brands) at competitive prices to our customers.
We generally do not lock in or otherwise hedge commodity costs or other costs of goods sold except within certain customer contracts where the customer bears the risk of cost fluctuation. We believe that our pricing mechanisms provide us with significant insulation from fluctuations in the cost of goods that we sell.
We generally do not lock in or otherwise hedge commodity costs or other costs of goods sold except within certain customer contracts based on a fixed markup per unit or pound where the customer bears the risk of cost fluctuation.
These laws and regulations may change in the future and we may incur material costs in our efforts to comply with current or future laws and regulations or in any required product recalls. Our operations are subject to a variety of federal, state, and local laws and other requirements, including employment practice standards for workers set by the U.S.
Our operations are subject to a variety of federal, state, and local laws and other requirements, including employment practice standards for workers set by the U.S. Department of Labor.
For the purchase of products produced, harvested or manufactured outside of the U.S., and for shipment of products to customers located outside of the U.S., we are subject to applicable customs laws regarding the import and export of various products. Available Information We file annual, quarterly, and current reports, proxy statements and other information with the SEC.
Such matters as weight and dimension of equipment are also subject to federal and state regulations. Trade. For the purchase of products produced, harvested or manufactured outside of the U.S., and for shipment of products to customers located outside of the U.S., we are subject to applicable customs laws regarding the import and export of various products.
As a result, we expanded our convenience business, which includes operations in Canada. Refer to Note 4. Business Combinations within the Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements ("Item 8") for additional details regarding the acquisition of Core-Mark.
(“Cheney Brothers”), expanding our Foodservice operations in the Southeastern portion of the United States. Refer to Note 4. Business Combinations within the Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements (“Item 8”) for additional details regarding the acquisition of Cheney Brothers.
Foodservice offers a “broad line” of products, including custom-cut meat and seafood, as well as products that are specific to our customers’ menu requirements.
Corporate & All Other is comprised of corporate overhead and certain operating segments that are not considered separate reportable segments based on their size. Foodservice . Foodservice offers a broad line of products, including custom-cut meat and seafood, as well as products that are specific to our customers’ menu requirements.
Vistar distribution centers deliver to vending and office coffee service distributors and directly to most theaters and various other locations.
Specialty distribution centers deliver to vending and office coffee service distributors as well as direct to customer locations including theaters and retail locations.
We believe these capabilities, in conjunction with the breadth of our inventory, are differentiating and allow us to serve many distinct customer types. Convenience . The Convenience segment is one of the largest foodservice and wholesaler consumer products distributors in the convenience retail industry.
We believe these capabilities, in conjunction with the breadth of our inventory, are differentiating and allow us to serve many distinct customer types. Specialty's scale in the channels it serves enhances our ability to procure a broad variety of products for our customers.
The Surface Transportation Board and the Federal Highway Administration regulate our trucking operations. In addition, interstate motor carrier operations are subject to safety requirements prescribed in the U.S. Department of Transportation and other relevant federal and state agencies. Such matters as weight and dimension of equipment are also subject to federal and state regulations.
In addition, interstate motor carrier operations are subject to safety requirements prescribed in the U.S. Department of Transportation and other relevant federal and state agencies. We must comply with the safety and fitness regulations promulgated by the Federal Motor Carrier Safety Administration, including those relating to drug and alcohol testing and hours of service.
Our inventory turns, on average, every three-and-a-half weeks, which further protects us from cost fluctuations. We seek to minimize the effect of higher diesel fuel costs both by reducing fuel usage and by taking action to offset higher fuel prices.
We believe that our pricing mechanisms provide us with significant insulation from fluctuations in the cost of goods that we sell. Our inventory turns, on average, every three-and-a-half weeks, which further protects us from cost fluctuations.
Suppliers We source our products from various suppliers and serve as an important partner to our suppliers by providing them access to our broad customer base. Many of our suppliers provide products to each of our reportable segments, while others sell to only one segment.
The Company had no customers that comprised more than 10% of consolidated net sales for fiscal 2025, fiscal 2024, or fiscal 2023. Suppliers We source our products from various suppliers and serve as an important partner to our suppliers by providing them access to our broad customer base.
As of June 29, 2024, we had collars in place for approximately 21% of the gallons we expect to use over the 12 months following June 29, 2024. Competition The foodservice distribution industry is highly competitive, with numerous national, regional, local, and specialty distributors.
We seek to manage fuel prices through diesel fuel surcharges to our customers and through the use of costless collars. As of June 28, 2025, we had collars in place for approximately 15% of the gallons we expect to use over the 12 months following June 28, 2025.
We believe we have a competitive advantage through economies of scale in purchasing and procurement, which allow us to offer a broad variety of products (including our proprietary Performance Brands) at competitive prices to our customers. Our customers benefit from our ability to provide them with extensive geographic coverage as they continue to grow.
Our customers benefit from our ability to provide them with extensive geographic coverage as they continue to grow.
Removed
On August 13, 2024, we entered into a definitive Stock Purchase Agreement to acquire Cheney Bros., Inc. ("Cheney Brothers") in a transaction valued at $2.1 billion. The closing of the contemplated transaction is subject to customary conditions, including the receipt of required regulatory approvals.
Added
Our Segments The Company regularly monitors for changes in facts and circumstances that would necessitate changes in its determination of operating segments. In the third quarter of fiscal 2025, the Company updated its operating segments to reflect the manner in which the business is managed.
Removed
The $2.1 billion purchase price is expected to be financed with borrowing under the ABL Facility (as defined below under "- Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Financing Activities" in Part II, Item 7 of this Form 10-K) and the net proceeds from the issuance of new senior unsecured notes.
Added
Based on changes to the Company’s organizational structure and how operating results are reviewed and decisions about resource allocations are made, certain operations and administrative and corporate costs previously reported in Corporate & All Other are now included in the Foodservice segment.
Removed
Cheney Brothers will be reported in the Foodservice segment. Our Segments Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company has three reportable segments: Foodservice, Vistar, and Convenience.
Added
In the third quarter of fiscal 2025, the Company also renamed the segment formerly known as “Vistar,” which, going forward, has been referred to as “Specialty.” There were no changes to the operations reported within the Specialty (formerly Vistar) segment. The Company continues to have three reportable segments: Foodservice, Convenience, and Specialty.
Removed
Corporate & All Other is comprised of corporate overhead and certain operating segments that are not considered separate reportable segments based on their size. This also includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense. Foodservice .
Added
The Convenience segment is one of the largest wholesale consumer products and foodservice distributors in the convenience retail industry.
Removed
Vistar is a leading national distributor of candy, snacks, beverages, and other items to vending and office coffee service distributors, retailers, theaters, and hospitality providers. The segment provides national distribution of candy, snacks, beverages, and other items to over 75,000 customer locations from our network of 27 Vistar distribution centers.
Added
There are 35 distribution centers located in the U.S. and four located in Canada. Specialty . Specialty (formerly Vistar) is a leading national distributor of candy, snacks, beverages, and other food items operating a network of 27 Specialty distribution centers. Specialty has successfully built upon our national platform to broaden the channels we serve.
Removed
Vending operators comprise Vistar’s largest channel, where we distribute a broad selection of vending machine products to the operators’ depots, from which they distribute products and stock machines. Additionally, Vistar is a leading distributor of products to theater chains as well as in the office coffee service channel.
Added
Many of our suppliers provide sales material and sales call support for the products that we purchase. Pricing Our pricing to customers is either set by contract with the customer or is priced at the time of order.
Removed
Vistar has successfully built upon our national platform to broaden the channels we serve to include hospitality venues, concessionaires, airport gift shops, college bookstores, corrections facilities, and impulse locations in various brick and mortar big box retailers nationwide. Vistar’s scale in these channels enhances our ability to procure a broad variety of products for our customers.
Added
Competition The foodservice distribution industry is highly competitive, with numerous national, regional, local, and specialty distributors. Certain of our competitors may have greater scale and financial and other resources than we do in certain markets.
Removed
There are 35 distribution centers located in the U.S. and four located in Canada. The Company had no customers that comprised more than 10% of consolidated net sales for fiscal 2024, fiscal 2023, or fiscal 2022.
Added
Trademarks and Trade Names We have numerous perpetual trademarks and trade names that are of significant importance, including Performance Food Group®, Performance Foodservice®, Core-Mark®, and Vistar SM . We also have registered or applied for trademark protections for our Performance Brands. These trademarks and the Performance Brands on which they are used are widely recognized within the foodservice industry.
Removed
Trademarks and Trade Names We have numerous perpetual trademarks and trade names that are of significant importance, including Core-Mark, West Creek, Silver Source, Braveheart 100% Black Angus, Empire’s Treasure, Brilliance, Heritage Ovens, Village Garden, Guest House, Piancone, Luigi’s, Ultimo, Corazo, Assoluti, Peak Fresh Produce, Roma, First Mark, and Nature’s Best Dairy.
Added
Human Capital Resources Our people are the driving force behind everything we do. Our focus is on attracting, developing, and retaining talented people who bring a wide range of backgrounds, experiences, and perspectives. We are committed to creating an environment where every associate feels they belong and can meaningfully contribute to our shared success.
Removed
Human Capital Resources Our vision is to create the best experience for our associates and the best outcomes for our Company, customers, and communities. An important component of our strategy is to attract, train, develop, and retain talented individuals who feel empowered to fully contribute their diverse backgrounds, experiences, and innovative ideas to help drive the success of the Company.
Added
Just as important, we prioritize the safety, health, and well-being of our associates. Associates. As of June 28, 2025, our team included approximately 43,000 associates across North America, including those in our consolidated subsidiaries. Approximately 99% of our associates were employed on a full-time basis, and approximately 70% were non-exempt, or paid on an hourly basis.
Removed
We also recognize the importance of keeping our associates safe and healthy, giving them a voice and listening to their concerns and suggestions. Below, we discuss our efforts to achieve these objectives. Associates. As of June 29, 2024, our associate population (including associates of our consolidated subsidiaries) totaled approximately 37,000 full-time and part-time associates in North America.
Added
Our workforce spans a wide range of functions, from warehouse operations and delivery drivers to corporate teams and frontline customer support, each playing a vital role in serving our customers and communities. Talent Acquisition. Attracting top talent is essential to delivering on our commitments to customers, communities, and shareholders.
Removed
Of that total, approximately 99% were employed on a full-time basis, and approximately 70% were non-exempt, or paid on an hourly basis. Compensation and Benefits. We strive to deliver base wages and salaries that are fair and competitive with the external labor markets.
Added
Our talent acquisition strategy focuses on attracting, hiring, developing, and retaining individuals whose skills, experiences, and values align with our business goals and culture. Compensation and Benefits. We believe that fair, competitive compensation is fundamental to attracting and retaining top talent. Our compensation approach combines base pay aligned with external market data and performance-based incentive programs.
Removed
We offer incentive programs that provide cash-bonus opportunities to encourage and reward participants for the Company’s achievement of financial and other key performance metrics that further strengthen the connection between pay and performance.
Added
Eligible associates can participate in short-term incentive plans, including cash bonuses tied to the company’s financial performance and other key priorities. For long-term growth, we offer equity awards to eligible associates, designed to foster ownership, reward sustained contributions, and align our shared interests with those of our stockholders.
Removed
Through our long-term incentive plan, we also grant eligible associates equity compensation awards that vest over time to align those incentives with the Company’s long-term strategic objectives and the interests of our stockholders. We offer an array of competitive benefits to our associates.
Added
Beyond pay, we offer a comprehensive suite of benefits to support the well-being of our associates and their families.
Removed
We are committed to building the most talented, diverse and an inclusive workforce that reflects the customers and communities we serve.
Added
In addition to compensation and benefits, we offer associate recognition programs to foster a culture of appreciation and reinforce the behaviors that drive our success. People and Culture. As one of the nation's leading foodservice distributors, we are committed to creating a workplace where our associates feel valued and can thrive.
Removed
Our diversity, inclusion, and belonging strategy consists of three areas of focus: • Promoting an inclusive culture and sense of belonging to engage our workforce. • Investing in attracting, hiring, and developing the best talent to reflect the communities we serve. • Supporting a diverse network of suppliers to drive economic development in our communities.
Added
As part of this commitment, we embrace key workplace culture strategies such as: • Promote a sense of community and connection to engage our workforce. • Invest in attracting, hiring, developing, and retaining the best talent to reflect our customers and the communities they serve. 5 This work is championed by our senior leadership team and supported through programs such as our associate resource groups.
Removed
With the active engagement of PFG’s senior leadership, we continue to foster a culture of inclusion through ongoing opportunities to learn and grow, and by continuing to sponsor our associate resource groups (ARGs). These associate-led networks drive associate engagement by fostering inclusion, enhancing career development, and promoting cultural awareness.
Added
These associate-led communities, which are open to all associates, create spaces for connection, cultural awareness, professional development, and engagement. Learning and Organizational Development. We believe in investing in our people at every stage of their careers. Our enterprise-wide learning strategy is designed to help associates succeed in their current roles while preparing them for future growth.
Removed
Our Vice President of Diversity, Inclusion and Belonging provides regular updates to the Company's Board of Directors (“Board of Directors”). With six out of 12 members of the Board of Directors representing gender and ethnic diversity, our commitment to workforce diversity is reflected at every level of the organization and is connected to our business strategy. Learning and Organizational Development.
Added
It starts with a thoughtful onboarding experience and continues with ongoing development opportunities. By reviewing strategic needs, compliance training requirements, and associate engagement survey data, we create and implement comprehensive training programs. This approach strives to deliver the right broad-based learning and development opportunities at the right time to support both organizational and associate growth.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

95 edited+25 added−26 removed89 unchanged
Biggest changeThe integration of Cheney Brothers with our existing business will be a complex, costly and time-consuming process that may involve material challenges, including, without limitation: • the diversion of management’s attention from ongoing business concerns, potentially resulting in performance shortfalls; 20 • managing a larger company; • maintaining employee morale and attracting, motivating and retaining management personnel and other key employees; • the possibility of faulty assumptions underlying expectations regarding the integration process; • retaining existing, and attracting new, business and operational relationships; • consolidating corporate and administrative infrastructures and eliminating duplicative operations; • coordinating geographically separate organizations; • unanticipated issues in integrating information technology, communications and other systems; • unanticipated changes in federal or state laws or regulations; and • unforeseen expenses or delays associated with the Cheney Brothers Transaction.
Biggest changeThe integration of Cheney Brothers with our existing business will be a complex, costly and time-consuming process that may involve material challenges, including, without limitation: • unanticipated issues in integrating information technology, communications and other systems; • maintaining employee morale and attracting, motivating and retaining management personnel and other key employees; • the possibility of faulty assumptions underlying expectations regarding the integration process; • consolidating corporate and administrative infrastructures and eliminating duplicative operations; • coordinating geographically separate organizations; • unanticipated changes in federal or state laws or regulations; and • unforeseen expenses or delays.
Any increase in their labor costs, including any increases in costs as a result of increases in minimum wage requirements, wage inflation and/or increased overtime payments as a result of labor shortages, work slowdowns, work interruptions, strikes, or other job actions by employees of customers could reduce the profitability of our customers and reduce demand for our products.
Any increase in their labor costs, including any increases in costs as a result of increases in minimum wage requirements, wage inflation or increased overtime payments as a result of labor shortages, work slowdowns, work interruptions, strikes, or other job actions by employees of customers could reduce the profitability of our customers and reduce demand for our products.
Our suppliers also may be affected by higher minimum wage and benefit standards, wage inflation and/or increased overtime payments as a result of labor shortages, work slowdowns, work interruptions, strikes, or other actions by their employees, which could result in higher costs for goods and services supplied to us.
Our suppliers also may be affected by higher minimum wage and benefit standards, wage inflation or increased overtime payments as a result of labor shortages, work slowdowns, work interruptions, strikes, or other actions by their employees, which could result in higher costs for goods and services supplied to us.
To the extent our future growth includes acquisitions, we may not be able to obtain any necessary financing for such acquisitions, consummate such potential acquisitions effectively, effectively and efficiently integrate any acquired entities, or successfully expand into new markets.
To the extent our future growth includes acquisitions, we may not be able to obtain the necessary financing for such acquisitions, consummate such potential acquisitions effectively, effectively and efficiently integrate any acquired entities, or successfully expand into new markets.
Significant increases in cigarette-related taxes and/or fees have been proposed or enacted and are likely to continue to be proposed or enacted by various taxing jurisdictions within the U.S.
Significant increases in cigarette-related taxes or fees have been proposed or enacted and are likely to continue to be proposed or enacted by various taxing jurisdictions within the U.S.
We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.
We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders or amend the covenants.
In addition, our operations are subject to various federal, state, provincial, regional and local laws and regulations in many areas of our business, such as, minimum wage, overtime, wage payment, wage and hour and employment discrimination, harassment, immigration, human health and safety and relating to the protection of the environment, including those governing the discharge of pollutants into the air, soil, and water; the management and disposal of solid and hazardous materials and wastes; employee exposure to hazards in the workplace; and the investigation and remediation of contamination resulting from releases of petroleum products and other regulated materials.
Labor and Workplace Safety: In addition, our operations are subject to various federal, state, provincial, regional and local laws and regulations in many areas of our business, such as, minimum wage, overtime, wage payment, wage and hour and employment discrimination, harassment, immigration, human health and safety and relating to the protection of the environment, including those governing the discharge of pollutants into the air, soil, and water; the management and disposal of solid and hazardous materials and wastes; employee exposure to hazards in the workplace; and the investigation and remediation of contamination resulting from releases of petroleum products and other regulated materials.
In addition, 14 the FDA has been empowered to regulate changes to nicotine yields and the chemicals and flavors used in tobacco and alternative nicotine products (including cigars, pipe and vapor products), require ingredient listings be displayed on tobacco and alternative nicotine products, prohibit the use of certain terms that may attract youth or mislead users as to the risks involved with using tobacco and alternative nicotine products, as well as limit or otherwise impact the marketing of tobacco and alternative nicotine products by requiring additional labels or warnings that must be pre-approved by the FDA.
In addition, the FDA has been empowered to regulate changes to nicotine yields and the chemicals and flavors used in tobacco and alternative nicotine products (including cigars, pipe and vapor products), require ingredient listings be displayed on tobacco and alternative nicotine products, prohibit the use of certain terms that may attract youth or mislead users as to the risks involved with using tobacco and alternative nicotine products, as well as limit or otherwise impact the marketing of tobacco and alternative nicotine products by requiring additional labels or warnings that must be pre-approved by the FDA.
The effects of climate change, and legal or regulatory initiatives to address climate change, could have a long-term adverse effect on our business, financial condition, or results of operations. In addition, from time to time we establish and publicly announce goals and commitments related to corporate social responsibility matters, including those related to reducing our impact on the environment.
The effects of climate change, and legal or regulatory initiatives to address climate change, could have a long-term material adverse effect on our business, financial condition, or results of operations. In addition, from time to time we establish and publicly announce goals and commitments related to corporate social responsibility matters, including those related to reducing our impact on the environment.
Our ability to meet this and other related goals depends in part on significant technological advancements with respect to the development and availability of reliable, affordable, and sustainable alternative solutions, including electric and other alternative fuel vehicles as well as alternative energy sources, which may not be developed or be available to us in the timeframe needed to achieve these goals.
Our ability to meet these and other related goals depends in part on significant technological advancements with respect to the development and availability of reliable, affordable, and sustainable alternative solutions, including electric and other alternative fuel vehicles as well as alternative energy sources, which may not be developed or be available to us in the timeframe needed to achieve these goals.
Because we do not control the actual production of most of the products we sell, we are also subject to material supply chain interruptions, delays caused by interruption in production, and increases in product costs, including those resulting from product recalls or a need to find alternate materials or suppliers, based on conditions outside our control.
Because we do not control the actual production of most of the products we sell, we are also subject to supply chain interruptions, delays caused by interruption in production, and increases in product costs, including those resulting from product recalls or a need to find alternate materials or suppliers, based on conditions outside our control.
If we are unable to collect upon our accounts receivable as they come due in an efficient and timely manner, our business, financial condition, or results of operations may be materially adversely affected. Insurance and claims expenses could significantly reduce our profitability. Our future insurance and claims expenses might exceed historic levels, which could reduce our profitability.
If we are unable to collect upon our accounts receivable as they come due in an efficient and timely manner, our business, financial condition, or results of operations could be materially adversely affected. Insurance and claims expenses could significantly reduce our profitability. Our future insurance and claims expenses might exceed historic levels, which could reduce our profitability.
In many instances, tobacco alternatives, such as e-vapor products, are not subject to federal, state, and local excise taxes like the sale of 15 conventional cigarettes or other tobacco products. We expect consumption trends of legal cigarette products will continue to be negatively impacted by the factors described above.
In many instances, tobacco alternatives, such as e-vapor products, are not subject to federal, state, and local excise taxes like the sale of conventional cigarettes or other tobacco products. We expect consumption trends of legal cigarette products will continue to be negatively impacted by the factors described above.
Certain of our customers have from time to time experienced bankruptcy, insolvency, and/or an inability to pay their debts to us as they come due. If our customers suffer significant financial difficulty, they may be unable to pay their debts to us timely or at all, which could have a material adverse effect on our results of operations.
Certain of our customers have from time to time experienced bankruptcy, insolvency, or an inability to pay their debts to us as they come due. If our customers suffer significant financial difficulty, they may be unable to pay their debts to us timely or at all, which could have a material adverse effect on our results of operations.
In addition, even when our contracts with these customers are not contested, if customers are unable to meet their obligations on a timely basis, it could adversely affect our ability to collect receivables. Further, we may have to negotiate significant discounts and/or extended financing terms with these customers in such a situation.
In addition, even when our contracts with these customers are not contested, if customers are unable to meet their obligations on a timely basis, it could adversely affect our ability to collect receivables. Further, we may have to negotiate significant discounts or extended financing terms with these customers in such a situation.
Our results of operations also may be adversely affected by expenses we incur in making acquisitions, by amortization of acquisition-related intangible assets with definite lives and by additional depreciation attributable to acquired assets. Moreover, in connection with contemplated or completed acquisitions or divestitures, we may incur related asset impairment charges that reduce our profitability.
Our results of operations also may be adversely affected by expenses we incur in making acquisitions, by amortization of acquisition-related intangible assets with definite lives and by additional depreciation attributable to acquired assets. Moreover, in connection with contemplated or completed acquisitions, we may incur related asset impairment charges that reduce our profitability.
Furthermore, our business model requires us to maintain an inventory of products, and changes in price levels between the time that we acquire inventory from our suppliers and the time we sell the inventory to our customers could lead to unexpected shifts in demand for our products or could require us to sell inventory at 11 lesser profit or a loss.
Furthermore, our business model requires us to maintain an inventory of products, and changes in price levels between the time that we acquire inventory from our suppliers and the time we sell the inventory to our customers could lead to unexpected shifts in demand for our products or could require us to sell inventory at lesser profit or a loss.
These covenants limit the ability of our subsidiaries to, among other things: • incur, assume, or permit to exist additional indebtedness or guarantees; • incur liens; • make investments and loans; 18 • pay dividends, make payments, or redeem or repurchase capital stock; • engage in mergers, liquidations, dissolutions, asset sales, and other dispositions (including sale leaseback transactions); • amend or otherwise alter terms of certain indebtedness; • enter into agreements limiting subsidiary distributions or containing negative pledge clauses; • engage in certain transactions with affiliates; • alter the business that we conduct; • change our fiscal year; and • engage in any activities other than permitted activities.
These covenants limit the ability of our subsidiaries to, among other things: • incur, assume, or permit to exist additional indebtedness or guarantees; • incur liens; • make investments and loans; • pay dividends, make payments, or redeem or repurchase capital stock; • engage in mergers, liquidations, dissolutions, asset sales, and other dispositions (including sale leaseback transactions); • amend or otherwise alter terms of certain indebtedness; • enter into agreements limiting subsidiary distributions or containing negative pledge clauses; • engage in certain transactions with affiliates; 17 • alter the business that we conduct; • change our fiscal year; and • engage in any activities other than permitted activities.
Further, as we pursue our strategy to grow through acquisitions and to pursue new initiatives that improve our operations and cost structure, we are also expanding our information technologies, resulting in a larger technological presence and corresponding 10 exposure to cybersecurity risk.
Further, as we pursue our strategy to grow through acquisitions and to pursue new initiatives that improve our operations and cost structure, we are also expanding our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.
While we remain committed to being responsive to climate change and reducing our GHG emissions, there can be no assurance that our goals and strategic plans to achieve those goals will be successful, that the costs related to climate transition will not be higher than expected, that the necessary technological advancements will occur in the timeframe we expect, or at all, or that proposed regulation or deregulation related to climate change will not have a negative competitive impact, any one of which could have a material adverse effect on our business, financial condition, or results of operations.
While we remain committed to being responsive to climate change and reducing our GHG emissions, there can be no assurance that our goals and strategic plans to achieve those goals will be successful, that the costs incurred will not be higher than expected, that the necessary technological advancements will occur in the timeframe we expect, or at all, or that proposed regulation or deregulation related to climate change will not have a negative competitive impact, any one of which could have a material adverse effect on our business, financial condition, or results of operations.
Our success depends on our ability to grow our business, including through increasing our independent sales, expanding our Performance Brands, making strategic acquisitions, and achieving improved operating efficiencies as we continue to expand and diversify our customer base.
Our success depends on our ability to grow our business, including through increasing our independent and organic sales, expanding our Performance Brands, making strategic acquisitions, and achieving improved operating efficiencies as we continue to expand and diversify our customer base.
If any of these proceedings were to be determined adversely to us or a settlement involving a payment of a material sum of money were to occur, it could materially and adversely affect our profits or ability to operate our business.
If any of these proceedings were to be determined adversely to us or a settlement involving a payment of a material sum of money were to occur, it could materially adversely affect our profits or ability to operate our business.
If we do not have adequate insurance or contractual indemnification available, the liability relating to defective products could adversely affect our business, financial condition, or results of operations.
If we do not have adequate insurance or contractual indemnification available, the liability relating to defective products could materially adversely affect our business, financial condition, or results of operations.
Our ability to control costs and to maximize profits, as well as to serve customers effectively, depends on the reliability of our information technology systems and related data entry processes.
Our ability to control costs and to maximize profits, as well as to serve customers effectively and efficiently, depends on the reliability of our information technology systems and related data entry processes.
Any such shortage would decrease our ability to serve our customers effectively. Such a shortage would also likely lead to higher wages for employees and a corresponding reduction in our profitability.
Any such shortage would decrease our ability to serve our customers effectively. Such a shortage could also likely lead to higher wages for employees and a corresponding reduction in our profitability.
Furthermore, while we have been successful in the past in implementing fuel surcharges to offset fuel cost increases, we may not be able to do so in the future.
Furthermore, 9 while we have been successful in the past in implementing fuel surcharges to offset fuel cost increases, we may not be able to do so in the future.
Our operations are subject to regulation by state and local health departments, the USDA, and the FDA, which generally impose standards for product quality and sanitation and are responsible for the administration of bioterrorism legislation affecting the foodservice industry. These government authorities regulate, among other things, the processing, packaging, storage, distribution, advertising, and labeling of our products.
Food Safety: Our operations are subject to regulation by state and local health departments, the USDA, and the FDA, which generally impose standards for product quality and sanitation and are responsible for the administration of bioterrorism legislation affecting the foodservice industry. These government authorities regulate, among other things, the processing, packaging, storage, distribution, advertising, and labeling of our products.
We often do not have exclusive service agreements with our customers and our customers may switch to other distributors if those distributors can offer lower prices, differentiated products, or customer service that is perceived to be superior. Such changes may occur particularly during periods of economic uncertainty or significant inflation.
We often do not have exclusive service agreements with our customers, and our customers may switch to other distributors if those distributors can offer lower prices, differentiated products, or customer service that is perceived to be superior. Such changes may occur particularly during periods of economic uncertainty, including uncertainty due to significant inflation.
Additionally, we may be 13 unable to retain qualified management and other key personnel employed by acquired companies and may fail to build a network of acquired companies in new markets. We could face significantly greater competition from broadline foodservice distributors in these markets than we face in our existing markets. We regularly evaluate opportunities to acquire other companies.
Additionally, we may be unable to retain qualified management and other key personnel employed by acquired companies and may fail to build a network of acquired companies in new markets. We could also face significantly greater competition from broadline foodservice distributors in these markets than we face in our existing markets. We regularly evaluate opportunities to acquire other companies.
If additional portions of our workforce became subject to collective bargaining agreements, this could result in increased costs of doing business as 9 we would become subject to mandatory, binding arbitration or labor scheduling, labor costs, and standards, which could adversely impact our results of operations. We are subject to a wide range of labor costs.
If additional portions of our workforce became subject to collective bargaining agreements, this could result in increased costs of doing business as we would become subject to mandatory, binding arbitration or labor scheduling, elevated labor costs, and standards, which could adversely impact our results of operations. We are subject to a wide range of labor costs.
Information technology systems evolve rapidly and in order to compete effectively we are required to integrate new technologies in a timely and cost-effective manner. For example, we may incorporate artificial intelligence (AI) solutions into our platform, offerings, services and features, and these applications may become important in our operations over time.
Information technology systems evolve rapidly, and in order to compete effectively we are required to integrate new technologies in a timely and cost-effective manner. For example, we may incorporate AI solutions into our platform, offerings, services and features, and these applications may become important in our operations over time.
In addition, we could incur investigation, remediation, or other costs related to environmental conditions at our currently or formerly owned or operated properties. Finally, we are subject to legislation, regulation and other matters regarding the marketing, distribution, sale, taxation and use of cigarette, tobacco and alternative nicotine products.
In addition, we could incur investigation, remediation, or other costs related to environmental conditions at our currently or formerly owned or operated properties. Cigarette, Tobacco and Alternative Nicotine Products: Finally, we are subject to and/or impacted by legislation, regulation and other matters regarding the marketing, distribution, sale, taxation and use of cigarette, tobacco and alternative nicotine products.
Our level of indebtedness could have important consequences for us, including: • requiring us to utilize a substantial portion of our cash flows from operations to make payments on our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, development activity, share repurchases and other general corporate purposes; • increasing our vulnerability to adverse economic, industry, or competitive developments; • exposing us to the risk of increased interest rates to the extent our borrowings are at variable rates of interest; 17 • making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing our indebtedness; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
Our level of indebtedness could have important consequences for us, including: • requiring us to utilize a substantial portion of our cash flows from operations to make payments on our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, development activity, share repurchases and other general corporate purposes; • increasing our vulnerability to adverse economic, industry, or competitive developments; • exposing us to the risk of increased interest rates to the extent our borrowings are at variable rates of interest or our interest rate hedges are ineffective; 16 • making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing our indebtedness; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who may be less leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
The theft, destruction, loss, misappropriation, release of sensitive or confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, including our third-party service providers, suppliers, and customers, could result in business disruption, a disruption in our supply chain, or reduced customer orders, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability, and remediation costs, which could adversely affect our business, financial condition, or results of operations.
The theft, destruction, loss, misappropriation, release of sensitive or confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, including our third-party service providers, suppliers, and customers, could result in business disruption, a disruption in our supply chain, or reduced customer orders, negative publicity, brand damage, violation of data and other privacy laws, loss of customers, potential liability, and remediation costs, which could materially adversely affect our business, financial condition, or results of operations.
As a result, we may not be able to recover the costs incurred in developing our new projects and initiatives or to realize their intended or projected benefits, which could have a material adverse effect on our business, financial condition, or results of operation.
As a result, we may not be able to recover the costs incurred in developing our new projects and initiatives or to realize their intended or projected benefits, which could have a material adverse effect on our business, financial condition, or results of operations.
The failure of our information technology systems, including those managed by third-party service providers, to perform as we anticipate could disrupt our business and could result in transaction errors, processing inefficiencies, and the loss of sales and customers, causing our business and results of operations to suffer.
The failure of our information technology systems, including those managed by third-party service providers, to perform as we anticipate could disrupt our business and could result in transaction errors, processing inefficiencies, increased costs, and the loss of sales and customers, causing our business and results of operations to suffer.
Anything that damages our reputation, or the public’s confidence in our products, services, facilities, delivery fleet, operations, or employees, whether or not justified, including adverse publicity about the quality, safety, or integrity of our products, could quickly affect our net sales and profits.
Anything that damages our reputation, or the public’s confidence in our products, services, facilities, delivery fleet, operations, or employees, whether or not justified, including adverse publicity about the quality, safety, or integrity of our products, could negatively affect our net sales and profits.
Any prolonged labor shortage or period of high employee turnover could have an adverse impact on our productivity and have an adverse effect on our business, financial condition and results of operations. Further, we continue to assess our healthcare benefit costs.
Any prolonged labor shortage or period of high employee turnover could have an adverse impact on our productivity and have a material adverse effect on our business, financial condition and results of operations. Further, we continue to assess our healthcare benefit costs.
Furthermore, both the price and supply of fuel are unpredictable and fluctuate based on events outside our control, including geopolitical developments (such as the war in the Ukraine), supply and demand for oil and gas, actions by the Organization of Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns, and environmental concerns.
Furthermore, both the price and supply of fuel are unpredictable and fluctuate based on events outside our control, including geopolitical developments (such as the war in the Ukraine and the conflict in the Middle East), supply and demand for oil and gas, actions by the Organization of Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns, and environmental concerns.
Any change in such practices that results in the reduction or elimination of promotional allowances could be disruptive to us and the industry as a whole and could have a material adverse effect on our business, financial condition, or results of operations. Our growth strategy may not achieve the anticipated results.
Any change in such practices that results in the reduction or elimination of promotional allowances could be disruptive to us and the industry as a whole and could have a material adverse effect on our business, financial condition, or results of operations. Our growth and innovation strategies may not achieve the anticipated results.
Additionally, as a result of the Cheney Brothers Transaction, rating agencies may take negative actions against our credit ratings, which may increase our financing costs, including in connection with the financing of the Cheney Brothers Transaction.
Additionally, as a result of the Cheney Brothers Acquisition, rating agencies may take negative actions against our credit ratings, which may increase our financing costs, including in connection with the financing of the Cheney Brothers Acquisition.
In fiscal 2024, product cost inflation contributed to an increase in selling price per case and an increase in net sales. However, sustained inflationary pressure and macroeconomic challenges could negatively affect consumer discretionary spending decisions within our customers’ establishments, which could negatively impact our sales.
In fiscal 2025, product cost inflation contributed to an increase in selling price per case and an increase in net sales. However, sustained inflationary pressure and macroeconomic 7 challenges could negatively affect consumer discretionary spending decisions within our customers’ establishments, which could negatively impact our sales.
Our profit levels may be negatively affected during periods of product cost deflation, even though our gross profit percentage may remain relatively constant or even increase.
Our sales and profit levels may be negatively affected during periods of product cost deflation, even though our gross profit percentage may remain relatively constant or even increase.
Additionally, we could become the subject of future claims by third parties, including our employees; suppliers, customers, and other counterparties; our investors; or regulators. Any significant adverse judgments or settlements could reduce our profits and could limit our ability to operate our business.
Additionally, we could become 15 the subject of future claims by third parties, including our employees; suppliers, customers, and other counterparties; our investors; or regulators. Any significant adverse judgments or settlements could reduce our profits and could limit our ability to operate our business or adversely affect our reputation.
Our business could be negatively impacted by reduced demand for our products related to unfavorable macroeconomic conditions triggered by developments beyond our control, including geopolitical events, health crises (including pandemics and epidemics), and other events that trigger economic volatility.
Our business could be negatively impacted by reduced demand for our products related to unfavorable macroeconomic conditions triggered by developments beyond our control, including geopolitical events, trade policies (including tariff increases), health crises (including pandemics and epidemics), and other events that trigger economic volatility.
Prolonged periods of product cost inflation also may have a negative impact on our profit margins and earnings to the extent such product cost increases are not passed on to customers because of their resistance to higher prices. For example, we experienced inflation of 3.7% for fiscal 2024, which increased our product costs and decreased profit margins.
Prolonged periods of product cost inflation also may have a negative impact on our profit margins and earnings to the extent such product cost increases are not passed on to customers because of their resistance to higher prices. For example, we experienced inflation of 4.7% for fiscal 2025, which increased our product costs.
Increased compliance costs and expenses due to the impacts of climate change on our business, as well as additional legal or regulatory requirements regarding climate change or designed to reduce or mitigate the effects of carbon dioxide and other GHG emissions on the environment, particularly diesel engine emissions, may cause disruptions in, or an increase in the costs associated with, the running of our business, particularly with regard to our distribution and supply chain operations.
Increased compliance costs and expenses due to these policies, as well as additional legal or regulatory requirements regarding climate change, including those designed to reduce or mitigate the effects of carbon dioxide and other GHG emissions on the environment, particularly diesel engine emissions, may cause disruptions in, or an increase in the costs associated with, the running of our business, 14 particularly with regard to our distribution and supply chain operations.
Extreme weather conditions and natural disasters may interrupt our business or our customers’ businesses. Many of our facilities and our customers’ facilities are located in areas that may be subject to extreme and occasionally prolonged weather conditions, including hurricanes, blizzards, earthquakes, and extreme heat or cold.
Extreme weather conditions and natural disasters may interrupt our business or our customers’ or suppliers’ businesses. Many of our facilities and our customers’ or suppliers’ facilities are located in areas that may be subject to extreme and occasionally prolonged weather conditions, including hurricanes, blizzards, earthquakes, and extreme heat or cold. Such extreme weather conditions could interrupt our operations.
Accordingly, we may not be able to compete effectively against current and potential future competitors, and increased competition may result in price reductions, reduced gross margins, and loss of market share, any of which could materially adversely affect our business, financial condition, or results of operations.
Accordingly, we may be unable to compete effectively against current and potential future competitors, and increased competition may result in price reductions or other concessions, reduced gross margins, and loss of market share, any of which could materially adversely affect our business, financial condition, or results of operations.
These conditions include labor shortages, work slowdowns, work interruptions, strikes or other job actions by employees of suppliers, government shutdowns, weather conditions (including as a result of climate change), crop conditions, product or raw material scarcity, water shortages, transportation interruptions, unavailability of fuel or increases in fuel costs, competitive demands, contamination with mold, bacteria or other contaminants, pandemics (such as the COVID-19 pandemic), natural disasters or other catastrophic events, including the outbreak of e. coli or similar food borne illnesses or acts of terrorism, international hostilities, civil insurrection, and social unrest.
These conditions include labor shortages, work slowdowns, work interruptions, strikes or other job actions by employees of suppliers, government shutdowns, weather conditions, crop conditions, product or raw material scarcity, water shortages, transportation interruptions, unavailability of fuel or increases in fuel costs, competitive demands, contamination with mold, bacteria or other contaminants, pandemics, natural disasters or other catastrophic events, including the outbreak of e. coli or similar food borne illnesses or acts of terrorism, international hostilities, civil insurrection, and social unrest.
Item 1A. Ris k Factors Risks Relating to Our Business and Industry Periods of difficult economic conditions, a public health crisis, other macroeconomic events and heightened uncertainty in the financial markets affect consumer spending and confidence, which can adversely affect our business. The foodservice industry is sensitive to national, regional and international economic conditions.
Item 1A. Risk Factors Risks Relating to Our Business and Industry Periods of difficult economic conditions, a public health crisis, other macroeconomic or geopolitical events and heightened uncertainty in the financial markets may affect consumer spending and confidence, which can adversely affect our business. The foodservice industry is sensitive to national, regional and international economic conditions.
Our results of operations and financial condition could be materially and adversely affected if (1) total claims costs significantly exceed our coverage limits, (2) we experience a claim in excess of our coverage limits, (3) our insurance carriers fail to pay on our insurance claims, (4) we experience a claim for which coverage is not provided, or (5) a large number of claims may cause our cost under our deductibles to differ from historic averages.
Our results of operations and financial condition could be materially adversely 11 affected if (1) total claims costs significantly exceed our coverage limits, (2) we experience a claim in excess of our coverage limits, (3) our insurance carriers fail to pay on our insurance claims, (4) we experience a claim for which coverage is not provided, (5) a large number of claims may cause our cost under our deductibles to differ from historic averages or (6) insurance carriers continue to significantly raise premiums in the industry and for our business.
Due to increases in the prices of cigarettes, restrictions on cigarette manufacturers’ marketing and promotions, increases in cigarette regulation and excise taxes, health concerns, increased pressure from anti-tobacco groups, the rise in popularity of tobacco alternatives, including e-vapor products and other alternative nicotine products, and other factors, cigarette consumption in the United States has been declining over the past few decades.
Due to restrictions on cigarette manufacturers’ marketing and promotions, decreases in social acceptance of cigarettes, increases in cigarette regulation and excise taxes, health concerns, increased pressure from anti-tobacco groups, the rise in popularity of tobacco alternatives, including legal and illicit e-vapor products, oral nicotine pouches, and other alternative nicotine products, increases in the prices of cigarettes, and other factors, cigarette consumption in the United States has been declining over the past few decades.
Despite our level of indebtedness, we and our subsidiaries will still be able to incur significant additional amounts of debt, which could further exacerbate the risks associated with our level of indebtedness. We and our subsidiaries may incur substantial additional indebtedness in the future.
Despite our level of indebtedness, we and our subsidiaries may still incur significant additional amounts of debt, which could further exacerbate the risks associated with our level of indebtedness. We and our subsidiaries may incur substantial additional indebtedness in the future.
Consumer eating habits can be affected by a number of factors, including changes in attitudes regarding diet and health or new information regarding the health effects of consuming certain foods.
Consumer eating habits can be affected by a number of factors, including changes in attitudes regarding diet and health, new information regarding the health effects of consuming certain foods or ingredients, or the impact of weight loss drugs.
Many of our customers are not obligated to continue purchasing products from us. Many of our customers buy from us pursuant to individual purchase orders, and we often do not enter into long-term agreements with these customers.
Many of our customers buy from us pursuant to individual purchase orders, and we often do not enter into long-term agreements with these customers.
The FSMA requires that the FDA impose comprehensive, prevention-based controls across the food supply, further regulates food products imported into the United States, and provides the FDA with mandatory recall authority.
The FSMA imposes comprehensive, prevention-based controls across the food supply industry, further regulates food products imported into the United States, and provides the FDA with mandatory recall authority.
Following completion of the Cheney Brothers Transaction, we may be unable to effectively and efficiently execute our integration plan, and the anticipated synergies and other benefits of the Cheney Brothers Transaction may not be realized or may not be realized within the expected timeframe.
Risks Relating to the Cheney Brothers Acquisition We may be unable to effectively and efficiently execute our integration plan, and the anticipated synergies and other benefits of the Cheney Brothers Acquisition may not be realized or may not be realized within the expected timeframe.
In addition, we had $2,678.8 million of availability under the ABL Facility (as defined below under "- Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Financing Activities" in Part II, Item 7 of this Form 10-K) after giving effect to $160.4 million of outstanding letters of credit and $96.3 million of lenders’ reserves under the ABL Facility.
In addition, we had $2,473.6 million of availability under the ABL Facility (as defined below under “— Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities ” in Part II, Item 7 of this Form 10-K) after giving effect to $171.4 million of outstanding letters of credit and $106.0 million of lenders’ reserves under the ABL Facility.
These factors, if 12 occurring over an extended period of time, could have a material adverse effect on our sales, margins, operating expenses, or results of operations. From time to time, we may enter into arrangements to manage our exposure to fuel costs.
These factors, if occurring over an extended period of time, could have a material adverse effect on our business, financial condition, or results of operations. From time to time, we may enter into arrangements to manage our exposure to fuel costs.
Competition in our industry is intense, and we may not be able to compete successfully. The foodservice distribution industry is highly competitive, with numerous regional, local, and specialty distributors. Certain of our competitors may have greater scale, financial and other resources than we do in certain markets.
The foodservice distribution industry is highly competitive, with numerous regional, local, and specialty distributors. Certain of our competitors may have greater scale, financial and other resources than we do in certain markets.
Although we believe our aggregate insurance limits should be sufficient to cover reasonably expected claims costs, including claims related to incidents within our operations and vehicle and driver related claims, it is possible that the amount of one or more claims could exceed our aggregate coverage limits. Insurance carriers have raised premiums for many businesses in our industry, including ours.
Although we believe our aggregate insurance limits should be sufficient to cover reasonably expected claims costs, including claims related to incidents within our operations and vehicle and driver related claims, it is possible that the amount of one or more claims could exceed our aggregate coverage limits.
Although our purchasing volume can sometimes provide an advantage when dealing with suppliers, suppliers may not provide the foodservice products and supplies needed by us in the quantities and at the prices requested.
We typically do not have long-term contracts with our suppliers. Although our purchasing volume can sometimes provide an advantage when dealing with suppliers, suppliers may not provide the foodservice products and supplies needed by us in the quantities and timeframe and at the prices requested.
The high cost of fuel can negatively affect consumer confidence and discretionary spending and, as a result, reduce the frequency and amount spent by consumers within our customers’ establishments for food away from home.
Fluctuations in fuel prices and other transportation costs could harm our business. The high cost of fuel can negatively affect consumer confidence and discretionary spending and, as a result, reduce the frequency and amount spent by consumers within our customers’ establishments for food away from home.
Achieving the anticipated benefits of the Cheney Brothers Transaction is subject to a number of uncertainties, including whether Cheney Brothers, which currently operates as an independent company, can be integrated with our business in an efficient and effective manner.
Achieving the anticipated benefits of the Cheney Brothers Acquisition is subject to a number of uncertainties, including whether Cheney Brothers, can be integrated with our business in an efficient and effective manner.
Our business is subject to significant governmental regulation, and costs or claims for non-compliance related to these requirements could adversely affect our business.
Risks Relating to Product Safety, Regulatory and Legal Matters Our business is subject to significant governmental regulation, and costs or claims for non-compliance related to these requirements could adversely affect our business.
In addition, we may determine that it is in our best interests to prioritize other business, social, governance, or sustainable investments over the achievement of our current goals based on economic, regulatory or social factors, business strategy, or other factors.
Our ability to meet these and other related goals also depends on the climate-related efforts and performance of our suppliers. In addition, we may determine that it is in our best interests to prioritize other business, social, governance, or sustainable investments over the achievement of our current goals based on economic, regulatory or social factors, business strategy, or other factors.
As of June 29, 2024, we had approximately 37,000 employees of whom approximately 2,245 were members of local unions associated with the International Brotherhood of Teamsters or other unions.
As of June 28, 2025, we had approximately [43,000] employees of whom approximately [2,400] were members of local unions associated with the International Brotherhood of Teamsters or other unions.
The effects of climate change may create financial and operational risks to our business, both directly and indirectly. There is an increased focus around the world by regulatory and legislative bodies at all levels towards policies relating to climate change and the impact of global warming, including the regulation of greenhouse gas (GHG) emissions, energy usage, and sustainability efforts.
There is an increased focus around the world by regulatory and legislative bodies at all levels towards policies relating to climate change and the impact of global warming, including the regulation of greenhouse gas (“GHG”) emissions, energy usage, and sustainability efforts.
We are also subject to regulation by state authorities for the accuracy of our weighing and measuring devices. Additionally, the Surface Transportation Board and the Federal Highway Administration regulate our trucking operations, and interstate motor carrier operations are subject to safety requirements prescribed by the U.S. Department of Transportation and other relevant federal and state agencies.
Additionally, the Surface Transportation Board and the Federal Highway Administration regulate our trucking operations, and interstate motor carrier operations are subject to safety requirements prescribed by the U.S. Department of Transportation and other relevant federal and state 13 agencies. Our suppliers are also subject to similar regulatory requirements and oversight.
We have experienced losses because of the inability to collect accounts receivable in the past and could experience increases in such losses in the future if our customers are unable to pay their debts to us when due.
Additionally, negative reaction to our marketing and advertising, including our social media content, could result in damage to our brands and reputation. We have experienced losses because of the inability to collect accounts receivable in the past and could experience increases in such losses in the future if our customers are unable to pay their debts to us when due.
We may not be able to realize benefits of acquisitions or successfully integrate the businesses we acquire. Our growth strategy includes growth through strategic acquisitions. If we are unable to integrate acquired businesses successfully or to realize anticipated economic, operational, and other benefits and synergies in a timely manner, our profitability could be adversely affected.
If we are unable to integrate acquired businesses successfully or to realize anticipated economic, operational, and other benefits and synergies in a timely manner, our profitability could be adversely affected.
A significant portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining. Following the acquisitions of Eby-Brown Company LLC (“Eby-Brown”) and Core-Mark, a significant portion of our sales volume depends upon the distribution of cigarettes and other tobacco products.
A significant portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining. 10 A significant portion of our sales volume depends upon the distribution of cigarettes and other tobacco products.
Furthermore, such extreme weather conditions may disrupt critical infrastructure in the United States and interrupt or impede access to our facilities or our customers’ facilities, all of which could have a material adverse effect on our business, financial condition, or results of operations. Fluctuations in fuel prices and other transportation costs could harm our business.
Furthermore, such extreme weather conditions may disrupt critical infrastructure and interrupt or impede access to our facilities or our customers’ or vendors’ facilities, reduce the number of consumers who visit our customers’ facilities in such areas, interrupt our suppliers’ production or shipments or increase our suppliers’ product costs, all of which could have a material adverse effect on our business, financial condition, or results of operations.
Any failure to adequately assess and identify cybersecurity risks associated with acquisitions and new initiatives could increase our susceptibility to such risks. We rely heavily on technology in our business and any technology disruption or delay in implementing new technology could adversely affect our business. The foodservice distribution industry is transaction intensive.
We rely heavily on technology in our business, and any technology disruption or delay in implementing new technology could adversely affect our business. The foodservice distribution industry is transaction intensive.
However, if one or more of our competitors in the foodservice distribution industry adopted an everyday low-price strategy, we would potentially be pressured to lower prices to our customers and would need to achieve cost savings to offset these reductions.
Further, although we have strategies to remain competitive in the marketplace by reducing our cost structure, if one or more of our competitors in the foodservice distribution industry adopted a lower cost structure, we would potentially be pressured to lower prices to our customers and would need to achieve cost savings to offset these reductions.
Sales of certain hemp-based CBD products are prohibited in some jurisdictions and the FDA and certain states and local governments may enact regulations that limit the marketing and use of such products.
We have expanded the product lines of our Specialty segment to include hemp-based CBD products authorized under the 2018 Farm Bill. Sales of certain hemp-based CBD products are prohibited in some jurisdictions and the FDA and certain states and local governments may enact regulations that limit the marketing and use of such products.
Our inability to anticipate and react to changing food costs through our sourcing and purchasing practices in the future could also have a material adverse effect on our business, financial condition, or results of operations. We face risks relating to labor relations, labor costs, and the availability of qualified labor.
Our inability to anticipate and react to changing food costs through our sourcing and purchasing practices in the future could have a material adverse effect on our business, financial condition, or results of operations. Competition in our industry is intense, and we may not be able to compete successfully.
In addition, cyber criminals are increasing their attacks on individual employees with business email compromise scams designed to trick victims into transferring sensitive data or funds, or steal credentials that compromise information systems. Moreover, the rapid evolution and increasing adoption of artificial intelligence technologies could both intensify our cybersecurity risks and introduce new risks.
In addition, cyber criminals are increasing their attacks on individual employees with business email compromise scams designed to trick victims into transferring sensitive data or funds, or steal credentials that compromise information systems.
Independent customers are also more likely to purchase our Performance Brands. Our ability to continue to penetrate this key customer type is critical to achieving increased operating profits.
We typically provide a higher level of services to our independent customers and are able to earn a higher operating margin on sales to independent customers. Independent customers are also more likely to purchase our Performance Brands. Our ability to continue to penetrate this key customer type is critical to achieving increased operating profits.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe believe that our Information Security Program aligns with industry frameworks and assesses security trends, and facilitates identification and reduction of vulnerabilities. Our cybersecurity strategy considers existing risks to our company and those that we are likely to encounter based on our industry, company profile, and business objectives.
Biggest changeOur cybersecurity strategy considers existing risks to our company and those that we are likely to encounter based on our industry, company profile, and business objectives. Consideration of risks from cybersecurity threats is a key component of our overall enterprise risk management strategy.
Accordingly, PFG has implemented a third-party risk management program to identify and oversee such risks. Our third-party risk assessment framework evaluates the cybersecurity practices and controls of third parties. Activities undertaken in relation to third parties may include due diligence inquiries, reviewing security policies and program capabilities, reviewing security certifications and results of independent 21 audits.
Accordingly, PFG has implemented a third-party risk management program to identify and oversee such risks. Our third-party risk assessment framework evaluates the cybersecurity practices and controls of third parties. Activities undertaken in relation to third parties may include due diligence inquiries, reviewing security policies and program capabilities, reviewing security certifications and results of independent audits.
We periodically perform tabletop exercises where we perform walkthroughs of cybersecurity incident situations to test our response plans. To date, we have not experienced any cybersecurity incidents that materially affected, or are likely to materially affect, our business strategy, results of operations, or financial condition, but future incidents cannot be predicted . See “ Item 1A.
We periodically perform tabletop exercises where we perform walkthroughs of cybersecurity incident situations to test our response plans. To date, we have not experienced any cybersecurity incidents that materially affected, or are likely to materially affect, our business strategy , results of operations, or financial condition, but future incidents cannot be predicted . See “ Part 1, Item 1A.
Additionally, we partner with independent third-party service providers to perform cybersecurity assessments, such as network and application penetration testing.
Additionally, we partner with independent third-party service providers to regularly perform cybersecurity assessments, such as network and application penetration testing.
In addition, the Technology and Cybersecurity Committee and the Board of Directors receive briefings from time to time from outside experts for an independent view on cybersecurity risks, including best practices and current trends in cybersecurity.
In addition, the Technology and Cybersecurity Committee and the Board of Directors receive briefings from time to time from outside experts for an independent view on cybersecurity risks and emerging cybersecurity threats, including best practices and current trends in cybersecurity .
Our CISO joined PFG following several years of experience working in information security consulting, including Big 4 Accounting and Assurance, as well as working in industries including banking and finance. 22
Our CISO joined PFG following several years of experience working in information security consulting, including Big 4 Accounting and Assurance, as well as working in industries including banking and finance. 19
Our CISO reports to our CIO and has more than 20 years of cybersecurity, technology assurance and controls experience, including 17 years as a Certified Information Systems Security Professional (CISSP) and 12 years at PFG in information security and compliance.
Our CISO reports to our CIO and has more than 20 years of cybersecurity, technology assurance and controls experience, including 18 years as a Certified Information Systems Security Professional (CISSP) and 13 years at PFG in information security and compliance.
Consideration of risks from cybersecurity threats is a key component of our overall enterprise risk management strategy. We have implemented a risk management program to identify and track information risks, including cybersecurity threats, from many different sources, including third parties, technology projects, acquisitions, risk assessments, technical assessments, and internal/external audits, and assesses them based on severity.
We have implemented a risk management program to identify and track information risks, including cybersecurity threats, from many different sources, including third parties, technology projects, acquisitions, risk assessments, technical assessments, and internal/external audits, and assess them based on severity.
Item 1C. Cybersecurity Risk Management and Strategy We rely upon information technology networks and systems to process, transmit, and store electronic information, and to manage or support virtually all of our business processes and activities. Accordingly, we maintain a comprehensive Information Security Program, anchored in a multi-tiered, defense-in-depth strategy designed to identify and mitigate risks from cybersecurity threats.
Item 1C. Cybersecurity 18 Risk Management and Strategy We rely upon information technology networks and systems to process, transmit, and store electronic information, and to manage or support virtually all of our business processes and activities. We also use mobile devices, social networking, and other online activities to connect with our employees, suppliers, business partners, and customers.
Added
Accordingly, we maintain a comprehensive Information Security Program, anchored in a multi-tiered, defense-in-depth strategy designed to identify and mitigate risks from cybersecurity threats. We believe that our Information Security Program aligns with industry frameworks and assesses security trends, and facilitates identification and reduction of vulnerabilities.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Foodservice Vistar Convenience Total Alabama 1 — — 1 Arkansas 1 — 1 2 Arizona 1 1 — 2 California 4 3 5 12 Colorado 1 1 1 3 Connecticut — 1 — 1 Florida 6 1 2 9 Georgia 3 1 2 6 Iowa 1 — 1 2 Illinois 2 1 1 4 Indiana 1 1 1 3 Kentucky 3 1 2 6 Louisiana 3 — — 3 Massachusetts 3 1 2 6 Maryland 2 — — 2 Maine 1 — 1 2 Michigan 1 1 1 3 Minnesota 3 1 1 5 Missouri 4 1 — 5 Mississippi 4 1 — 5 North Carolina 1 1 2 4 Nebraska 1 — — 1 New Jersey 3 2 — 5 New Mexico — — 2 2 Nevada — 1 1 2 Ohio 3 1 2 6 Oregon 1 1 1 3 Pennsylvania 2 1 2 5 South Carolina 3 — — 3 Tennessee 5 1 — 6 Texas 5 2 1 8 Utah — — 1 1 Virginia 4 — — 4 Vermont 2 — — 2 Washington — — 1 1 Wisconsin 3 1 1 5 Canada — — 4 4 Total 78 27 39 144 Our Foodservice “broad-line” customers are generally located no more than 200 miles from one of our distribution facilities, and national chain customers are generally located no more than 450 miles from one of our distribution facilities.
Biggest changeLocation Foodservice Convenience Specialty Total Alabama 1 — — 1 Arkansas 1 1 — 2 Arizona 1 — 1 2 California 4 5 3 12 Colorado 1 1 1 3 Connecticut — — 1 1 Florida 14 2 1 17 Georgia 3 2 1 6 Iowa 1 1 — 2 Illinois 2 1 1 4 Indiana 1 1 1 3 Kentucky 3 2 1 6 Louisiana 3 — — 3 Massachusetts 3 1 1 5 Maryland 2 — — 2 Maine 1 1 — 2 Michigan 1 1 1 3 Minnesota 3 1 1 5 Missouri 4 — 1 5 Mississippi 3 — 1 4 North Carolina 3 2 1 6 Nebraska 1 — — 1 New Jersey 3 — 2 5 New Mexico — 1 — 1 Nevada — 1 1 2 Ohio 3 3 1 7 Oregon 1 1 1 3 Pennsylvania 2 2 1 5 South Carolina 3 — — 3 Tennessee 5 — 1 6 Texas 5 2 2 9 Utah — 1 — 1 Virginia 4 — — 4 Vermont 2 — — 2 Washington — 1 — 1 Wisconsin 4 1 1 6 Canada — 4 — 4 Puerto Rico 1 — — 1 Total 89 39 27 155 Our Foodservice “broad-line” customers are generally located no more than 200 miles from one of our distribution facilities, and national chain customers are generally located no more than 450 miles from one of our distribution facilities.
The Convenience segment operates two additional facilities as a third-party logistics provider dedicated solely to supporting the logistics and management requirements of one of our customers. These distribution facilities are located in Arizona and Texas. Customer orders are typically assembled in our distribution facilities and then sorted, placed on pallets, and loaded onto trucks and trailers in delivery sequence.
The Convenience segment operates two additional facilities as a third-party logistics provider dedicated solely to supporting the logistics and management requirements of one of our customers. These distribution facilities are located in Arizona and Texas. 20 Customer orders are typically assembled in our distribution facilities and then sorted, placed on pallets, and loaded onto trucks and trailers in delivery sequence.
Our Foodservice segment operated 78 distribution centers, our Vistar segment operated 27 distribution centers, and our Convenience segment operated 39 distribution centers, all of which had an average square footage of approximately 200,000 square feet per facility.
Our Foodservice segment operated 89 distribution centers, our Convenience segment operated 39 distribution centers, and our Specialty segment operated 27 distribution centers, all of which had an average square footage of approximately 200,000 square feet per facility.
Of the 78 Foodservice distribution centers, 9 have meat cutting operations that provide custom-cut meat products and one has seafood processing operations that provide custom-cut and packed seafood to our customers and our other distribution centers.
Of the 89 Foodservice distribution centers, 11 have meat cutting operations that provide custom-cut meat products and two have seafood processing operations that provide custom-cut and packed seafood to our customers and our other distribution centers.
We use integrated computer systems to design and track efficient route sequences for the delivery of our products. 23 Our properties also include a combined headquarters facility for our corporate offices and the Foodservice segment that is located in Richmond, Virginia; a combined support service center and headquarters facility for Vistar that is located in Englewood, Colorado; headquarters for Convenience located in Westlake, Texas; locations to support Other segment operations; and other support service centers and corporate offices located in North America.
Our properties also include a combined headquarters facility for our corporate offices and the Foodservice segment that is located in Richmond, Virginia; a combined support service center and headquarters facility for Specialty that is located in Englewood, Colorado; a headquarters facility for Convenience located in Westlake, Texas; locations to support other segment operations; and other support service centers and corporate offices located in North America.
Item 2. P roperties As of June 29, 2024, we operated 144 distribution centers across our three reportable segments. Of our 144 facilities, we owned 62 facilities and leased the remaining 82 facilities.
Item 2. P roperties As of June 28, 2025, we operated 155 distribution centers across our three reportable segments. Of our 155 facilities, we owned 72 facilities and leased the remaining 83 facilities.
Deliveries are generally made in large tractor-trailers that we usually lease.
Deliveries are generally made in large tractor-trailers that we usually lease. We use integrated computer systems to design and track efficient route sequences for the delivery of our products.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeCommitments and Contingencies within the Notes to Consolidated Financial Statements included in Item 8 for disclosure of ongoing litigation. Item 4. Mine Saf ety Disclosures Not Applicable 24 PART II
Biggest changeCommitments and Contingencies within the Notes to Consolidated Financial Statements included in Item 8 for disclosure of ongoing litigation. Item 4. Mine Saf ety Disclosures Not Applicable. 21 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+3 added−1 removed3 unchanged
Biggest changeRepurchases under this program depend upon market place conditions and other factors, including compliance with the covenants in the agreements governing our existing indebtedness. 25 Stock Performance Graph The performance graph below compares the cumulative total shareholder return of the Company’s common stock over the previous five fiscal years, with the cumulative total return for the same period of the S&P 500 index and the S&P Midcap 400 Food, Beverage & Tobacco Industry Group.
Biggest changeAs of June 28, 2025, $500 million remained available for additional share repurchases. 22 Stock Performance Graph The stock performance graph below compares the cumulative total stockholder return of the Company’s common stock with the cumulative total return of the S&P 500 Index and the S&P MidCap 400 Food Beverage & Tobacco Industry Group Index for the last five fiscal years.
Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market and Price Range of Common Stock Our common stock is listed on the New York Stock Exchange under the symbol “PFGC.” Approximate Number of Common Shareholders At the close of business on August 7, 2024, there were approximately 1,378 holders of record of our shares of common stock.
Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market and Price Range of Common Stock Our common stock is listed on the New York Stock Exchange under the symbol “PFGC.” Approximate Number of Common Shareholders At the close of business on August 6, 2025, there were approximately 1,260 holders of record of our shares of common stock.
The graph assumes the investment of $100 in our common stock and each of the indices as of the market close on June 28, 2019 and the reinvestment of dividends, as applicable.
The graph assumes the investment of $100 in our common stock and each of the indices as of the market close on June 26, 2020, the last trading day of fiscal 2020, and the reinvestment of dividends, as applicable.
Performance data for the Company, the S&P 500 index, and the S&P Midcap 400 Food, Beverage & Tobacco Industry Group is provided as of the last trading day of each of our last five fiscal years. The stock price performance graph is not necessarily indicative of future stock price performance. Item 6. [ R eserved] 26
Performance data for the Company, the S&P 500 Index, and the S&P MidCap 400 Food Beverage & Tobacco Industry Group Index is provided as of the last trading day of each of our last five fiscal years.
Because we are a holding company, and have no direct operations, we will only be able to pay dividends from funds we receive from our subsidiaries. Recent Sales of Unregistered Securities None.
Because we are a holding company, and have no direct operations, we will only be able to pay dividends from funds we receive from our subsidiaries. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer The following table provides information relating to our purchases of the Company's common stock during the fourth quarter of fiscal 2025.
Period Total Number of Shares Purchased(1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan(2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan (in millions)(2) March 31, 2024—April 27, 2024 128 $ 70.30 — $ 210.6 April 28, 2024—May 25, 2024 143 $ 68.76 — $ 210.6 May 26, 2024—June 29, 2024 241 $ 69.67 — $ 210.6 Total 512 $ 69.57 — (1) During the fourth quarter of fiscal 2024, the Company purchased 512 shares of the Company's common stock via share withholding for payroll tax obligations due from employees in connection with the delivery of shares of the Company's common stock under our incentive plans.
Period Total Number of Shares Purchased (1)(2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan (In millions) (2) March 30, 2025—April 26, 2025 162,633 $ 74.97 162,052 $ 154.2 April 27, 2025—May 24, 2025 15,313 $ 80.00 15,095 $ 153.0 May 25, 2025—June 28, 2025 — — — $ 500.0 Total 177,946 $ 75.41 177,147 (1) During the fourth quarter of fiscal 2025, the Company repurchased 799 shares of the Company's common stock via share withholding for payroll tax obligations due from employees in connection with the delivery of shares of the Company's common stock under our incentive plans.
(2) On November 16, 2022, the Board of Directors authorized a share repurchase program for up to $300 million of the Company’s outstanding common stock. The share repurchase program has an expiration date of November 16, 2026 and may be amended, suspended, or discontinued at any time at the Company’s discretion, subject to compliance with applicable laws.
This authorization replaces the previously authorized $300 million share repurchase program. The new share repurchase program has an expiration date of May 27, 2029 and may be amended, suspended, or discontinued at any time at the Board’s discretion, subject to compliance with applicable laws.
Removed
Purchases of Equity Securities by the Issuer The following table provides information relating to our purchases of shares of the Company's common stock during the fourth quarter of fiscal 2024.
Added
(2) In November 2022, the Board of Directors of the Company authorized a share repurchase program for up to $300 million of the Company’s outstanding common stock. On May 27, 2025, the Board of Directors authorized a new share repurchase program for up to $500 million of the Company’s outstanding common stock.
Added
Repurchases under this program depend upon marketplace conditions and other factors, including compliance with the covenants under the ABL Facility and the indentures governing the Notes due 2027, Notes due 2029, and Notes due 2032.
Added
The stock performance graph is not necessarily indicative of future performance. 6/26/2020 7/2/2021 7/1/2022 6/30/2023 6/28/2024 6/27/2025 Performance Food Group Company $ 100 $ 172 $ 170 $ 216 $ 237 $ 314 S&P 500 100 147 131 155 193 221 S&P MidCap 400 Food Beverage & Tobacco Industry Group 100 149 127 142 143 139 Item 6. [ R eserved] 23

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

88 edited+33 added−49 removed35 unchanged
Biggest changeThe following tables set forth net sales and Adjusted EBITDA by segment for the periods indicated (dollars in millions): Net Sales Fiscal year ended Fiscal 2024 Fiscal 2023 June 29, 2024 July 1, 2023 July 2, 2022 Change % Change % Foodservice $29,024.6 $28,490.6 $26,579.2 $534.0 1.9 $1,911.4 7.2 Vistar 4,789.8 4,549.3 3,681.8 240.5 5.3 867.5 23.6 Convenience 24,177.0 24,119.6 20,603.3 57.4 0.2 3,516.3 17.1 Corporate & All Other 946.1 700.4 526.5 245.7 35.1 173.9 33.0 Intersegment Eliminations (656.3) (605.2) (496.7) (51.1) (8.4) (108.5) (21.8) Total net sales $58,281.2 $57,254.7 $50,894.1 $1,026.5 1.8 $6,360.6 12.5 Segment Adjusted EBITDA Fiscal year ended Fiscal 2024 Fiscal 2023 June 29, 2024 July 1, 2023 July 2, 2022 Change % Change % Foodservice $1,001.2 $943.6 $786.5 $57.6 6.1 $157.1 20.0 Vistar 340.6 325.3 193.0 15.3 4.7 132.3 68.5 Convenience 363.6 328.8 257.1 34.8 10.6 71.7 27.9 Corporate & All Other (199.3) (234.3) (216.8) 35.0 14.9 (17.5) (8.1) Total Adjusted EBITDA $1,506.1 $1,363.4 $1,019.8 $142.7 10.5 $343.6 33.7 Segment Results—Foodservice Fiscal year ended June 29, 2024 compared to fiscal year ended July 1, 2023 Net Sales Net sales for Foodservice increased $534.0 million, or 1.9%, from fiscal 2023 to fiscal 2024.
Biggest changeCorporate & All Other is comprised of unallocated corporate overhead and certain operations that are not considered separate reportable segments based on their size. 28 The following tables set forth net sales and Adjusted EBITDA by reportable segment and the reconciling items for Corporate & All Other and eliminations for the periods indicated (dollars in millions): Net Sales Fiscal Year Ended Fiscal 2025 Fiscal 2024 June 28, 2025 June 29, 2024 July 1, 2023 Change % Change % Foodservice $33,646.1 $29,061.5 $28,527.5 $4,584.6 15.8 $534.0 1.9 Convenience 24,507.5 24,177.0 24,119.6 330.5 1.4 57.4 0.2 Specialty 4,905.0 4,789.8 4,549.3 115.2 2.4 240.5 5.3 Total Segments $63,058.6 $58,028.3 $57,196.4 $5,030.3 8.7 $831.9 1.5 Corporate & All Other 955.0 909.2 663.5 45.8 5.0 245.7 37.0 Intersegment Eliminations (714.7) (656.3) (605.2) (58.4) (8.9) (51.1) (8.4) Total net sales $63,298.9 $58,281.2 $57,254.7 $5,017.7 8.6 $1,026.5 1.8 Segment Adjusted EBITDA Fiscal Year Ended Fiscal 2025 Fiscal 2024 June 28, 2025 June 29, 2024 July 1, 2023 Change % Change % Foodservice $1,221.6 $982.2 $924.5 $239.4 24.4 $57.7 6.2 Convenience 407.3 363.6 328.8 43.7 12.0 34.8 10.6 Specialty 348.2 340.6 325.3 7.6 2.2 15.3 4.7 Total Segments $1,977.1 $1,686.4 $1,578.6 $290.7 17.2 $107.8 6.8 Corporate & All Other (210.2) (180.3) (215.2) (29.9) (16.6) 34.9 16.2 Total Adjusted EBITDA $1,766.9 $1,506.1 $1,363.4 $260.8 17.3 $142.7 10.5 Segment Results—Foodservice Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024 Net Sales Net sales for Foodservice increased $4.6 billion, or 15.8%, from fiscal 2024 to fiscal 2025.
For example, Adjusted EBITDA: • excludes certain tax payments that may represent a reduction in cash available to us; • does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future; • does not reflect changes in, or cash requirements for, our working capital needs; and 28 • does not reflect the significant interest expense, or the cash requirements, necessary to service our debt.
For example, Adjusted EBITDA: • excludes certain tax payments that may represent a reduction in cash available to us; • does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future; • does not reflect changes in, or cash requirements for, our working capital needs; and • does not reflect the significant interest expense, or the cash requirements, necessary to service our debt.
In performing step zero for our 38 goodwill impairment test, we are required to make assumptions and judgments, including but not limited to: the evaluation of macroeconomic conditions as related to our business, industry and market trends, and the overall future financial performance of our reporting units and future opportunities in the markets in which they operate.
In performing step zero for our goodwill impairment test, we are required to make assumptions and judgments, including but not limited to: the evaluation of macroeconomic conditions as related to our business, industry and market trends, and the overall future financial performance of our reporting units and future opportunities in the markets in which they operate.
In addition, depending on conditions in the credit and capital markets and other factors, we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness, make investments or acquisitions or for other purposes. Any new debt may be secured debt.
In addition, depending on conditions in the credit and capital markets and other factors, 30 we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness, make investments or acquisitions or for other purposes. Any new debt may be secured debt.
If the incentives are not probable and reasonably estimable, we record the incentives as the underlying objectives or milestones are achieved. We record annual and multi-year incentives when earned, generally over the agreement period. We use current and historical purchasing data, forecasted purchasing volumes, and other factors in estimating whether the underlying objectives or milestones will be achieved.
If the incentives are not probable and reasonably estimable, we record the incentives as the underlying objectives or milestones are achieved. We record annual and multi-year 33 incentives when earned, generally over the agreement period. We use current and historical purchasing data, forecasted purchasing volumes, and other factors in estimating whether the underlying objectives or milestones will be achieved.
Our net sales are driven by changes in case volumes, product inflation that is reflected in the pricing of our products, and mix of products sold. Gross Profit Gross profit is equal to our net sales minus our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of supplier consideration) and inbound freight.
Our net sales are driven by changes in case volumes, product inflation that is reflected in the pricing of our products, mix of products sold, and acquisitions. Gross Profit Gross profit is equal to our net sales minus our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of supplier consideration) and inbound freight.
Adjusted EBITDA Management measures operating performance based on our Adjusted EBITDA, defined as net income before interest expense, interest income, income and franchise taxes, and depreciation and amortization, further adjusted to exclude certain items that we do not consider part of our core operating results.
Adjusted EBITDA Management measures operating performance based on our Adjusted EBITDA, defined as net income before interest expense, interest income, income and franchise taxes, and depreciation and amortization, further adjusted to exclude certain items that we do 25 not consider part of our core operating results.
The foodservice distribution industry is also sensitive to national and regional economic conditions, such as changes in consumer spending, changes in consumer confidence, changes in the rate of inflation and fuel prices, supply chain disruptions, and labor shortages. 27 • Food distribution market structure.
The foodservice distribution industry is also sensitive to national and regional economic conditions, such as changes in consumer spending, changes in consumer confidence, changes in the rate of inflation and fuel prices, supply chain disruptions, and labor shortages. • Food distribution market structure.
In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates, and beliefs and involve numerous risks and uncertainties, including those described in Item 1A. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Form 10-K.
In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates, and beliefs and involve numerous risks and uncertainties, including those described in Item 1A. Risk Factors. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Form 10-K.
If impairment indicators are present after performing step zero, we would perform a quantitative impairment analysis to estimate the fair value of goodwill. During fiscal 2024, fiscal 2023, and fiscal 2022, we performed the step zero analysis for our goodwill impairment test and no further quantitative impairment test was deemed necessary for our reporting units within our reportable segments.
If impairment indicators are present after performing step zero, we would perform a quantitative impairment analysis to estimate the fair value of goodwill. During fiscal 2025, fiscal 2024, and fiscal 2023, we performed the step zero analysis for our goodwill impairment test and no further quantitative impairment test was deemed necessary for our reporting units within our reportable segments.
Our Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit “Chain” restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments.
Our Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit chain restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments.
Based on our assessment, there were no impairments recorded in fiscal 2024 or fiscal 2022. There was an immaterial impairment of goodwill related to reporting units within the Corporate & All Other segment for fiscal 2023. Recently Issued Accounting Pronouncements Refer to Note 3.
Based on our assessment, there were no impairments recorded in fiscal 2025 or fiscal 2024. There was an immaterial impairment of goodwill related to reporting units within the Corporate & All Other segment for fiscal 2023. Recently Issued Accounting Pronouncements Refer to Note 3.
Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read together with the audited Consolidated Financial Statements and the Notes thereto included in Item 8. Financial Statements and Supplementary Data of this Form 10-K.
Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read together with the audited Consolidated Financial Statements and the Notes thereto included in Item 8. Financial Statements and Supplementary Data (“Item 8”) of this Form 10-K.
Segment Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, depreciation, and amortization and excludes certain items that the Company does not consider part of its segments’ core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives. See Note 19.
Segment Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, depreciation, and amortization and excludes certain items that the Company does not consider part of its segments’ core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives.
Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and closings of statutes of limitations. Such adjustments are reflected in the tax provision as appropriate.
Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and expirations of statutes of limitations. Such adjustments are reflected in the tax provision as appropriate.
Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, and groceries to candy, snacks, beverages, cigarettes, and other tobacco products. We also sell disposables, cleaning and kitchen supplies, and related products used by our customers.
Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, and groceries to candy, snacks, and beverages. We also sell disposables, cleaning and kitchen supplies, and related products used by our customers, as well as cigarettes and other nicotine products.
Liquidity and Capital Resources We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit facilities, operating and finance leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our credit facilities or with the net proceeds from the issuances of senior notes.
Liquidity and Capital Resources We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our ABL Facility, operating and finance leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our ABL Facility or with the net proceeds from the issuances of senior notes.
Consideration received for incentives that contain volume and growth rebates, annual incentives, and multi-year incentives are recorded as a reduction of cost of goods sold. We systematically and rationally allocate the consideration for these incentives to each of the underlying transactions that results in progress by the Company toward earning the incentives.
Consideration received for incentives that contain volume and growth rebates, annual incentives, and multi-year incentives are recorded as a reduction of cost of goods sold. We rationally allocate the consideration for these incentives to each underlying transaction that results in progress by the Company toward earning the incentives.
Under our credit agreement and indentures, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and making restricted payments is tied to ratios based on Adjusted EBITDA (as defined in our credit agreement and indentures). Our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies.
Under our ABL Facility and indentures, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and making restricted payments is tied to ratios based on Adjusted EBITDA (as defined in the ABL Facility and indentures). Our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies.
Our borrowing levels are subject to seasonal fluctuations, as well as procurement and acquisition activities. We borrow under our credit facilities or pay them down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.
Our borrowing levels are subject to seasonal fluctuations, as well as procurement and acquisition activities. We borrow under our credit facility or pay it down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.
The following includes a comparison of our consolidated results of operations, our segment results and financial position for fiscal years 2024 and 2023.
The following includes a comparison of our consolidated results of operations, our segment results and financial position for fiscal years 2025 and 2024.
As market conditions warrant, we may from time to time seek to repurchase our securities or loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such repurchases may be funded by incurring new debt, including additional borrowings under our credit facilities.
As market conditions warrant, we may from time to time seek to repurchase our securities or loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such repurchases may be funded by incurring new debt, including additional borrowings under our ABL Facility.
Such adjustments include certain unusual, non-cash, non-recurring, cost reduction, and other adjustment items permitted in calculating covenant compliance under our credit agreement and indentures (other than certain pro forma adjustments permitted under our credit agreement and indentures governing the Notes due 2027 and Notes due 2029 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date).
Such adjustments include certain unusual, non-cash, non-recurring, cost reduction, or other adjustment items permitted in calculating covenant compliance under our ABL Facility and indentures (other than certain pro forma adjustments permitted under our ABL Facility and indentures governing the Notes due 2027, Notes due 2029, and Notes due 2032 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date).
Adjusted EBITDA has important limitations as analytical tools and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. Included in the total purchase obligations above are commitments of $146.8 million for capital projects related to warehouse expansion and improvements and warehouse equipment.
Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. Included in the total purchase obligations above are commitments of $170.9 million for capital projects related to warehouse expansion and improvements and warehouse equipment.
We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties, including our lenders under our credit agreement and holders of our Notes due 2027 and Notes due 2029 in their evaluation of the operating performance of companies in industries similar to ours.
We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties, including our lenders under the ABL Facility and holders of our Notes due 2027, Notes due 2029, and Notes due 2032, in their evaluation of the operating performance of companies in industries similar to ours.
Our Company We market and distribute over 250,000 food and food-related products to customers across the United States from approximately 144 distribution facilities to over 300,000 customer locations in the “food-away-from-home” industry. We offer our customers a broad assortment of products including our proprietary-branded products, nationally branded products, and products bearing our customers’ brands.
Our Company We market and distribute over 250,000 food and food-related products to customers across the United States from approximately 155 distribution facilities to over 300,000 customer locations in the food-away-from-home industry. We offer our customers a broad assortment of products including our proprietary-branded products, nationally branded products, and products bearing our customers’ brands.
In fiscal 2024, purchases of property, plant, and equipment primarily consisted of outlays for warehouse improvements and expansion, warehouse equipment, transportation equipment, and information technology. The following table presents the capital purchases of property, plant, and equipment by segment.
In fiscal 2025, purchases of property, plant, and equipment primarily consisted of outlays for warehouse improvements and expansions, warehouse equipment, transportation equipment, and information technology. The following table presents the capital purchases of property, plant, and equipment by segment.
These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments. As of June 29, 2024, $350.0 million of the outstanding ABL Facility balance is currently hedged under interest rate swaps which results in 80% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.
These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments. As of June 28, 2025, $150.0 million of the outstanding ABL Facility balance is currently hedged under interest rate swaps, which results in 68% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.
Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company has three reportable segments: Foodservice, Vistar, and Convenience.
Based on the Company’s organizational structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company has three reportable segments: Foodservice, Convenience, and Specialty.
In calculating Adjusted EBITDA, we add back certain non-cash, non-recurring, and other items as permitted or required by our credit agreement and indentures.
In calculating Adjusted EBITDA, we add back certain non-cash, non-recurring, and other items as permitted or required by our ABL Facility and indentures.
As of June 29, 2024, the Company had total purchase obligations of $229.9 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences.
As of June 28, 2025, the Company had total purchase obligations of $276.8 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences.
In November 2022, the Board of Directors authorized a share repurchase program for up to $300 million of the Company’s outstanding common stock. This authorization replaced the previously authorized $250 million share repurchase program.
In November 2022, the Board of Directors authorized a share repurchase program for up to $300 million of the Company’s outstanding common stock.
The following table reconciles Adjusted EBITDA to net income for the periods presented: Fiscal year ended June 29, 2024 July 1, 2023 July 2, 2022 (In millions) Net income (GAAP) $ 435.9 $ 397.2 $ 112.5 Interest expense 232.2 218.0 182.9 Income tax expense 160.9 146.8 54.6 Depreciation 355.2 315.7 279.7 Amortization of intangible assets 201.5 181.0 183.1 Change in LIFO reserve (1) 62.3 39.2 122.9 Stock-based compensation expense 41.9 43.3 44.0 (Gain) loss on fuel derivatives (1.8 ) 5.7 (20.7 ) Acquisition, integration & reorganization expenses (2) 23.7 10.6 49.9 Other adjustments (3) (5.7 ) 5.9 10.9 Adjusted EBITDA (Non-GAAP) $ 1,506.1 $ 1,363.4 $ 1,019.8 29 (1) Includes increases in the last-in-first-out (“LIFO”) reserve of $3.8 million for Foodservice and $58.5 million for Convenience for fiscal 2024 compared to a decrease of $19.2 million for Foodservice and an increase $58.4 million for Convenience for fiscal 2023 and increases of $31.9 million for Foodservice and $91.0 million for Convenience for fiscal 2022.
The following table reconciles Adjusted EBITDA to net income for the periods presented: Fiscal Year Ended (In millions) June 28, 2025 June 29, 2024 July 1, 2023 Net income (GAAP) $ 340.2 $ 435.9 $ 397.2 Interest expense 358.4 232.2 218.0 Income tax expense 118.6 160.9 146.8 Depreciation 455.3 355.2 315.7 Amortization of intangible assets 262.6 201.5 181.0 Change in LIFO reserve (1) 88.1 62.3 39.2 Stock-based compensation expense 47.8 41.9 43.3 Loss (gain) on fuel derivatives 0.2 (1.8 ) 5.7 Acquisition, integration & reorganization expenses (2) 87.8 23.7 10.6 Other adjustments (3) 7.9 (5.7 ) 5.9 Adjusted EBITDA (Non-GAAP) $ 1,766.9 $ 1,506.1 $ 1,363.4 (1) Includes increases in the last-in-first-out (“LIFO”) reserve of $6.6 million for Foodservice and $81.5 million for Convenience for fiscal 2025 compared to increases of $3.8 million for Foodservice and $58.5 million for Convenience for fiscal 2024 and a decrease of $19.2 million for Foodservice and an increase of $58.4 million for Convenience for fiscal 2023.
Operating Activities Fiscal year ended June 29, 2024 compared to fiscal year ended July 1, 2023 During fiscal 2024 and fiscal 2023, our operating activities provided cash flow of $1,163.0 million and $832.1 million, respectively.
Operating Activities Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024 During fiscal 2025 and fiscal 2024, our operating activities provided cash flow of $1,210.1 million and $1,163.0 million, respectively.
Adjusted EBITDA among other things: • does not include non-cash stock-based employee compensation expense and certain other non-cash charges; and • does not include acquisition, restructuring, and other costs incurred to realize future cost savings and enhance our operations.
Adjusted EBITDA among other things: • does not include non-cash stock-based employee compensation expense and certain other non-cash charges; • does not include acquisition, restructuring, and other costs incurred to realize future cost savings and enhance our operations; and • does not include items outside of the ordinary course of the Company's operations and not indicative of ongoing performance.
During fiscal 2024, the Company repurchased and subsequently retired 1.3 million shares of common stock, for a total of $78.1 million or an average cost of $58.83 per share. During fiscal 2023, the Company repurchased and subsequently retired 0.2 million shares of common stock, for a total of $11.2 million or an average cost of $56.06 per share.
During the fiscal year ended June 29, 2024, the Company repurchased and subsequently retired 1.3 million shares of common stock, for a total cost of $78.1 million or an average cost of $58.83 per share.
These investments consisted primarily of capital purchases of property, plant, and equipment of $395.6 million and $269.7 million for fiscal years 2024 and 2023, respectively, along with net cash paid for recent acquisitions of $307.7 million and $63.8 million for fiscal years 2024 and 2023, respectively.
These investments consisted primarily of net cash paid for recent acquisitions of $2,596.4 million and $307.7 million for fiscal years 2025 and 2024, respectively, along with capital purchases of property, plant, and equipment of $506.0 million and $395.6 million for fiscal years 2025 and 2024, respectively.
It is anticipated that the ABL Amendment will be consummated in the first quarter of fiscal 2025. We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
These adjustments are based upon inventory category, inventory age, specifically identified items, and overall economic conditions. Insurance Programs We maintain high-deductible insurance programs covering portions of general and vehicle liability and workers’ compensation. The amounts in excess of the deductibles are fully insured by third-party insurance carriers, subject to certain limitations and exclusions. We also maintain self-funded group medical insurance.
Insurance Programs We maintain high-deductible insurance programs covering portions of general and vehicle liability and workers’ compensation. The amounts in excess of self-insured levels are fully insured by third-party insurance carriers, subject to certain limitations and exclusions. We also maintain self-funded group medical insurance.
Segment Results—Convenience Fiscal year ended June 29, 2024 compared to fiscal year ended July 1, 2023 Net Sales Net sales for Convenience increased $57.4 million, or 0.2% from fiscal 2023 to fiscal 2024.
Segment Results—Convenience Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024 Net Sales Net sales for Convenience increased $330.5 million, or 1.4%, from fiscal 2024 to fiscal 2025.
The increase in interest expense was primarily the result of an increase in the average interest rate in fiscal 2024 compared to the prior fiscal year. The Company reported income tax expense of $160.9 million for fiscal 2024 compared to $146.8 million for fiscal 2023.
The increase in interest expense was primarily the result of an increase in the average borrowings, including finance lease obligations, during fiscal 2025 compared to the prior fiscal year. The Company reported income tax expense of $118.6 million for fiscal 2025 compared to $160.9 million for fiscal 2024.
Receivables are recorded net of the allowance for credit losses on the accompanying consolidated balance sheets. We evaluate the collectability of our accounts receivable based on a combination of factors.
Accounts receivable also includes other receivables primarily related to various rebate and promotional incentives with our suppliers. Receivables are recorded net of the allowance for credit losses on the accompanying consolidated balance sheets. We evaluate the collectability of our accounts receivable based on a combination of factors.
This increase in net sales was driven by case volume growth, including growth in our independent and Chain business. Securing new and expanding business with independent customers resulted in organic independent case growth of 6.0% in fiscal 2024 compared to the prior fiscal year. For fiscal 2024, independent sales as a percentage of total segment sales were 39.5%.
Total independent case growth was 16.9% in fiscal 2025 compared to the prior fiscal year driven by recent acquisitions. Securing new and expanding business with independent customers resulted in organic independent case growth of 4.6% in fiscal 2025 compared to the prior fiscal year. For fiscal 2025, independent sales as a percentage of total segment sales were 40.6%.
Operating expenses increased as a result of a $108.8 million increase in personnel expenses primarily related to wages, benefits, and commissions due to an increase in full-time employees, an increase of $25.1 million in insurance expense primarily related to vehicle liability and workers' compensation, a $6.5 million increase in repairs and maintenance expense primarily related to transportation equipment, partially offset by a $10.3 million decrease in fuel expense primarily due to lower fuel prices, compared to the prior fiscal year.
Operating expenses increased compared to the prior fiscal year primarily as a result of recent acquisitions, including the Cheney Brothers Acquisition, a $144.1 million increase in personnel expenses primarily related to salaries and wages, benefits, and commissions, and an increase of $21.0 million in insurance expense primarily related to workers' compensation and vehicle liability, partially offset by a $21.8 million decrease in fuel expense primarily due to lower fuel prices, compared to the prior fiscal year.
At June 29, 2024, our cash balance totaled $27.7 million, including restricted cash of $7.7 million, as compared to a cash balance totaling $20.0 million, including restricted cash of $7.3 million, at July 1, 2023.
At June 28, 2025, our cash balance totaled $86.7 million, including restricted cash of $8.2 million, as compared to a cash balance totaling $27.7 million, including restricted cash of $7.7 million, at June 29, 2024.
As of June 29, 2024, $210.6 million remained available for share repurchases. Our cash requirements over the next 12 months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 8.
As of June 28, 2025, $500 million remained available for additional share repurchases under the program. Our contractual cash requirements over the next 12 months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations.
Depreciation of fixed assets and amortization of intangible assets recorded in this segment increased from $42.1 million in fiscal 2023 to $49.9 million in fiscal 2024 due primarily to a recent acquisition.
Depreciation and amortization of intangible assets recorded in this segment increased from $49.9 million in fiscal 2024 to $54.6 million in fiscal 2025 due primarily to an acquisition in the second quarter of fiscal 2024.
Results of Operations and Adjusted EBITDA The following table sets forth a summary of our results of operations and Adjusted EBITDA for the periods indicated (dollars and shares in millions, except per share data): Fiscal Year Ended Fiscal 2024 Fiscal 2023 June 29, 2024 July 1, 2023 July 2, 2022 Change % Change % Net sales $ 58,281.2 $ 57,254.7 $ 50,894.1 $ 1,026.5 1.8 6,360.6 12.5 Cost of goods sold 51,704.1 50,999.8 45,637.7 704.3 1.4 5,362.1 11.7 Gross profit 6,577.1 6,254.9 5,256.4 322.2 5.2 998.5 19.0 Operating expenses 5,750.7 5,489.1 4,929.0 261.6 4.8 560.1 11.4 Operating profit 826.4 765.8 327.4 60.6 7.9 438.4 133.9 Other expense, net Interest expense 232.2 218.0 182.9 14.2 6.5 35.1 19.2 Other, net (2.6 ) 3.8 (22.6 ) (6.4 ) (168.4 ) 26.4 116.8 Other expense, net 229.6 221.8 160.3 7.8 3.5 61.5 38.4 Income before income taxes 596.8 544.0 167.1 52.8 9.7 376.9 225.6 Income tax expense 160.9 146.8 54.6 14.1 9.6 92.2 168.9 Net income $ 435.9 $ 397.2 $ 112.5 $ 38.7 9.7 284.7 253.1 Adjusted EBITDA $ 1,506.1 $ 1,363.4 $ 1,019.8 $ 142.7 10.5 343.6 33.7 Weighted-average common shares outstanding: Basic 154.4 154.2 149.8 0.2 0.1 4.4 2.9 Diluted 156.0 156.1 151.3 (0.1 ) (0.1 ) 4.8 3.2 Earnings per common share: Basic $ 2.82 $ 2.58 $ 0.75 $ 0.24 9.3 $ 1.83 244.0 Diluted $ 2.79 $ 2.54 $ 0.74 $ 0.25 9.8 $ 1.80 243.2 We believe that the most directly comparable GAAP measure to Adjusted EBITDA is net income.
We have included below reconciliations of Adjusted EBITDA to the most directly comparable measure calculated in accordance with GAAP for the periods presented. 26 Results of Operations and Adjusted EBITDA The following table sets forth a summary of our results of operations and Adjusted EBITDA for the periods indicated: Fiscal Year Ended Fiscal 2025 Fiscal 2024 (In millions, except per share data) June 28, 2025 June 29, 2024 July 1, 2023 Change % Change % Net sales $ 63,298.9 $ 58,281.2 $ 57,254.7 $ 5,017.7 8.6 1,026.5 1.8 Cost of goods sold 55,882.3 51,704.1 50,999.8 4,178.2 8.1 704.3 1.4 Gross profit 7,416.6 6,577.1 6,254.9 839.5 12.8 322.2 5.2 Operating expenses 6,600.3 5,750.7 5,489.1 849.6 14.8 261.6 4.8 Operating profit 816.3 826.4 765.8 (10.1 ) (1.2 ) 60.6 7.9 Other expense, net Interest expense 358.4 232.2 218.0 126.2 54.3 14.2 6.5 Other, net (0.9 ) (2.6 ) 3.8 1.7 65.4 (6.4 ) (168.4 ) Other expense, net 357.5 229.6 221.8 127.9 55.7 7.8 3.5 Income before income taxes 458.8 596.8 544.0 (138.0 ) (23.1 ) 52.8 9.7 Income tax expense 118.6 160.9 146.8 (42.3 ) (26.3 ) 14.1 9.6 Net income (GAAP) $ 340.2 $ 435.9 $ 397.2 $ (95.7 ) (22.0 ) 38.7 9.7 Adjusted EBITDA $ 1,766.9 $ 1,506.1 $ 1,363.4 $ 260.8 17.3 142.7 10.5 Weighted-average common shares outstanding: Basic 154.8 154.4 154.2 0.4 0.3 0.2 0.1 Diluted 156.4 156.0 156.1 0.4 0.3 (0.1 ) (0.1 ) Earnings per common share: Basic $ 2.20 $ 2.82 $ 2.58 $ (0.62 ) (22.0 ) $ 0.24 9.3 Diluted $ 2.18 $ 2.79 $ 2.54 $ (0.61 ) (21.9 ) $ 0.25 9.8 We believe that the most directly comparable GAAP measure to Adjusted EBITDA is net income.
As of June 29, 2024, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2027 and the Notes due 2029.
Debt within the Notes to Consolidated Financial Statements included in Item 8. As of June 28, 2025, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2027, the Notes due 2029, and the Notes due 2032.
Cross-segment opportunities include business development, procurement, operational best practices such as the use of new productivity technologies, and supply chain and network optimization, as well as shared corporate functions such as accounting, treasury, tax, legal, information systems, and human resources. The Company’s fiscal year ends on the Saturday nearest to June 30 th .
We believe our diverse segments provide substantial opportunities for cross-segment collaboration to better serve our customers, including business development, procurement, operational best practices such as the use of new productivity technologies, and supply chain and network optimization, as well as shared corporate functions such as accounting, treasury, tax, legal, information systems, and human resources.
The increase in gross profit was driven by a favorable shift in the mix of cases sold and growth in cases sold, including more Performance Brands products sold to independent customers. 31 Operating expenses impacting Foodservice’s Adjusted EBITDA increased by $148.8 million, or 5.1%, from fiscal 2023 to fiscal 2024.
The increase in gross profit was driven by recent acquisitions, including the Cheney Brothers Acquisition, a favorable shift in the mix of cases sold, and growth in cases sold, including more Performance Brands products sold to our independent customers. The Cheney Brothers Acquisition contributed $485.0 million to Foodservice’s gross profit impacting Adjusted EBITDA in fiscal 2025.
Fiscal year ended (Dollars in millions) June 29, 2024 July 1, 2023 July 2, 2022 Foodservice $259.7 $191.4 $148.2 Vistar 53.8 18.0 19.1 Convenience 43.7 46.3 31.9 Corporate & All Other 38.4 14.0 16.3 Total capital purchases of property, plant and equipment $395.6 $269.7 $215.5 Financing Activities During fiscal 2024, our financing activities used cash flow of $472.6 million, which consisted primarily of $275.0 million in cash used for the repayment of the Notes due 2025, $122.2 million in payments under finance lease obligations, and $78.1 million in repurchases of common stock.
Fiscal Year Ended (In millions) June 28, 2025 June 29, 2024 July 1, 2023 Foodservice $ 382.7 $ 260.1 $ 191.8 Convenience 59.0 43.7 46.3 Specialty 33.3 53.8 18.0 Corporate & All Other 31.0 38.0 13.6 Total capital purchases of property, plant and equipment $ 506.0 $ 395.6 $ 269.7 Financing Activities During fiscal 2025, our financing activities provided cash flow of $1,937.9 million, which consisted primarily of $1,194.2 million in net borrowings under our ABL Facility and $1.0 billion in cash received from the issuance and sales of the Notes due 2032, partially offset by $188.0 million in payments under finance lease obligations and $57.6 million in repurchases of common stock.
This resulted in a 52-week year for fiscal 2024, 2023, and 2022. References to “fiscal 2024” are to the 52-week period ended June 29, 2024, references to “fiscal 2023” are to the 52-week period ended July 1, 2023, and references to “fiscal 2022” are to the 52-week period ended July 2, 2022.
References to “fiscal 2025” are to the 52-week period ended June 28, 2025, references to “fiscal 2024” are to the 52-week period ended June 29, 2024, and references to “fiscal 2023” are to the 52-week period ended July 1, 2023.
Total organic case volume benefited from an increase of 6.0% in organic independent cases sold, growth in Performance Brands cases, and growth in cases sold to Foodservice's Chain business. Gross Profit Gross profit increased $322.2 million, or 5.2%, in fiscal 2024 compared to fiscal 2023.
Total case volume increased 8.5% during fiscal 2025 compared to fiscal 2024. Total organic case volume increased 2.1% in fiscal 2025 compared to the prior fiscal year. Total organic case volume benefited from a 4.6% increase in organic independent cases sold during fiscal 2025, including growth in Performance Brands cases and growth in cases sold to Foodservice's chain business.
Key Factors Affecting Our Business We believe that our performance is principally affected by the following key factors: • Changing demographic and macroeconomic trends. Excluding the peak years of the COVID-19 pandemic, the share of consumer spending captured by the food-away-from-home industry has increased steadily for several decades.
Excluding the peak years of the COVID-19 pandemic, the share of consumer spending captured by the food-away-from-home industry has increased steadily for several decades.
Our most critical accounting policies and estimates include those that pertain to the allowance for doubtful accounts receivable, inventory valuation, insurance programs, income taxes, vendor rebates and promotional incentives, and acquisitions, goodwill and other intangible assets.
Our most critical accounting policies and estimates include those that pertain to the allowance for doubtful accounts receivable, inventory valuation, insurance programs, income taxes, vendor rebates and promotional incentives, and acquisitions, goodwill and other intangible assets. 32 Accounts Receivable Accounts receivable are comprised of trade receivables from customers in the ordinary course of business, are recorded at the invoiced amount, adjusted for any discounts granted to customers, and primarily do not bear interest.
The overall rate of product cost inflation was approximately 0.2% for fiscal 2024. Segment Adjusted EBITDA Adjusted EBITDA for Foodservice increased $57.6 million, or 6.1%, from fiscal 2023 to fiscal 2024. This increase was the result of an increase in gross profit, partially offset by an increase in operating expenses.
Segment Adjusted EBITDA Adjusted EBITDA for Specialty increased $7.6 million, or 2.2%, from fiscal 2024 to fiscal 2025 as a result of an increase in gross profit, partially offset by an increase in operating expenses.
For a comparison of our consolidated results of operations, segment results and financial position for fiscal years 2023 and 2022, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended July 1, 2023, filed with the SEC on August 16, 2023.
For a comparison of our consolidated results of operations, segment results and financial position for fiscal years 2024 and 2023, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended June 29, 2024, filed with the SEC on August 14, 2024, which remains materially consistent with the recast prior period results disclosed herein reflecting the updates made to our reportable segments in the third quarter of fiscal 2025 discussed below.
Debt and Note 12. Leases , respectively, within the Notes to Consolidated Financial Statements included in Item 8.
For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 8. Debt and Note 12. Leases , respectively, within the Notes to Consolidated Financial Statements included in Item 8.
The key measures used by our management are discussed below. The percentages on the results presented below are calculated based on rounded numbers.
The key measures used by our management are discussed below. The percentages on the results presented below are calculated based on rounded numbers. Case Growth Case volume represents the volume of products sold to customers during a given period of time.
Our Chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Vistar segment specializes in distributing candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, hospitality, and other channels.
Our chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Convenience segment distributes candy, snacks, beverages, cigarettes, other nicotine products, food and foodservice related products and other items to convenience stores across North America.
Gross profit contributing to Convenience’s Adjusted EBITDA decreased $1.0 million, or 0.1%, for fiscal 2024 compared to the prior fiscal year primarily due to expected decreases in inventory holding gains, partially offset by pricing improvement from procurement efficiencies. Operating expenses impacting Convenience’s Adjusted EBITDA, decreased $35.2 million, or 2.8%, for fiscal 2024 compared to the prior fiscal year.
Gross profit contributing to Convenience’s Adjusted EBITDA increased $68.1 million, or 4.3%, for fiscal 2025 compared to the prior fiscal year primarily due to inventory holding gains and pricing improvement from procurement efficiencies.
The Company values inventories at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method and last-in, first-out ("LIFO") using the link chain technique of the dollar value method. FIFO was used for approximately 65% of total inventories at June 29, 2024. We adjust our inventory balances for slow-moving, excess, and obsolete inventories.
The Company values inventories at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method, weighted average cost method, and last-in, first-out ("LIFO") method. For its LIFO based inventory, the Company utilizes the link chain technique of the dollar value method.
These insurance programs are managed by a third party, and the deductibles for general and vehicle liability and workers compensation are primarily collateralized by letters of credit and restricted cash. 37 Income Taxes We follow Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740-10, Income Taxes—Overall , which requires the use of the asset and liability method of accounting for deferred income taxes.
Income Taxes We follow Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740-10, Income Taxes—Overall , which requires the use of the asset and liability method of accounting for deferred income taxes.
The increase in gross profit was primarily driven by cost of goods sold optimization through procurement efficiencies, as well as growth in cases sold, including growth in the independent channel and Performance Brands, and recent acquisitions. Independent customers typically receive more services from us, cost more to serve, and pay a higher gross profit per case than other customers.
The increase in gross profit was primarily driven by recent acquisitions, including the Cheney Brothers Acquisition, cost of goods sold optimization through procurement efficiencies, as well as a favorable shift in the mix of cases sold, including growth in the independent channel.
Net sales increased $1.0 billion, or 1.8%, in fiscal 2024 compared to fiscal 2023. The increase in net sales was primarily attributable to case volume growth in our independent Foodservice business, an increase in selling price per case as a result of inflation, and recent acquisitions, partially offset by case declines in our Convenience business.
Net sales increased $5.0 billion, or 8.6%, in fiscal 2025 compared to fiscal 2024. The increase in net sales was driven by recent acquisitions, including the Cheney Brothers Acquisition, an increase in cases sold, including a favorable shift in mix of cases sold, and an increase in selling price per case as a result of inflation.
Depreciation and amortization of intangible assets recorded in this segment increased from $148.0 million in fiscal 2023 to $153.5 million in fiscal 2024 as a result of an increase in transportation equipment under finance leases. 32 Segment Results—Corporate & All Other Fiscal year ended June 29, 2024 compared to fiscal year ended July 1, 2023 Net Sales Net sales for Corporate & All Other increased $245.7 million from fiscal 2023 to fiscal 2024.
This increase in operating expenses was partially offset by a $8.0 million decrease in fuel expense compared to the prior fiscal year. Depreciation and amortization of intangible assets recorded in this segment increased from $153.5 million in fiscal 2024 to $157.7 million in fiscal 2025 as a result of an increase in transportation equipment under finance leases.
These increases were partially offset by a $34.5 million decrease in fuel expenses primarily due to lower fuel prices for fiscal 2024 compared to the prior fiscal year. Depreciation and amortization of intangible assets increased from $496.7 million in fiscal 2023 to $556.7 million in fiscal 2024, an increase of 12.1%.
These increases were partially offset by a $31.9 million decrease in fuel expenses primarily due to lower fuel prices for fiscal 2025 compared to the prior fiscal year.
Total organic case volume growth for Vistar was flat for fiscal 2024, as growth in the vending, office coffee service, office supply, travel, and hospitality channels was offset by declines in theater cases sold. Segment Adjusted EBITDA Adjusted EBITDA for Vistar increased $15.3 million, or 4.7%, from fiscal 2023 to fiscal 2024.
Total organic case volume growth for Specialty for fiscal 2025 was 1.4%, as growth in the vending, office coffee service, and value channels was partially offset by declines in theater cases sold compared to the prior fiscal year.
We apply the guidance in FASB Accounting Standards Update (“ASU”) 2011-08 “Intangibles—Goodwill and Other—Testing Goodwill for Impairment,” which provides entities with an option to perform a qualitative assessment (commonly referred to as “step zero”) to determine whether further quantitative analysis for impairment of goodwill is necessary.
We perform a qualitative assessment (commonly referred to as “step zero”) to determine whether further quantitative analysis for impairment of goodwill is necessary.
Segment Adjusted EBITDA Adjusted EBITDA for Convenience increased $34.8 million, or 10.6%, from fiscal 2023 to fiscal 2024. This increase was a result of a decrease in operating expenses.
Segment Adjusted EBITDA Adjusted EBITDA for Convenience increased $43.7 million, or 12.0%, from fiscal 2024 to fiscal 2025 as a result of an increase in gross profit, partially offset by an increase operating expenses.
Depreciation of fixed assets and amortization of intangible assets increased a result of recent acquisitions, an increase in transportation equipment under finance leases, and accelerated amortization of certain customer relationships and trade names.
Depreciation of fixed assets and amortization of intangible assets increased in fiscal 2025 29 as a result of recent acquisitions, including the Cheney Brothers Acquisition, and an increase in transportation equipment under finance leases. Total depreciation and amortization related to Cheney Brothers was $83.4 million in fiscal 2025.
Depreciation of fixed assets and amortization of intangible assets recorded in this segment increased from $279.8 million in fiscal 2023 to $293.6 million in fiscal 2024.
The Cheney Brothers operating expenses impacting Foodservice's Adjusted EBITDA were $365.6 million in fiscal 2025. Depreciation of fixed assets and amortization of intangible assets recorded in this segment increased from $294.4 million in fiscal 2024 to $448.5 million in fiscal 2025.
(3) Includes an $8.1 million gain on the sale of a Foodservice warehouse facility for fiscal year 2024, asset impairments, gains and losses on disposal of other fixed assets, amounts related to favorable and unfavorable leases, foreign currency transaction gains and losses, franchise tax expense, and other adjustments permitted by our credit agreement.
(3) Includes a $3.8 million gain on the sale of a Foodservice warehouse facility for fiscal year 2025 and an $8.1 million gain on the sale of a Foodservice warehouse facility for fiscal year 2024, as well as amounts related to favorable and unfavorable leases, litigation-related accruals, severance, franchise tax expense, insurance proceeds due to hurricane and other weather related events, foreign currency transaction gains and losses, gains and losses on disposals of other fixed assets, and other adjustments permitted by our ABL Facility. 27 Consolidated Results of Operations Fiscal year ended June 28, 2025 compared to fiscal year ended June 29, 2024 Net Sales Net sales growth is primarily a function of acquisitions, case growth, pricing, including product inflation/deflation, and a changing mix of customers, channels, and product categories sold.
Operating expenses impacting Vistar’s Adjusted EBITDA increased $44.6 million, or 9.6%, for fiscal 2024 compared to the prior fiscal year. Operating expenses increased primarily as a result of a recent acquisition and an increase of $5.9 million in building rent expense as a result of lease renewals and expansion compared to the prior fiscal year.
Operating expenses impacting Convenience’s Adjusted EBITDA, increased $22.8 million, or 1.9%, for fiscal 2025 compared to the prior fiscal year primarily as a result of a $15.1 million increase in personnel expenses related to wages, salaries, and benefits, a $9.7 million increase in insurance expense, and a $4.9 million increase in outbound freight expense.
The effective tax rate for fiscal 2024 remained consistent with the prior fiscal year at 27.0%, although the components of the rate changed from the prior year period due to an increase in income tax credits and a benefit from stock-based compensation, offset by an increase in foreign and state income tax expense and non-deductible expenses as a percentage of book income. 30 Segment Results The Company has three reportable segments: Foodservice, Vistar, and Convenience.
The effective tax rate differed from the prior year primarily due to an increase in benefit from stock-based compensation and an increase in income tax credits net of valuation allowance established, partially offset by an increase in non-deductible expenses and an increase in state taxes as a percentage of income.
The increase was the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Vistar's Adjusted EBITDA increased $60.9 million, or 7.7%, in fiscal 2024 compared to fiscal 2023, driven by a recent acquisition and pricing improvement from procurement efficiencies, partially offset by expected decreases in inventory holding gains.
Segment Adjusted EBITDA Adjusted EBITDA for Foodservice increased $239.4 million, or 24.4%, from fiscal 2024 to fiscal 2025. This increase was the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Foodservice’s Adjusted EBITDA increased $805.6 million, or 19.7% in fiscal 2025 compared to the prior fiscal year.
The increase in net sales was primarily driven by an increase in selling price per case as a result of inflation and an acquisition in the second quarter of fiscal 2024. The overall rate of product cost inflation was 5.8% for fiscal 2024.
This increase in net sales was driven by recent acquisitions, an increase in selling price per case as a result of inflation, and case volume growth, including growth in our independent and chain business. The Cheney Brothers Acquisition contributed $2.7 billion to net sales in fiscal 2025. Total case growth for Foodservice was 12.7% from fiscal 2024 to fiscal 2025.
The Company anticipates using cash flows from operations or borrowings under our credit agreement to fulfill these commitments.
The Company anticipates using cash flows from operations or borrowings under the ABL Facility to fulfill these commitments. Amounts due under these agreements were not included in the Company’s consolidated balance sheet as of June 28, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAlthough we hedge a portion of our interest rate risk through interest rate swaps, any borrowings under our ABL Facility in excess of the notional amount of the swaps will be subject to variable interest rates.
Biggest changeAlthough we hedge a portion of our interest rate risk through interest rate swaps, any borrowings under our ABL Facility in excess of the notional amount of the swaps will be subject to variable interest rates. 34 As of June 28, 2025, our subsidiary, Performance Food Group, Inc., had two interest rate swaps with a combined notional value of $150.0 million that were designated as cash flow hedges of interest rate risk.
A hypothetical 100 bps increase in SOFR on our variable-rate debt would lead to an increase of approximately $9.2 million in annual interest expense. Fuel Price Risk We seek to minimize the effect of higher diesel fuel costs both by reducing fuel usage and by taking action to offset higher fuel prices.
A hypothetical 100 bps increase in SOFR on our variable-rate debt would lead to an increase of approximately $22.1 million in annual interest expense. Fuel Price Risk We seek to minimize the effect of higher diesel fuel costs both by reducing fuel usage and by taking action to offset higher fuel prices.
As discussed above, this increase in fuel costs would be partially offset by fuel surcharges passed through to our customers. 40
As discussed above, this increase in fuel costs would be partially offset by fuel surcharges passed through to our customers. 35
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk All of our market sensitive instruments are entered into for purposes other than trading. Interest Rate Risk We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk All of our market sensitive instruments are entered into for purposes other than trading. Our market risks consist of interest rate risk and fuel price risk. Interest Rate Risk We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility.
Derivatives and Hedging Activities within the Notes to Consolidated Financial Statements included in Item 8 for further discussion of these interest rate swaps.
See Note 9. Derivatives and Hedging Activities within the Notes to Consolidated Financial Statements included in Item 8 for further discussion of these interest rate swaps.
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as hedged interest payments are made on our debt. During the next twelve months, we estimate that gains of approximately $8.3 million will be reclassified as a decrease to interest expense.
Amounts reported in accumulated other comprehensive income on the consolidated statements of comprehensive income related to derivatives will be reclassified to interest expense on the consolidated statements of operations as hedged interest payments are made on our debt. During the next twelve months, we estimate that gains of approximately $0.8 million will be reclassified as a decrease to interest expense.
As of June 29, 2024, we had collars in place for approximately 21% of the gallons we expect to use over the twelve months following June 29, 2024. Any changes in fair value are recorded in the period of the change as unrealized gains or losses on fuel hedging instruments within Other, net in the consolidated statements of operations.
As of June 28, 2025, we had collars in place for approximately 15% of the gallons we expect to use over the twelve months following June 28, 2025. Any changes in fair value are recorded in the period of the change as unrealized gains or losses on fuel hedging instruments within other, net on the consolidated statements of operations.
Assuming an average daily balance on our ABL Facility of approximately $1.2 billion, approximately $242.9 million of our outstanding long-term debt is fixed through interest rate swap agreements over the next 12 months and approximately $0.9 billion represents variable-rate debt.
Assuming an average daily balance on our ABL Facility of approximately $2.4 billion, approximately $150.0 million of our outstanding long-term debt is fixed through interest rate swap agreements over the next 12 months and approximately $2.2 billion represents variable-rate debt.
Based on the fair values of these interest rate swaps as of June 29, 2024, a hypothetical 100 bps decrease in SOFR would result in a loss of $5.4 million and a hypothetical 100 bps increase in SOFR would result in a gain of $5.3 million within accumulated other comprehensive income.
Based on the fair values of these interest rate swaps as of June 28, 2025, a hypothetical 100 bps decrease in SOFR would result in a loss of $3.4 million and a hypothetical 100 bps increase in SOFR would result in a gain of $3.3 million within accumulated other comprehensive income.
Using published market price projections for diesel and estimates of fuel consumption, a 10% hypothetical increase in diesel prices from the market price would result in a potential increase of approximately 39 $27.8 million in fuel costs included in Operating expenses.
Using published market price projections for diesel and estimates of fuel consumption, a 10% hypothetical increase in diesel prices from the market price would result in a potential increase of approximately $26.3 million in fuel costs included in operating expenses on the consolidated statements of operations.
Removed
As of June 29, 2024, our subsidiary, Performance Food Group, Inc., had three interest rate swaps with a combined notional value of $500.0 million that were designated as cash flow hedges of interest rate risk. See Note 9.

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