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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 27, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to ___________

Commission File Number 001-37578

Performance Food Group Company

(Exact name of registrant as specified in its charter)


Delaware		43-1983182
(State or other jurisdiction of incorporation or organization)		(IRS employer identification number)

12500 West Creek Parkway Richmond, Virginia 23238		(804) 484-7700
(Address of principal executive offices) (Zip Code)		(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PFGC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

157,098,971 shares of common stock were outstanding as of January 28, 2026.

TABLE OF CONTENTS


		Page

Special Note Regarding Forward-Looking Statements		3

PART I - FINANCIAL INFORMATION		5

Item 1.	Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	35

PART II - OTHER INFORMATION		36

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

SIGNATURES		38

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q (this “Form 10-Q”) may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends, and other information, and integration of our acquisition of Cheney Bros., Inc. (the “Cheney Brothers Acquisition”), are forward-looking statements. Words such as “estimates,” “expects,” “contemplates,” “will,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may,” “should” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties, and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended June 28, 2025 (the “Form 10-K”), as such risk factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the “SEC”), and are accessible on the SEC’s website at www.sec.gov, and also include the following:

•

costs and risks associated with a potential cybersecurity incident or other technology disruption;

•

our reliance on technology and risks associated with disruption or delay in implementation of new technology, including artificial intelligence;

•

economic factors, including inflation or other adverse changes such as a downturn in economic conditions, geopolitical events, tariff increases, or a public health crisis, negatively affecting consumer confidence and discretionary spending;

•

our reliance on third-party suppliers;

•

labor relations and cost risks and availability of qualified labor;

•

competition in our industry is intense, and we may not be able to compete successfully or adjust cost structure where one or more of our competitors successfully implement lower costs;

•

we operate in a low margin industry, which could increase the volatility of our results of operations;

•

our profitability is directly affected by cost inflation and deflation, commodity volatility, and other factors;

•

we do not have long-term contracts with certain customers;

•

group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;

•

changes in eating habits of consumers;

•

extreme weather conditions, including hurricane, earthquake and natural disaster damage and extreme heat or cold;

•

volatility of fuel and other transportation costs;

•

our inability to increase our sales in the highest margin portion of our business;

•

changes in pricing practices of our suppliers;

•

our growth and innovation strategy may not achieve the anticipated results;

•

risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire or that we incur significant integration costs;

•

a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining;

•

negative media exposure and other events that damage our reputation;

•

impact of uncollectibility of accounts receivable;

•

the cost and adequacy of insurance coverage and increases in the number or severity of insurance and claims expenses;

•

the potential impacts of shareholder activists or potential bidders;

•

the integration of artificial intelligence into our processes;

•

environmental, health, and safety costs, including compliance with current and future environmental laws and regulations relating to carbon emissions and climate change and related legal or market measures;

•

our inability to comply with requirements imposed by applicable law or government regulations, including increased regulation of e-vapor products and other alternative nicotine products;

•

increase in excise taxes or reduction in credit terms by taxing jurisdictions;

•

the potential impact of product recalls and product liability claims relating to the products we distribute and other litigation;

•

adverse judgments or settlements or unexpected outcomes in legal proceedings;

•

risks relating to our outstanding indebtedness, including the impact of interest rate increases on our variable rate debt;

•

our ability to raise additional capital on commercially reasonable terms or at all; and

•

the possibility that the expected synergies and other benefits from the Cheney Brothers Acquisition will not be realized or will not be realized within the expected time period.

We caution you that the risks, uncertainties, and other factors referenced above may not contain all of the risks, uncertainties, and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. We cannot assure you (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct, or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and, except as required by applicable law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “the Company,” or “PFG” as used in this Form 10-Q refer to Performance Food Group Company and its consolidated subsidiaries.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions, except per share data)	As of December 27, 2025			As of June 28, 2025
ASSETS
Current assets:
Cash	$	41.0		$	78.5
Accounts receivable, less allowances of $72.8 and $69.0		2,733.2			2,833.0
Inventories, net		4,253.3			3,887.7
Income taxes receivable		65.0			96.2
Prepaid expenses and other current assets		278.0			239.7
Total current assets		7,370.5			7,135.1
Goodwill		3,504.7			3,480.1
Other intangible assets, net		1,567.3			1,688.5
Property, plant and equipment, net		4,575.8			4,458.7
Operating lease right-of-use assets		941.7			933.8
Other assets		222.8			185.0
Total assets	$	18,182.8		$	17,881.2
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable and outstanding checks in excess of deposits		3,320.1			3,165.3
Accrued expenses and other current liabilities		943.6			1,025.9
Finance lease obligations—current installments		243.8			221.9
Operating lease obligations—current installments		107.6			104.5
Total current liabilities		4,615.1			4,517.6
Long-term debt		5,274.1			5,388.8
Deferred income tax liability, net		903.5			887.1
Finance lease obligations, excluding current installments		1,458.5			1,379.9
Operating lease obligations, excluding current installments		902.3			900.7
Other long-term liabilities		380.7			334.7
Total liabilities		13,534.2			13,408.8
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 155.8 million shares issued and outstanding as of December 27, 2025; 154.9 million shares issued and outstanding as of June 28, 2025		1.6			1.5
Additional paid-in capital		2,852.0			2,831.0
Accumulated other comprehensive loss, net of tax benefit of $1.0 and $0.9		(3.4	)		(3.2	)
Retained earnings		1,798.4			1,643.1
Total shareholders’ equity		4,648.6			4,472.4
Total liabilities and shareholders’ equity	$	18,182.8		$	17,881.2

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


(In millions, except per share data)	Three Months Ended December 27, 2025			Three Months Ended December 28, 2024		Six Months Ended December 27, 2025			Six Months Ended December 28, 2024
Net sales	$	16,444.7		$	15,638.2	$	33,520.6		$	31,053.7
Cost of goods sold		14,478.3			13,810.4		29,537.6			27,461.7
Gross profit		1,966.4			1,827.8		3,983.0			3,592.0
Operating expenses		1,776.3			1,669.0		3,568.2			3,217.9
Operating profit		190.1			158.8		414.8			374.1
Other expense, net:
Interest expense		104.5			100.2		208.9			167.0
Other, net		(1.1	)		1.9		(2.3	)		3.5
Other expense, net		103.4			102.1		206.6			170.5
Income before taxes		86.7			56.7		208.2			203.6
Income tax expense		25.0			14.3		52.9			53.2
Net income	$	61.7		$	42.4	$	155.3		$	150.4
Weighted-average common shares outstanding:
Basic		155.8			154.6		155.7			154.6
Diluted		156.8			156.3		156.8			156.3
Earnings per common share:
Basic	$	0.40		$	0.27	$	1.00		$	0.97
Diluted	$	0.39		$	0.27	$	0.99		$	0.96

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


(In millions)	Three Months Ended December 27, 2025			Three Months Ended December 28, 2024			Six Months Ended December 27, 2025			Six Months Ended December 28, 2024
Net income	$	61.7		$	42.4		$	155.3		$	150.4
Other comprehensive income (loss), net of tax
Interest rate swaps:
Change in fair value, net of tax		—			3.1			0.1			0.2
Reclassification adjustment, net of tax		(0.2	)		(2.3	)		(0.5	)		(5.3	)
Foreign currency translation adjustment, net of tax		1.1			(3.2	)		0.2			(2.7	)
Other comprehensive income (loss)		0.9			(2.4	)		(0.2	)	$	(7.8	)
Total comprehensive income	$	62.6		$	40.0		$	155.1		$	142.6

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


					Additional			Accumulated Other					Total
	Common Stock				Paid-in			Comprehensive			Retained		Shareholders’
(In millions)	Shares		Amount		Capital			Income (Loss)			Earnings		Equity
Balance as of September 28, 2024		154.5	$	1.5	$	2,797.2		$	(1.4	)	$	1,410.9	$	4,208.2
Net income		—		—		—			—			42.4		42.4
Interest rate swaps		—		—		—			0.8			—		0.8
Foreign currency translation adjustment		—		—		—			(3.2	)		—		(3.2	)
Issuance of common stock under stock-based compensation plans		0.1		—		2.7			—			—		2.7
Common stock repurchased		—		—		(4.1	)		—			—		(4.1	)
Stock-based compensation expense		—		—		10.4			—			—		10.4
Balance as of December 28, 2024		154.6	$	1.5	$	2,806.2		$	(3.8	)	$	1,453.3	$	4,257.2

Balance as of September 27, 2025		155.7	$	1.6	$	2,839.5		$	(4.3	)	$	1,736.7	$	4,573.5
Net income		—		—		—			—			61.7		61.7
Interest rate swaps		—		—		—			(0.2	)		—		(0.2	)
Foreign currency translation adjustment		—		—		—			1.1			—		1.1
Issuance of common stock under stock-based compensation plans		0.1		—		(0.1	)		—			—		(0.1	)
Stock-based compensation expense		—		—		12.6			—			—		12.6
Balance as of December 27, 2025		155.8	$	1.6	$	2,852.0		$	(3.4	)	$	1,798.4	$	4,648.6


						Additional			Accumulated Other					Total
	Common Stock					Paid-in			Comprehensive			Retained		Shareholders’
(In millions)	Shares			Amount		Capital			Income (Loss)			Earnings		Equity
Balance as of June 29, 2024		154.2		$	1.5	$	2,818.5		$	4.0		$	1,302.9	$	4,126.9
Net income		—			—		—			—			150.4		150.4
Interest rate swaps		—			—		—			(5.1	)		—		(5.1	)
Foreign currency translation adjustment		—			—		—			(2.7	)		—		(2.7	)
Issuance of common stock under stock-based compensation plans		0.6			—		(14.0	)		—			—		(14.0	)
Issuance of common stock under employee stock purchase plan		0.2			—		15.0			—			—		15.0
Common stock repurchased		(0.4	)		—		(33.6	)		—			—		(33.6	)
Stock-based compensation expense		—			—		20.3			—			—		20.3
Balance as of December 28, 2024		154.6		$	1.5	$	2,806.2		$	(3.8	)	$	1,453.3	$	4,257.2

Balance as of June 28, 2025		154.9			1.5		2,831.0			(3.2	)		1,643.1		4,472.4
Net income		—			—		—			—			155.3		155.3
Interest rate swaps		—			—		—			(0.4	)		—		(0.4	)
Foreign currency translation adjustment		—			—		—			0.2			—		0.2
Issuance of common stock under stock-based compensation plans		0.7			0.1		(21.7	)		—			—		(21.6	)
Issuance of common stock under employee stock purchase plan		0.2			—		17.1			—			—		17.1
Stock-based compensation expense		—			—		25.6			—			—		25.6
Balance as of December 27, 2025		155.8		$	1.6	$	2,852.0		$	(3.4	)	$	1,798.4	$	4,648.6

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(In millions)	Six Months Ended December 27, 2025			Six Months Ended December 28, 2024
Cash flows from operating activities:
Net income	$	155.3		$	150.4
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		261.7			211.5
Amortization of intangible assets		133.6			123.9
Amortization of deferred financing costs		6.7			6.0
Provision for losses on accounts receivables		13.3			11.9
Change in LIFO reserve		52.6			30.5
Stock compensation expense		25.6			23.0
Deferred income tax expense (benefit)		20.6			(16.8	)
Change in fair value of derivative assets and liabilities		—			0.2
Other non-cash activities		1.8			1.4
Changes in operating assets and liabilities, net
Accounts receivable		96.3			96.4
Inventories		(408.9	)		(325.7	)
Income taxes receivable		31.2			(25.7	)
Prepaid expenses and other assets		(39.0	)		48.5
Trade accounts payable and outstanding checks in excess of deposits		150.8			145.7
Accrued expenses and other liabilities		(45.6	)		(102.2	)
Net cash provided by operating activities		456.0			379.0
Cash flows from investing activities:
Purchases of property, plant and equipment		(192.3	)		(203.9	)
Net cash paid for acquisitions		(61.0	)		(2,535.5	)
Proceeds from sale of property, plant and equipment and other		1.7			2.7
Net cash used in investing activities		(251.6	)		(2,736.7	)
Cash flows from financing activities:
Net (payments) borrowings under ABL Facility		(118.0	)		1,499.9
Borrowing of Notes due 2032		—			1,000.0
Cash paid for debt issuance, extinguishment and modifications		—			(33.8	)
Payments under finance lease obligations		(114.1	)		(84.8	)
Net cash paid for acquisitions		(5.0	)		—
Proceeds from employee stock purchase plan		17.1			15.0
Proceeds from exercise of stock options		3.3			3.2
Cash paid for shares withheld to cover taxes		(24.9	)		(17.2	)
Repurchases of common stock		—			(33.6	)
Net cash (used in) provided by financing activities		(241.6	)		2,348.7
Net decrease in cash and restricted cash		(37.2	)		(9.0	)
Cash and restricted cash, beginning of period		86.7			27.7
Cash and restricted cash, end of period	$	49.5		$	18.7

The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:


(In millions)	As of December 27, 2025		As of June 28, 2025
Cash	$	41.0	$	78.5
Restricted cash(1)		8.5		8.2
Total cash and restricted cash	$	49.5	$	86.7

(1)

Restricted cash is reported within Other assets and represents the amounts required by insurers to collateralize a part of the deductibles for the Company’s workers’ compensation and liability claims.

Supplemental disclosures of cash flow information are as follows:


(In millions)	Six Months Ended December 27, 2025		Six Months Ended December 28, 2024
Cash paid during the year for:
Interest (net of amounts capitalized)	$	207.4	$	146.3
Income taxes (net of refunds received)		1.0		84.1

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

PERFORMANCE FOOD GROUP COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Summary of Business Activities

Business Overview

Performance Food Group Company, through its subsidiaries, markets and distributes primarily national and Company-branded food and food-related products to customer locations across North America. The Company serves both of the major customer types in the restaurant industry: (i) independent customers, and (ii) multi-unit, or chain customers, which include some of the most recognizable family and casual dining restaurant chains, as well as schools, business and industry locations, healthcare facilities, and retail establishments. The Company also specializes in distributing candy, snacks, beverages, cigarettes, other tobacco products, health and beauty care products and other items to vending distributors, big box retailers, theaters, convenience stores, drug stores, grocery stores, travel providers, hospitality providers, and direct to consumers.

Share Repurchase Program

In May 2025, the Board of Directors of the Company authorized a share repurchase program for up to $500 million of the Company’s outstanding common stock. This authorization replaced the previously authorized $300 million share repurchase program. The current share repurchase program has an expiration date of May 27, 2029 and may be amended, suspended, or discontinued at any time at the Company’s discretion, subject to compliance with applicable laws. As of December 27, 2025, $500.0 million remained available for share repurchases.

2. Summary of Significant Accounting Policies and Estimates

Basis of Presentation

The consolidated financial statements have been prepared by the Company, without audit, with the exception of the June 28, 2025 consolidated balance sheet, which was derived from the audited consolidated financial statements included in the Form 10-K. The financial statements include consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity, and consolidated statements of cash flows. Certain prior period amounts have been reclassified to conform to current period presentation. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, shareholders’ equity, and cash flows for all periods presented have been made.

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, impairment testing of goodwill and other intangible assets, acquisition accounting, reserves for claims and recoveries under insurance programs, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization, determination of useful lives of tangible and intangible assets, leases, and income taxes. Actual results could differ from these estimates.

The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K. Certain footnote disclosures included in annual financial statements prepared in accordance with GAAP have been condensed or omitted herein pursuant to applicable rules and regulations for interim financial statements.

3. Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update expands public entities’ income tax disclosure requirements primarily by requiring disaggregation of specific categories and reconciling items that meet a quantitative threshold within the rate reconciliation, as well as disaggregation of income taxes paid by jurisdiction. This pronouncement is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments in this update will be adopted for the fiscal year ending June 27, 2026 (“fiscal 2026”), with annual reporting requirements effective for our fiscal 2026 Annual Report on Form 10-K. The amendments in this update should be applied on a prospective basis, with retrospective application permitted. The provisions of the new standard will not impact the Company’s results of operations, financial position, or cash flows but will require the Company to expand its current income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement--Reporting Comprehensive Income--Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The update improves the disclosures about a public entity’s expenses and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions. In January 2025, the FASB released ASU 2025-01 to clarify ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The amendments in this update will be adopted for the fiscal year ending July 1, 2028 (“fiscal 2028”), with annual reporting requirements effective for our fiscal 2028 Annual Report on Form 10-K and interim reporting requirements effective for our Quarterly Reports on Forms 10-Q within the fiscal year ending June 30, 2029 (“fiscal 2029”). The amendments in this update should be applied prospectively, however, retrospective application is permitted. The provisions of the new standard will not impact the Company’s results of operations, financial position, or cash flows but will require the Company to expand its disclosures of the Company's expenses.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments--Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This update provides a practical expedient for all entities to simplify the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606: Revenue from Contracts with Customers. In developing reasonable and supportable forecasts as part of estimating expected credit losses, entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this update should be applied on a prospective basis. This pronouncement is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this update will be adopted at the beginning of the fiscal year ending July 3, 2027 (“fiscal 2027”). The Company is currently evaluating the impact of adopting ASU 2025-05 on its future consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for and disclosure of internal-use software costs. This update removes all references to project stages, defines the threshold to begin capitalizing costs, and clarifies the disclosure requirements of capitalized software costs. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years, and can be applied retrospectively, prospectively, or on a modified transition approach. Early adoption is permitted. The amendments in this update will be adopted at the beginning of fiscal 2029. The Company is currently assessing the impact of this update on its future consolidated financial statements.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvement. The new guidance amends existing guidance to simplify the application of hedge accounting, enhance alignment between risk management activities and financial reporting, and provide additional flexibility in the designation and measurement of certain hedging relationships. The amendments included in the five matters addressed in this ASU are intended to better reflect hedging and risk management strategies in financial reporting by enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted transactions. This pronouncement is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted on any date on or after the issuance of the ASU. The amendments in this ASU should be applied on a prospective basis for all hedging relationships. The Company is currently evaluating the impact that adoption of ASU 2025-09 will have on its future consolidated financial statements, as well as when the Company will adopt the new guidance. If the Company does not elect to early adopt the new guidance, the amendments in this update will be adopted at the beginning of fiscal 2028.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income. The amendments introduce two permitted approaches for asset-related grants: a deferred income approach or a cost accumulation approach. This pronouncement is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this ASU may be applied using a modified prospective, modified retrospective, or retrospective approach. Since the FASB largely leveraged the guidance in International Accounting Standard 20: Accounting for Government Grants and Disclosure of Government Assistance, which the Company has historically applied by analogy, the Company does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements. The Company is evaluating when it will adopt the new guidance. If the Company does not elect to early adopt the new guidance, the amendments in this update will be adopted at the beginning of the fiscal year ending June 29, 2030.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. This pronouncement is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The amendments in this update can be applied either prospectively or retrospectively to any or all prior periods

presented in the financial statements. The provisions of the new standard will not impact the Company’s results of operations, financial position, or cash flows but may require the Company to expand its interim disclosures beginning in fiscal 2029.

4. Revenue Recognition

The Company markets and distributes primarily national and Company-branded food and food-related products to customer locations across North America. The Foodservice segment primarily services restaurants and supplies a broad line of products to its customers, including the Company’s Performance Brands and custom-cut meats and seafood, as well as products that are specific to each customer’s menu requirements. The Convenience segment distributes candy, snacks, beverages, cigarettes and other nicotine products, food and food-service products, and other items to convenience stores. The Specialty segment primarily specializes in distributing candy, snacks, beverages, and other food items nationally to vending and office coffee service distributors as well as direct to consumer locations including theater and retail locations. The Company disaggregates revenue by customer type and product offerings and determined that disaggregating revenue at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 13. Segment Information for external revenue by reportable segment.

The Company has customer contracts in which incentives are paid upfront to certain customers. These payments have become industry practice and are not related to financing the customer’s business, nor are they associated with any distinct good or service to be received from the customer. These incentive payments are capitalized and amortized over the life of the contract or the expected life of the customer relationship on a straight-line basis, and are regularly assessed for impairment. The Company’s contract asset for these incentives totaled $63.6 million and $67.0 million as of December 27, 2025 and June 28, 2025, respectively.

5. Business Combinations

During the first six months of fiscal 2026, the Company paid cash of $61.0 million, net of cash received, for two acquisitions reported in the Foodservice segment. These acquisitions did not materially affect the Company’s results of operations. During the first six months of fiscal 2025, the Company paid cash of $2.5 billion, net of cash received, for two acquisitions reported in the Foodservice segment. Included below is the information related to our material acquisition of Cheney Bros., Inc. (“Cheney Brothers”).

Cheney Brothers Acquisition

On October 8, 2024, PFG acquired Cheney Brothers for $2.0 billion, consisting of $1,978.6 million of cash consideration, net of cash received, and $32.4 million of deferred consideration payable to the seller over the next five years. As of December 27, 2025, the deferred consideration payable to the seller was $26.4 million. The cash consideration portion of the purchase price was financed with borrowings under the Company’s asset-based revolving credit facility.

Assets acquired and liabilities assumed are recognized at their respective fair values as of the acquisition date. The following table summarizes the purchase price allocation for each major class of assets acquired and liabilities assumed for the Cheney Brothers acquisition:


(In millions)	Cheney Brothers
Net working capital	$	241.7
Goodwill		750.9
Intangible assets with definite lives:
Customer relationships		485.0
Trade names		160.0
Property, plant and equipment		726.1
Operating lease right-of-use assets		6.7
Other assets		10.1
Deferred tax liabilities		(271.5	)
Finance lease obligations		(96.8	)
Operating lease obligations		(6.7	)
Other long-term liabilities		(26.9	)
Total purchase price	$	1,978.6

Intangible assets consist primarily of customer relationships and trade names with useful lives of ten to twelve years, and a total weighted-average useful life of 11.5 years. The excess of the estimated fair value of the assets acquired and the liabilities assumed over consideration paid was recorded as $750.9 million of goodwill.

The net sales and net loss related to Cheney Brothers recorded in the Company’s Consolidated Statements of Operations for the first six months of fiscal 2025 were $825.0 million and $28.4 million, respectively. The net loss related to Cheney Brothers was driven by depreciation and amortization of purchase accounting adjustments.

The following table summarizes the unaudited pro-forma consolidated financial information of the Company as if the acquisition had occurred on July 2, 2023:


	Three Months Ended				Six Months Ended
(In millions)	December 28, 2024		December 30, 2023		December 28, 2024		December 30, 2023
Net sales	$	15,716.4	$	15,102.2	$	31,945.5	$	30,782.2
Net income		74.1		59.7		169.0		91.1

These pro-forma results include nonrecurring pro-forma adjustments related to acquisition costs incurred, including the amortization of the step up in fair value of inventory acquired as products were sold. The pro-forma net income for the six months ended December 30, 2023 includes $69.1 million, after-tax, of acquisition costs assuming the acquisition had occurred on July 2, 2023. The recurring pro-forma adjustments include estimates of interest expense for the debt issued to finance the acquisition and estimates of depreciation and amortization associated with fair value adjustments for property, plant and equipment and intangible assets acquired.

6. Debt

The Company is a holding company and conducts its operations through its subsidiaries, which have incurred or guaranteed indebtedness as described below.

Debt consisted of the following:



(In millions)	As of December 27, 2025			As of June 28, 2025
Credit Agreement	$	2,237.0		$	2,355.0
5.500% Notes due 2027, effective interest rate 5.930%		1,060.0			1,060.0
4.250% Notes due 2029, effective interest rate 4.439%		1,000.0			1,000.0
6.125% Notes due 2032, effective interest rate 6.286%		1,000.0			1,000.0
Less: Original issue discount and deferred financing costs		(22.9	)		(26.2	)
Long-term debt		5,274.1			5,388.8
Less: current installments		—			—
Total debt, excluding current installments	$	5,274.1		$	5,388.8

Credit Agreement

PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, and Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, are parties to the Sixth Amended and Restated Credit Agreement, dated September 9, 2024 (the “ABL Facility”), with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other lenders party thereto. The ABL Facility has an aggregate principal amount available of $5.0 billion and matures September 9, 2029. The ABL Facility also provides for up to $1.0 billion of uncommitted incremental facilities. The terms of any such incremental facility shall be agreed between Performance Food Group, Inc. and the lenders providing the new commitments, subject to certain limitations set forth in the ABL Facility.

Performance Food Group, Inc. is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by, and secured by the majority of the assets of, PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than the captive insurance subsidiary and other excluded subsidiaries). Availability for loans and letters of credit under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned real property, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real property and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on periodic commercial finance examinations and appraisals, and the real property and transportation equipment values included in the borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the administrative agent for the benefit and on behalf of all lenders.

Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greatest of (i) a floor rate of 0.00%, (ii) the federal funds rate in effect on such date plus 0.5%, (iii) the prime rate on such day, or (iv) one month Term SOFR plus 1.0%) plus a spread or (b) Adjusted Term SOFR plus a spread. The ABL Facility also provides for an unused commitment fee at a rate of 0.250% per annum.

The following table summarizes outstanding borrowings, availability, and the average interest rate under the Company’s credit agreement:


(Dollars in millions)	As of December 27, 2025			As of June 28, 2025
Aggregate borrowings	$	2,237.0		$	2,355.0
Letters of credit		165.9			171.4
Excess availability, net of lenders’ reserves of $103.0 and $106.0		2,597.1			2,473.6
Average interest rate, excluding impact of interest rate swaps		5.25	%		5.86	%

The ABL Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if Alternate Availability (as defined in the ABL Facility) falls below the greater of (i) $375.0 million and (ii) 10% of the lesser of the borrowing base and the sum of (a) the aggregate commitments plus (b) any outstanding term loans for five consecutive business days. The ABL Facility also contains customary restrictive covenants that include restrictions on the loan parties’ and their subsidiaries’ abilities to incur additional indebtedness, pay dividends, create liens, make investments, make prepayments, redemptions, or defeasances prior to the maturity of certain restricted debt and dispose of assets. The ABL Facility provides for customary events of default, including payment defaults and cross-defaults on other material indebtedness. If an event of default occurs and is continuing, amounts due under the ABL Facility may be accelerated and the rights and remedies of the lenders may be exercised, including rights with respect to the collateral securing the obligations under such agreement.

Senior Notes due 2027

On September 27, 2019, PFG Escrow Corporation (which subsequently merged with and into Performance Food Group, Inc.), issued and sold $1,060.0 million aggregate principal amount of its 5.500% Senior Notes due 2027 (the “Notes due 2027”). The Notes due 2027 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2027 are not guaranteed by the Company.

The proceeds from the Notes due 2027, along with an offering of shares of the Company’s common stock and borrowings under a prior credit agreement, were used to fund the cash consideration for the acquisition of Reinhart Foodservice, L.L.C. and to pay related fees and expenses.

The Notes due 2027 were issued at 100.0% of their par value. The Notes due 2027 mature on October 15, 2027 and bear interest at a rate of 5.500% per year, payable semi-annually in arrears.

The indenture governing the Notes due 2027 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2027 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2027 to become or be declared due and payable.

Senior Notes due 2029

On July 26, 2021, Performance Food Group, Inc. issued and sold $1.0 billion aggregate principal amount of its 4.250% Senior Notes due 2029 (the “Notes due 2029”). The Notes due 2029 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2029 are not guaranteed by the Company.

The proceeds from the Notes due 2029 were used to pay down the outstanding balance of a prior credit agreement, to redeem the 5.500% Senior Notes due 2024, and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2029.

The Notes due 2029 were issued at 100.0% of their par value. The Notes due 2029 mature on August 1, 2029, and bear interest at a rate of 4.250% per year, payable semi-annually in arrears.

The indenture governing the Notes due 2029 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2029 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2029 to become or be declared due and payable.

Senior Notes due 2032

On September 12, 2024, Performance Food Group, Inc. issued and sold $1.0 billion aggregate principal amount of its 6.125% Senior Notes due 2032 (the “Notes due 2032”). The Notes due 2032 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2032 are not guaranteed by the Company.

The Company intended to use the proceeds from the Notes due 2032, together with borrowings under the ABL Facility, to finance the cash consideration in connection with the Cheney Brothers Acquisition and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2032. However, since there was no requirement to hold the funds in escrow until the Cheney Brothers Acquisition closed, the net proceeds for the Notes due 2032 were initially used to pay down a portion of the outstanding balance of the ABL Facility. The Company subsequently funded the cash consideration for the Cheney Brothers Acquisition with borrowings under the ABL Facility.

The Notes due 2032 were issued at 100.0% of their par value. The Notes due 2032 mature on September 15, 2032, and bear interest at a rate of 6.125% per year, payable semi-annually in arrears.

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2032 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2032 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2032 at any time prior to September 15, 2027, at a redemption price equal to 100% of the principal amount of the Notes due 2032 being redeemed plus a make-whole premium as defined in the indenture governing the Notes due 2032 and accrued and unpaid interest. In addition, beginning on September 15, 2027, Performance Food Group, Inc. may redeem all or a part of the Notes due 2032 at a redemption price equal to 103.063% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.531% and 100% of the principal amount redeemed on September 15, 2028, and September 15, 2029, respectively. In addition, at any time prior to September 15, 2027, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2032 from the proceeds of certain equity offerings at a redemption price equal to 106.125% of the principal amount thereof, plus accrued and unpaid interest.

The indenture governing the Notes due 2032 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2032 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2032 to become or be declared due and payable.

7. Leases

The Company determines if an arrangement is a lease at inception and recognizes a financing or operating lease liability and right-of-use asset in the Company’s consolidated balance sheet. Right-of-use assets and lease liabilities for both operating and finance leases are recognized based on present value of lease payments over the lease term at commencement date. When the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. This rate was determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. Leases with an initial term of 12

months or less are not recorded on the balance sheet. The lease expenses for these short-term leases are recognized on a straight-line basis over the lease term. The Company has several lease agreements that contain lease and non-lease components, such as maintenance, taxes, and insurance, which are accounted for separately. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to adjustments for deferred rent, favorable leases, and prepaid rent.

Subsidiaries of the Company have entered into numerous operating and finance leases for various warehouses, office facilities, equipment, tractors, and trailers. Our leases have remaining lease terms of 1 year to 25 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. Certain full-service fleet lease agreements include variable lease payments associated with usage, which are recorded and paid as incurred. When calculating lease liabilities, lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Certain of the leases for tractors, trailers, and other vehicles and equipment provide for residual value guarantees to the lessors. Circumstances that would require the subsidiary to perform under the guarantees include either (1) default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) decisions not to purchase the assets at the end of the lease terms combined with the sale of the assets, with sales proceeds less than the residual value of the leased assets specified in the lease agreements. Residual value guarantees under these operating lease agreements typically range between 6% and 20% of the value of the leased assets at inception of the lease. These leases have original terms ranging from 5 to 10 years and are set to expire at various dates ranging from 2026 to 2032. As of December 27, 2025, the undiscounted maximum amount of potential future payments for lease residual value guarantees totaled approximately $7.3 million, which would be mitigated by the fair value of the leased assets at lease expiration.

The following table presents the location of the right-of-use assets and lease liabilities in the Company’s consolidated balance sheet as of December 27, 2025 and June 28, 2025 (in millions), as well as the weighted-average lease term and discount rate for the Company’s leases:


Leases	Consolidated Balance Sheet Location	As of December 27, 2025			As of June 28, 2025
Assets:
Operating	Operating lease right-of-use assets	$	941.7		$	933.8
Finance	Property, plant and equipment, net		1,710.9			1,614.7
Total lease assets		$	2,652.6		$	2,548.5
Liabilities:
Current
Operating	Operating lease obligations—current installments	$	107.6		$	104.5
Finance	Finance lease obligations—current installments		243.8			221.9
Non-current
Operating	Operating lease obligations, excluding current installments		902.3			900.7
Finance	Finance lease obligations, excluding current installments		1,458.5			1,379.9
Total lease liabilities		$	2,712.2		$	2,607.0

Weighted average remaining lease term
Operating leases		10.3 years			10.7 years
Finance leases		9.7 years			9.8 years
Weighted average discount rate
Operating leases			5.6	%		5.6	%
Finance leases			5.7	%		5.7	%

The following table presents the location of lease costs in the Company’s consolidated statement of operations for the periods reported (in millions):


		Three Months Ended				Six Months Ended
Lease Cost	Statement of Operations Location	December 27, 2025		December 28, 2024		December 27, 2025		December 28, 2024
Finance lease cost:
Amortization of finance lease assets	Operating expenses	$	59.2	$	45.5	$	116.6	$	82.6
Interest on lease liabilities	Interest expense		24.2		14.8		47.5		26.7
Total finance lease cost		$	83.4	$	60.3	$	164.1	$	109.3
Operating lease cost	Operating expenses		42.5		43.7		86.2		85.8
Short-term lease cost	Operating expenses		14.0		13.1		28.7		25.9
Total lease cost		$	139.9	$	117.1	$	279.0	$	221.0

The following table presents the supplemental cash flow information related to leases for the periods reported (in millions):


	Six Months Ended
	December 27, 2025		December 28, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	79.0	$	77.7
Operating cash flows from finance leases		47.5		26.7
Financing cash flows from finance leases		114.1		84.8
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		54.8		129.7
Finance leases		213.4		299.8

The following table presents the future minimum lease payments under non-cancelable leases as of December 27, 2025 (in millions):


Fiscal Year	Operating Leases		Finance Leases
2026	$	80.5	$	168.6
2027		158.8		322.7
2028		149.3		294.3
2029		134.2		270.4
2030		120.1		242.7
Thereafter		742.0		1,055.7
Total future minimum lease payments	$	1,384.9	$	2,354.4
Less: Interest		375.0		652.1
Present value of future minimum lease payments	$	1,009.9	$	1,702.3

As of December 27, 2025, the Company had additional operating and finance leases that had not yet commenced, which total $8.6 million in future minimum lease payments. These leases primarily relate to fleet leases expected to commence in the second half of fiscal 2026 with lease terms of 6 to 10 years.

8. Fair Value of Financial Instruments

The carrying values of cash, accounts receivable, outstanding checks in excess of deposits, trade accounts payable, and accrued expenses approximate their fair values because of the relatively short maturities of those instruments. The derivative assets and liabilities are recorded at fair value on the balance sheet. The fair value of long-term debt, which has a carrying value of $5,274.1 million and $5,388.8 million, is $5,305.7 million and $5,399.7 million at December 27, 2025 and June 28, 2025, respectively, and is determined by reviewing current market pricing related to comparable debt issued at the time of the balance sheet date, and is considered a Level 2 measurement.

9. Income Taxes

The determination of the Company’s overall effective tax rate requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. The effective tax rate reflects the income earned and taxed in various federal, state, and foreign jurisdictions. Tax law changes, increases and decreases in temporary and permanent differences between book and tax

items, tax credits, and the Company’s change in income in each jurisdiction all affect the overall effective tax rate. It is the Company’s practice to recognize interest and penalties related to uncertain tax positions in income tax expense.

On July 4, 2025, Public Law No. 119-21, referred to as the One Big Beautiful Bill Act (the “Act”), was enacted into law. The Act includes changes to U.S. tax law that are applicable to the Company in fiscal 2025 and fiscal 2026, including 100% bonus depreciation on qualified property, immediate expensing of domestic research costs and modification of the business interest expense limitation. The effects of these changes were incorporated into the income tax provision for the six months ended December 27, 2025. The Company expects a beneficial cash flow impact, with no material impact to its effective tax rate, in fiscal 2026.

The Company’s effective tax rate was 28.8% for the three months ended December 27, 2025 and 25.2% for the three months ended December 28, 2024. The Company’s effective tax rate was 25.4% for the six months ended December 27, 2025 and 26.1% for the six months ended December 28, 2024. The effective tax rate varies from the 21% statutory rate primarily due to state and foreign income taxes, federal credits and other permanent items. The excess tax benefit of exercised and vested stock awards is treated as a discrete item. The effective tax rate for the three months ended December 27, 2025 differed from the prior year period primarily due to a decrease in deductible discrete items related to stock-based compensation and an increase in foreign taxes as a percentage of income, partially offset by an increase in tax credits net of the valuation allowance established. The effective tax rate for the six months ended December 27, 2025 differed from the prior year period primarily due to an increase in tax credits net of the valuation allowance established and deductible discrete items related to stock-based compensation, partially offset by an increase in foreign taxes and non-deductible expenses as a percentage of income.

As of December 27, 2025 and June 28, 2025, the Company had net deferred tax assets of $250.9 million and $227.4 million, respectively, and deferred tax liabilities of $1,154.4 million and $1,114.5 million, respectively. As of December 27, 2025 and June 28, 2025, the Company had established a valuation allowance net of federal benefit of $14.5 million and $11.8 million, respectively, against deferred tax assets related to certain tax credit carryforwards and certain net operating losses which are not likely to be realized due to limitations on utilization. The change in the deferred tax balances relates primarily to certain modifications of U.S. tax law applicable under the Act and valuation allowance established on foreign tax credit carryforwards. The Company believes that it is more likely than not that the remaining deferred tax assets will be realized.

Since the Organization for Economic Co-operation and Development (“OECD”) announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting in 2021, a number of countries have begun to enact legislation to implement the OECD international tax framework, including the Pillar Two minimum tax regime. Of the regions in which we operate, Canada has implemented the Pillar Two framework effective January 1, 2024. The Company was not subject to Pillar Two minimum tax in Canada during the first twenty-six weeks of fiscal 2026 under the applicable safe harbor rules.

10. Commitments and Contingencies

Purchase Obligations

The Company had outstanding contracts and purchase orders of $273.2 million related to capital projects and services at December 27, 2025. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of December 27, 2025.

Guarantees

The Company from time to time enters into certain types of contracts that contingently require it to indemnify various parties against claims from third parties. These contracts primarily relate to: (i) certain real estate leases under which subsidiaries of the Company may be required to indemnify property owners for environmental and other liabilities and other claims arising from their use of the applicable premises; (ii) certain agreements with the Company’s officers, directors, and employees under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship; and (iii) customer agreements under which the Company may be required to indemnify customers for certain claims brought against them with respect to the supplied products. Generally, a maximum obligation under these contracts is not explicitly stated. Because the obligated amounts associated with these types of agreements are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations and, therefore, no liabilities have been recorded for these obligations in the Company’s consolidated balance sheets.

Litigation

The Company is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss arising from these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When losses are probable and reasonably estimable, they have been accrued. Based on estimates of the range of potential losses associated with these matters, management does not believe that the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the Company. However, the final results of legal proceedings cannot be predicted with certainty and, if the Company failed to prevail in one or more of these legal matters, and the associated realized losses were to exceed the Company’s

current estimates of the range of potential losses, the Company’s consolidated financial position or results of operations could be materially adversely affected in future periods.

JUUL Labs, Inc. Marketing Sales Practices, and Products Liability Litigation. In October 2019, a Multidistrict Litigation action (“MDL”) was initiated in order to centralize litigation against JUUL Labs, Inc. (“JUUL”) and other parties in connection with JUUL’s e-cigarettes and related devices and components in the United States District Court for the Northern District of California. On March 11, 2020, counsel for plaintiffs and the Plaintiffs’ Steering Committee filed a Master Complaint in the MDL (“Master Complaint”) naming, among several other entities and individuals including JUUL, Altria Group, Inc., Philip Morris USA, Inc., Altria Client Services LLC, Altria Group Distribution Company, Altria Enterprises LLC, certain members of management and/or individual investors in JUUL, various e-liquid manufacturers, and various retailers, including the Company’s subsidiaries Eby-Brown Company LLC (“Eby-Brown”) and Core-Mark Holding Company, Inc. (“Core-Mark”), as defendants. The Master Complaint also named additional distributors of JUUL products (collectively with Eby-Brown and Core-Mark, the “Distributor Defendants”). The Master Complaint contains various state law claims and alleges that the Distributor Defendants: (i) failed to disclose JUUL’s nicotine contents or the risks associated; (ii) pushed a product designed for a youth market; (iii) engaged with JUUL in planning and marketing its product in a manner designed to maximize the flow of JUUL products; (iv) met with JUUL management in San Francisco, California to further these business dealings; and (v) received incentives and business development funds for marketing and efficient sales. JUUL and Eby-Brown are parties to a Domestic Wholesale Distribution Agreement dated March 10, 2020 (the “Distribution Agreement”), and JUUL has agreed to defend and indemnify Eby-Brown under the terms of that agreement and is paying Eby-Brown’s outside counsel fees directly. In addition, Core-Mark and JUUL have entered into a Defense and Indemnity Agreement dated March 8, 2021 (the “Defense Agreement”) pursuant to which JUUL has agreed to defend and indemnify Core-Mark, and JUUL is paying Core-Mark’s outside counsel fees directly.

On December 6, 2022, JUUL announced that it had reached settlements with the plaintiffs in the MDL and related cases that had been consolidated in the U.S. District Court for Northern District of California (the “MDL Settlement”). Per the settlement agreement, the MDL Settlement encompasses the various personal injury, consumer class action, government entity, and Native American tribe claims made against JUUL and includes, among others, all of the Distributor Defendants (including Core-Mark and Eby-Brown) as released parties. The release applicable to the Distributor Defendants, as well as certain other defendants, took effect when JUUL made the first settlement payment on October 27, 2023. The MDL Settlement Master informed the parties that there are ten plaintiffs who opted out of the MDL Settlement; however, those opt-out plaintiffs have amended their individual complaints and have removed Eby-Brown and Core-Mark as defendants in their individual cases.

On September 10, 2021, Michael Lumpkins filed a parallel lawsuit in Illinois state court against several entities, including JUUL, e-liquid manufacturers, various retailers, and various distributors, including Eby-Brown and Core-Mark, alleging similar claims to the claims at issue in the MDL (the “Illinois Litigation”). Because there was no federal jurisdiction for this case, it proceeded in Illinois state court. Plaintiff alleged as damages that his use of JUUL products caused a brain injury that was later exacerbated by medical negligence. The court denied Eby-Brown and Core-Mark’s motion to dismiss, and the case moved into the discovery phase. On October 20, 2025, the court entered a stipulated order of dismissal without prejudice as to various defendants, including Eby-Brown and Core-Mark. Following the order of dismissal, the Company considers the Illinois Litigation to be resolved. In the event the Plaintiff attempts to refile the Illinois Litigation against Eby-Brown or Core-Mark, the defense and indemnity of Eby-Brown and Core-Mark for the Illinois Litigation would be covered by the Distribution Agreement and the Defense Agreement, respectively.

Tax Liabilities

The Company is subject to customary audits by authorities in the jurisdictions where it conducts business in the United States and foreign countries, which may result in assessments of additional taxes. These additional taxes are accrued when probable and reasonably estimable.

11. Related-Party Transactions

The Company participates in, and has an equity method investment in, a purchasing alliance that was formed to obtain better pricing, to expand product options, to reduce internal costs, and to achieve greater inventory turnover. The Company’s investment in the purchasing alliance was $14.6 million as of December 27, 2025 and $13.3 million as of June 28, 2025. For the three-month periods ended December 27, 2025 and December 28, 2024, the Company recorded purchases of $729.2 million and $586.3 million, respectively, through the purchasing alliance. For the six-month periods ended December 27, 2025 and December 28, 2024, the Company recorded purchases of $1,524.0 million and $1,187.4 million, respectively, through the purchasing alliance.

12. Earnings Per Common Share

Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. The Company’s potential common shares include outstanding stock-based compensation awards and expected issuable shares under the employee

stock purchase plan. In computing diluted earnings per common share, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the assumed proceeds under the treasury stock method. No potential common shares were considered antidilutive for each of the three and six months ended December 27, 2025 and December 28, 2024.

A reconciliation of the numerators and denominators for the basic and diluted earnings per common share computations is as follows:


(In millions, except per share amounts)	Three Months Ended December 27, 2025		Three Months Ended December 28, 2024		Six Months Ended December 27, 2025		Six Months Ended December 28, 2024
Numerator:
Net income	$	61.7	$	42.4	$	155.3	$	150.4
Denominator:
Weighted-average common shares outstanding		155.8		154.6		155.7		154.6
Dilutive effect of potential common shares		1.0		1.7		1.1		1.7
Weighted-average dilutive common shares outstanding		156.8		156.3		156.8		156.3
Basic earnings per common share	$	0.40	$	0.27	$	1.00	$	0.97
Diluted earnings per common share	$	0.39	$	0.27	$	0.99	$	0.96

13. Segment Information

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 chief operating decision maker (“CODM”) manages the business. Based on changes to the Company’s organizational structure and how the CODM reviews operating results and makes decisions about resource allocation, certain operations and administrative and corporate costs previously reported in Corporate & All Other are now included in the Foodservice segment. The Company continues to have three reportable segments: Foodservice, Convenience, and Specialty. The presentation and amounts for the three and six months ended December 28, 2024 have been recast to reflect these segment changes.

The 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 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 tobacco products, food and foodservice related products, and other items to convenience stores across North America. Our Specialty segment specializes in distributing candy, snacks, beverages, and other food items nationally to vending, office coffee service, theater, retail, hospitality, and other channels and utilizes 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 fleet network.

Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service.

Intersegment sales represent sales between the segments, which are eliminated in consolidation.

The Company’s CODM, our Chief Executive Officer, utilizes net sales and Segment Adjusted EBITDA, which is the Company’s GAAP measure of segment profit, to evaluate each operating segment’s financial performance and make decisions about resource allocation. 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 last-in-first-out (“LIFO”) reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives. The CODM reviews budget-to-actual and year-over-year variances for net sales and Segment Adjusted EBITDA each month when assessing segment performance and making decisions about allocating resources to the segments.

The Company adopted ASU 2023-07, Segment Reporting - Improving Reportable Segment Disclosures (Topic 280) for the fiscal year ended June 28, 2025 and applied the provisions on a retrospective basis to all periods presented in this Form 10-Q. Adoption of this standard resulted in additional disclosure of the significant expenses in the respective segments. The Company’s significant segment expenses, Segment Cost of Goods Sold and Segment Operating Expense, are significant to the segment, regularly provided to or easily computed from information regularly provided to our CODM, and included in Segment Adjusted EBITDA. Accordingly, the segment expenses presented below exclude the same items that are excluded from Segment Adjusted EBITDA.


	Reportable Segments								Reconciling Items
(In millions)	Foodservice			Convenience			Specialty		Corporate & All Other		Eliminations			Consolidated
For the three months ended December 27, 2025
Net external sales	$	8,798.9		$	6,331.0		$	1,251.9	$	62.9	$	—		$	16,444.7
Inter-segment sales		3.8			—			0.8		176.8		(181.4	)		—
Total net sales		8,802.7			6,331.0			1,252.7		239.7		(181.4	)		16,444.7

Less:
Segment cost of goods sold(1)		7,513.4			5,887.3			1,016.9
Segment operating expenses(2)		997.8			322.4			135.6
Segment other (income) expense, net(3)		(0.6	)		(0.4	)		—
Segment Adjusted EBITDA		292.1			121.7			100.2

Depreciation and amortization		133.4			41.0			13.1		12.4		—			199.9
Capital expenditures		71.4			18.3			3.6		20.1		—			113.4

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company

Performance Food Group Co 10-Q