Performance Food Group (PFGC)·Q2 2026 Earnings Summary
Performance Food Group Misses on EPS as Integration Costs Weigh; Stock Drops 15%
February 4, 2026 · by Fintool AI Agent
Performance Food Group (PFGC) reported fiscal Q2 2026 results that disappointed the Street, with adjusted EPS missing consensus by over 10% as Cheney Brothers integration costs ran higher than anticipated. The stock tumbled nearly 15% in reaction, its worst single-day decline in years. Management lowered full-year guidance but maintained confidence in three-year strategic targets.
Did Performance Food Group Beat Earnings?
PFG missed on all key metrics this quarter:
Total company net sales grew 5.2% year-over-year, with all three operating segments contributing growth. However, the quarter faced multiple headwinds including the government shutdown impact, cheese and poultry deflation, and elevated integration costs at Cheney Brothers.
GAAP net income was $61.7 million, up 45.5% year-over-year, with diluted EPS of $0.39. The gap between GAAP and adjusted earnings reflects various non-recurring items related to acquisitions and restructuring.
Ask Fintool AI AgentWhat Did Management Guide?
PFG lowered full-year guidance, citing the difficult Q2 operating environment as a flow-through impact:
The Q3 guidance embeds several headwinds including continued cheese and poultry deflation, ongoing Cheney integration costs, specialty segment pressures, and the impact of recent winter storms.
Importantly, management maintained their three-year Investor Day targets of $73B-$75B revenue and $2.3B-$2.5B EBITDA by FY2028.
"Our results keep us on track to achieve the three-year projections we announced at Investor Day." — Patrick Hatcher, CFO
How Did the Stock React?
PFGC shares dropped 14.9% on earnings day, falling from $97.09 to $82.60. This represents the stock's worst single-day decline in recent memory and pushes shares down nearly 24% from the 52-week high of $109.05.
The magnitude of the selloff reflects investor concern over:
- The 10% EPS miss vs. expectations
- Lowered full-year guidance
- Uncertainty around Cheney integration timeline
- Deflation headwinds in key protein categories
What Changed From Last Quarter?
Several notable shifts from Q1 2026:
Leadership Transition: CEO George Holm retired after nearly 25 years, with Scott McPherson taking the helm. McPherson emphasized continuity while highlighting technology leverage as a differentiator going forward.
Cheney Integration Costs Running Hot: The new 350,000 sq ft Florence, SC facility and 42,000 sq ft St. Cloud, FL manufacturing facility are coming online, creating near-term expense pressure. Management now expects synergies to flow primarily in years two and three post-acquisition.
Deflation Emerged as a Drag: Cheese and poultry deflation impacted food service margins, with management citing oversupply dynamics in both categories.
Weather Disruption: February storms materially impacted early Q3 operations, factored into guidance.
Segment Performance
Food Service
The core food service segment delivered 5.3% organic independent case growth despite challenging traffic trends. Key highlights:
- Independent account growth of 5.8%
- Sales force expanded nearly 6% year-over-year
- Share gains across chicken, burger, barbecue, and seafood concepts
- Chain restaurant volume grew low single digits despite industry traffic down 3.5%
Convenience (Core-Mark)
The convenience segment was the star performer:
- Net sales up 6.1% on market share gains and new account wins
- Adjusted EBITDA increased 13.4% with strong cost discipline
- Successfully onboarded 500+ Love's stores in late September
- Over 600 RaceTrac locations integrated in December
- Non-combustible nicotine products grew mid-teens
Specialty (Vistar)
Mixed results with structural headwinds:
- Adjusted EBITDA grew nearly 7% with 40bps margin expansion
- Theater channel down over 30%, representing ~$50M revenue drag
- Strength in vending, office coffee, retail, campus, and travel channels
Ask Fintool AI AgentKey Q&A Highlights
On Cheney Brothers timing: "We knew going in that we were going to make some material investments in their infrastructure... their costs are running a little bit higher than we anticipated. We anticipate the majority of the synergies to start flowing through the income statement late in year two through year three." — Scott McPherson, CEO
On procurement synergies: "The clean room exercise was just a further validation that that opportunity exists, and that we have a clear line of sight to go capture it... We're gonna be able to get to that top end of the $100-$125 million of procurement synergies over our three-year plan." — Scott McPherson
On potential M&A: "Really no change to our approach to M&A. George and I have collaborated on M&A for the last four years. We'll continue to collaborate moving forward on that." — Scott McPherson
On Florida market concerns: "I do think there's been a little bit of a slowdown with international travel and the Canadian travel in the marketplace. But... we have a ton of confidence in Florida overall... They're poised for a big rebound in that state." — Scott McPherson
Capital Allocation and Financial Position
PFG generated $456 million of operating cash flow in H1 2026, up $77 million year-over-year. Free cash flow was $264 million in the first half, up $89 million vs. prior year.
Capital allocation priorities remain focused on debt reduction, with no share repurchases in the quarter. Management noted the M&A pipeline remains "robust" but emphasized high standards and due diligence.
CapEx is tracking to approximately 70 basis points of net revenue for the full year, in line with long-term targets.
Forward Catalysts and Risks to Watch
Potential Upside:
- Tax refund season and "no taxes on tips/overtime" policy could boost restaurant traffic
- World Cup 2026 as potential tailwind (not embedded in guidance)
- Love's and RaceTrac full-quarter contribution in Q3/Q4
- Cheney synergies accelerating in FY2027
Key Risks:
- Cheese and poultry deflation persisting longer than expected
- Theater recovery remaining elusive
- Florida tourism softness (Canadian travel, theme parks)
- Integration execution at Cheney Brothers
- SNAP benefit changes
Historical EPS Beat/Miss Trend
*Values retrieved from S&P Global
PFG has had a mixed beat/miss record over the past year, with fiscal Q4 periods (summer quarter) typically the strongest.
Ask Fintool AI AgentFiscal Q2 2026 ended December 28, 2025. View full earnings call transcript.