Performance Food Group's stock pops after announcing profit beat and latest deal

By Steve Gelsi and Ciara Linnane

Company is buying Florida-based Cheney Bros. to expand its presence in the southeast

Performance Food Group Co.'s stock rose Wednesday, after the food and foodservice distribution company announced its latest acquisition and posted better-than -expected fiscal fourth-quarter profit.

The Richmond, Va.-based company (PFGC) agreed to pay $2.1 billion to buy Cheney Bros. Inc., a Florida-based foodservice distributor, to build up its presence in the Southeastern U.S. The company had closed its acquisition of José Santiago, a broadline food service distributor headquartered in Puerto Rico, in July.

Performance Food Group's stock was rallying by 8% on Wednesday.

Cheney Bros. is currently owned by private-equity firm Clayton Dubilier & Rice and the Cheney family, with about $3.2 billion in annual revenue and 3,600 employees.

Performance Food Group said the deal will grow its business in Georgia and Florida, as well as South Carolina and North Carolina. The company is expecting the deal to deliver $50 million of cost savings by the third full fiscal year after close, which is expected in 2025.

Separately, the company posted net income of $166.5 million, or $1.07 a share, for its fiscal fourth quarter to June 29, up from $150.1 million, or 96 cents a share, in the year-earlier period.

Adjusted for one-time items, the company had earnings per share of $1.45, well ahead of the $1.37 FactSet consensus.

Sales rose to $15.189 billion from $14.865 billion a year ago, just below the $15.249 billion FactSet consensus.

Total case volume rose 1.1% in the quarter, while organic independent foodservice case volume rose 3.7%.

The company is now expecting fiscal first-quarter sales to range from $15.2 billion to $15.5 billion, while analysts polled by FactSet expect $15.5 billion. For the full fiscal 2025, it expects sales to range from $60 billion to $61 billion, while FactSet is expecting $60.8 billion.

Performance Food Group stock is down 3% in 2024 while the S&P 500 has risen 13.9%.

-Steve Gelsi -Ciara Linnane

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08-14-24 1111ET

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