Performance Food Group Co

Previous wording

We market and distribute food and food-related products to customers across North America from our over 150 locations 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 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. 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.

Current wording

We market and distribute more than 300,000 food and food-related products to customers across North America, from our over 150 distribution centers to over 350,000 customer locations in the food-away-from-home industry. We offer our customers a broadline assortment of products including our proprietary-branded products, nationally branded products, and products bearing our customers’ brands. 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 alternative nicotine products. 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.

Previous wording

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. 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 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 distributes candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, 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. 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.

Current wording

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. Our Foodservice segment distributes a broadline assortment of products under national brands, customer brands, and our 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, alternative nicotine products, food and food-related products and other non-food items to convenience stores across North America. Our Specialty segment distributes candy, snacks, and beverages as well as fresh and frozen perishable foods and other non-food items nationally to vending and office coffee service distributors, retailers and entertainment venues, and provides small parcel “pick and pack” capabilities, including fulfillment of ambient, frozen, fresh and temperature sensitive items, utilizing third-party carriers to deliver order sizes too small to be served effectively by our fleet network. 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.

Previous wording

Our business, our industry and the economy are subject to a number of macroeconomic conditions triggered by developments beyond our control, which can result in reduced demand for our products. The Company and our industry may face challenges related to geopolitical dynamics and other events, which can drive economic volatility, market uncertainty, inflationary pressure, supply chain disruptions, or lower disposable incomes, negatively affecting consumer confidence and discretionary spending. We continue to actively monitor the impacts of the evolving macroeconomic and geopolitical landscape, including rapidly evolving tariff and global trade policies and recent geopolitical events (such as the military conflict in the Middle East), on all aspects of our business. Although we have seen little impact from tariffs on our results during the first nine months of fiscal 2026, rapidly evolving tariff and global trade policies and geopolitical dynamics have continued to cause uncertainty throughout the first nine months of fiscal 2026. On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Although U.S. Customs and Border Protection is developing refund procedures for tariffs previously paid under IEEPA, significant uncertainty remains regarding potential tariff refunds and replacement tariffs under other statutes. The timing and amount of any recovery are uncertain and, therefore, we are unable to estimate the financial effects of potential tariff refunds, if any, at this time. The situation continues to evolve, and further legislative, regulatory, or judicial developments may affect the ultimate outcome and the availability or timing of any refunds. The scope and duration of existing and new tariffs imposed under alternate authorities and the resulting future impact on general economic conditions and our future financial position, liquidity, and results of operations likewise remains uncertain. Additionally, recent hostilities and geopolitical tensions, such as the conflict in the Middle East, have contributed to significantly higher fuel prices. To the extent increasing fuel expenses are not able to be offset by (i) fuel collar derivatives and/or (ii) diesel fuel surcharges (which are generally recognized on a one-month lag behind changes in fuel prices), prolonged high fuel prices could adversely affect our business, financial condition, or results of operations. Further, sustained macroeconomic challenges, whether due to tariffs, rising fuel prices, or otherwise, could negatively affect consumer discretionary spending decisions within our customers’ establishments, which could negatively impact our sales and profitability.

Current wording

Our business, our industry and the economy are subject to a number of macroeconomic conditions triggered by developments beyond our control, which can result in reduced demand for our products. The Company and our industry may face challenges related to geopolitical dynamics and other events, which can drive economic volatility, market uncertainty, inflationary pressure, supply chain disruptions, or lower disposable incomes, negatively affecting consumer confidence and discretionary spending. We continue to actively monitor the impacts of the evolving macroeconomic and geopolitical landscape, including dynamic tariff and global trade policies, recovery of potential tariff refunds, and recent geopolitical events (including the ongoing conflicts in Ukraine and the Middle East), on all aspects of our business. Although we saw little impact from tariffs on our results during fiscal 2026 and the first quarter of fiscal 2027, rapidly evolving tariff and global trade policies and geopolitical dynamics continued to cause uncertainty. Additionally, recent hostilities and geopolitical tensions, such as the conflict in the Middle East, contributed to significantly higher fuel prices in fiscal 2026 and the first quarter of fiscal 2027. To the extent increasing fuel expenses are not able to be offset by (i) diesel fuel surcharges (which are generally recognized on a one-month lag following changes in fuel prices) and/or (ii) gains on derivative instruments, prolonged high fuel prices could adversely affect our business, financial condition, or results of operations. Further, sustained macroeconomic challenges, whether due to tariffs, rising fuel prices, or otherwise, have in the past and could in the future negatively affect consumer discretionary spending decisions within our customers’ establishments, which could negatively impact our sales and profitability.

Previous wording

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. The share increases in periods of increasing employment, rising disposable income, increases in the number of restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income households, and an aging population base that spends more per capita at foodservice establishments and is adversely impacted when these factors move in the opposite direction. 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.

Current wording

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. The share increases in periods of increasing employment, rising disposable income, increases in the number of restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income households, and an aging population base that spends more per capita at foodservice establishments and is adversely impacted when these factors move in the opposite direction. The food-away-from-home 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.

Previous wording

Case volume represents the volume of products sold to customers during a given period of time. Case growth is calculated by dividing the increase (decrease) in the case volumes sold year-over-year by the number of cases sold in the prior year. We define a case as the lowest level of packaged products as received from our suppliers, with one case containing several individually packaged units of the same product. Where individual packaged units are sold separately, case volume is calculated using the case equivalent quantity sold. Case growth provides useful information to management and investors in evaluating sales performance and as an indicator of gross margin performance. In our assessment of sales performance, management utilizes total case growth, as well as organic case growth, which excludes acquisition-related growth until the acquired business has been reflected in our results of operations for at least 12 months. While overall case growth reflects a key component of sales growth, case growth by customer type provides additional context around gross profit performance. Management also reviews case volume growth by customer type, with distinction between Foodservice independent and chain customers, as this provides a measure of gross profit performance due to the pricing strategies and product mix differences associated with each customer type.

Current wording

Case volume represents the volume of products sold to customers during a given period of time. Case growth is calculated by dividing the increase (decrease) in the case volumes sold year-over-year by the number of cases sold in the prior year. We define a case as the lowest level of packaged products as received from our suppliers, with one case containing several individually packaged units of the same product. Where individual packaged units are sold separately, case volume is calculated using the case equivalent quantity sold. Case growth provides useful information to management and investors in evaluating sales performance and as an indicator of gross margin performance. In our assessment of sales performance, management utilizes total case growth, as well as organic case growth, which excludes acquisition-related growth until the acquired business has been reflected in our results of operations for at least 12 months. Management also reviews case volume growth by customer type, with distinction between Foodservice independent and chain customers, as this provides a measure of gross profit performance due to the pricing strategies and product mix differences associated with each customer type.

Previous wording

Net sales is equal to gross sales, plus excise taxes, minus sales returns; minus sales incentives that we offer to our customers, such as rebates and discounts that are offsets to gross sales; and certain other adjustments. 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.

Current wording

Net sales is equal to gross sales, plus excise taxes, minus sales returns; minus sales incentives that we offer to our customers, such as rebates and discounts that are offsets to gross sales; and certain other adjustments. Our net sales are driven by changes in case volumes, product inflation or deflation that is reflected in the pricing of our products, mix of products sold, and acquisitions.

Previous wording

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), inbound freight, and remittances of excise tax. Cost of goods sold generally changes as we incur higher or lower costs from our suppliers and as our customer and product mix changes.

Current wording

Gross profit is equal to our net sales minus our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of vendor rebates and promotional incentives), inbound freight, and remittances of excise tax. Cost of goods sold generally changes as we incur higher or lower costs from our suppliers and as our customer and product mix changes.

Previous wording

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. 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 2029, Notes due 2032, and Notes due 2034 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). Under our ABL

Current wording

Management measures operating performance based on our Adjusted EBITDA, defined as net income before interest expense, interest income, income taxes, and depreciation and amortization, further adjusted to exclude certain items that we do not consider part of our core operating results. 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 2029, Notes due 2032, and Notes due 2034 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). 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.

Previous wording

Includes amounts related to litigation-related accruals, professional fees related to the modification of debt, insurance proceeds due to hurricane and other weather-related events, gains and losses on disposals of fixed assets, franchise tax expense, favorable and unfavorable leases, foreign currency transaction gains and losses, and other adjustments permitted by our ABL Facility. Additionally, for the nine months ended March 28, 2026, Other adjustments includes $20.2 million of legal and professional fees incurred in connection with shareholder activism and the clean team agreement with US Foods Holding Corp.

Current wording

Includes amounts related to gains and losses on other commodity derivatives, insurance proceeds due to hurricane and other weather-related events, franchise tax expense, favorable and unfavorable leases, gains and losses on disposals of fixed assets, litigation-related accruals, foreign currency transaction gains and losses, and other adjustments permitted by our ABL Facility. Additionally, for the three months ended September 27, 2025, other adjustments included $9.9 million of legal and professional fees incurred in connection with shareholder activism and the clean team agreement with US Foods Holding Corp.

Previous wording

Net sales increased $983.7 million, or 6.4%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026 primarily driven by 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. Net sales increased $3.5 billion, or 7.4%, for the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025 primarily driven by an increase in cases sold, including a favorable shift in mix of cases sold, acquisitions, including the Cheney Brothers Acquisition, and an increase in selling price per case as a result of inflation. Total case volume increased 4.4% and 5.7% during the third quarter and first nine months of fiscal 2026, respectively, compared to the same periods of fiscal 2025. Total organic case volume increased 3.7% and 3.1% in the third quarter and first nine months of fiscal 2026, respectively, compared to the same periods of fiscal 2025. Total organic case volume benefited from an increase of 6.5% and 6.0% in organic independent cases sold during the third quarter and first nine months of fiscal 2026, respectively, including growth in Performance Brands cases and growth in cases sold to Foodservice’s chain business. The overall rate of product cost inflation was approximately 4.5% for both the third quarter and first nine months of fiscal 2026.

Current wording

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. Net sales increased $942.5 million, or 5.5%, for the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 primarily driven by an increase of $437.8 million resulting from an increase in organic cases sold, $261.2 million of incremental net sales from recent acquisitions, and an increase of $243.5 million related to an increase in selling price per case as a result of inflation. Total case volume increased 4.2% during the first quarter of fiscal 2027 compared to the same period of fiscal 2026. Total organic case volume increased 2.5% in the first quarter of fiscal 2027 compared to the same period of fiscal 2026. Total organic case volume benefited from a 5.5% increase in organic independent Foodservice cases, including growth in Performance Brands cases, and growth in cases sold to Foodservice’s chain business. The overall rate of product cost inflation was approximately 3.4% for the first quarter of fiscal 2027.

Previous wording

Gross profit increased $116.4 million, or 6.4%, for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 primarily driven by 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, which generates higher gross profit due to additional services provided. Gross profit increased $507.4 million, or 9.4%, for the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025 primarily driven by the same drivers of the increase in gross profit for the third quarter of fiscal 2026, as well as acquisitions, including the Cheney Brothers Acquisition.

Current wording

Gross profit increased $170.9 million, or 8.5%, for the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 primarily driven by vendor rebates and promotional incentives, a favorable shift in the mix of cases sold, including growth in the independent channel which generates higher gross profit due to additional services provided, as well as recent acquisitions.

Previous wording

Net income decreased $16.6 million, or 28.5%, for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 primarily driven by an increase in operating expenses, partially offset by increases in gross profit and other income due to unrealized gains on fuel collars. Net income decreased $11.7 million, or 5.6%, for the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025 primarily driven by increases in operating expenses and interest expense, partially offset by increases in gross profit and other income due to unrealized gains on fuel collars. The increase in interest expense for the first nine months of fiscal 2026 was primarily the result of an increase in the average borrowings, including finance lease obligations, during the first nine months of fiscal 2026 compared to the prior year period.

Current wording

Net income increased $35.9 million, or 38.4%, for the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 primarily driven by an increase in gross profit and decrease in interest expense, partially offset by increases in operating expenses and income tax expense. The decrease in interest expense was primarily the result of decreases in the average borrowings and average interest rate during the first quarter of fiscal 2027 compared to the prior year period.

Previous wording

The Company reported income tax expense of $14.2 million and $67.1 million for the third quarter and first nine months of fiscal 2026, respectively, compared to income tax expense of $20.2 million and $73.4 million for the third quarter and first nine months of fiscal 2025, respectively. Our effective tax rate for both the third quarter and first nine months of fiscal 2026 was 25.4% compared to 25.8% and 26.0% for the third quarter and first nine months of fiscal 2025, respectively. The effective tax rate for the three months ended March 28, 2026 differed from the prior year period primarily due to an increase in tax credits net of valuation allowance established, a decrease in state and foreign taxes as a percentage of income, and a decrease in non-deductible expenses, partially offset by a decrease in deductible discrete items related to stock-based compensation. The effective tax rate for the nine months ended March 28, 2026 differed from the prior year period primarily due to an increase in tax credits net of valuation allowance established, partially offset by a decrease in deductible discrete items related to stock-based compensation and an increase in foreign taxes as a percentage of income.

Current wording

The Company reported income tax expense of $43.6 million for the first quarter of fiscal 2027 compared to $27.9 million for the first quarter of fiscal 2026. Our effective tax rate for the first quarter of fiscal 2027 was 25.2% compared to 23.0% for the first quarter of fiscal 2026. The effective tax rate differed from the prior year period primarily due to a decrease in deductible discrete items related to stock-based compensation and a decrease in federal tax credits net of valuation allowance established, partly offset by a decrease in non-deductible compensation and other non-deductible expenses and a decrease in foreign taxes as a percentage of income.

Previous wording

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. Management evaluates the performance of these segments based on various operating and financial metrics, including their respective sales growth and Segment Adjusted EBITDA, which is the Company’s GAAP measure of segment profit. 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 13. Segment Informationof the consolidated financial statements in this Form 10-Q.

Current wording

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. Management evaluates the performance of these segments based on various operating and financial metrics, including their respective sales growth and Segment Adjusted EBITDA, which is the Company’s GAAP measure of segment profit. 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 changes in the LIFO reserve, stock-based compensation expense, and acquisition and business optimization expenses. See Note 14. Segment Informationof the consolidated financial statements in this Form 10-Q.

Previous wording

The following tables set forth net sales and Segment Adjusted EBITDA by reportable segment and the reconciling items for Corporate & All Other and eliminations for the periods indicated (dollars in millions):

Current wording

The following tables set forth total net sales and Segment Adjusted EBITDA by reportable segment and the reconciling items for Corporate & All Other and eliminations for the periods indicated (dollars in millions):

Previous wording

Net sales for Foodservice increased $421.4 million, or 5.0%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026 driven primarily by organic case volume growth, including growth in our independent and chain business, an increase in selling price per case as a result of inflation, and recent acquisitions. Net sales for Foodservice increased $2.3 billion, or 9.4%, from the first nine months of fiscal 2025 to the first nine months of fiscal 2026 driven primarily by acquisitions, including the Cheney Brothers Acquisition, in addition to organic case volume growth and an increase in selling price per case as a result of inflation. Cheney Brothers contributed $2.8 billion in net sales for the first nine months of fiscal 2026 compared to $1.8 billion for the first nine months of fiscal 2025. Total case growth for Foodservice was 3.9% in the third quarter of fiscal 2026 and 7.5% in the first nine months of fiscal 2026, compared to the prior year periods. Total independent case growth was 7.3% and 11.1% for the third quarter and first nine months of fiscal 2026, respectively, compared to the prior year periods. Securing new, and expanding business with, independent customers resulted in organic independent case growth of 6.5% and 6.0% in the third quarter and first nine months of fiscal 2026, respectively, compared to the prior year periods. For the third quarter and first nine months of fiscal 2026, independent sales as a percentage of total Foodservice sales were 41.5% and 41.8%, respectively.

Current wording

Net sales for Foodservice increased $458.5 million, or 5.0%, from the first quarter of fiscal 2026 to the first quarter of fiscal 2027 primarily driven by $261.2 million of incremental net sales contributions from recent acquisitions, a $151.8 million increase as a result of organic case volume growth, and a $45.5 million increase related to an increase in selling price per case as a result of inflation. Total case growth for Foodservice was 4.2% and organic case growth was 1.7% for the first quarter of fiscal 2027, compared to the prior year period. Total independent case growth was 7.8% for the first quarter of fiscal 2027 compared to the prior year period. Securing new, and expanding business with, independent customers resulted in organic independent case growth of 5.5% in the first quarter of fiscal 2027 compared to the prior year period. For the first quarter of fiscal 2027, independent sales as a percentage of total Foodservice segment sales were 43.0%.

Previous wording

Adjusted EBITDA for Foodservice increased $6.0 million, or 2.2%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026. 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 $85.8 million, or 7.0%, in the third quarter of fiscal 2026 compared to the prior year period primarily driven by growth in cases sold, a favorable shift in the mix of cases sold, including more Performance Brands products sold to our independent customers, and recent acquisitions. Operating expenses impacting Foodservice’s Adjusted EBITDA increased $79.7 million, or 8.4%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026. Operating expenses increased compared to the prior year period primarily as a result of a $54.5 million increase in personnel expenses related to salaries, benefits, and commissions, $10.3 million additional operating expenses as a result of recent acquisitions, a $6.8 million increase in insurance expense related to auto insurance and workers’ compensation, and a $5.5 million increase in fuel expense due to higher fuel prices and miles driven as a result of new business.

Current wording

Adjusted EBITDA for Foodservice increased $43.5 million, or 13.4%, from the first quarter of fiscal 2026 to the first quarter of fiscal 2027 primarily as a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Foodservice’s Adjusted EBITDA increased $141.9 million, or 10.7%, in the first quarter of fiscal 2027, compared to the prior year period, primarily driven by growth in cases sold, a favorable shift in the mix of cases sold, including more Performance Brands products sold to independent customers, vendor rebates and promotional incentives, and recent acquisitions.

Previous wording

Net sales for Convenience increased $501.5 million, or 8.7%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026 and increased $1,088.2 million, or 6.0%, from the first nine months of fiscal 2025 to the first nine months of fiscal 2026 driven primarily by case volume growth due to the addition of new chain customers and an acquisition completed in the fourth quarter of fiscal 2025 and inflation in selling price per case, partially offset by a revenue mix shift due to the decline in cigarette case volume. Total Convenience cases sold increased 8.8% and 5.2% for the third quarter and first nine months of fiscal 2026, respectively, compared to the prior year periods. Securing new chain customers resulted in an organic increase of 8.3% and 4.7% in Convenience cases sold for the third quarter and first nine months of fiscal 2026, respectively, compared to the prior year periods.

Current wording

Net sales for Convenience increased $353.2 million, or 5.4%, from the first quarter of fiscal 2026 to the first quarter of fiscal 2027 primarily driven by an increase of $274.4 million as a result of case growth due to the addition of new chain customers and an increase of $78.8 million related to an increase in selling price per case related to inflation, partially offset by a mix shift from cigarettes to alternative nicotine products. Total Convenience cases sold increased 4.1% in the first quarter of fiscal 2027 compared to the prior year period.

Previous wording

Depreciation and amortization of intangible assets recorded in this segment increased from $39.2 million in the third quarter of fiscal 2025 to $41.1 million in the third quarter of fiscal 2026 and increased from $116.8 million in the first nine months of fiscal 2025 to $122.0 million in the first nine months of fiscal 2026.

Current wording

Depreciation of fixed assets and amortization of intangible assets recorded in this segment increased from $39.9 million in the first quarter of fiscal 2026 to $41.1 million in the first quarter of fiscal 2027.

Previous wording

We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. To add stability to interest expense and manage our exposure to interest rate movements, we enter into interest rate swap agreements. 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 March 28, 2026, $150.0 million of the outstanding ABL Facility balance is hedged under interest rate swaps which results in 72% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.

Current wording

We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. To add stability to interest expense and manage our exposure to interest rate movements, we enter into interest rate swap agreements. 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 September 26, 2026, $150.0 million of the outstanding ABL Facility balance is hedged under interest rate swaps, which results in 71% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.

Previous wording

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. This authorization replaces the previously authorized $300 million share repurchase program. The new share repurchase program has an expiration date of May 27, 2029. Repurchases of the Company’s outstanding common stock will be made in accordance with applicable securities laws and may be made at management’s discretion from time to time in the open market, through privately negotiated transactions or otherwise, including pursuant to Rule 10b5-1 trading plans. The share repurchase program may be amended, suspended or discontinued at any time at the Board’s discretion, and does not commit the Company to repurchase any specified number of shares of its common stock. The actual timing, number and value of the shares to be purchased under the program will be determined by the Company at its discretion and will depend on a number of factors, including the performance of the Company’s stock price, general market and other conditions, applicable legal requirements and compliance with the terms of the Company’s outstanding indebtedness. During the three and nine months ended March 28, 2026, the Company repurchased and subsequently retired less than 0.1 million shares of common stock, for a total of $1.2 million or an average cost of $83.11 per share. As of March 28, 2026, $498.8 million remained available for share repurchases.

Current wording

On May 27, 2025, the Board of Directors 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. Repurchases of the Company’s outstanding common stock will be made in accordance with applicable securities laws and may be made at management’s discretion from time to time in the open market, through privately negotiated transactions or otherwise, including pursuant to Rule 10b5-1 trading plans. The share repurchase program may be amended, suspended or discontinued at any time at the Board’s discretion, and does not commit the Company to repurchase any specified number of shares of its common stock. The actual timing, number and value of the shares to be purchased under the program will be determined by the Company at its discretion and will depend on a number of factors, including the performance of the Company’s stock price, general market and other conditions, applicable legal requirements and compliance with the terms of the Company’s outstanding indebtedness. As of September 26, 2026, $498.5 million remained available for share repurchases.

Previous wording

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. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 6. Debt and Note 7. Leases, respectively, of the consolidated financial statements in this Form 10-Q. As of March 28, 2026, the Company had total purchase obligations of $254.5 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. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. As of March 28, 2026, the Company had commitments of $114.8 million for capital projects related to warehouse expansion and improvements and warehouse equipment. 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 March 28, 2026.

Current wording

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. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 6. Debt and Note 8. Leases, respectively, within the Notes to Consolidated Financial Statements included in Item 1. As of September 26, 2026, the Company had total purchase obligations of $217.3 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. 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 $85.5 million for capital projects related to warehouse expansion and improvements and warehouse equipment. 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 September 26, 2026.

Previous wording

We believe that our cash flows from operations and available borrowing capacity will be sufficient both to meet our anticipated cash requirements over at least the next 12 months and to maintain sufficient liquidity for normal operating purposes and to fund capital expenditures.

Current wording

We believe that our cash flows from operations and available borrowing capacity will be sufficient both to meet our anticipated cash requirements over at least the next 12 months and beyond, to maintain sufficient liquidity for normal operating purposes, and to fund capital expenditures.

Previous wording

As of March 28, 2026, our cash balance totaled $56.1 million, including restricted cash of $10.2 million, as compared to a cash balance totaling $86.7 million, including restricted cash of $8.2 million, as of June 28, 2025.

Current wording

As of September 26, 2026, our cash balance totaled $46.6 million, including restricted cash of $10.7 million, as compared to a cash balance totaling $103.1 million, including restricted cash of $10.7 million, as of June 27, 2026.

Previous wording

During the first nine months of fiscal 2026 and fiscal 2025, our operating activities provided cash flow of $1,071.9 million and $827.1 million, respectively. The increase in cash flow provided by operating activities in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025 was largely driven by higher cash-based operating income, improvements in working capital, and income tax refunds of $51.0 million received during the first nine months of fiscal 2026, partially offset by advanced purchases of inventory to take advantage of preferred pricing.

Current wording

During the first three months of fiscal 2027 and fiscal 2026, net cash used in operating activities was $89.3 million and $145.2 million, respectively. The improvement in net cash used in operating activities in the first three months of fiscal 2027 compared to the first three months of fiscal 2026 was largely driven by a change in the timing and volume of advanced purchases of inventory to take advantage of preferred pricing.

Previous wording

Cash used in investing activities totaled $656.9 million in the first nine months of fiscal 2026 compared to $2,875.1 million in the first nine months of fiscal 2025. These investments consisted of cash paid for acquisitions of $384.2 million in the first nine months of fiscal 2026 compared to $2,552.9 million in the first nine months of fiscal 2025, along with capital purchases of property, plant, and equipment of $265.9 million and $332.7 million for the first nine months of fiscal 2026 and the first nine months of fiscal 2025, respectively. For the first nine months of both fiscal 2026 and fiscal 2025, 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:

Current wording

Net cash used in investing activities was $53.8 million in the first three months of fiscal 2027 compared to $78.0 million in the first three months of fiscal 2026. These investments consisted of $4.1 million cash paid for an acquisition in the first three months of fiscal 2027 compared to no cash paid for acquisitions in the first three months of fiscal 2026, along with capital purchases of property, plant, and equipment of $53.9 million and $78.9 million for the first three months of fiscal 2027 and the first three months of fiscal 2026, respectively. For the first three months of fiscal 2027, purchases of property, plant, and equipment primarily consisted of outlays for transportation equipment, information technology, warehouse equipment, and warehouse improvements and expansions. The following table presents the capital purchases of property, plant, and equipment by segment.

Previous wording

During the first nine months of fiscal 2025, our financing activities provided cash flow of $2,038.6 million, which consisted primarily of $1,229.7 million in net borrowings under our ABL Facility and $1.0 billion in cash received from the issuance and sale of the Notes due 2032, partially offset by $135.4 million in payments under finance lease obligations and $43.6 million in cash paid for repurchases of common stock.

Current wording

During the first three months of fiscal 2027, net cash provided by financing activities was $86.6 million, which consisted primarily of $162.3 million in net borrowings under our ABL Facility, which was partially offset by $70.3 million in payments under finance lease obligations.

Previous wording

The Company’s financing arrangements as of March 28, 2026 are described in Note 6. Debtof the consolidated financial statements within this Form 10-Q. As of March 28, 2026, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2029, Notes due 2032, and the Notes due 2034.

Current wording

The Company’s financing arrangements as of September 26, 2026 are described in Note 6. Debtof the consolidated financial statements within this Form 10-Q. As of September 26, 2026, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2029, the Notes due 2032, and the Notes due 2034.

Previous wording

Total assets for Convenience increased $257.2 million from $4,086.5 million as of March 29, 2025 to $4,343.7 million as of March 28, 2026. During this time period, the segment increased its inventory due to advanced purchases to take advantage of preferred pricing and increased its property, plant and equipment through additional transportation equipment leases and a warehouse under finance lease. Additionally, the Convenience segment’s accounts receivable balance increased compared to the prior year period. These increases were partially offset by decreases in intangible assets due to normal amortization and right-of-use assets. Total assets for Convenience increased $66.9 million from $4,276.8 million as of June 28, 2025 to $4,343.7 million as of March 28, 2026. During this time period, the segment increased its inventory due to advanced purchases to take advantage of preferred pricing and increased its property, plant and equipment through additional transportation equipment leases and a warehouse under finance lease. These increases were partially offset by decreases in intangible assets due to normal amortization, cash, and accounts receivable.

Current wording

Total assets for Convenience increased $21.4 million from $4,718.6 million as of September 27, 2025 to $4,740.0 million as of September 26, 2026 primarily due to increases in inventory, prepaid expenses, and property, plant and equipment through additional transportation equipment under finance leases, partially offset by decreases in intangible assets and right-of-use assets due to normal amortization. Total assets for Convenience increased $278.5 million from $4,461.5 million as of June 27, 2026 to $4,740.0 million as of September 26, 2026 primarily due to increases in inventory due to advanced purchases to take advantage of preferred pricing, partially offset by a decrease in cash and accounts receivable.

Previous wording

Total assets for Specialty increased $24.6 million from $1,444.8 million as of March 29, 2025 to $1,469.4 million as of March 28, 2026. During this time period, this segment increased its accounts receivable and inventory, partially offset by decreases in right-of-use assets, property, plant, and equipment due to normal depreciation, and intangible assets due to normal amortization. Total assets for Specialty decreased $117.5 million from $1,586.9 million as of June 28, 2025 to $1,469.4 million as of March 28, 2026 primarily due to decreases in inventory due to sales in the normal course of business, property, plant, and equipment due to normal depreciation, accounts receivable, right-of-use assets, and intangibles assets due to normal amortization.

Current wording

Total assets for Specialty increased $20.2 million from $1,509.9 million as of September 27, 2025 to $1,530.1 million as of September 26, 2026 primarily due to increases in accounts receivable, partially offset by decreases in property, plant and equipment, and right-of-use assets due to normal depreciation and amortization. Total assets for Specialty decreased $93.5 million from $1,623.6 million as of June 27, 2026 to $1,530.1 million as of September 26, 2026 primarily due to decreases in inventory as a result of sales in the normal course of business, as well as decreases in accounts receivable and property, plant and equipment due to normal depreciation.