Performance Food Group Company

Your program is about to begin. Good day and welcome to PFG's fiscal year Q2 2025 earnings conference call. If you would like to ask a question at the conclusion of the prepared remarks, please press the star key followed by number one on your telephone keypad at any time. I would now like to turn the call over to Bill Marshall, Vice President, Investor Relations for PFG. Please go ahead, sir.

Thank you and good morning. We're here with George Holm, PFG CEO, Patrick Hatcher, PFG CFO, and Scott McPherson, PFG COO. We issued a press release this morning regarding our 2025 fiscal second quarter results, which can be found in the investor relations section of our website at pfgc.com. During our call today, unless otherwise stated, we are comparing results to the results in the same period in fiscal 2024. The results discussed on this call will include GAAP and non-GAAP results adjusted for certain items. The reconciliation of these non-GAAP measures to the corresponding GAAP measures can be found in the back of the earnings release. Our remarks on this call and the earnings release contain forward-looking statements and projections of future results. Please review the cautionary forward-looking statement section in today's earnings release and our SEC filings for various factors that could cause our actual results to differ materially from our forward-looking statements and projections. Now, I'd like to turn the call over to George.

Thanks, Bill. Good morning, everyone, and thank you for joining our call today. Our company remained active during the fiscal second quarter, continuing to build upon our underlying business momentum while adding new avenues for growth through targeted acquisitions. I am very pleased with the results and believe we are well positioned to accelerate our growth through the back half of the fiscal year. This morning, I will review some of the high-level trends in our business and industry, and touch upon our early accomplishments integrating both Jose Santiago and Cheney Brothers. I will then turn the call over to Scott, who will review details of our segment results for the quarter. Finally, Patrick will review our financial position, key priorities, and guidance for the balance of fiscal 2025. Let's begin with an overview of our second quarter results and the industry factors influencing performance. We are pleased to see an acceleration in our underlying organic growth in the fiscal second quarter through a combination of steady market share gains and an improving consumer backdrop. In particular, our organic independent restaurant case volume grew 5% in the quarter, stepping up from the 4.3% we reported in the fiscal first quarter. Keep in mind, this result includes a difficult year-over-year comparison in December, primarily due to calendar differences compared to the prior year. In October and November combined, our organic independent restaurant case volume was up over 7%. As we moved through January, our case volume reaccelerated, in part due to easier comparisons, but also reflecting the strength of our underlying business. I continue to believe we can achieve fiscal year 25 6% independent case growth with some help from the macro. My confidence is underpinned by several factors, including the excellent work of our food service teams. We continue to build our organization through targeted hiring of talented salespeople and have increased the pace of Salesforce hiring. Turning to our Vistar segment, business picked up modestly in the fiscal second quarter following a challenging start to the year. Total cases grew 1.4% per Vistar in the fiscal second quarter with broad growth across many channels. In particular, the vending, office coffee services, and corrections channels saw positive case and sales growth in the quarter. Theater box office revenue was strong in the final months of the calendar year, reflecting high demand content. This by itself is encouraging for the long-term health of the movie theater channel. As we discussed last quarter, we anticipate a better back half of the fiscal year for Vistar due to improving consumer sentiment and easier year-over-year comparisons. Similarly, our convenience business is building momentum on both the top and bottom lines. As we have discussed on prior earnings calls, the convenience industry has been challenged, largely due to significant inflationary pressure in candy and snacks. However, we remained encouraged by Cormark's ability to win market share and outpace key categories compared to industry peers. Food service into convenience remains a large driver of our performance, but candy and other key non-nicotine categories have also boosted volume performance through low single-digit growth. As our legacy business continues to perform well, our integration team has been hard at work welcoming the teams from both Jose Santiago and Chaney Brothers. Early in the fiscal second quarter, we closed on the Chaney Brothers acquisition, have included their results in our numbers beginning on the closing date. As we discussed when we announced the deal, we have high expectations for Chaney, and I have admired their success for many years. I am pleased to say that they have made substantial progress in the months since becoming part of PFG, and early results have been very strong. The past few months have not been without challenges, particularly in the southeast markets that have been impacted by weather, including hurricanes, and a slow recovery from the consumer. However, the Cheney Brothers team is proving to be formidable at managing through these challenges and continues to grow at a brisk pace. Jose Santiago has performed well. This organization joined PFG early in the fiscal year, and we remain pleased with the results. We believe Puerto Rico will be an increasingly important market, and Jose Santiago's strong market position provides an excellent platform for growth. We are excited to see what the future holds. Keep in mind that both Cheney Brothers and Jose Santiago have slightly different seasonal patterns than legacy PFG, with strong winter selling seasons. As a result, we expect nice contribution to our top and bottom lines, particularly in our fiscal third quarter. Taken together, PFG had an excellent fiscal second quarter with contribution from all three of our business segments. Our diversification strategy across the food away from home market continues to pay dividends and provide significant areas of growth opportunity for the long term, which we believe is unique to PFG. I'd now like to turn the call over to Scott McPherson, In December, we announced Scott's promotion to Chief Operating Officer effective at the beginning of the calendar year. We were thrilled to welcome Scott to our team through the COREmark acquisition, and we greatly value the high-level management expertise he has brought to PFT. In addition to running COREmark, in 2023, Scott assumed oversight of the VISTAR segment, and in 2024, was named our Chief Field Operations Officer giving him responsibility for all three business segments. In the role of COO, Scott will continue to oversee our business segments and strengthen his influence across our organization and industry. I've asked Scott to join our earnings calls to provide additional insight into our business operations. He will also be available to take your questions during the Q&A portion of our call. Scott assumed the Chief Operating Officer role from Craig Hoskins. I cannot speak highly enough about the contributions Craig has made to our organization. Craig was the VP Sales of Multi Foods Distribution Group in 2002, which was our first acquisition, which later became Vistar. He also served as the CEO of our Performance Customized Division and then also CEO of our Performance Food Service Division before ascending to three years as the President and Chief Operating aiding officer of PFG. Craig did an excellent job onboarding Scott into his new role. I'm thrilled to have Craig as our chief development officer. As we announced in December, in this role, Craig will work closely with Jose Santiago and Chaney Brothers as we integrate those organizations into PFG. I'll now turn the call over to Scott McPherson.