Analyst Note| Rebecca Scheuneman, CFA |
No-moat Performance Food Group’s recovery from the pandemic is tracking in line with our expectations. Its food-service segment’s organic sales fell 8% in the second fiscal quarter of 2021, in line with our estimate, and reported sales grew 27% including the Reinhart acquisition. The segment’s EBITDA margin increased 20 basis points to 3.2% due to the mix shift to more profitable independent pizzerias from lower-margin casual dining chains, which have been hard hit. PFG’s Vistar segment’s sales fell 12% in the quarter, a bit worse than our expectation for a 10% drop. The segment’s EBITDA margin contracted 60 basis points to 2.0% due to a mix shift toward convenience stores and away from higher-margin theatres.