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Category: Stock Market and Performance Food Group
Date: 15 September 2019 Stock Price: $46.60 We take a look at the 4th quarter earnings release of their 2019 fiscal year of Performance Food Group a food and food-related products distribution company.
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About Performance Food Group
Performance Food Group Company (PFGC) delivers approximately 150,000 food and food-related products to more than 150,000 customer locations across the United States through its three divisions – Performance Foodservice, Vistar and PFG Customized. With 73 distribution centers, PFG serves a diverse mix of customers, spanning independent and chain restaurants, schools, businesses, hospitals, vending distributors, office coffee service distributors, big box retailers and theaters.
Overview of Performance Food Group's latest earnings report
The numbers we are interested in (for the quarter):
- Total revenue: $5.899 billion (up from $4.594 billion from the same quarter of the previous year)
- Revenues increased by 28.4% over the last 12 months
- Total operating expenses: $5.199 billion (down from $3.982 billion for the same quarter of the previous year)
- Cost of revenues increased by 30.6% over the last 12 months
- Net income: $63.2million (down from $64.4 million for the same quarter of the previous year)
- Diluted earnings per share: $0.60 (down from $0.61 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 105.4 million (up from 104.9 million for the same quarter of the previous year)
- Cash and cash equivalents: $14.7 million
- Cash and cash equivalents per share: $0.139
- Cash and cash equivalents makes up 0.299% of Performance Food Group's market capital
- Cash and cash equivalents makes up 0.31% of Performance Food Group's total assets
- Accounts receivable: $1.227 billion
- Accounts receivable makes up 26.37% of the Performance Food Group's total assets.
- Inventories: $1.356 billion
- Inventories makes up 29.1% of Performance Food Group's total assets
- Stockholders equity for SpartanNash: $1.298 billion
- Stockholders equity per share: $12.36
- Performance Food Group is trading at 3.77 times its stockholders equity
- Cash generated from operations: $56.9 million
- Cash generated from operations per share: $0.54
Performance Food Group's management commentary on the results and earnings guidance
RICHMOND, Va.--(BUSINESS WIRE)-- Performance Food Group Company (“PFG”) (NYSE: PFGC) today announced its fourth-quarter and full-year fiscal 2019 business results. “Fiscal 2019 was a successful year for PFG, and I’m very pleased with our team’s execution,” said George Holm, PFG’s Chairman, President and Chief Executive Officer. “Our strong top-line growth, combined with increased gross profit per case, led to profitability at the high end of our expectations for the year. Our core business segments delivered strong financial results led by Vistar’s double-digit EBITDA growth. Looking ahead to fiscal 2020, we believe our two recently announced strategic acquisitions position us well across our business and we expect fiscal 2020 to be another year of solid earnings growth.”
Fiscal 2020 Outlook
For fiscal 2020, PFG expects Adjusted EBITDA growth to be in a range of 9% to 13% over its fiscal 2019 Adjusted EBITDA of $475.5 million. Fiscal 2020 organic Adjusted EBITDA is projected to grow 7% to 10%. PFG expects fiscal 2020 Adjusted Diluted EPS to grow in a range of 4% to 10% over its fiscal 2019 Adjusted Diluted EPS of $1.85. Higher depreciation and amortization related to Vistar acquisitions, higher interest expense due to the debt incurred to fund the Eby-Brown acquisition and a higher effective tax rate versus fiscal 2019 are expected to drive lower Adjusted Diluted EPS growth.
This outlook is based on the following annual assumptions:
Fiscal 2020 Outlook
For fiscal 2020, PFG expects Adjusted EBITDA growth to be in a range of 9% to 13% over its fiscal 2019 Adjusted EBITDA of $475.5 million. Fiscal 2020 organic Adjusted EBITDA is projected to grow 7% to 10%. PFG expects fiscal 2020 Adjusted Diluted EPS to grow in a range of 4% to 10% over its fiscal 2019 Adjusted Diluted EPS of $1.85. Higher depreciation and amortization related to Vistar acquisitions, higher interest expense due to the debt incurred to fund the Eby-Brown acquisition and a higher effective tax rate versus fiscal 2019 are expected to drive lower Adjusted Diluted EPS growth.
This outlook is based on the following annual assumptions:
- Organic case growth in a range of 3% to 5% and case growth in a range of 6% to 8%, including Eby-Brown;
- Interest expense in the range of approximately $70 million to $75 million;
- An effective tax rate on operations of approximately 26%; and
- Capital expenditures between $180 million and $200 million, with depreciation and amortization between $175 million to $185 million. The fiscal 2020 capital expenditures estimate is higher than fiscal 2019 because of ongoing investment to drive growth, which includes Vistar’s Retail East automated facility, Eby-Brown expansions and the timing of certain projects.
The Company's fiscal year guidance reflects an effective tax rate of 22.0% to 23.0%, due to a shift in profitability into lower tax jurisdictions. The Company expects capital expenditures for fiscal year 2019 to be in the range of $86.0 million to $92.0 million, with depreciation and amortization of $89.0 million to $91.0 million. Interest expense is now expected to range from $34.0 million to $35.0 million in fiscal 2019.
The Company's updated guidance for fiscal 2019 does not include costs associated with the CEO transition and costs from a non-recurring, supplemental, transition incentive program for eligible associates.
The Company's updated guidance for fiscal 2019 does not include costs associated with the CEO transition and costs from a non-recurring, supplemental, transition incentive program for eligible associates.
Performance Food Group (NYSE: PFGC) stock price history
The image below shows the stock price history of Performance Food Group (NYSE:PFGC) for the last 3 years. And it's been a good time for Performance Food Group stockholder. 3 years ago Performance Food Group was trading at around $23.70 a stock and its currently trading at $46.6. Thats a return of 96.6% provided by Performance Food Group's stock over the last 3 years. Performance Food Group is also trading at very close to its 52 week high and is far away from its 52 week low which shows short term momentum and sentiment of the stock is positive.
Recent coverage of Performance Food Group
The extract below shows recent coverage of Performance Food Group as obtained from Zacks
Performance Food Group (PFGC - Free Report) came out with quarterly earnings of $0.70 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 11.11%. A quarter ago, it was expected that this food distributor would post earnings of $0.37 per share when it actually produced earnings of $0.35, delivering a surprise of -5.41%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Performance Food, which belongs to the Zacks Food - Natural Foods Products industry, posted revenues of $5.90 billion for the quarter ended June 2019, surpassing the Zacks Consensus Estimate by 4%. This compares to year-ago revenues of $4.59 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Performance Food shares have added about 35.7% since the beginning of the year versus the S&P 500's gain of 16.7%.
Read the full article here
Performance Food Group (PFGC - Free Report) came out with quarterly earnings of $0.70 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 11.11%. A quarter ago, it was expected that this food distributor would post earnings of $0.37 per share when it actually produced earnings of $0.35, delivering a surprise of -5.41%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Performance Food, which belongs to the Zacks Food - Natural Foods Products industry, posted revenues of $5.90 billion for the quarter ended June 2019, surpassing the Zacks Consensus Estimate by 4%. This compares to year-ago revenues of $4.59 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Performance Food shares have added about 35.7% since the beginning of the year versus the S&P 500's gain of 16.7%.
Read the full article here
Performance Food Group (NYSE: PFGC) latest stock valuation
So based on the earnings report of Performance Food Group and their fiscal outlook provided for 2020 what do we value Performance Food Group stock at? Based on the earnings reported and the fiscal guidance provided our valuation model provides a target (full value) price for Performance Food Group (PFGC) at $41.20 a stock. We therefore feel that the stock is overvalued and would not recommend long term fundamental or value investors buy into the stock at its current price. A good entry point would be at least 10% below our target (full value) price. We would therefore suggest looking to buy into Performance Food Group at around $36 a stock.