Performance Food Group shares plunge 14% on earnings miss, guidance cut
Food distributor lowers full-year outlook amid challenging consumer environment and foodservice deflation
Performance Food Group shares plummeted more than 14% on Thursday after the food distributor missed quarterly earnings expectations and slashed its full-year fiscal 2026 guidance, citing a challenging consumer environment and ongoing foodservice deflation.
The Richmond, Virginia-based company reported second-quarter adjusted earnings per share of $0.98, falling short of analyst estimates ranging from $1.07 to $1.09. Revenue reached $16.4 billion, below the consensus forecast of $16.54 billion to $16.56 billion. The stock dropped to around $83.39, wiping out roughly $2.4 billion in market capitalization and bringing the company's value down to approximately $14.9 billion.
Performance Food Group lowered its fiscal 2026 revenue guidance to a range of $67.25 billion to $68.25 billion, while reducing adjusted EBITDA expectations to between $1.875 billion and $1.975 billion. The company blamed the revised outlook on a "challenging consumer environment" and deflationary pressures in the foodservice sector, which have been compressing margins across the industry.
The earnings miss represents a significant reversal for Performance Food Group, which had been benefiting from strong revenue growth in recent quarters. Despite the top-line miss, the company's revenue grew 10.8% year-over-year in its most recent quarter, according to market data. However, earnings growth contracted 13% over the same period, reflecting the pressure on profitability from higher operating costs and increased interest expenses.
Analysts maintain a generally positive outlook on the stock despite the disappointment, with an average target price of $119.69—roughly 43% above current levels. According to analyst data, 12 analysts rate the stock a buy or strong buy, while two recommend holding. The forward price-to-earnings ratio stands at 18.94, suggesting the shares trade at a premium to peers but below its trailing multiple of 45.33.
The company operates in the competitive food distribution market, supplying more than 250,000 stock-keeping units to restaurants, schools, and healthcare facilities across the United States. With a market capitalization of $14.9 billion and trailing 12-month revenue of $61.6 billion, Performance Food Group is one of the largest players in the consumer staples sector.
Thursday's decline pushed the stock well below its 50-day moving average of $93.31 and its 200-day moving average of $94.27. The shares are now trading closer to their 52-week low of $68.39 than their yearly high of $109.05 reached earlier in the fiscal year.
The food distribution sector has faced headwinds in recent months as inflation has cooled and consumers have become more price-sensitive, leading to what analysts describe as "foodservice deflation." This dynamic creates pricing pressure for distributors like Performance Food Group, which must balance the need to maintain margins with the imperative to keep restaurant and institutional customers competitive in a tough market environment.
Investors will be watching closely for signs of stabilization in the foodservice market and whether Performance Food Group can execute on its revised guidance range. The company's ability to manage costs while maintaining its extensive distribution network will be critical factors in determining whether the stock can recover from Thursday's steep decline.