Performance Food Group (PFGC) Plunges 6.38% on Q1 Earnings Miss, Margin Pressures Spark Sell-Off

The share price of Performance Food Group (PFGC) fell to its lowest level since July 2025 on 06/Nov, with an intraday decline of 6.38%. The stock has now dropped 2.53% over two consecutive sessions, marking its worst performance in months amid investor concerns over margin pressures and operational costs.

The decline follows the company’s Q1 fiscal 2026 earnings report, which highlighted a 10.9% year-over-year revenue increase to $17.1 billion but revealed a $0.03 EPS miss against analyst estimates. While gross profit and adjusted EBITDA rose by 14.3% and 16.6%, respectively, net income fell 13.3% to $93.6 million due to a 15.7% surge in operating expenses. Legal fees tied to shareholder activism and integration costs from recent acquisitions, including Cheney Brothers, exacerbated the strain on profitability.

Segment performance underscored divergent trends: the Foodservice division drove 18.8% revenue growth, while the Specialty segment declined 0.7% as theater sales weakened. Despite raising full-year revenue guidance to $67.5–$68.5 billion, the stock’s reaction reflected skepticism over its ability to sustain margins amid 4.4% product cost inflation. Analysts noted that elevated operating expenses and a net income contraction have eroded confidence in the company’s cost management, even as it aims for non-GAAP adjusted gross margins of at least 32% in fiscal 2026.