Performance Food Group (PFGC) risk factors, FY2025 10-K

Risks Relating to Our Business and Industry

1. 01Periods of difficult economic conditions, a public health crisis, other macroeconomic or geopolitical events and heightened uncertainty in the financial markets may affect consumer spending and confidence, which can adversely affect our business
2. 02We rely on third-party suppliers, and our business may be affected by interruption of supplies or increases in product costs
3. 03Competition in our industry is intense, and we may not be able to compete successfully
4. 04We operate in a low margin industry, which could increase the volatility of our results of operations
5. 05Volatile food costs may have a direct impact upon our profitability
6. 06Many of our customers are not obligated to continue purchasing products from us
7. 07Group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations
8. 08Changes in consumer eating habits could reduce the demand for our products and adversely affect our business, financial condition, or results of operations
9. 09Extreme weather conditions and natural disasters may interrupt our business or our customers’ or suppliers’ businesses
10. 10Fluctuations in fuel prices and other transportation costs could harm our business
11. 11while we have been successful in the past in implementing fuel surcharges to offset fuel cost increases, we may not be able to do so in the future
12. 12If we fail to increase our sales in the highest margin portions of our business, our profitability may suffer
13. 13Changes in pricing practices of our suppliers could negatively affect our profitability
14. 14Our growth and innovation strategies may not achieve the anticipated results
15. 15We may not be able to realize benefits of acquisitions or successfully integrate the businesses we acquire [and we may incur significant costs related to the integration of acquired businesses]
16. 16A significant portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining
17. 17Adverse publicity about us, lack of confidence in our products or services, and other risks could negatively affect our reputation and our business
18. 18We have experienced losses because of the inability to collect accounts receivable in the past and could experience increases in such losses in the future if our customers are unable to pay their debts to us when due
19. 19Insurance and claims expenses could significantly reduce our profitability
20. 20We reserve for anticipated losses and expenses and periodically evaluate and adjust our claims reserves to reflect our experience. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts
21. 21Activist shareholders or potential bidders could cause us to incur significant expense, hinder execution of our business strategy, and impact our stock price

Risks Relating to Technology and Information Security

1. 22A cybersecurity incident or other technology disruptions could negatively affect our business and our relationships with customers
2. 23We rely heavily on technology in our business, and any technology disruption or delay in implementing new technology could adversely affect our business
3. 24As we integrate AI technologies into our processes, these technologies may present business, compliance, security, and reputational risks

Risks Relating to Product Safety, Regulatory and Legal Matters

1. 25Our business is subject to significant governmental regulation, and costs or claims for non-compliance related to these requirements could adversely affect our business
2. 26Climate change, or the legal, regulatory, or market measures being implemented to address climate change, could have an adverse impact on our business
3. 27If the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may need to recall our products
4. 28We may be subject to or affected by product liability claims relating to products we distribute
5. 29Adverse judgments or settlements resulting from legal proceedings in which we may be involved in the normal course of our business could reduce our profits or limit our ability to operate our business

Risks Relating to Human Capital Management

1. 30We face risks relating to labor relations, labor costs, and the availability of qualified labor

Risks Relating to Our Indebtedness

1. 31Our future financial and operating flexibility could be adversely affected by our level of indebtedness
2. 32limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who may be less leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting
3. 33Our ability to generate sufficient cash to service our indebtedness depends on many factors, some of which are not within our control
4. 34Despite our level of indebtedness, we and our subsidiaries may still incur significant additional amounts of debt, which could further exacerbate the risks associated with our level of indebtedness
5. 35The agreements governing our outstanding indebtedness contain restrictions that limit our flexibility in operating our business
6. 36engage in any activities other than permitted activities
7. 37We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness, and we are exposed to risks related to counterparty credit worthiness or non-performance of these instruments

Risks Relating to the Cheney Brothers Acquisition

1. 38We may be unable to effectively and efficiently execute our integration plan, and the anticipated synergies and other benefits of the Cheney Brothers Acquisition may not be realized or may not be realized within the expected timeframe
2. 39unforeseen expenses or delays