US Food Distributors: C2Q26 EPS Preview: A Better Backdrop than Restaurants; PFGC Our Top Pick Given Tailwinds to F27 vs Algorithm

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US Food Distributors: C2Q26 EPS Preview: A Better Backdrop than Restaurants; PFGC Our Top Pick Given Tailwinds to F27 vs Algorithm

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22 Jul 2026 02:00:00 ET │ 36 pages

US Food Distributors

C2Q26 EPS Preview: A Better Backdrop than Restaurants; PFGC Our

Top Pick Given Tailwinds to F27 vs Algorithm

Karen Holthouse, CFA AC

CITI'S TAKE +1-212-519-9385

We expect a positive tone on fundamentals, albeit with oil prices and (to karen.holthouse@citi.com

some extent) perceived cyclospora risks factors for shares. On top line, Jon Tower, CFA

distributors likely speak to outsized exposure to the upper half of a K-

shaped economy, limited profit dollars tied to segments struggling the most +1-212-816-6238

(e.g., fast food), and buffers to GLP-1 risks vs restaurants, with their own jon.tower@citi.com

momentum on headcount. On diesel prices, we expect companies to Gautam Nanda

acknowledge volatility creates challenges, but, given timing of C1Q results, +1-212-816-9397

ests should be largely de-risked. On commodities, the commodity index we

track has been choppy but is back to deflationary, while PPI data that has gautam.nanda@citi.com

tracked recent company data-points more closely has been more stable.

Our top pick is PFGC, where we have confidence in top-line momentum

and a cleaner cost quarter offers the most room for re-rating as it moves

into a FY with net tailwinds vs algo.

PFGC (EPS TBA) – Moving into an above-algorithm year against favorable cost

compares, ramping initiatives — We see more tailwinds than headwinds in F27

(note a 53rd week) vs the ~11% EBTIDA CAGR embedded in current L/T guidance,

including: lapping new facility inefficiencies (mostly F2Q/3Q), lapping

chicken/cheese deflation (F2Q), procurement synergies starting to flow in, and