PFGC 10-K & 10-Q changes, risk factors and insider trading

Periods 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.

The foodservice industry is sensitive to national, regional and international economic conditions. Our business could be negatively impacted by reduced demand for our products related to unfavorable macroeconomic conditions triggered by developments beyond our control, including geopolitical events,events (including the ongoing conflicts in Ukraine and the Middle East), trade policies (including tariff increasestariffs), health crises (including pandemics and epidemics), increases in fuel costs, and other events that trigger economic volatility. In particular, deteriorating economic conditions and heightened uncertainty in the financial markets, inflationary pressure, an uncertain political environment, evolving tariff increases,and global trade policies, and supply chain disruptions have in the past and may in the future negatively affect consumer confidence and discretionary spending. In fiscal 2025,2026, product cost inflation contributed to an increase in selling price per case and an increase in net sales. However, sustained inflationary pressurepressure, increased fuel prices and macroeconomic challenges could negatively affect consumer discretionary spending decisions within our customers’ establishments, which could negatively impact our sales. Such conditions and high levels of uncertainty make it difficult to predict when, or if, a recession may occur.

The foodservice distributionfood-away-from-home industry is highly competitive, with numerousnational, regional, local, and specialty distributors. Certain of our competitors may have greater scale,scale and greater financial and other resources than we do in certain markets. Smaller distributors often align themselves with other smaller distributors through purchasing cooperatives and marketing groups to enhance their geographic reach, private label offerings, overall purchasing power, and cost efficiencies and to assemble delivery networks for national or multi-regional distribution. We often do not have exclusive service agreements with our customers, and our customers may switch to other distributors if those distributors can offer lower prices, differentiated products, or customer service that is perceived to be superior. Such changes may occur particularly during periods of economic uncertainty, including uncertainty due to significant inflation. We believe that most purchasing decisions in the foodservice business are based on the quality and price of the product and a distributor’s ability to fill orders completely and accurately and provide timely deliveries. Our current or potential future competitors may be able to provide products or services that are comparable or superior to those provided by us or adapt more quickly than we do to evolving trends ortrends, changing market requirements.requirements or the utilization of new technologies, including AI and machine learning. Further, althoughdemand for food-away-from-home products is volatile and price sensitive, imposing limits on our customers’ ability to absorb cost increases. Although we have strategies to remain competitive in the marketplace by reducing our cost structure, if one or more of our competitors in the foodservice distributionfood-away-from-home industry adopted a lower cost structure, we would potentially be pressured to lower prices to our customers and would need to achieve cost savings to offset these reductions. Accordingly, we may be unable to compete effectively against current and potential future competitors, and increased competition may result in price reductions or other concessions, reduced gross margins, and loss of market share, any of which could materially adversely affect our business, financial condition, or results of operations.

Some of our customers, particularly our larger customers, purchase their products from us through group purchasing organizations (“GPOs”) in an effort to lower the prices paid by these customers on their foodservice orders, and we have in the past experienced some pricing pressure from these purchasers. These GPOs have also made efforts to include smaller, independent restaurants. If these GPOs are able to add a significant number of our customers as members, we may be forced to lower the prices we charge these customers in order to retain their business, which wouldcould negatively affect our business, financial condition, or results of operations. Additionally, if we are unable or unwilling to lower the prices we charge for our products to a level that is satisfactory to the GPOs, we may lose the business of those customers that are members of these organizations, which could have a material adverse effect on our business, financial condition, or results of operations.

Distributors have traditionally generated a significant percentage of their gross margins from rebates and promotional allowancesincentives paid by their suppliers. PromotionalRebates allowancesand promotional incentives are payments from suppliers based upon the efficiencies that the distributor provides to its suppliers through purchasing scale and through marketing and merchandising expertise. PromotionalRebates allowancesand promotional incentives are a standard practice among suppliers to distributors and represent a significant source of profitability for us and our competitors. Any change in such practices that results in the reduction or elimination of rebates and promotional allowancesincentives could be disruptive to us and the industry as a whole and could have a material adverse effect on our business, financial condition, or results of operations.

We may not be able to realize the benefits of acquisitions or successfully integrate the businesses we acquire [and we may incur significant costs related to the integration of acquired businesses].businesses.

Our growth strategy includes growth through strategic acquisitions. If we are unable to integrate acquired businesses successfully or to realize anticipated economic, operational, and other benefits and synergies in a timely manner, our profitability could be adversely affected. Integration of an acquired business may be more difficult when we acquire a business in a market in which we have limited expertise or with a company culture different from ours. A significant expansion of our business and operations, in terms of geography or magnitude, could strain our administrative and operational resources and divert management and the board’s attention and resources. Additionally, we may be unable to retain qualified management and other key personnel employed by acquired companies and may fail to build a network of acquired companies in new markets. We could also face significantly greater competition from broadline foodservice distributors in these markets than we face in our existing markets.

Adverse publicity about us,us or our products, lack of confidence in our products or services, and other risksnegative public impressions could negativelyadversely affect our reputation and our business.

Maintaining a good reputation and public confidence in the safety of the products we distribute or manufacture or services we provide is critical to our business, particularly to selling our Performance Brands products. Anything that damages our reputation, or the public’s confidence in our products, services, facilities, delivery fleet, operations, or employees, whether or not justified, including adverse publicity about the quality, safety, or integrity of our products, could negatively affect our net sales and profits. Reports, whether true or not, of food-borne illnesses or harmful bacteria (such as e. coli, bovine spongiform encephalopathy, hepatitis A, trichinosis, listeria, or salmonella) and injuries caused by food tampering could also severely injure our reputation or negatively affect the public’s confidence in our products. We may need to recall our products if they become adulterated. If patrons of our restaurant customers become ill from food-borne illnesses, our customers could be forced to temporarily close restaurant locations and our sales would be correspondingly decreased. In addition, instances of food-borne illnesses, food tampering, or other health concerns, such as epidemics and pandemics, even those unrelated to the use of our products, or public concern regarding the safety of our products, can result in negative publicity about the foodservice distributionfood-away-from-home industry and cause our sales to decrease dramatically. Health concerns and negative publicity could materially adversely affect our business and results of operations and damage the reputation of, or result in a lack of acceptance of, our products or the brands that we carry or the services that we provide.

Moreover, the growing use of social and digital media by consumers has greatly increased the speed and extent that information or misinformation and opinions can be shared. Negative posts or comments about us, our brands, or our products on social or digital media could significantly damage our brands and reputation, regardless of its accuracy or the reputability of its source, including as a result of fictitious media content (such as content produced by generative AI or bad actors). Additionally, negative reactionreactions to our marketing and advertising, including our social media content, could result in damage to our brands and reputation.

Although we believe our aggregate insurance limits should be sufficient to cover reasonably expected claims costs, including claims related to incidents within our operations and vehicle and driver related claims, it is possible that the amount of one or more claims could exceed our aggregate coverage limits. Additionally, insurance carriers have raised premiums on certain lines of coverage for many businesses in our industry, including ours. For example, we experienced a $28.0$25.3 million increase in insurance expense in fiscal 20252026 compared to fiscal 2024,2025, primarily related to acquisitions, vehicle liabilityliability, and workers’ compensation. Our insurance and claims expense could continue to increase in the future. Our results of operations and financial condition could be materially adversely affected if (1) total claims costs significantly exceed our coverage limits, (2) we experience a claim in excess of our coverage limits, (3) our insurance carriers fail to pay on our insurance claims, (4) we experience a claim for which coverage is not provided, (5) a large number of claims may cause our cost under our deductibles to differ from historic averages or (6) insurance carriers continue to significantly raise premiums in the industry and for our business.

A cybersecurity incident or other technology disruptions could negatively affect our business and our relationships with customers.customers, vendors and other partners.

We rely upon information technology networks and systems to process, transmit, and store electronic information, and to manage or support substantially all of our business processes and activities. Some of these systems are managed or provided by third-party service providers, including cloud computing platform providers. We also use mobile devices, social networking, and other online activities to connect with our employees, suppliers, business partners, and customers.

These uses give rise to cybersecurity risks, including security breaches, espionage, system disruption, theft, and inadvertent release of information. Our business involves the storage and transmission of numerous classes of sensitive or confidential information and intellectual property, including customers’ and suppliers’ personal information, private information about employees, and financial and strategic information about us and our business partners. We have implemented measures to prevent security breaches and prevent or mitigate other cybersecurity incidents. However, we and our third-party providers experience cybersecurity incidents of varying degrees from time-to-time, including ransomwareransomware, ransom-related extortion, and phishing attacks, as well as distributed denial of service attacks, social engineering attacks and the theft of data. To date, interruption of our information technology networks and systems and unauthorized access to or theft of data have been infrequent and have not had a material impact on our operations. However, because cyber-attacks are increasingly sophisticated and more frequent, including through the use of AI by threat actors, our preventative measures and incident response efforts may not be entirely effective. In addition, cyber criminals are increasing their attacks on individual employees with business email compromise scams designed to trick victims into transferring sensitive data or funds, or steal credentials that compromise information systems. Moreover, as AI continues to evolve, malicious actors couldcontinue to increase the use of AI to enhance the sophistication and coordination of their attacks, which could pose significant challenges to our security defense. These and other operational risks may also be heightened due to a portion of our employees, and the employees of our customers, suppliers and business partners, working remotely or using personal devices due to challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks. There can be no assurance that our operations will not be materially adversely impacted in the future, and there is a risk that we may incur significant costs in protecting against or remediating cyberattacks or other cyber incidents, especially if the amount of insurance coverage we maintain is not sufficient to cover claims or liabilities relating to an incident. The theft, destruction, loss, misappropriation, release of sensitive or confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, including our third-party service providers, suppliers, and customers, could result in business disruption, a disruption in our supply chain, or reduced customer orders, negative publicity, brand damage, violation of data and other privacy laws, loss of customers, potential liability, and remediation costs, which could materially adversely affect our business, financial condition, or results of operations.

Further, as we pursue our strategy to grow through acquisitions and to pursue new initiatives that improve our operations and cost structure, we are also expanding our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk. Acquisition targets may have less mature information technology systems and/or less sophisticated measures in place to detect and prevent cybersecurity breaches or incidents, which could expose us to increased cybersecurity risk during the acquisition integration process until we improve their maturity or integrate them into our information technology standards. Any failure to adequately assess, identify, and mitigate cybersecurity risks associated with acquisitions and new initiatives could increase our susceptibility to such risks.

The foodservice distributionfood-away-from-home industry is transaction intensive. Our ability to control costs and to maximize profits, as well as to serve customers effectively and efficiently, depends on the reliability of our information technology systems and related data entry processes. We rely on software and other technology systems, some of which are managed by third-party service providers,providers (including cloud computing platform providers), to manage significant aspects of our business, including making purchases, processing orders,orders and customer payments, managing our warehouses, loading trucks in the most efficient manner, and optimizing the use of storage space.space, and assessing customer credit. Our reliance on such networks and systems has increased due to a portion of our employees, and the employees of our customers, suppliers and business partners, working remotely or using personal devices.

Information technology systems evolve rapidly, and in order to compete effectively we are required to integrate new technologies in a timely and cost-effective manner. For example, we may incorporate AI solutions into our platform, offerings, services and features, and these applications may become important in our operations over time. Any failure to implement new technologies in a timely and cost- effectivecost-effective manner, or if competitors implement new technologies before we do, including AI, allowing such competitors to provide lower priced or enhanced services of superior quality compared to those we provide, could have a material adverse effect on our business, financial condition, or results of operations.

We have incorporated, and are continuing to incorporateincorporate, AI, including machine learning, into certain of our operations, such asincluding sales, support and supply chain operations, and may in the future incorporate AI into more of our operations, with the intent to enhance their operationoperation, efficiency and effectiveness. Flaws, breaches or malfunctions in these systemssystems, including the associated input data and assumptions, or insufficient or inadequate human oversight could lead to operational disruptions, data loss, or erroneous decision-making, impacting our operations,business, financial condition and reputation. Additionally, the use of AI tools by our employees and/or third parties engaged by us may result in the exposure of our confidential information, including material non-public information, trade secrets, or personal information to unauthorized third parties, including our competitors. Further, we may not be able to control how any third-party AI technologies that we use are developed or maintained, or how data we input is used or disclosed, even where we have contractual protections with respect to these matters. Legal challenges may arise, including or as a result of cybersecurity incidents, non-compliance with data protection regulations, and lack of transparency relating to the use of AI. The legal and regulatory landscape and industry standards surrounding AI technologies is rapidly evolving and remains uncertain, and compliance may impose significant operational costs and may limit our ability to develop, deploy or use AI technologies. Furthermore, the rapid evolution and increasing deployment of AI systems could both intensify our cybersecurity risks, such as data breaches and unauthorized access, and introduce new risks, leading to financial losses, legal liabilities, and reputational damage.

Food Safety: Our operations are subject to regulation by state and local health departments, the USDA, and the FDA, which generally impose standards for product quality and sanitation and are responsible for the administration of bioterrorism legislation affecting the foodservice industry. These government authorities regulate, among other things, the processing, packaging, storage, distribution, advertising, and labeling of our products. The FSMA imposes comprehensive, prevention-based controls across the food supply industry, further regulates food products imported into the United States, and provides the FDA with mandatory recall authority. Our seafood operations are also specifically regulated by federal and state laws, including those administered by the National Marine Fisheries Service and the National Shellfish Sanitation Program, established for the preservation of certain species of marine life, including fish and shellfish. Our distribution and certain manufacturing facilities must be registered with the FDA and are subject to periodic government agency inspections by federal and/or state authorities. The Federal Perishable Agricultural Commodities Act, which specifies standards for the sale, shipment, inspection, and rejection of agricultural products, governs our relationships with our fresh produce suppliers with respect to the grading and commercial acceptance of product shipments. We are also subject to regulation by state authorities for the accuracy of our weighing and measuring devices. Additionally, the Surface Transportation Board and the Federal Highway Administration regulate our trucking operations, and interstate motor carrier operations are subject to safety requirements prescribed by the U.S. Department of Transportation and other relevant federal and state agencies. Our suppliers are also subject to similar regulatory requirements and oversight. We have expanded theour product lines of our Specialty segment to include hemp-based CBD products authorized under the 2018 Farm Bill. Sales of certain hemp-based CBD products are prohibited in some jurisdictions and the FDA and certain states and local governments may enact regulations that limit the marketing and use of such products. The failure to comply with applicable laws and regulatory requirements could result in, among other things, administrative, civil, or criminal penalties or fines; mandatory or voluntary product recalls; warning or untitled letters; cease and desist orders against operations that are not in compliance; closure of facilities or operations; the loss, revocation, or modification of any existing licenses, permits, registrations, or approvals; or the failure to obtain additional licenses, permits, registrations, or approvals in new jurisdictions where we intend to do business, any of which could have a material adverse effect on our business, financial condition, or results of operations.

Cigarette, Tobacco and Alternative Nicotine Products: Finally, weWe are also subject to and/or impacted by legislation, regulation and other matters regarding the marketing, distribution, sale, taxation and use of cigarette, tobacco and alternative nicotine products. For example, various jurisdictions have adopted or are considering legislation and regulations restricting displays and marketing of tobacco and alternative nicotine products, requiring the disclosure of ingredients used in the manufacture of tobacco and alternative nicotine products, and imposing restrictions on public smoking and vaping. In addition, the FDA has been empowered to regulate changes to nicotine yields and the chemicals and flavors used in tobacco and alternative nicotine products (including cigars, pipe and vapor products), require ingredient listings be displayed on tobacco and alternative nicotine products, prohibit the use of certain terms that may attract youth or mislead users as to the risks involved with using tobacco and alternative nicotine products, as well as limit or otherwise impact the marketing of tobacco and alternative nicotine products by requiring additional labels or warnings that must be pre-approved by the FDA. Such legislation and related regulation are likely to continue to adversely impact the market for tobacco and alternative nicotine products and, accordingly, our sales of such products. Likewise, cigarettes and tobacco products are subject to substantial excise taxes. Significant increases in cigarette-related taxes or fees have been proposed or enacted and are likely to continue to be proposed or enacted by various taxing jurisdictions within the U.S. These tax increases negatively impact consumption and may cause a shift in sales from premium brands to discount brands, illicit channels, or tobacco alternatives, such as e-vapor products, as smokers seek lower priced options. Furthermore, taxing jurisdictions have the ability to change or rescind credit terms currently extended for the remittance of taxes that we collect on their behalf. If these excise taxes are substantially increased, or credit terms are substantially reduced, it could have a material adverse effect on our business, financial condition, and results of operations.

Data Privacy: There are new and emerging data privacy laws, as well as frequent updates and changes to existing data privacy laws, in the jurisdictions in which we operate. Given the complexity of these laws and the requirements they place on businesses regarding the collection, storage, handling, use, disclosure, transfer and security of personal data, it is important for us to understand their impact and respond accordingly. Failure to comply with applicable data privacy laws canand regulations, or to implement required changes in a timely manner, could result in substantial fines or penalties, legalgovernment liabilityinvestigations, private litigation, mandated remediation, and reputational damage. Several U.S. states have enacted (and additional U.S. states are considering enacting) stringent consumer privacy laws,laws whichthat may impose varying standards and requirements on our data collection, use and processingprocessing, activities.including Continuednotice, stateconsent, byaccess/deletion, stateand introductionopt-out mechanisms. Ongoing state-by-state enactment and amendment of privacy laws can be expected tomay lead to significantly greater compliance complexity inand ourthe compliancerisk requirements,of inconsistent obligations across jurisdictions, which could resultincrease inthe likelihood of regulatory inquiries or enforcement and complaints from data subjects or actionclaims fromby regulators.private plaintiffs. If we do not provide sufficient resources to be able to respond, adapt and implement therequired necessarychanges requirements– toincluding respondany to the various forthcoming changes, which could includefuture federal data privacy requirements,requirements our reputation could be adversely impacted and– we could faceexperience, among other things, reputational harm, constraints in certain data uses, increased compliance and vendor management costs, and exposure to regulatory fines leviedor byother regulators,penalties, any of which could haveadversely an adverse effect onaffect our business.business, financial condition or results of operations.

The effects of climate change may create financial and operational risks to our business, both directly and indirectly. There is an increased focus around the world by regulatory and legislative bodies at all levels towards policies relating to climate change and the impact of global warming, including the regulation of greenhouse gas (“GHG”) emissions, energy usage, extended producer responsibility laws, and sustainability efforts. Increased compliance costs and expenses due to these policies, as well as additional legal or regulatory requirements regarding climate change, including those designed to reduce or mitigate the effects of carbon dioxide and other GHG emissions on the environment, particularly diesel engine emissions, may cause disruptions in, or an increase in the costs associated with, the running of our business, particularly with regard to our distribution and supply chain operations. These costs include an increase in the cost of the fuel and other energy we purchase, and capital costs associated with updating or replacing our vehicles prematurely. Moreover, compliance with any such legal or regulatory requirements may require that we implement changes to our business operations and strategy, which would require us to devote substantial time and attention to these matters and cause us to incur additional costs. We may not be able to accurately predict, prepare for, and respond to new kinds of technological innovations with respect to electric vehicles and other technologies that minimize emissions. Laws related to climate change, including those enacted to try to reduce GHG emissions, could also directly or indirectly affect our suppliers, who could increase the prices of the products that we buy from them to recover the costs they incur related to such laws. The effects of climate change, and legal or regulatory initiatives to address climate change, could have a long-term material adverse effect on our business, financial condition, or results of operations.

In addition, from time to time we establishhave previously established and publicly announceannounced goalsgoals, commitments and commitmentstargets related to corporate social responsibilitysustainability matters, including those related to reducing our impact on the environment. For example, in 2024, we established goals for the reduction of GHG emissions, which includewe amay target of reducing Scope 1 and 2 GHG emissions by 30% by 2034 from a 2021 base year. Additionally,change in 2025, we established a goal to engage with our suppliers representing 40% of our spend to set Scope 1 and 2 GHG emissions targets by 2034 that are in line with the Paris Agreement’s 1.5 °C emissions reduction goal.future. Our ability to meet these and other related goals depends in part on significant technological advancements with respect to the development and availability of reliable, affordable, and sustainable alternative solutions, including electric and other alternative fuel vehicles as well as alternative energy sources, which may not be developed or be available to us in the timeframe needed to achieve these goals. Recent federal actions ending certain clean technology incentives have reduced the cost-effectiveness of reducing GHG emissions in our fleet and facilities. Our ability to meet these and other related goals also depends on the climate-related efforts and performance of our suppliers. InFurther, addition,there weare conflicting expectations and priorities from governmental authorities, investors, customers, voluntary reporting frameworks, and other stakeholders surrounding disclosure of sustainability matters and climate-related initiatives. We may determine that it is in our best interests to prioritize other business, social, governance, or sustainable investments over the achievement of our current goals based on economic, regulatory or social factors, business strategy, or other factors. If we do not meet our publicly stated goals, then we may experience a negative reaction from the media, stockholders, activists, and other interested stakeholders, and any perception that we have failed to act responsibly regarding climate change, whether or not valid, could result in adverse publicity or legal challenges and negatively affect our business and reputation. In addition, we may face increased regulatory, reputational and legal scrutiny as a result of our sustainability-related commitments and disclosures, and we could also face challenges with managing conflicting regulatory requirements and our various stakeholders’ expectations. While we remain committed to being responsive to climate change and reducing our GHG emissions, there can be no assurance that our goals and strategic plans to achieve those goals will be successful, that the costs incurred will not be higher than expected, that the necessary technological advancements will occur in the timeframe we expect, or at all, or that proposed regulation or deregulation related to climate change will not have a negative competitive impact, any one of which could have a material adverse effect on our business, financial condition, or results of operations.

If the products we distribute or manufacture are alleged to cause injuryinjury, illness or illnessdeath or fail to comply with governmental regulations,regulations or applicable quality standards, we may need to recall or withdraw our products.

The products we distribute or manufacture may be subject to product recalls, including voluntary recalls or withdrawals, if they are alleged to cause injury orinjury, illness (including food-borne illness such as e. coli, bovine spongiform,spongiform encephalopathy, hepatitis A, trichinosis, listeria, or salmonella) or death, alleged to be associated with known human allergens or pathogens, or if they are alleged to have been mislabeled, misbranded, improperly stored, contaminated or adulterated or to otherwise be in violation of governmental regulations. We may also voluntarily recall or withdraw products that we consider not to meet our quality standards, whether for taste, appearance, spoilage or otherwise, in order to protect our brand and reputation. If there is any future product withdrawalwithdrawal, whether as a result of injury, illness, death or otherwise that results in substantial and unexpected expenditures, destruction of product inventory, damage to our reputation, or lost sales because of the unavailability of the product for a period of time,time or customer concerns or dissatisfaction, our business, financial condition, or results of operations may be materially adversely affected.

We may be subject to or affected by product liability claims relating to products we distribute.distribute or manufacture.

We may be exposed to product liability claims in the event that the use of the products we sell is alleged to cause injuryinjury, illness, or illness.other damage or fails to comply with applicable laws and regulations. While we believe we have sufficient primary and excess umbrella liability insurance with respect to product liability claims, we cannot assure you that our limits are sufficient to cover all our liabilities. For example, punitive damages may not be covered by insurance. In addition, we may not be able to continue to maintain our existing insurance or obtain replacement insurance on comparable terms, and any replacement insurance or our current insurance may not continue to be available at a reasonable cost, or, if available, may not be adequate to cover all of our liabilities. We generally seek contractual indemnification and insurance coverage from parties supplying products to us, but this indemnification or insurance coverage is limited, as a practical matter, to the creditworthiness of the indemnifying party and the insured limits of any insurance provided by suppliers. If we do not have adequate insurance or contractual indemnification available,available (or if such indemnitor is unable to fulfill its indemnity obligations for whatever reason), the liability relating to defective products or claims could materially adversely affect our business, financial condition, or results of operations.

In the normal course of our business, we are involved in various legal proceedings. The outcome of these proceedings cannot be predicted. If any of these proceedings were to be determined adversely to us or a settlement involving a payment of a material sum of money were to occur, it could materially adversely affect our profits or ability to operate our business. Additionally, we could become the subject of future claims by third parties, including our employees;employees, suppliers, customers, and other counterparties; our investors; or regulators. Any significant adverse judgments or settlements could reduce our profits and could limit our ability to operate our business or adversely affect our reputation. Further, we may incur costs related to claims for which we have appropriate third-party indemnity, but such third parties may fail to fulfill their contractual obligations.

As of June 28,27, 2025,2026, we had approximatelyover [43,000]44,000 employees of whom approximately [2,400]2,800 were members of local unions associated with the International Brotherhood of Teamsters or other unions. Although our labor contract negotiations have in the past generally taken place with the local union representatives, we may be subject to increased efforts to engage us in multi-unit bargaining that could subject us to the risk of multi-location labor disputes or work stoppages that would place us at greater risk of being materially adversely affected by labor disputes. In addition, labor organizing activities could result in additional employees becoming unionized, which could result in higher labor costs. Although we have not experienced any significant labor disputes or work stoppages in recent history, and we believe we have satisfactory relationships with our employees, including those who are union members, increased unionization or a work stoppage because of our inability to renegotiate union contracts could have a material adverse effect on our business. Further, potential changes in labor legislation and case law could result in current non-union portions of our workforce, including warehouse and delivery personnel, being subjected to greater organized labor influence. If additional portions of our workforce became subject to collective bargaining agreements, this could result in increased costs of doing business as we would become subject to mandatory, binding arbitration or labor scheduling, elevated labor costs, and standards, which could adversely impact our results of operations.

We rely heavily on our employees, particularly warehouse workers and drivers, and any significant shortage of qualified labor could significantly affect our business. Our recruiting and retention efforts and efforts to increase productivity may not be successful, and we could encounter a shortage of qualified labor in future periods. Any such shortage would decrease our ability to serve our customers effectively. Such a shortage could also likely lead to higher wages for employees and a corresponding reduction in our profitability. Any prolonged labor shortage or period of high employee turnover could have an adverse impact on our productivity and have a material adverse effect on our business, financial condition and results of operations.

Further, we continue to assess our healthcare benefit costs. Despite our efforts to control costs while still providing competitive healthcare benefits to our associates, significant increases in healthcare costs continue to occur, and we can provide no assurance that our cost containment efforts in this area will be effective. Our suppliers also may be affected by higher minimum wage and benefit standards, wage inflation or increased overtime payments as a result of labor shortages, work slowdowns, work interruptions, strikes, or other actions by their employees, which could result in higher costs for goods and services supplied to us. If we are unable to raise our prices or cut other costs to cover this expense, such increases in expenses could materially reduce our operating profit.

As of June 28,27, 2025,2026, we had $6,990.6$6.8 millionbillion of indebtedness, including finance lease obligations. In addition, we had $2,473.6$2.9 millionbillion of availability under the ABL Facility (as defined below under “—Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities” in Part II, Item 7 of this Form 10-K) after giving effect to $171.4$160.3 million of outstanding letters of credit and $106.0$137.2 million of lenders’ reserves under the ABL Facility.

We may elect to enter into interest rate swaps to reduce our exposure to floating interest rates as described below under “—We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness and we are be exposed to risks related to counterparty creditworthiness or non-performance of these instruments.” However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

The following includes a comparison of our consolidated results of operations, our segment results and financial position for fiscal years 20252026 and 2024.2025. For a comparison of our consolidated results of operations, segment results and financial position for fiscal years 20242025 and 2023,2024, see Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended June 29,28, 2024,2025, filed with the SEC on August 14,13, 2024, which remains materially consistent with the recast prior period results disclosed herein reflecting the updates made to our reportable segments in the third quarter of fiscal 2025 discussed below.2025.

We market and distribute over 250,000300,000 food and food-related products to customers across the United States from approximately 155154 distribution facilities to over 300,000350,000 customer locations in the food-away-from-home industry. We offer our customers a broadbroadline assortment of products including our proprietary-branded products, nationally branded products, and products bearing our customers’ brands. Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, and groceries to candy, snacks, and beverages. We also sell disposables, cleaning and kitchen supplies, and related products used by our customers, as well as cigarettes and otheralternative nicotine products. In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy.

Based on the Company’s organizational structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company has three reportable segments: Foodservice, Convenience, and Specialty. Our Foodservice segment distributes a broadbroadline lineassortment of products under national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit chain restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments. Our chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Convenience segment distributes candy, snacks, beverages, cigarettes, otheralternative nicotine products, food and foodservice relatedfoodservice-related products and other items to convenience stores across North America. Our Specialty segment distributes candy, snacks, beverages,and beverages as well as fresh and frozen perishable foods and other foodnon-food items nationally to vending,vending and office coffee service,service theater,distributors retail,as well as direct to consumer locations, including retailers, entertainment venues, and other channelstheaters, and utilizesprovides small parcel “pick and pack” capabilities, including fulfillment of ambient, frozen, fresh and temperature sensitive items, utilizing third-party carriers to deliver direct to consumers for our supplier partners and to our customers whose order sizes are too small to be served effectively by our truckfleet network. We believe our diverse segments provide substantial opportunities for cross-segment collaboration to better serve our customers, including business development, procurement, operational best practices such as the use of new productivity technologies, and supply chain and network optimization, as well as shared corporate functions such as accounting, treasury, tax, legal, information systems, and human resources.

The Company’s fiscal year ends on the Saturday nearest to June 30th. This resulted in a 52-week year for fiscal 2026, 2025, 2024, and 2023.2024. References to “fiscal 2026” are to the 52-week period ended June 27, 2026, references to “fiscal 2025” are to the 52-week period ended June 28, 2025, and references to “fiscal 2024” are to the 52-week period ended June 29, 2024, and references to “fiscal 2023” are to the 52-week period ended July 1, 2023.2024.

Our business, our industry and the economy are influencedsubject byto a number of general macroeconomic factors, including, but not limited to, reduced demand for our products related to unfavorable macroeconomic conditions triggered by developments beyond our control, includingwhich can result in reduced demand for our products. The Company and our industry may face challenges related to geopolitical dynamics and other eventsevents, thatwhich triggercan drive economic volatilityvolatility, market uncertainty, inflationary pressure, supply chain disruptions, or lower disposable incomes, negatively affectaffecting consumer confidence and discretionary spending. We continue to actively monitor the impacts of the evolving macroeconomic and geopolitical landscape, including rapidly evolvingdynamic tariff and global trade policies, recovery of any potential tariff refunds, and recent geopolitical events (including the ongoing conflicts in Ukraine and the Middle East), on all aspects of our business. TheAlthough Companywe andsaw little impact from tariffs on our industryresults mayduring facefiscal challenges related to uncertain economic conditions and heightened uncertainty in the financial markets, inflationary pressure, an uncertain political environment, supply chain disruptions, and lower disposable incomes due to macroeconomic conditions. Although2026, rapidly evolving tariff and global trade policies causedand increasedgeopolitical dynamics continued to cause uncertainty throughout fiscal 2026. Additionally, recent hostilities and geopolitical tensions, such as the conflict in the secondMiddle halfEast, of fiscal 2025, we saw little impactcontributed to oursignificantly resultshigher fuel prices in fiscal 2025.2026. However,To the extent andincreasing durationfuel ofexpenses theare tariffsnot andable theto resultingbe futureoffset impactby (i) diesel fuel surcharges (which are generally recognized on generala economicone-month conditionslag following changes in fuel prices) and/or (ii) gains on derivative instruments, prolonged high fuel prices could adversely affect our futurebusiness, financial position,condition, liquidity, andor results of operationsoperations. remainsFurther, uncertain. Sustainedsustained macroeconomic challenges, whether due to tariffstariffs, rising fuel prices, or otherwise, have in the past and could in the future negatively affect consumer discretionary spending decisions within our customers’ establishments, which could negatively impact our sales and profitability. For further information on the risks posed to our business, please see Item 1A. Risk Factors of this Form 10-K.

Changing demographic and macroeconomic trends. Excluding the peak years of the COVID-19 pandemic, the share of consumer spending captured by the food-away-from-home industry has increased steadily for several decades. The share increases in periods of increasing employment, rising disposable income, increases in the number of restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income households, and an aging population base that spends more per capita at foodservice establishments and is adversely impacted when these factors move in the opposite direction. The foodservice distributionfood-away-from-home industry is also sensitive to national and regional economic conditions, such as changes in consumer spending, changes in consumer confidence, changes in the rate of inflation and fuel prices, supply chain disruptions, and labor shortages.

Our ability to successfully execute our segment and corporate strategies and implement our initiatives. Our performance will continue to depend on our ability to successfully execute our segment and corporate strategies and to implement our current and future initiatives. The key strategies include focusing on independent sales and Performance Brands, pursuing new customers for our three reportable segments, expansion of geographies, utilizing our infrastructure and technology to gain further operating and purchasing efficiencies, and making strategic acquisitions.

Case volume represents the volume of products sold to customers during a given period of time. Case growth is calculated by dividing the increase (decrease) in the case volumes sold year-over-year by the number of cases sold in the prior year. We define a case as the lowest level of packaged products as received from our suppliers, with one case containing several individually packaged units of the same product. Where individual packaged units are sold separately, case volume is calculated using the case equivalent quantity sold. Case growth provides useful information to management and investors in evaluating sales performance and as an indicator of gross margin performance. In our assessment of sales performance, management utilizes total case growth, as well as organic case growth, which excludes acquisition-related growth until the acquired business has been reflected in our results of operations for at least 12 months. While overall case growth reflects a key component of sales growth, case growth by customer type provides additional context around gross profit performance. Management also reviews case volume growth by customer type, with distinction between Foodservice independent and chain customers, as this provides a measure of gross profit performance due to the pricing strategies and product mix differences associated with each customer type.

Net sales is equal to gross sales, plus excise taxes, minus sales returns; minus sales incentives that we offer to our customers, such as rebates and discounts that are offsets to gross sales; and certain other adjustments. Our net sales are driven by changes in case volumes, product inflation or deflation that is reflected in the pricing of our products, mix of products sold, and acquisitions.

Gross profit is equal to our net sales minus our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of suppliervendor consideration)rebates and promotional incentives), inbound freight.freight, and remittances of excise tax. Cost of goods sold generally changes as we incur higher or lower costs from our suppliers and as our customer and product mix changes.

Management measures operating performance based on our Adjusted EBITDA, defined as net income before interest expense, interest income, income and franchise taxes, and depreciation and amortization, further adjusted to exclude certain items that we do not consider part of our core operating results. Such adjustments include certain unusual, non-cash, non-recurring, cost reduction, or other adjustment items permitted in calculating covenant compliance under our ABL Facility and indentures (other than certain pro forma adjustments permitted under our ABL Facility and indentures governing the Notes due 2027,2029, Notes due 2029,2032, and Notes due 20322034 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). Under our ABL Facility and indentures, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and making restricted payments is tied to ratios based on Adjusted EBITDA (as defined in the ABL Facility and indentures). Our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies.

Adjusted EBITDA is not a measure of operating income, operating performance, or liquidity presented in accordance with ,with, or required by, GAAP and is subject to important limitations. We use this measure to evaluate the performance of our business on a consistent basis over time and for business planning purposes. In addition, targets based on Adjusted EBITDA are among the measures we use to evaluate our management’s performance for purposes of determining their compensation under our incentive plans. We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties, including our lenders under the ABL Facility and holders of our Notes due 2027,2029, Notes due 2029,2032, and Notes due 2032,2034 in their evaluation of the operating performance of companies in industries similar to ours.

Includes increases in the last-in-first-out (“LIFO”) reserve of $4.4 million for Foodservice and $96.7 million for Convenience for fiscal 2026 compared to increases of $6.6 million for Foodservice and $81.5 million for Convenience for fiscal 2025 compared toand increases of $3.8 million for Foodservice and $58.5 million for Convenience for fiscal 2024 and a decrease of $19.2 million for Foodservice and an increase of $58.4 million for Convenience for fiscal 2023.2024.

Includes a $3.8 million gain on the sale of a Foodservice warehouse facility forin fiscal year 2025 and an $8.1 million gain on the sale of a Foodservice warehouse facility forin fiscal year 2024, as well as amounts related to favorable and unfavorable leases,certain litigation-related accruals, severance,professional fees related to the modification of debt, franchise tax expense, gains and losses on disposals of fixed assets, foreign currency transaction gains and losses, insurance proceeds due to hurricane and other weather relatedweather-related events, foreign currency transaction gainsfavorable and losses,unfavorable gains and losses on disposals of other fixed assets,leases, and other adjustments permitted by our ABL Facility. Additionally, for the fiscal year ended June 27, 2026, Other adjustments includes $20.2 million of legal and professional fees incurred in connection with shareholder activism and the clean team agreement with US Foods Holding Corp.

TheNet increasesales growth is primarily a function of acquisitions, case growth, pricing, including product inflation/deflation, and a changing mix of customers, channels, and product categories sold. Net sales increased $4.5 billion, or 7.2%, in netfiscal sales2026 wascompared to fiscal 2025, primarily driven by recent acquisitions, including the Cheney Brothers Acquisition, an increase in organic cases sold, including a favorable shift in mix of cases sold, acquisitions, including the acquisition of Cheney Bros., Inc. (the “Cheney Brothers Acquisition”), and an increase in selling price per case as a result of inflation. Total case volume increased 8.5%5.1% during fiscal 20252026 compared to fiscal 2024.2025. Total organic case volume increased 2.1%2.8% in fiscal 20252026 compared to the prior fiscal year. Total organic case volume benefited from a 4.6%5.9% increase in organic independent cases sold during fiscal 2025,2026, including growth in Performance Brands cases and growth in cases sold to Foodservice'sFoodservice’s chain business. The overall rate of product cost inflation was approximately 4.7%4.5% for fiscal 2025.2026.

Operating expenses increased $849.6$602.8 million, or 14.8%,9.1%, for fiscal 20252026 compared to fiscal 2024. The increase in operating expenses was2025 primarily driven by recenta $227.3 million increase in personnel expenses related to salaries and wages, commissions, and benefits, additional operating expenses as a result of acquisitions, including $156.4 million related to the Cheney Brothers Acquisition, a $191.4 million increase in personnel expenses primarily related to wages and salaries, commissions, and benefits, a $53.5$57.1 million increase in depreciation and amortization expense mainly driven by an increase in transportation equipment and facilities under finance leases, a $34.3$47.6 million increase in fuel expense due to higher fuel prices and miles driven as a result of new business, $20.2 million in legal and professional fees incurred in connection with shareholder activism and outsidethe servicesclean primarilyteam relatedagreement towith recentUS acquisitions,Foods Holding Corp., and a $28.0$13.3 million increase in insurance expense primarily related to workers’auto compensationinsurance and vehicleworkers’ liability compared to the prior year. These increases were partially offset by a $31.9 million decrease in fuel expenses primarily due to lower fuel prices for fiscal 2025 compared to the prior fiscal year.compensation.

Net income decreasedincreased $95.7$19.1 million, or 22.0%,5.6%, for fiscal 20252026 compared to fiscal 20242025 primarily driven by an increaseincreases in depreciationgross profit and amortizationother andincome interest expense primarily relateddue to recentgains acquisitions,on fuel collars, partially offset by a decreaseincreases in incomeoperating tax expenseexpenses and grossinterest profit contributions from recent acquisitions.expense. The increase in interest expense was primarily the result of an increase in the average borrowings, including finance lease obligations, during fiscal 20252026 compared to the prior fiscal year.

The Company reported income tax expense of $126.5 million for fiscal 2026 compared to $118.6 million for fiscal 2025 compared to $160.9 million for fiscal 2024.2025. Our effective tax rate for fiscal 20252026 was 25.8%26.0% compared to 27.0%25.8% for the prior fiscal year. The effective tax rate differed from the prior year primarily due to ana increase in benefit from stock-based compensation and an increasedecrease in income tax credits net of valuation allowance established, partially offset by anstate increaseincome intax non-deductible expensescredits and anfavorable increasetax inplanning state taxes as a percentage of income.initiatives.

InBased on the thirdCompany’s quarterorganizational ofstructure fiscaland 2025,how the Company’s management reviews operating results and makes decisions about resource allocation, the Company updated its operating segments to reflect the manner in which the business is managed. The Company continues to havehas three reportable segments: Foodservice, Convenience, and Specialty (formerly Vistar).Specialty. Management evaluates the performance of these segments based on various operating and financial metrics, including their respective sales growth, and Segment Adjusted EBITDA, which is the Company’s GAAP measure of segment profit. Segment Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, depreciation, and amortization and excludes certain items that the Company does not consider part of its segments’ core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives. The presentation and amounts for the fiscal years ended June 29, 2024 and July 1, 2023 have been recast to reflect these segment changes. See Note 19. Segment Information of the consolidated financial statements in this Form 10-K.

Corporate & All Other is comprised of unallocated corporate overhead and certain operations that are not considered separate reportable segments based on their size. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service.

Net sales for Foodservice increased $4.6$2.9 billion, or 15.8%,8.7%, from fiscal 20242025 to fiscal 2025.2026 Thisdriven increaseprimarily by acquisitions, including the Cheney Brothers Acquisition, in netaddition salesto wasorganic drivencase byvolume recentgrowth acquisitions,and an increase in selling price per case as a result of inflation, and case volume growth, including growth in our independent and chain business.inflation. The Cheney Brothers Acquisition contributed $2.7$3.7 billion toin net sales infor fiscal 2026 compared to $2.7 billion for fiscal 2025. Total case growth for Foodservice was 12.7%6.6% fromin fiscal 20242026 compared to the prior fiscal 2025.year. Total independent case growth was 16.9%10.2% in fiscal 20252026 compared to the prior fiscal year driven by recent acquisitions.year. Securing newnew, and expanding business withwith, independent customers resulted in organic independent case growth of 4.6%5.9% in fiscal 20252026 compared to the prior fiscal year. For fiscal 2025,2026, independent sales as a percentage of total segmentFoodservice sales were 40.6%.42.1%.

Adjusted EBITDA for Foodservice increased $239.4$71.4 million, or 24.4%,5.8%, from fiscal 20242025 to fiscal 2025.2026. This increase was the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Foodservice’s Adjusted EBITDA increased $805.6$500.9 million, or 19.7%10.2% in fiscal 20252026 compared to the prior fiscal year.year Theprimarily increasedue in gross profit was driven by recentto acquisitions, including the Cheney Brothers Acquisition, growth in cases sold, and a favorable shift in the mix of cases sold, and growth in cases sold, including more Performance Brands products sold to our independent customers. The Cheney Brothers Acquisition contributed $485.0an additional $142.8 million to Foodservice’sof gross profit impacting Adjusted EBITDA in fiscal 2025.2026. Operating expenses impacting Foodservice’s Adjusted EBITDA increased by $430.7 million, or 11.7%, from fiscal 2025 to fiscal 2026 primarily as a result of a $181.9 million increase in personnel expenses related to salaries and wages, commissions, and benefits, additional operating expenses as a result of acquisitions, including $123.5 million related to the Cheney Brothers Acquisition, a $35.5 million increase in fuel expense due to higher fuel prices and miles driven as a result of new business, and a $28.2 million increase in insurance expense related to auto insurance and workers’ compensation.

Depreciation of fixed assets and amortization of intangible assets recorded in this segment increased from $294.4 million in fiscal 2024 to $448.5 million in fiscal 2025.2025 Depreciationto of$546.2 fixed assets and amortization of intangible assets increasedmillion in fiscal 20252026 primarily as a result of recent acquisitions, including the Cheney Brothers Acquisition,Acquisition and an increase in transportation equipment and facilities under finance leases. TotalThe Cheney Brothers Acquisition contributed an additional $29.7 million in depreciation and amortization related to Cheney Brothers was $83.4 million in fiscal 2025.2026 compared to the prior fiscal year.

Adjusted EBITDA for Convenience increased $43.7$68.1 million, or 12.0%,16.7%, from fiscal 20242025 to fiscal 20252026 as a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Convenience’s Adjusted EBITDA increased $68.1$115.7 million, or 4.3%,7.0%, for fiscal 20252026 compared to the prior fiscal year primarily due to growth in cases sold, vendor rebates and promotional incentives, inventory holding gainsgains, and pricingincome improvementearned from procurementmanufacturers efficiencies.for distribution and related services. Operating expenses impacting Convenience’s Adjusted EBITDA, increased $22.8$48.9 million, or 1.9%,3.9%, for fiscal 20252026 compared to the prior fiscal year primarily as a result of a $15.1$27.7 million increase in personnel expenses related to wages, salaries,salaries and benefits,benefits ato $9.7support case volume growth from the addition of new chain customers, an $8.9 million increase in insurancefuel expense,expense due to higher fuel prices and miles driven as a $4.9result of new business, and $7.4 million increase in outbound freight expense. This increase inadditional operating expenses wasas partiallythe offsetresult byof aan $8.0acquisition million decreasecompleted in fuel expense compared to the priorfourth quarter of fiscal year.2025.

Depreciation and amortization of intangible assets recorded in this segment increased from $153.5 million in fiscal 2024 to $157.7 million in fiscal 2025 asto a$164.7 result of an increasemillion in transportationfiscal equipment under finance leases.2026.

Adjusted EBITDA for Specialty increased $7.6$12.2 million, or 2.2%,3.5%, from fiscal 20242025 to fiscal 20252026 as a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Specialty’s Adjusted EBITDA increased $32.6$31.1 million, or 3.8%,3.5%, in fiscal 20252026 compared to fiscal 2024,2025 primarily driven by anfavorable acquisitionchannel insales the second quarter of fiscal 2024, procurement-related cost improvements,mix and inventoryvendor holdingrebates gains.and promotional incentives. Operating expenses impacting Specialty’s Adjusted EBITDA increased $25.4$19.1 million, or 5.0%,3.6%, forin fiscal 20252026 compared to the prior fiscal year primarily drivendue byto $18.1a $8.8 million ofincrease in personnel expenses related to anwages acquisitionand in the second quarter of fiscal 2024, $4.7 million in variable operational expenses asbenefits, a result of a shift in channel mix, and a $4.4$5.3 million increase in occupancyoutbound costsfreight expense primarily associatedfrom withsmall buildingparcel expansions, partially offset by a $3.3 million reduction in lease expense as the segment has transitioned to finance leases for fleet equipmentvolume, and a $2.9$2.4 million decreaseincrease in fuel expense comparedprimarily due to thehigher priorfuel fiscal year.prices.

Depreciation and amortization of intangible assets recorded in this segment increaseddecreased from $49.9 million in fiscal 2024 to $54.6 million in fiscal 2025 due primarily to an$53.7 acquisitionmillion in the second quarter of fiscal 2024.2026.

We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our ABL Facility, operating and finance leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our ABL Facility orand occasionally with the net proceeds from the issuances of senior notes.notes and/or equity. Our borrowing levels are subject to seasonal fluctuations, as well as procurement and acquisition activities. We borrow under our creditABL facilityFacility or pay it down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonablesufficient liquidity.

We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. To add stability to interest expense and manage our exposure to interest rate movements, we enter into interest rate swap agreements. These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments. As of June 28,27, 2025,2026, $150.0 million of the outstanding ABL Facility balance is currently hedged under interest rate swaps, which results in 68%73% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.

On May 27, 2025, the Board of Directors authorized a new share repurchase program for up to $500 million of the Company’s outstanding common stock. This authorization replacesreplaced the previously authorized $300 million share repurchase program. The new share repurchase program has an expiration date of May 27, 2029. Repurchases of the Company’s outstanding common stock will be made in accordance with applicable securities laws and may be made at management’s discretion from time to time in the open market, through privately negotiated transactions or otherwise, including pursuant to Rule 10b5-1 trading plans. The share repurchase program may be amended, suspended or discontinued at any time at the Board’s discretion, and does not commit the Company to repurchase any specified number of shares of its common stock. The actual timing, number and value of the shares to be purchased under the program will be determined by the Company at its discretion and will depend on a number of factors, including the performance of the Company’s stock price, general market and other conditions, applicable legal requirements and compliance with the terms of the Company’s outstanding indebtedness. During the fiscal year ended June 27, 2026, the Company repurchased and subsequently retired less than 0.1 million shares of common stock, for a total of $1.5 million or an average cost of $83.12 per share. As of June 28,27, 2025,2026, $500$498.5 million remained available for additional share repurchases under the program.

Our contractual cash requirements over the next 12twelve months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 8. Debt and Note 12. Leases, respectively, within the Notes to Consolidated Financial Statements included in Item 8. As of June 28,27, 2025,2026, the Company had total purchase obligations of $276.8$193.2 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. Included in the total purchase obligations above are commitments of $170.9$68.9 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings under the ABL Facility to fulfill these commitments. Amounts due under these agreements were not included in the Company’s consolidated balance sheet as of June 28,27, 2025.2026.

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

We believe that our cash flows from operations and available borrowing capacity will be sufficient to meet our anticipated cash requirements over the next 12twelve months and beyond, to maintain sufficient liquidity for normal operating purposes, and to fund capital expenditures.

During fiscal 20252026 and fiscal 2024,2025, our operating activities provided cash flow of $1,210.1$1,413.7 million and $1,163.0$1,210.1 million, respectively. The increase in cash flows provided by operating activities in fiscal 20252026 compared to fiscal 20242025 was largely driven by higher cash-based operating income,income and income tax refunds of $52.3 million received during fiscal 2026, partially offset by changes in the timing of advanced purchases of inventory.inventory to take advantage of preferred pricing.

During fiscal 2024,2026, ourcash used in financing activities usedtotaled cash flow of $472.6$624.8 million, which consisted primarily of $275.0 million in cash used for the repayment of the $1.1 billion aggregate principal amount of the 5.500% Senior Notes due 2025,2027, $122.2$384.0 million in net repayments under our ABL Facility, $241.6 million in payments under finance lease obligations, and $78.1$1.5 million in repurchases of common stock.stock, partially offset by $1.1 billion in cash received from the issuance and sale of the Notes due 2034.

Total assets for Foodservice increased $4,218.7$693.0 million from $7,052.4$11.3 million as of June 29, 2024 to $11,271.1 millionbillion as of June 28, 2025,2025 to $12.0 billion as of June 27, 2026, primarily due to recent acquisitions within the segmentsegment, asincreases wellin asinventory, anand increaseincreases in property, plant, and equipment through additional transportation equipment under finance leases.

Total assets for SpecialtyConvenience increased $67.8$184.7 million from $1,519.1$4.3 million as of June 29, 2024 to $1,586.9 millionbillion as of June 28, 2025.2025 Duringto this$4.5 timebillion period,as theof segmentJune increased27, its2026, inventoryprimarily due to increases in inventory through advanced purchases to take advantage of preferred pricing, increased its accounts receivable,pricing and increasedincreases itsin property, plant, and equipment through additional transportation equipment under finance leases. These increases wereleases, partially offset by a decreasedecreases in intangible assets due to normal amortization.

Accounts receivable are comprised of trade receivables from customers in the ordinary course of business, are recorded at the invoiced amount, adjusted for any discounts granted to customers, and primarily do not bear interest. Accounts receivable also includes other receivables primarily related to various rebaterebates and promotional incentives with our suppliers. Receivables are recorded net of the allowance for credit losses on the accompanying consolidated balance sheets. We evaluate the collectability of our accounts receivable based on a combination of factors. We regularly analyze our significant customer accounts, and when we become aware of a specific customer’s inability to meet its financial obligations to us, such as bankruptcy filings or deterioration in the customer’s operating results or financial position, we record a specific reserve for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record reserves for bad debt for other customers based on a variety of factors, including the length of time the receivables are past due, macroeconomic considerations, and historical experience. If circumstances related to specific customers change, our estimates of the recoverability of receivables could be further adjusted.

Our inventories consist primarily of food and non-food products. The Company values inventories at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method, weighted average cost method, and last-in, first-out ("LIFO") method. For its LIFO based inventory, the Company utilizes the link chain technique of the dollar value method. FIFO was used for approximately 55.6%,54.4%, LIFO was used for approximately 38.2%,38.6%, and weighted average costing was used for approximately 6.2%7.0% of total inventories at June 28,27, 2025.2026. We adjust our inventory balances for slow-moving, excess, and obsolete inventories. These adjustments are based upon inventory category, inventory age, specifically identified items, and overall economic conditions.

Vendor Rebates and Other Promotional Incentives

We participate in various rebaterebates and promotional incentives with our suppliers, either unilaterally or in combination with purchasing cooperatives and other procurement partners, that consist primarily of volume and growth rebates, annual and multi-year incentives, and promotional programs. Consideration received under these incentives is generally recorded as a reduction of cost of goods sold. However, as described below, in certain limited circumstances the consideration is recorded as a reduction of operating expenses incurred by us. Consideration received may be in the form of cash and/or invoice deductions. Changes in the estimated amount of incentives to be received are treated as changes in estimates and are recognized in the period of change.

During fiscal 2026, fiscal 2025, fiscal 2024, and fiscal 2023,2024, we performed the step zero analysis for our goodwill impairment test and no further quantitative impairment test was deemed necessary for our reporting units within our reportable segments. Based on our assessment, there were no impairments recorded in fiscal 20252026, 2025, or fiscal 2024. There was an immaterial impairment of goodwill related to reporting units within the Corporate & All Other segment for fiscal 2023.

Based on the Company’s organizational structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company has three reportable segments: Foodservice, Convenience, and Specialty. Our Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit chain restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments. Our chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Convenience segment distributes candy, snacks, beverages, cigarettes, other tobacco products, food and foodservice related products and other items to convenience stores across North America. Our Specialty segment distributes candy, snacks, beverages, and other food items nationally to vending, office coffee service, theater, retail, and other channels and utilizes third-party carriers to deliver direct to consumers for our supplier partners and to our customers whose order sizes are too small to be served effectively by our fleet network. We believe our diverse segments provide substantial opportunities for cross-segment collaboration to better serve our customers, including business development, procurement, operational best practices such as the use of new productivity technologies, and supply chain and network optimization, as well as shared corporate functions such as accounting, treasury, tax, legal, information systems, and human resources.

Our ability to successfully execute our segment and corporate strategies and implement our initiatives. Our performance will continue to depend on our ability to successfully execute our segment and corporate strategies and to implement our current and future initiatives. The key strategies include focusing on independent sales and Performance Brands, pursuing new customers for our three reportable segments, expansion of geographies, utilizing our infrastructure and technology to gain further operating and purchasing efficiencies, and making strategic acquisitions.

Includes an increase of $20.3 million for Convenience and a decrease of $1.9 million for Foodservice in the LIFO reserve of $28.1 million for Convenience for the secondthird quarter of fiscal 2026 compared to a decreaseincreases of $0.1$8.2 million for Convenience and $0.2 million for Foodservice and an increase of $17.9 million for Convenience for the secondthird quarter of fiscal 2025. The LIFO reserve increased $1.7$71.2 million for Convenience and decreased $0.2 million for Foodservice and $50.9 million for Convenience for the first sixnine months of fiscal 2026 compared to increases of $0.8$37.9 million for Convenience and $1.0 million for Foodservice and $29.7 million for Convenience for the first sixnine months of fiscal 2025.

Includes amounts related to favorable and unfavorable leases, litigation-related accruals, franchiseprofessional taxfees expense,related to the modification of debt, insurance proceeds due to hurricane and other weather relatedweather-related events, foreign currency transaction gains and losses, gains and losses on disposals of fixed assets, franchise tax expense, favorable and unfavorable leases, foreign currency transaction gains and losses, and other adjustments permitted by our ABL Facility. Additionally, for the three and sixnine months ended DecemberMarch 27,28, 2025,2026, Other adjustments includes $10.2$20.2 million and $20.1 million, respectively, of legal and professional fees incurred in connection with shareholder activism and the clean team agreement with US Foods Holding Corp.

Three and sixnine months ended DecemberMarch 27,28, 20252026 compared to the three and sixnine months ended DecemberMarch 28,29, 20242025

Net sales increased $806.5$983.7 million, or 5.2%,6.4%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026 primarily driven by an increase in cases sold, including a favorable shift in mix of cases sold, and an increase in selling price per case as a result of inflation. Net sales increased $2,466.9$3.5 million,billion, or 7.9%,7.4%, for the first sixnine months of fiscal 2026 compared to the first sixnine months of fiscal 2025 primarily driven by recent acquisitions, including the Cheney Brothers Acquisition, an increase in cases sold, including a favorable shift in mix of cases sold, acquisitions, including the Cheney Brothers Acquisition, and an increase in selling price per case as a result of inflation. Total case volume increased 3.4%4.4% and 6.4%5.7% during the secondthird quarter and first sixnine months of fiscal 2026, respectively, compared to the same periods of fiscal 2025. Total organic case volume increased 2.8%3.7% and 3.1% in both the secondthird quarter and first sixnine months of fiscal 2026, respectively, compared to the same periods of fiscal 2025. Total organic case volume benefited from an increase of 5.3%6.5% and 5.8%6.0% in organic independent cases sold during the secondthird quarter and first sixnine months of fiscal 2026, respectively, including growth in Performance Brands cases and growth in cases sold to Foodservice’s chain business. The overall rate of product cost inflation was approximately 4.5% for both the secondthird quarter and first sixnine months of fiscal 2026.

Gross profit increased $138.6$116.4 million, or 7.6%,6.4%, for the secondthird quarter of fiscal 2026 compared to the secondthird quarter of fiscal 2025 primarily driven by cost of goods sold optimization through procurement efficiencies, as well as a favorable shift in the mix of cases sold, including growth in the independent channel.channel, Independentwhich customers typically receive more services from us, cost more to serve, and pay agenerates higher gross profit perdue caseto thanadditional otherservices customers.provided. Gross profit increased $391.0$507.4 million, or 10.9%,9.4%, for the first sixnine months of fiscal 2026 compared to the first sixnine months of fiscal 2025 primarily driven by recent acquisitions, including the Cheney Brothers Acquisition, as well as the same drivers of the increase in gross profit for the secondthird quarter of fiscal 2026.2026, as well as acquisitions, including the Cheney Brothers Acquisition.

Operating expenses increased $107.3$141.9 million, or 6.4%,8.6%, for the secondthird quarter of fiscal 2026 compared to the secondthird quarter of fiscal 2025 primarily driven by a $63.9$71.7 million increase in personnel expenses related to salaries, commissions, and benefits, a $16.5$10.1 million increase in professional fees primarily related to the issuance of debt and recent acquisitions, a $15.8 million increase in depreciation and amortization expense mainly driven by an increase in transportation equipment and facilities under finance leases, and $10.2$15.3 million additional operating expenses as a result of acquisitions, a $8.3 million increase in legalinsurance expense related to auto insurance and professionalworkers’ feescompensation, incurredand a $7.8 million increase in connectionfuel withexpense thedue cleanto teamhigher agreementfuel withprices USand Foodsmiles Holdingdriven Corp.as a result of new business.

Operating expenses increased $350.3$492.2 million, or 10.9%,10.1%, for the first halfnine months of fiscal 2026 compared to the first halfnine months of fiscal 2025 primarily driven by recenta acquisitions, including $156.4$201.4 million ofincrease in personnel expenses related to salaries and wages, benefits, and commissions, additional operating expenses as a result of acquisitions, including $156.4 million related to the Cheney Brothers Acquisition, a $129.7 million increase in personnel expenses related to wages and salaries, commissions, and benefits, a $29.1$44.9 million increase in depreciation and amortization expense mainly driven by an increase in transportation equipment and facilities under finance leases, and $20.1$20.2 million in legal and professional fees incurred in connection with shareholder activism and the clean team agreement with US Foods Holding Corp.Corp., a $13.1 million increase in fuel expense due to higher fuel prices and miles driven as a result of new business, and a $10.6 million increase in insurance expense related to auto insurance and workers’ compensation.

Net income increaseddecreased $19.3$16.6 million, or 45.5%,28.5%, for the secondthird quarter of fiscal 2026 compared to the secondthird quarter of fiscal 2025 primarily driven by an increase grossin profit,operating expenses, partially offset by an increaseincreases in operatinggross expenses,profit and other income taxes,due andto interestunrealized expense.gains on fuel collars. Net income increaseddecreased $4.9$11.7 million, or 3.3%,5.6%, for the first sixnine months of fiscal 2026 compared to the first sixnine months of fiscal 2025 primarily driven by increases in grossoperating profitexpenses and otherinterest income,expense, partially offset by increases in operatinggross expensesprofit and interestother expense.income due to unrealized gains on fuel collars. The increasesincrease in interest expense werefor the first nine months of fiscal 2026 was primarily the result of an increase in the average borrowings, including finance lease obligations, during the second quarter and first sixnine months of fiscal 2026 compared to the prior year periods.period.

The Company reported income tax expense of $25.0$14.2 million and $52.9$67.1 million for the secondthird quarter and first sixnine months of fiscal 2026, respectively, compared to income tax expense of $14.3$20.2 million and $53.2$73.4 million for the secondthird quarter and first sixnine months of fiscal 2025, respectively. Our effective tax ratesrate for both the secondthird quarter and first sixnine months of fiscal 2026 werewas 28.8% and 25.4%, respectively,25.4% compared to 25.2%25.8% and 26.1%26.0% for the secondthird quarter and first sixnine months of fiscal 2025, respectively. The effective tax rate for the three months ended DecemberMarch 27,28, 20252026 differed from the prior year period primarily due to an increase in tax credits net of valuation allowance established, a decrease in state and foreign taxes as a percentage of income, and a decrease in non-deductible expenses, partially offset by a decrease in deductible discrete items related to stock-based compensation. The effective tax rate for the nine months ended March 28, 2026 differed from the prior year period primarily due to an increase in tax credits net of valuation allowance established, partially offset by a decrease in deductible discrete items related to stock-based compensation and an increase in foreign taxes as a percentage of income, partially offset by an increase in tax credits net of the valuation allowance established. The effective tax rate for the six months ended December 27, 2025 differed from the prior year period primarily due to an increase in tax credits net of the valuation allowance established and deductible discrete items related to stock-based compensation, partially offset by an increase in foreign taxes and non-deductible expenses as a percentage of income.

InBased on the thirdCompany’s quarterorganizational ofstructure fiscaland 2025,how the Company’s management reviews operating results and makes decisions about resource allocation, the Company updated its operating segments to reflect the manner in which the business is managed. The Company continues to havehas three reportable segments: Foodservice, Convenience, and Specialty. Management evaluates the performance of these segments based on various operating and financial metrics, including their respective sales growth and Segment Adjusted EBITDA, which is the Company’s GAAP measure of segment profit. Segment Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, depreciation, and amortization and excludes certain items that the Company does not consider part of its segments’ core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives. The presentation and amounts for the fiscal quarter and six months ended December 28, 2024 have been recast to reflect these segment changes. See Note 13. Segment Information of the consolidated financial statements in this Form 10-Q.

Corporate & All Other is comprised of unallocated corporate overhead and certain operations that are not considered separate reportable segments based on their size. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service.

Three and sixnine months ended DecemberMarch 27,28, 2025,2026, compared to the three and sixnine months ended DecemberMarch 28,29, 20242025

Net sales for Foodservice increased $424.1$421.4 million, or 5.1%,5.0%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026 driven primarily by organic case volume growth, including growth in our independent and chain business, and an increase in selling price per case as a result of inflation.inflation, and recent acquisitions. Net sales for Foodservice increased $1.9$2.3 billion, or 11.6%,9.4%, from the first halfnine months of fiscal 2025 to the first halfnine months of fiscal 2026 driven primarily by acquisitions, including the Cheney Brothers AcquisitionAcquisition, in addition to organic case volume growth and an increase in selling price per case as a result of inflation. Cheney Brothers contributed $1.8$2.8 billion in net sales for the first halfnine months of fiscal 2026 compared to $825.0$1.8 millionbillion for the first halfnine months of fiscal 2025. Total case growth for Foodservice was 3.5%3.9% in the secondthird quarter of fiscal 2026 and 9.3%7.5% in the first halfnine months of fiscal 2026, compared to the prior year periods. Total independent case growth was 6.7%7.3% and 13.0%11.1% for the secondthird quarter and first halfnine months of fiscal 2026, respectively, compared to the prior year periods. Securing newnew, and expanding business withwith, independent customers resulted in organic independent case growth of 5.3%6.5% and 5.8%6.0% in the secondthird quarter and first halfnine months of fiscal 2026, respectively, compared to the prior year periods. For the secondthird quarter and first halfnine months of fiscal 2026, independent sales as a percentage of total Foodservice sales were 44.4%41.5% and 42.1%,41.8%, respectively.

Adjusted EBITDA for Foodservice increased $7.0$6.0 million, or 2.5%,2.2%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026. This increase was the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Foodservice’s Adjusted EBITDA increased $78.7$85.8 million, or 6.5%,7.0%, in the secondthird quarter of fiscal 2026 compared to the prior year period primarily driven by growth in cases sold, a favorable shift in the mix of cases sold and growth in cases sold, including more Performance Brands products sold to our independent customers.customers, and recent acquisitions. Operating expenses impacting Foodservice’s Adjusted EBITDA increased $72.2$79.7 million, or 7.8%,8.4%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026. Operating expenses increased compared to the prior year period primarily as a result of a $46.4$54.5 million increase in personnel expenses related to salaries, commissions,benefits, and benefits,commissions, $10.3 million additional operating expenses as a $8.4result of recent acquisitions, a $6.8 million increase in insurance expense related to auto insurance and workers’ compensation, a $3.3 million increase in professional fees, and a $2.9$5.5 million increase in fuel expense due to higher fuel prices.prices and miles driven as a result of new business.

Adjusted EBITDA for Foodservice increased $56.8$62.8 million, or 10.1%,7.5%, from the first halfnine months of fiscal 2025 to the first halfnine months of fiscal 2026. This increase was the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Foodservice’s Adjusted EBITDA increased $308.5$394.3 million, or 13.3%,11.2%, in the first halfnine months of fiscal 2026, primarily due to acquisitions, including the Cheney Brothers Acquisition, growth in cases sold, and a favorable shift in mix of cases sold, and growth in cases sold, including more Performance Brands products sold to our independent customers. The Cheney Brothers Acquisition contributed an additional $142.8 million of gross profit impacting Adjusted EBITDA for the first halfnine months of fiscal 2026. Operating expenses impacting Foodservice’s Adjusted EBITDA increased $253.4$333.1 million, or 14.5%,12.3%, from the first halfnine months of fiscal 2025 to the first halfnine months of fiscal 2026 primarily as a result of the Cheney Brothers Acquisition, which contributed an additional $123.5 million of operating expenses for the first half of fiscal 2026. Excluding the impact of the additional Cheney Brothers expenses, operating expenses impacting Foodservice’s Adjusted EBITDA increased primarily as a result of a $94.2$148.7 million increase in personnel expenses related to salaries and wages, commissions, andsalaries, benefits, and commissions, additional operating expenses as a $15.2result of acquisitions, including $123.5 million related to the Cheney Brothers Acquisition, a $22.0 million increase in insurance expense related to auto insurance and workers’ compensation, a $5.1 million increase in professional fees, and a $4.9$10.4 million increase in fuel expense due to higher fuel prices.prices and miles driven as a result of new business.

Depreciation and amortization of intangible assets recorded in this segment increased from $115.7$120.5 million in the secondthird quarter of fiscal 2025 to $133.4$137.7 million in the secondthird quarter of fiscal 2026 primarily due to an increase in transportation equipment and facilities under finance leases. Additionally, Foodservice depreciation and amortization of intangible assets increased from $200.9$321.5 million in the first halfnine months of fiscal 2025 to $263.7$401.4 million in the first halfnine months of fiscal 2026 primarily as a result of the Cheney Brothers Acquisition and an increase in transportation equipment and facilities under finance leases and the Cheney Brothers Acquisition.leases. The Cheney Brothers Acquisition contributed an additional $29.7 million in depreciation and amortization for the first halfnine months of fiscal 2026 compared to the prior year period.

Three and sixnine months ended DecemberMarch 27,28, 2025,2026, compared to the three and sixnine months ended DecemberMarch 28,29, 20242025

Net sales for Convenience increased $363.5$501.5 million, or 6.1%,8.7%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026 and increased $586.7$1,088.2 million, or 4.8%,6.0%, from the first halfnine months of fiscal 2025 to the first halfnine months of fiscal 2026 driven primarily by case volume growth due to the addition of new chain customers, a recent acquisition,customers and an increaseacquisition completed in the fourth quarter of fiscal 2025 and inflation in selling price per casecase, aspartially offset by a resultrevenue ofmix continuedshift inflation.due to the decline in cigarette case volume. Total Convenience cases sold increased 6.8%8.8% and 3.6%5.2% for the secondthird quarter and first halfnine months of fiscal 2026, respectively, compared to the prior year periods. Securing new chain customers resulted in an organic increase of 6.3%8.3% and 3.1%4.7% in Convenience cases sold for the secondthird quarter and first halfnine months of fiscal 2026, respectively, compared to the prior year periods.

Adjusted EBITDA for Convenience increased $14.4$25.5 million, or 13.4%,34.1%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026. This increase was a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Convenience’s Adjusted EBITDA increased $26.7$39.3 million, or 6.4%,10.3%, for the secondthird quarter of fiscal 2026 compared to the prior year period primarily due to pricing improvements from procurement efficiencies, inventory holding gains, an increase in cases sold, aand favorableincome shiftearned infrom mixmanufacturers offor cases sold,distribution and pricingrelated improvements from procurement efficiencies.services. Operating expenses impacting Convenience’s Adjusted EBITDA increased $12.4$13.8 million, or 4.0%,4.5%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026 primarily as a result of ana $8.3$11.7 million increase in personnel expenseexpenses related to salaries and benefits to support case volume growth from the addition of new chain customers and a $2.4$2.5 million increaseadditional dueoperating toexpenses recentas acquisitions.a result of an acquisition completed in the fourth quarter of fiscal 2025.

Adjusted EBITDA for Convenience increased $30.1$55.6 million, or 14.2%,19.4%, from the first halfnine months of fiscal 2025 to the first halfnine months of fiscal 2026. This increase was a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Convenience’s Adjusted EBITDA increased $49.3$88.6 million, or 5.9%,7.2%, for the first halfnine months of fiscal 2026 compared to the prior year period primarily due to inventory holding gains, an increase in cases sold, apricing favorableimprovements shiftfrom inprocurement mixefficiencies, ofand cases sold, higher feesincome earned from manufacturers for distribution and related services, and pricing improvements from procurement efficiencies.services. Operating expenses impacting Convenience’s Adjusted EBITDA increased $20.0$33.8 million, or 3.2%,3.6%, from the first halfnine months of fiscal 2025 to the first halfnine months of fiscal 2026 primarily as a result of ana $19.9 million increase in variable operatingpersonnel expenses related to salaries and benefits to support case volume growth from the addition of new chain customers,customers includingand $7.4 million additional operating expenses as a result of an $8.2acquisition million increasecompleted in personnelthe expensesfourth relatedquarter toof salariesfiscal and benefits, and a $4.9 million increase due to recent acquisitions.2025.

Depreciation and amortization of intangible assets recorded in this segment increased from $39.0$39.2 million in the secondthird quarter of fiscal 2025 to $41.0$41.1 million in the secondthird quarter of fiscal 2026 and increased from $77.6$116.8 million in the first halfnine months of fiscal 2025 to $80.9$122.0 million in the first halfnine months of fiscal 2026.

Three and sixnine months ended DecemberMarch 27,28, 2025,2026, compared to the three and sixnine months ended DecemberMarch 28,29, 20242025

Adjusted EBITDA for Specialty increaseddecreased $6.3$4.4 million, or 6.7%,5.6%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026. This increasedecrease was a result of an increase in grossoperating profit,expenses, partially offset by an increase in operatinggross expenses.profit. Gross profit contributing to Specialty’s Adjusted EBITDA increased $7.8$6.0 million, or 3.4%,3.0%, for the secondthird quarter of fiscal 2026 primarily driven by pricing improvements from procurement efficiencies and a favorable shift in channel mix, pricing improvements from procurement efficiencies, and inventory holding gains, partially offset by a decrease in casesinventory sold.holding gains. Operating expenses impacting Specialty’s Adjusted EBITDA increased $1.5$10.4 million, or 1.1%,8.4%, from the secondthird quarter of fiscal 2025 to the secondthird quarter of fiscal 2026 primarily due to ana $6.9 million increase in variable operatingpersonnel expenses asrelated to wages and benefits and a result$2.7 ofmillion a shiftincrease in channeloutbound mix.freight expense.

Adjusted EBITDA for Specialty increased $17.1$12.7 million, or 9.7%,5.0%, from the first halfnine months of fiscal 2025 to the first halfnine months of fiscal 2026 as a result of an increase in gross profitprofit, andpartially aoffset decreaseby an increase in operating expenses. Gross profit contributing to Specialty’s Adjusted EBITDA increased $14.8$20.8 million, or 3.2%, for the first halfnine months of fiscal 2026 compared to the prior year period primarily driven by pricing improvements from procurement efficiencies and a shift in channel mix, pricing improvements from procurement efficiencies, and inventory holding gains, partially offset by ainventory decreaseholding in cases sold.gains. Operating expenses impacting Specialty’s Adjusted EBITDA decreasedincreased $2.2$8.2 million, or 0.8%,2.0%, from the first halfnine months of fiscal 2025 to the first halfnine months of fiscal 2026 primarily due to a decrease$6.8 million increase in variable operatingpersonnel expenses asrelated to wages and benefits and a result$4.3 ofmillion a shiftincrease in channeloutbound mix.freight expense.

Depreciation and amortization of intangible assets recorded in this segment decreasedincreased from $13.3$13.4 million in the secondthird quarter of fiscal 2025 to $13.1$14.4 million in the secondthird quarter of fiscal 2026 and decreased from $27.7$41.1 million in the first halfnine months of fiscal 2025 to $26.1$40.5 million in the first halfnine months of fiscal 2026.

We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. To add stability to interest expense and manage our exposure to interest rate movements, we enter into interest rate swap agreements. These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments. As of DecemberMarch 27,28, 2025,2026, $150.0 million of the outstanding ABL Facility balance is hedged under interest rate swaps which results in 70%72% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.

On May 27, 2025, the Board of Directors authorized a new share repurchase program for up to $500 million of the Company’s outstanding common stock. This authorization replaces the previously authorized $300 million share repurchase program. The new share repurchase program has an expiration date of May 27, 2029. Repurchases of the Company’s outstanding common stock will be made in accordance with applicable securities laws and may be made at management’s discretion from time to time in the open market, through privately negotiated transactions or otherwise, including pursuant to Rule 10b5-1 trading plans. The share repurchase program may be amended, suspended or discontinued at any time at the Board’s discretion, and does not commit the Company to repurchase any specified number of shares of its common stock. The actual timing, number and value of the shares to be purchased under the program will be determined by the Company at its discretion and will depend on a number of factors, including the performance of the Company’s stock price, general market and other conditions, applicable legal requirements and compliance with the terms of the Company’s outstanding indebtedness. During the three and nine months ended March 28, 2026, the Company repurchased and subsequently retired less than 0.1 million shares of common stock, for a total of $1.2 million or an average cost of $83.11 per share. As of DecemberMarch 27,28, 2025,2026, $500$498.8 million remained available for share repurchases.

Our contractual cash requirements over the next 12 months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 6. Debt and Note 7. Leases, respectively, of the consolidated financial statements in this Form 10-Q. As of DecemberMarch 27,28, 2025,2026, the Company had total purchase obligations of $273.2$254.5 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. As of DecemberMarch 27,28, 2025,2026, the Company had commitments of $129.3$114.8 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings under the ABL Facility to fulfill these commitments. Amounts due under these agreements were not included in the Company’s consolidated balance sheet as of DecemberMarch 27,28, 2025.2026.

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

As of DecemberMarch 27,28, 2025,2026, our cash balance totaled $49.5$56.1 million, including restricted cash of $8.5$10.2 million, as compared to a cash balance totaling $86.7 million, including restricted cash of $8.2 million, as of June 28, 2025.

SixNine months ended DecemberMarch 27,28, 2025,2026, compared to the sixnine months ended DecemberMarch 28,29, 20242025

During the first sixnine months of fiscal 2026 and fiscal 2025, our operating activities provided cash flow of $456.0$1,071.9 million and $379.0$827.1 million, respectively. The increase in cash flow provided by operating activities in the first sixnine months of fiscal 2026 compared to the first sixnine months of fiscal 2025 was largely driven by higher cash-based operating income, improvements in working capital, and income tax refunds of $51.0 million received during the first nine months of fiscal 2026, partially offset by advanced purchases of inventory to take advantage of preferred pricing.

SixNine months ended DecemberMarch 27,28, 2025,2026, compared to the sixnine months ended DecemberMarch 28,29, 20242025

Cash used in investing activities totaled $251.6$656.9 million in the first sixnine months of fiscal 2026 compared to $2,736.7$2,875.1 million in the first sixnine months of fiscal 2025. These investments consisted of cash paid for acquisitions of $61.0$384.2 million in the first sixnine months of fiscal 2026 compared to $2,535.5$2,552.9 million in the first sixnine months of fiscal 2025, along with capital purchases of property, plant, and equipment of $192.3$265.9 million and $203.9$332.7 million for the first sixnine months of fiscal 2026 and the first sixnine months of fiscal 2025, respectively. For the first sixnine months of both fiscal 2026 and fiscal 2025, purchases of property, plant, and equipment primarily consisted of outlays for warehouse improvements and expansion, warehouse equipment, transportation equipment, and information technology. The following table presents the capital purchases of property, plant, and equipment by segment:

SixNine months ended DecemberMarch 27,28, 2025,2026, compared to the sixnine months ended DecemberMarch 28,29, 20242025

During the first sixnine months of fiscal 2026, our financing activities used cash flow of $241.6$445.6 million, which consisted primarily of $118.0the repayment of the $1.1 billion aggregate principal amount of the 5.500% Senior Notes due 2027, $271.5 million in net repayments under our ABL FacilityFacility, asand well as $114.1$176.2 million in payments under finance lease obligations.obligations, partially offset by $1.1 billion in cash received from the issuance and sale of the Notes due 2034.

During the first sixnine months of fiscal 2025, our financing activities provided cash flow of $2,348.7$2,038.6 million, which consisted primarily of $1,499.9$1,229.7 million in net borrowings under our ABL Facility and $1.0 billion in cash received from the issuance and sale of the Notes due 2032, partially offset by $84.8$135.4 million in payments under finance lease obligations.obligations and $43.6 million in cash paid for repurchases of common stock.

The Company'sCompany’s financing arrangements as of DecemberMarch 27,28, 20252026 are described in Note 6. Debt of the consolidated financial statements within this Form 10-Q. As of DecemberMarch 27,28, 2025,2026, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2027, the2029, Notes due 2029,2032, and the Notes due 2032.2034.

Total assets by segment discussed below exclude intercompany receivables between segments, and amounts as of December 28, 2024 have been recast to reflect the changes to our reportable segments that occurred in the third quarter of fiscal 2025.segments.

Total assets for Foodservice increased $738.3$946.5 million from $10,600.2$10,845.7 million as of DecemberMarch 28,29, 20242025 to $11,338.5$11,792.2 million as of DecemberMarch 27,28, 2025,2026, primarily due to an increase in property, plant and equipment and inventory due to warehouse expansion and improvement projects and an increase in goodwill due to recent acquisitions,acquisitions partiallywithin offsetthe by a decrease in intangible assets due to normal amortization.segment. Total assets for Foodservice increased $67.4$521.1 million from $11,271.1 million as of June 28, 2025 to $11,338.5$11,792.2 million as of DecemberMarch 27,28, 2025,2026, primarily due to anrecent increaseacquisitions inwithin inventorythe and property, plant and equipment, offset by a decrease in intangible assets due to normal amortization and a decrease in accounts receivable.segment.

Total assets for Convenience increased $380.2$257.2 million from $4,182.2$4,086.5 million as of DecemberMarch 28,29, 20242025 to $4,562.4$4,343.7 million as of DecemberMarch 27,28, 2025.2026. During this time period, the segment increased its inventory due to advanced purchases to take advantage of preferred pricing and increased its property, plant and equipment through additional transportation equipment leases and a warehouse under finance lease. Additionally, the Convenience segment'ssegment’s accounts receivable balance increased compared to the prior year end.period. These increases were partially offset by decreases in intangible assets due to normal amortization and right-of-use assets. Total assets for Convenience increased $285.6$66.9 million from $4,276.8 million as of June 28, 2025 to $4,562.4$4,343.7 million as of DecemberMarch 27,28, 2025.2026. During this time period, the segment increased its inventory due to advanced purchases to take advantage of preferred pricing and increased its property, plant and equipment through additional transportation equipment leases and a warehouse under finance lease. These increases were partially offset by decreases in accounts receivable, cash, and intangible assets due to normal amortization.amortization, cash, and accounts receivable.