Performance Food Furloughs 3,000, Cuts Salaries and Suspends Buybacks

Performance Food furloughed 3,000 staffers and is cutting salaries and suspending stock buybacks. And it further cut capital spending, all in response to the coronavirus pandemic.
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Foods distributor Performance Food Group  (PFGC) - Get Report said Monday that it furloughed 3,000 workers in response to the coronavirus pandemic.

The Richmond, Va., company and its competitors have been hammered by the closure of restaurants and institutional eating facilities.

Performance Food also is suspending stock repurchases, cutting executive salaries, further slashing capital expenditures and drawing $400 million from its $3 billion line of credit to preserve cash.

At the same time, the company has brought on 13 new retail partners and is sharing 1,100 workers for grocery clients to keep their shelves stocked.

“During the covid-19 pandemic we have made important decisions to protect the organization,” Performance Food Chief Executive George Holm said in a statement.

“Many of these moves are opening new lines of business and providing important resources to the communities and customers we serve,” Holm said.

But other decisions, he said, "are difficult for any company to make, but necessary during challenging times. We are confident that we have taken the appropriate steps and look forward to a time when we can resume a more normal operating environment." 

One silver lining for PFG, says Morningstar analyst Rebecca Scheuneman: “We think PFG’s sales will prove more resilient [than competitors US Foods  (USFD) - Get Report and Sysco  (SYY) - Get Report due to a greater customer mix of delivery-heavy pizzerias, where disruption should be less pronounced, and less severe declines in the firm’s Vistar segment,” she wrote in a report this month.

PFG shares closed at $29.28 Thursday, up 8.04%. At last check they added 0.4% to $29.40.