Segment Information

12 Months Ended

Jul. 02, 2022

Segment Reporting [Abstract]

Segment Information

19. Segment Information

In the second quarter of fiscal 2022, the Company changed its operating segments to reflect the manner in which the chief operating decision maker (“CODM”) manages the business. Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company now has three reportable segments: Foodservice, Vistar, and Convenience.

The Foodservice segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional “food-away-from-home” locations. Foodservice offers a “broad line” of products, including custom-cut meat and seafood, as well as products that are specific to our customers’ menu requirements. The Vistar segment distributes candy, snacks, beverages, and other products to customers in the vending, office coffee services, theater, retail, hospitality, and other channels. The Convenience segment distributes candy, snacks, beverages, cigarettes, other tobacco products, food and foodservice products, and other items to convenience stores across the United States and Canada. Corporate & All Other is comprised of corporate overhead and certain operating segments that are not considered separate reportable segments based on their size. This includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service. Intersegment sales represent sales between the segments, which are eliminated in consolidation.

The accounting policies of the segments are the same as those described in Note 2. Summary of Significant Accounting Policies and Estimates. Management evaluates the performance of each operating segment based on various operating and financial metrics, including total sales and EBITDA, defined as net income before interest expense, interest income, income taxes, depreciation and amortization.

The presentation and amounts for the fiscal years ended July 3, 2021 and June 27, 2020 and as of July 3, 2021 have been restated to reflect the segment changes described above.

(In millions)	Foodservice		Vistar		Convenience		Corporate & All Other		Eliminations			Consolidated
For the fiscal year ended July 2, 2022
Net external sales	$	26,561.1	$	3,679.4	$	20,603.3	$	50.3	$	—		$	50,894.1
Inter-segment sales		18.1		2.4		-		476.2		(496.7	)		—
Total sales		26,579.2		3,681.8		20,603.3		526.5		(496.7	)		50,894.1
Depreciation and amortization		260.0		52.6		125.7		24.5		—			462.8
Capital expenditures		148.2		19.1		31.9		16.3		—			215.5
For the fiscal year ended July 3, 2021
Net external sales	$	21,880.0	$	2,537.4	$	5,946.8	$	34.7	$	—		$	30,398.9
Inter-segment sales		10.0		2.2		-		393.9		(406.1	)		—
Total sales		21,890.0		2,539.6		5,946.8		428.6		(406.1	)		30,398.9
Depreciation and amortization		248.3		47.9		12.6		30.1		—			338.9
Capital expenditures		99.9		48.0		26.5		14.4		—			188.8
For the fiscal year ended June 27, 2020
Net external sales	$	16,728.5	$	3,162.0	$	5,173.4	$	22.4	$	—		$	25,086.3
Inter-segment sales		12.0		4.0		-		323.4		(339.4	)		—
Total sales		16,740.5		3,166.0		5,173.4		345.8		(339.4	)		25,086.3
Depreciation and amortization		197.7		40.3		9.7		28.6		—			276.3
Capital expenditures		57.8		46.7		25.3		28.2		—			158.0

EBITDA for each reportable segment and Corporate & All Other is presented below along with a reconciliation to consolidated income before taxes.

	Fiscal Year Ended
	July 2, 2022			July 3, 2021			June 27, 2020
Foodservice EBITDA	$	741.8		$	658.9		$	336.3
Vistar EBITDA		192.0			81.6			119.9
Convenience EBITDA		151.4			12.1			(81.4	)
Corporate & All Other EBITDA		(272.4	)		(206.6	)		(203.8	)
Depreciation and amortization		(462.8	)		(338.9	)		(276.3	)
Interest expense		(182.9	)		(152.4	)		(116.9	)
Income before taxes	$	167.1		$	54.7		$	(222.2	)

Total assets by reportable segment, excluding intercompany receivables between segments, are as follows:

(In millions)	As of July 2, 2022		As of July 3, 2021
Foodservice	$	6,455.3	$	5,791.7
Vistar		1,133.7		1,049.7
Convenience		4,411.6		681.9
Corporate & All Other		377.4		322.4
Total assets	$	12,378.0	$	7,845.7

The sales mix for the Company’s principal product and service categories is as follows:

(In millions)	For the fiscal year ended July 2, 2022		For the fiscal year ended July 3, 2021		For the fiscal year ended June 27, 2020
Cigarettes	$	13,197.4	$	4,231.4	$	3,728.3
Center of the plate		11,332.2		8,931.1		6,677.7
Canned and dry groceries		4,602.5		3,290.0		2,561.2
Refrigerated and dairy products		4,230.2		2,951.0		2,466.9
Frozen foods		4,086.8		3,484.4		2,859.4
Candy/snack/theater and concession		3,826.7		1,725.0		1,939.7
Paper products and cleaning supplies		2,695.5		2,312.1		1,650.1
Beverage		2,511.6		1,534.9		1,624.9
Other tobacco products		2,511.1		704.0		588.0
Produce		1,049.2		876.6		678.1
Other miscellaneous goods and services		850.9		358.4		312.0
Total	$	50,894.1	$	30,398.9	$	25,086.3

Cigarette sales represented 25.9%, 13.9%, and 14.9% of net sales for the years ended July 2, 2022, July 3, 2021, and June 27, 2020, respectively. The Company’s significant suppliers include Altria Group, Inc. (parent company of Philip Morris USA Inc.) and R.J. Reynolds Tobacco Company, which, in the aggregate, represents approximately 20.7% of products purchased for the year ended July 2, 2022. Although cigarettes represent a significant portion of the Company’s total net sales and cost of goods sold, the majority of the Company's gross profit is generated from the sales of food and food-related products.