Segment Information

12 Months Ended

Jun. 29, 2024

Segment Reporting [Abstract]

Segment Information

19. Segment Information

Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company has three reportable segments: Foodservice, Vistar, and Convenience.

The 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 Vistar segment specializes in distributing candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, hospitality, and other channels. 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.

Corporate & All Other is comprised of corporate overhead and certain operations 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 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.

(In millions)	Foodservice		Vistar		Convenience		Corporate & All Other		Eliminations			Consolidated
For the year ended June 29, 2024
Net external sales	$	29,002.4	$	4,786.1	$	24,176.9	$	315.8	$	—		$	58,281.2
Inter-segment sales		22.2		3.7		0.1		630.3		(656.3	)		—
Total sales		29,024.6		4,789.8		24,177.0		946.1		(656.3	)		58,281.2
Depreciation and amortization		293.6		49.9		153.5		59.7		—			556.7
Capital expenditures		259.7		53.8		43.7		38.4		—			395.6
For the year ended July 1, 2023
Net external sales	$	28,467.5	$	4,546.3	$	24,119.5	$	121.4	$	—		$	57,254.7
Inter-segment sales		23.1		3.0		0.1		579.0		(605.2	)		—
Total sales		28,490.6		4,549.3		24,119.6		700.4		(605.2	)		57,254.7
Depreciation and amortization		279.8		42.1		148.0		26.8		—			496.7
Capital expenditures		191.4		18.0		46.3		14.0		—			269.7
For the 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

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

	Fiscal year ended
	June 29, 2024			July 1, 2023			July 2, 2022
Foodservice Adjusted EBITDA	$	1,001.2		$	943.6		$	786.5
Vistar Adjusted EBITDA		340.6			325.3			193.0
Convenience Adjusted EBITDA		363.6			328.8			257.1
Corporate & All Other Adjusted EBITDA		(199.3	)		(234.3	)		(216.8	)
Depreciation and amortization		(556.7	)		(496.7	)		(462.8	)
Interest expense		(232.2	)		(218.0	)		(182.9	)
Change in LIFO reserve		(62.3	)		(39.2	)		(122.9	)
Stock-based compensation expense		(41.9	)		(43.3	)		(44.0	)
Gain (loss) on fuel derivatives		1.8			(5.7	)		20.7
Acquisition, integration & reorganization expenses		(23.7	)		(10.6	)		(49.9	)
Other adjustments (1)		5.7			(5.9	)		(10.9	)
Income before taxes	$	596.8		$	544.0		$	167.1

(1) Other adjustments include asset impairments, gains and losses on disposal of fixed assets, amounts related to favorable and unfavorable leases, foreign currency transaction gains and losses, and franchise tax expense.

Total assets by reportable segment and Corporate & All Other, excluding intercompany receivables between segments, are as follows:

(In millions)	As of June 29, 2024		As of July 1, 2023
Foodservice	$	6,996.8	$	6,511.6
Vistar		1,519.1		1,292.7
Convenience		4,080.9		4,226.2
Corporate & All Other		796.1		468.5
Total assets	$	13,392.9	$	12,499.0

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

(In millions)	For the fiscal  year ended June 29, 2024		For the fiscal year ended July 1, 2023		For the fiscal year ended July 2, 2022
Cigarettes	$	14,390.8	$	14,902.7	$	13,197.4
Center of the plate		11,509.8		11,285.7		11,332.2
Canned and dry groceries		5,631.1		5,537.4		4,602.5
Frozen Foods		5,564.9		4,989.2		4,086.8
Candy/snack/theater and concession		5,211.4		4,986.9		3,826.7
Refrigerated and dairy products		4,441.3		4,557.4		4,230.2
Paper products and cleaning supplies		3,209.6		3,189.3		2,695.5
Beverage		3,053.2		2,823.3		2,511.6
Other tobacco products		2,857.9		2,978.8		2,511.1
Produce		1,346.3		1,336.8		1,049.2
Other miscellaneous goods and services		1,064.9		667.2		850.9
Total	$	58,281.2	$	57,254.7	$	50,894.1

Cigarette sales represented 24.7%, 26.0%, and 25.9% of net sales for the years ended June 29, 2024, July 1, 2023, and July 2, 2022, 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 22.4%, 23.1%, and 20.7% of products purchased for the years ended June 29, 2024, July 1, 2023, and July 2, 2022, respectively. 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.