In This Article:
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Total Revenue: Over $20 billion, a growth of 4.5% versus fiscal 2024.
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US Food Service Volume Growth: 1.4%.
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National Volume Growth: 4.3%.
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International Segment Adjusted Operating Income: 26.5% growth.
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SYGMA Sales Growth: 10.6%.
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Adjusted EPS: $0.93, a growth rate of 4.5% versus prior year.
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Gross Profit: $3.7 billion, a growth of 3.9%.
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Gross Margin: 18.1%.
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Adjusted Operating Income: $783 million.
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Adjusted EBITDA: $969 million, up 4.4%.
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Net Debt Leverage Ratio: 2.76 times.
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Operating Cash Flow: Approximately $498 million.
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Free Cash Flow: $331 million for the first half.
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Share Repurchase Plan: Increased to $1.25 billion for the fiscal year.
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Dividend Payments: Expected to distribute $1 billion in FY25.
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Net Sales Growth Guidance for FY25: 4% to 5%.
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Adjusted EPS Growth Guidance for FY25: 6% to 7%.
Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sysco Corp (NYSE:SYY) reported over $20 billion in total revenue for the quarter, marking a 4.5% growth compared to the previous fiscal year.
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The International segment showed strong performance with a 26.5% increase in adjusted operating income, driven by operational improvements and procurement synergies.
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The National sales business achieved a 4.3% volume growth, supported by strong customer retention and new customer acquisitions.
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Sysco Corp (NYSE:SYY) increased its share repurchase plan to $1.25 billion for the fiscal year, demonstrating confidence in its financial position.
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The company maintained a robust balance sheet with a net debt leverage ratio of 2.76 times and approximately $3.1 billion in total liquidity.
Negative Points
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Local case performance in the US Food Service segment declined by 0.9%, with challenges attributed to weather disruptions and holiday timing.
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Foot traffic to restaurants in the US was down approximately 2% for the second quarter, impacting overall sales growth.
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The company faced a choppy quarter with hurricane impacts and unfavorable holiday shifts affecting performance.
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Sysco Corp (NYSE:SYY) experienced increased turnover in its sales force due to changes in the compensation model, although retention has since stabilized.
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Inflationary pressures, particularly in dairy and protein categories, are expected to persist, potentially impacting cost management.
Q & A Highlights
Q: How have January sales trended, considering headwinds like southern winter storms and Los Angeles wildfires? Will these impact local or National businesses in Q3? A: Kevin Hourican, CEO, noted that January is typically the lowest volume month. The California wildfires and Southern storms impacted sales, but Sysco was quick to resume deliveries. Both local and National businesses were equally affected. Kenny Cheung, CFO, added that despite disruptions, they are confident in their FY25 guidance due to strong progress in select geographies and international momentum.