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| Information Source: Sysco Corporation |
| Sysco Corporation (NYSE: SYY) (“Sysco” or the “company”) today announced financial results for its 13-week third fiscal quarter ended March 29, 2025. |
| Key financial results for the third quarter of fiscal year 2025 include the following (comparisons are to the same period in fiscal year 2024): |
- Sales increased 1.1%; U.S. Foodservice volume decreased 2.0%;
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- Gross profit decreased 0.8% to $3.6 billion;
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- Operating income decreased 5.7% to $681 million, and adjusted operating income decreased 3.3% to $773 million1;
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- Net earnings decreased 5.6% to $401 million, and adjusted net earnings decreased 2.9% to $469 million1;
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- EBITDA decreased 2.5% to $910 million, and adjusted EBITDA decreased 0.8% to $969 million1,2;
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- EPS3 decreased 3.5% to $0.82, and adjusted EPS1 was $0.96, in line with the same period last year;
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- FY25 guidance now includes expected sales growth of approximately 3% and adjusted EPS growth of at least 1%1; and
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- Remain on target to return approximately $2.25 billion back to shareholders in FY25, with share repurchase and dividends.
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| “Sysco's Q3 results were negatively impacted by multiple factors: California wildfires, significantly adverse weather, and more recently, weakening consumer confidence. Each of these variables hurt foot traffic to restaurants, which led the quarter, in total, to fall short of our internal expectations. Countering these headwinds as much as possible, Sysco is making progress on multiple important growth and profit improvement activities. Our local case volume has seen an improved exit velocity in March, and I fully anticipate further progress on initiatives as we progress through Q4 and into fiscal 2026. Our entire team is motivated to improve our results despite the external headwinds, and we are focused on levers we can directly control. Sysco has the strongest income statement and balance sheet in the foodservice industry, and we are well-positioned to navigate a challenging macroeconomic environment,” said Kevin Hourican, Sysco’s Chair of the Board and Chief Executive Officer. |
| “Going forward in this dynamic environment, we will remain agile in the near term while continuing to invest in support of long-term growth. This includes over $4 billion in liquidity, our investment-grade balance sheet, and disciplined approach to capital allocation. Our recently announced 6% dividend increase also sets FY26 up to be our 56th year of delivering dividend growth. We are driving improvements across our business, which also include our previously announced $100 million of annualised cost savings that will carry into the next fiscal year,” said Kenny Cheung, Sysco’s Chief Financial Officer. |
| Third Quarter Fiscal Year 2025 Results (comparisons are to the same period in fiscal year 2024) |
| Total Sysco |
| Sales for the third quarter increased 1.1% to $19.6 billion. |
| Gross profit decreased 0.8% to $3.6 billion, and gross margin decreased 35 basis points to 18.3%. Product cost inflation was 2.1% at the total enterprise level, as measured by the estimated change in Sysco’s product costs, primarily in the dairy and meat categories. The decrease in gross profit for the third quarter was primarily driven by lower volumes and mix. |
| Operating expenses increased 0.5%, driven by business and sales headcount investments, as well as elevated supply chain costs. These increases were partially offset by lower annual bonus incentive compensation. Adjusted operating expenses decreased 0.1%. |
| Operating income decreased 5.7% to $681 million, and adjusted operating income decreased 3.3% to $773 million. |
| U.S. Foodservice Operations |
| The U.S. Foodservice Operations segment results were impacted by lower volumes from negative industry foot traffic and planned business investments, partially offset by lower annual bonus incentive compensation. |
| Sales for the third quarter increased 0.7% to $13.8 billion. Total case volume within U.S. Foodservice decreased 2.0% for the third quarter, while local case volume within U.S. Foodservice decreased 3.5%. |
| Gross profit decreased 1.9% to $2.6 billion, and gross margin decreased 50 basis points to 18.9%. |
| Operating expenses increased 2.7%, and adjusted operating expenses increased 2.0%. |
| Operating income decreased 11.5% to $754 million, and adjusted operating income decreased 9.7% to $790 million. |
| International Foodservice Operations |
| The International Foodservice Operations segment continued to deliver effective margin management and profit growth. |
| Sales for the third quarter decreased 1.1% to $3.5 billion. On a constant currency basis4,5, sales for the third quarter increased 2.2% to $3.6 billion. Foreign exchange rates decreased both International Foodservice Operations' sales by $114 million and total Sysco sales by $117 million during the quarter. Excluding the impact of the Mexico joint venture5, which was divested during the second quarter, sales grew 2.5% for International Foodservice Operations and 1.8% for total Sysco. |
| Gross profit increased 1.1% to $728 million, and gross margin increased 45 basis points to 21.1%. On a constant currency basis4,5, gross profit increased 4.0% to $749 million. Foreign exchange rates decreased both International Foodservice Operations' gross profit by $21 million and Sysco's total gross profit by $22 million during the quarter. |
| Operating expenses decreased 0.6%, and adjusted operating expenses decreased 1.8%. On a constant currency basis4,5, adjusted operating expenses increased 1.0%. Foreign exchange rates decreased both International Foodservice Operations' operating expenses by $17 million and total Sysco's operating expenses by $18 million during the quarter. |
| Operating income increased 14.3% to $96 million, and adjusted operating income increased 17.4% to $128 million. On a constant currency basis4,5, adjusted operating income increased 21.1% to $132 million. Foreign exchange rates decreased both International Foodservice Operations' operating income by $4 million and Sysco's total operating income by $4 million during the quarter. |
| Balance Sheet, Cash Flow and Capital Spending |
| As of the end of the quarter, the company had a cash balance of $1.5 billion. |
| During the first 39 weeks of fiscal year 2025, Sysco returned $1.5 billion to shareholders via $700 million of share repurchases and $752 million of dividends. |
| Cash flow from operations was $1.3 billion for the first 39 weeks of fiscal year 2025, which was a decrease of $56 million compared to the prior year period. |
| Capital expenditures, net of proceeds from sales of plant and equipment, for the first 39 weeks of fiscal year 2025 were $363 million. |
| Free cash flow6 for the first 39 weeks of fiscal year 2025 was $954 million, which was a $90 million increase compared to the prior year period. |
| For the full document, click the link below |
| Sysco Corporation |
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