| Segment/Period                              | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|---------------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **U.S. Foodservice Operations (in billions)** | **$13.1**  **[0000096021-23-000031_syy2023q2pressrelease.htm:2]**  | **$13.3**  **[0000096021-23-000063_syy2023q3pressrelease.htm:3]**  | **$13.7**  **[0000096021-23-000087_syy2023q4pressrelease.htm:3]**  | **$13.7**  **[0000096021-23-000201_syy-20230930.htm:8]**  | **$13.5**  **[0000096021-24-000018_syy-20231230.htm:10]**  | **$13.7**  **[0000096021-24-000043_syy-20240330.htm:9]**  | **$63.931**  **[0000096021-24-000128_syy-20240629.htm:140]**  | **$14.362**  **[0000096021-24-000186_syy-20240928.htm:22]**  |
| **International Foodservice Operations (in billions)** | **$3.3**  **[0000096021-23-000031_syy2023q2pressrelease.htm:3]**  | **$3.3**  **[0000096021-23-000063_syy2023q3pressrelease.htm:4]**  | **$3.6**  **[0000096021-23-000087_syy2023q4pressrelease.htm:4]**  | **$3.7**  **[0000096021-23-000201_syy-20230930.htm:8]**  | **$3.6**  **[0000096021-24-000018_syy-20231230.htm:10]**  | **$3.5**  **[0000096021-24-000043_syy-20240330.htm:34]**  | **$5.993**  **[0000096021-24-000128_syy-20240629.htm:140]**  | **$3.794**  **[0000096021-24-000186_syy-20240928.htm:22]**  |
| **SYGMA (in billions)**                     | **$1.9**  **[0000096021-23-000033_syy-20221231.htm:8]**  | N/A     | **$1.4**  **[SYY_3383802_5]**  | **$1.9**  **[0000096021-23-000201_syy-20230930.htm:8]**  | **$1.9**  **[0000096021-24-000018_syy-20231230.htm:10]**  | **$1.9**  **[0000096021-24-000043_syy-20240330.htm:34]**  | **$3.760**  **[0000096021-24-000128_syy-20240629.htm:140]**  | **$2.046**  **[0000096021-24-000186_syy-20240928.htm:22]**  |
| **Other (in billions)**                     | **$0.3**  **[0000096021-23-000033_syy-20221231.htm:8]**  | N/A     | N/A     | **$0.307**  **[0000096021-23-000201_syy-20230930.htm:8]**  | **$0.283**  **[0000096021-24-000018_syy-20231230.htm:10]**  | **$0.275**  **[0000096021-24-000043_syy-20240330.htm:34]**  | **$1.712**  **[0000096021-24-000128_syy-20240629.htm:140]**  | **$0.282**  **[0000096021-24-000186_syy-20240928.htm:22]**  |

9df46282ba06b746343f8f8e2578b116f19d6059e035a27c2596eb01407f68cf

| Metric (Unit) | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|---------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Case Volume Growth (%) | **5.2%**  **[0000096021-23-000033_syy-20221231.htm:35]**  | **6.1%**  **[0000096021-23-000065_syy-20230401.htm:36]**  | **2.3%**  **[0000096021-23-000087_syy2023q4pressrelease.htm:6]**  | **1.6%**  **[0000096021-23-000201_syy-20230930.htm:28]**  | **3.4%**  **[0000096021-24-000018_syy-20231230.htm:38]**  | **2.9%**  **[0000096021-24-000043_syy-20240330.htm:36]**  | **3.5%**  **[0000096021-24-000128_syy-20240629.htm:49]**  | **2.7%**  **[0000096021-24-000186_syy-20240928.htm:23]**  |
| Local Case Volume Growth (%) | **3.2%**  **[0000096021-23-000033_syy-20221231.htm:35]**  | **4.2%**  **[0000096021-23-000065_syy-20230401.htm:36]**  | **0.8%**  **[0000096021-23-000087_syy2023q4pressrelease.htm:3]**  |  | **2.9%**  **[0000096021-24-000018_syy-20231230.htm:38]**  | **0.4%**  **[0000096021-24-000128_syy-20240629.htm:46]**  | **0.7%**  **[0000096021-24-000057_syy2024q4pressrelease.htm:3]**  | **0.2%**  **[0000096021-24-000186_syy-20240928.htm:23]**  |

cfacf4afddf93a9b97155889ae07988fb1dab0ef3f18a5043348bff8f630fcef

9659cbdb1cd7b561deb52d7b2d783e9f6eb84d6c01c81d20846a6dd455c51fa8

Sysco Corporation is a global leader in the sale, marketing, and distribution of food products to various sectors, including restaurants, healthcare, educational facilities, and lodging establishments **[SYY_3391569_0]** **[0000096021-24-000128_syy-20240629.htm:43]** **[0001193125-24-208908_d883445ds3asr.htm:10]**. Operating primarily in North America and Europe, Sysco holds a significant presence in the U.S. foodservice market with a 17% market share of a $370 billion industry **[SYY_3391569_0]** **[0000096021-24-000128_syy-20240629.htm:43]** **[0001193125-24-208908_d883445ds3asr.htm:10]**. The company offers a wide range of food and non-food items, including frozen foods, fresh produce, and restaurant equipment **[0000096021-24-000128_syy-20240629.htm:4]**. Sysco's business strategy focuses on expanding specialty operations and enhancing supply chain efficiency through digital transformation and strategic acquisitions **[SYY_3391569_0]** **[SYY_3368872_0]**.

1. **U.S. Foodservice Operations** - Provides a comprehensive range of food and non-food products to restaurants and other foodservice establishments across the United States.
2. **International Foodservice Operations** - Delivers food and non-food products to foodservice customers outside the U.S., primarily in Europe.
3. **SYGMA** - Supplies quick-service chain restaurants with food and non-food items, focusing on efficiency and reliability.
4. **Other Operations** - Includes specialty operations like FreshPoint for fresh produce, Greco & Sons for Italian specialties, and hotel supply services.

3f8e59868f93b1ba943dfea11984c578e4488f8f51f44fa129f3c9214fc29a04

edafb1ebf566140c7386c6744c0700d8fdf7849d916f2729222ed1e4938518f6

| Program Details           | Program 1       |
|---------------------------|-----------------|
| Approval Date             | May 20, 2021  **[0000096021-24-000186_syy-20240928.htm:42]** |
| End Date/Duration         | Until fully utilized  **[0000096021-24-000186_syy-20240928.htm:42]**  |
| Total additional amount   | **$5.0 billion**  **[0000096021-24-000186_syy-20240928.htm:42]**  |
| Remaining authorization   | **$2.7 billion**  **[0000096021-24-000186_syy-20240928.htm:42]**  |
| Details                   | Offset dilution from shares issued under benefit plans and make opportunistic repurchases  **[0000096021-24-000128_syy-20240629.htm:67]** **[0000096021-23-000117_syy-20230701.htm:66]** **[0000096021-24-000186_syy-20240928.htm:42]**  |

4b50160eb6b27438d587d97f97b2149ac83cc61b31d093b2ea57c75b99bea39b

1. Despite a **51 basis point decline in Sysco Brand penetration** in U.S. Broadline, what specific steps are you taking to reverse this trend and drive private label growth in fiscal 2025, especially given the competitive pressures and improved national supplier fill rates?

2. With **gross margins slightly down year-over-year** due to mix and increased competition, how are you balancing market share gains in the lower-margin CMU space with the need to maintain or improve overall profitability?

3. Local case volume growth was only **0.7%** for the year, and you mentioned not being satisfied with growth in the important local segment; what are your specific strategies to accelerate local case growth and how confident are you in achieving these targets amid declining restaurant foot traffic?

4. Given that **restaurant foot traffic was down approximately 3%** year-over-year in the quarter and macro conditions remain challenging, how realistic is your expectation of volume growth in the **low single digits** for fiscal 2025, and what gives you confidence in this outlook?

5. With your focus on expanding into the specialty market being a **$10 billion-plus opportunity**, what are the key challenges you anticipate in integrating your specialty assets, and how will you ensure that the **Total Team Selling program** effectively captures this growth potential?

d5f0f2769b6be2f4ac31d18376a399cfd10a95c6900d672d73402235a9580c26

5b1429fa937252f1038261f4fbc25414d79147c115bbe11c3e79caf49f6854b1

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Net Sales Growth**: **4% to 5%**, including **2% inflation** and positive volume growth of low single digits. Slight benefit from M&A anticipated  **[SYY_3395012_6]** .
  2. **Adjusted EPS Growth**: **6% to 7%**  **[SYY_3395012_6]** .
  3. **Tax Rate**: Approximately **25%**  **[SYY_3395012_7]** .
  4. **Interest Expense**: Approximately **$650 million**  **[SYY_3395012_7]** .
  5. **Other Expense**: Approximately **$50 million**  **[SYY_3395012_7]** .
  6. **Adjusted Depreciation & Amortization (D&A)**: Approximately **$800 million**  **[SYY_3395012_7]** .
  7. **Capital Expenditures (CapEx)**: Approximately **1% of sales**  **[SYY_3395012_7]** .
  8. **Net Leverage**: **2.5 to 2.75x** net leverage  **[SYY_3395012_7]** .
  9. **Free Cash Flow Distribution**: Distribute essentially all free cash flow to shareholders  **[SYY_3395012_6]** .
  10. **Dividends**: Over **$1 billion**  **[SYY_3395012_7]** .
  11. **Share Repurchases**: Approximately **$1 billion**  **[SYY_3395012_7]** .
  12. **Local Volume Growth**: Low single digits growth  **[SYY_3395012_14]** .
  13. **Supply Chain Productivity**: Improvements expected  **[SYY_3395012_15]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Net Sales Growth**: **4% to 5%**, including **2% inflation** and positive volume growth of low single digits. Slight benefit from M&A anticipated  **[SYY_3395012_6]** .
  2. **Adjusted EPS Growth**: **6% to 7%**  **[SYY_3395012_6]** .
  3. **Tax Rate**: Approximately **25%**  **[SYY_3395012_7]** .
  4. **Interest Expense**: **$650 million**  **[SYY_3395012_7]** .
  5. **Other Expense**: Approximately **$50 million**  **[SYY_3395012_7]** .
  6. **Adjusted Depreciation & Amortization (D&A)**: Approximately **$800 million**  **[SYY_3395012_7]** .
  7. **Capital Expenditures (CapEx)**: Approximately **1% of sales**  **[SYY_3395012_7]** .
  8. **Net Leverage Ratio**: **2.5 to 2.75x** net leverage  **[SYY_3395012_7]** .
  9. **Free Cash Flow Distribution**: Distribute essentially all free cash flow to shareholders  **[SYY_3395012_6]** .
  10. **Local Volume Growth**: Low single digits growth  **[SYY_3395012_14]** .
  11. **Supply Chain Productivity**: Improvements expected  **[SYY_3395012_15]** .
  12. **Corporate Expense Management**: Ongoing improvements  **[SYY_3395012_17]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted EPS**: **$4.20 to $4.40**, with **7% EPS growth** at midpoint  **[SYY_3381493_5]** .
  2. **Net Sales**: Approximately **$79 billion**  **[SYY_3381493_5]** .
  3. **Free Cash Flow**: Increased free cash flow expected  **[SYY_3381493_5]** .
  4. **Cost Savings**: More than **$120 million** in cost savings  **[SYY_3381493_4]** .
  5. **Shareholder Returns**: Over **$2.25 billion**  **[SYY_3381493_6]** .
  6. **Tax Rate**: Increase due to global minimum tax rate changes  **[SYY_3381493_6]** .
  7. **Interest Expense**: Increase to fund capital allocation priorities  **[SYY_3381493_6]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Net Sales Growth**: Mid-single digits, aiming for **$80 billion**  **[SYY_3371138_5]** .
  2. **Adjusted EPS**: **$4.20 to $4.40**, with **7% growth** at midpoint  **[SYY_3371138_5]** .
  3. **Operating Leverage**: Positive operating leverage expected  **[SYY_3371138_5]** .
  4. **Industry Volume Growth and Inflation**: Slightly positive growth expected  **[SYY_3371138_5]** .
  5. **Share Repurchases**: Increased to **$1.25 billion**  **[SYY_3371138_4]** .
  6. **Total Shareholder Returns**: Approximately **$2.25 billion**  **[SYY_3371138_4]** .
  7. **Tax Rate**: **24.5%**  **[SYY_3371138_7]** .
  8. **Interest Expense**: Increase of **$20 million**  **[SYY_3371138_7]** .
  9. **Free Cash Flow**: Growth expected  **[SYY_3371138_5]** .
  10. **M&A Activity**: **50 to 100 basis points** growth contribution  **[SYY_3371138_5]** .

b401ede3b9d379156da29dca00b2b1a1bc808dd3e031246beb470130207366a4

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

818d6554be9095a4943ed46c7ffeb271057f4a9140a2636ebfa1d1e2aab48026

Case Volume Growth (%)

Local Case Volume Growth (%)

e9c1f9b802c4e5cd13c59fac6cb48dca4059b7e7edc19828bc9cb2b8ae97e99f

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Units]

EPS - Diluted [USD, Units]

9bafded7204ae853c4a351d08b2147a0cc3d51e56ee638d04043b83be21970c0

U.S. Foodservice Operations

International Foodservice Ops

- Canada

- United Kingdom

- France

- Other

SYGMA

Other

Total Revenue

ba67d9205fcd4721158ae8824e74c0c2046c6284e57b4a1d88a46ef76b00c720

| Name                  | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                                                                                                                                                                     |
|-----------------------|--------------------------------------------------------------------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Kevin P. Hourican     | Chair of the Board and Chief Executive Officer                           | April 2024       | Kevin P. Hourican has served as Sysco Corporation's Chair of the Board and Chief Executive Officer since April 2024. Prior to this, he was the President and CEO and a member of Sysco's Board from February 2020 until April 2024. Before joining Sysco, Mr. Hourican was the Executive Vice President of CVS Health Corporation and President of CVS Pharmacy  **[0000096021-24-000175_syy-20241003.htm:41]** **[0000096021-24-000175_syy-20241003.htm:31]** . |
| Greg D. Bertrand      | Executive Vice President, Global Chief Operating Officer                 | September 2003   | Greg D. Bertrand has been serving as Sysco's Executive Vice President and Global Chief Operating Officer since September 2003. He began his career at Sysco in 1991 as a Marketing Associate at Sysco Chicago and has held various leadership positions throughout his tenure  **[0000096021-24-000175_syy-20241003.htm:41]** .                                                                                 |
| Kenny K. Cheung       | Executive Vice President and Chief Financial Officer                     | April 2023       | Kenny K. Cheung has served as Sysco's Executive Vice President and Chief Financial Officer since April 2023. Before joining Sysco, Mr. Cheung was the Executive Vice President and Chief Financial Officer at The Hertz Corporation from September 2020 to March 2023  **[0001308179-23-001019_lsyy2023_def14a.htm:43]** **[0000096021-24-000175_syy-20241003.htm:41]** .                                                                                     |
| Victoria L. Gutierrez | Senior Vice President, Chief Merchandising Officer                       | August 2022      | Victoria L. Gutierrez has served as Senior Vice President, Chief Merchandising Officer at Sysco since August 2022. She joined Sysco in July 2021 as Vice President of Category Management. Before joining Sysco, Ms. Gutierrez was a Partner at the Boston Consulting Group  **[0000096021-24-000175_syy-20241003.htm:42]** **[0001308179-23-001019_lsyy2023_def14a.htm:43]** .                                                                               |
| Jennifer L. Johnson   | Senior Vice President and Chief Accounting Officer                       | October 2023     | Jennifer L. Johnson has served as Sysco's Senior Vice President and Chief Accounting Officer since October 2023. Before joining Sysco, she was the Corporate Vice President and Principal Accounting Officer at FedEx Corporation from October 2021 to October 2023  **[0000096021-24-000175_syy-20241003.htm:42]** .                                                                                         |
| Gregory S. Keller     | Senior Vice President, National Accounts - Sysco, SYGMA and Guest Worldwide | September 2023   | Gregory S. Keller has served as Senior Vice President, National Accounts - Sysco, SYGMA and Guest Worldwide since September 2023. Prior to this role, he held various leadership positions within Sysco, including Senior Vice President, National Sales from November 2021 to September 2023  **[0000096021-24-000175_syy-20241003.htm:42]** **[0001308179-23-001019_lsyy2023_def14a.htm:43]** .                                                              |
| Eve M. McFadden       | Senior Vice President, Legal, General Counsel and Corporate Secretary    | February 2019    | Eve M. McFadden has served as Sysco's Senior Vice President, Legal, General Counsel, and Corporate Secretary since February 2019. She is responsible for the company's legal, compliance, ethics, enterprise risk management, and business continuity functions  **[0001308179-23-001019_lsyy2023_def14a.htm:45]** **[0000096021-24-000175_syy-20241003.htm:42]** **[0001308179-22-000374_lsysco2022_def14a.htm:43]** .                                                                                       |
| Thomas R. Peck, Jr.   | Executive Vice President, Chief Information and Digital Officer          | January 2021     | Thomas R. Peck, Jr. has served as Sysco's Executive Vice President and Chief Information and Digital Officer since January 2021. Before joining Sysco, he was the Executive Vice President, Chief Information and Digital Officer for Ingram Micro Inc.  **[0000096021-24-000175_syy-20241003.htm:43]** **[0001308179-23-001019_lsyy2023_def14a.htm:45]** **[0001308179-22-000374_lsysco2022_def14a.htm:43]** .                                                                                               |
| Ronald L. Phillips    | Executive Vice President and Chief Human Resources Officer               | May 2021         | Ronald L. Phillips has served as Sysco's Executive Vice President and Chief Human Resources Officer since May 2021. Before joining Sysco, he was the Senior Vice President of Human Resources, Retail, Omnicare, and Enterprise Modernization for CVS Health Corporation  **[0001308179-23-001019_lsyy2023_def14a.htm:45]** **[0000096021-24-000175_syy-20241003.htm:43]** **[0001308179-22-000374_lsysco2022_def14a.htm:45]** .                                                                              |
| Daniel T. Purefoy     | Senior Vice President, Chief Supply Chain Officer                        | September 2023   | Daniel T. Purefoy has served as Sysco's Senior Vice President, Chief Supply Chain Officer since September 2023. Prior to this role, he was the Chief Supply Chain Operations Officer from August 2022 to September 2023  **[0000096021-24-000175_syy-20241003.htm:43]** **[0001308179-23-001019_lsyy2023_def14a.htm:45]** .                                                                                                                                |
| Neil A. Russell, II   | Senior Vice President, Corporate Affairs and Chief Administrative Officer | April 2023       | Neil A. Russell, II has been serving as Sysco's Senior Vice President, Corporate Affairs and Chief Administrative Officer since April 2023. He began his career at Sysco in August 2007 as Vice President, Investor Relations  **[0000096021-24-000175_syy-20241003.htm:44]** **[0001308179-23-001019_lsyy2023_def14a.htm:47]** .                                                                                                                           |

41543255f5cc82c5b5e868d0753dde1753b29c08d6486878deb0b3e0379ef224

**Annual guidance for FY 2025:**
- **Net Sales Growth**: 4% to 5%  **[SYY_3395012_6]**  (no change from 4% to 5%  **[SYY_3395012_7]** )  
- **Adjusted EPS Growth**: 6% to 7%  **[SYY_3395012_6]**  (no change from 6% to 7%  **[SYY_3395012_7]** )  
- **Tax Rate**: Approximately 25%  **[SYY_3395012_6]**  (no change from approximately 25%  **[SYY_3395012_7]** )  
- **Interest Expense**: Approximately $650 million  **[SYY_3395012_6]**  (no change from $650 million  **[SYY_3395012_7]** )  
- **Other Expense**: Approximately $50 million  **[SYY_3395012_6]**  (no change from approximately $50 million  **[SYY_3395012_7]** )  
- **Adjusted Depreciation & Amortization (D&A)**: Approximately $800 million  **[SYY_3395012_6]**  (no change from approximately $800 million  **[SYY_3395012_7]** )  
- **Capital Expenditures (CapEx)**: Approximately 1% of sales  **[SYY_3395012_6]**  (no change from approximately 1% of sales  **[SYY_3395012_7]** )  
- **Net Leverage**: 2.5 to 2.75x  **[SYY_3395012_6]**  (no change from 2.5 to 2.75x  **[SYY_3395012_7]** )  
- **Free Cash Flow Distribution**: Distribute essentially all free cash flow to shareholders  **[SYY_3395012_6]**  (no change from distributing essentially all free cash flow  **[SYY_3395012_7]** )  
- **Local Volume Growth**: Low single digits  **[SYY_3395012_6]**  (no change from low single digits  **[SYY_3395012_7]** )  
- **Supply Chain Productivity**: Improvements expected  **[SYY_3395012_6]**  (no change from improvements expected  **[SYY_3395012_7]** )  
- **Dividends**: Over $1 billion  **[SYY_3395012_6]**  (no prior guidance)  
- **Share Repurchases**: Approximately $1 billion  **[SYY_3395012_6]**  (no prior guidance)  

8cd79c051773e2f60d35b76611c59da6a3d804d6b5edd58b40904c9b476f6ed6

- Despite weather-related disruptions like the Southern storms and California wildfires in January, **Sysco expects accelerated growth in the second half of fiscal 2025** due to investments in sales professionals and operational improvements.  **[SYY_3413377_9]**
- **Sysco anticipates over $100 million in annualized savings starting in the second half of fiscal 2025**, driven by strategic sourcing, supply chain efficiencies, and organizational optimization, which will enhance gross profit and operating expenses.  **[SYY_3413377_0]**
- **Improvements in Sysco's local business**, including increased sales headcount and a new compensation program that has significantly boosted new customer win rates, are expected to contribute to stronger performance in the second half of fiscal 2025.  **[SYY_3413377_0]**

a4e712cbf7a1fc3ea25b06e1a733f1bb8aae88d323b1faa188f152e22fba721c

- **Sysco's local case volumes are declining and underperforming the industry**, with local case volume down **1.9%** in Q2, compared to industry restaurant traffic decline of approximately **2%**, indicating potential market share loss in the local segment.  **[SYY_3413377_13]** **[SYY_3413377_10]**
- The company is relying on cost-saving initiatives, including an expected **$100 million in annualized savings**, to drive EPS growth, rather than organic sales growth, suggesting that future earnings growth may be driven more by cost-cutting than by top-line expansion.  **[SYY_3413377_10]** **[SYY_3413377_12]**
- **Sysco brand sales as a percentage of total sales are declining**, potentially impacting margins, as customers shift back to national brands, reducing the higher-margin Sysco brand sales.  **[SYY_3413377_12]**

6d461553b396eaeb26b678ce4e0780f53bd01c6272e055b66c0661953c235cf2

1. **Local Case Growth and Sales Force Performance**  
   **Q:** When will local case growth turn positive?  
   **A:** Management is confident in improving local case growth quarter-over-quarter and anticipates showing numerical progress as the year progresses, due to increased sales headcount and the effectiveness of new hires. They expect improvement towards the end of the fiscal year, potentially turning positive in fiscal 2026.  **[SYY_3413377_11]** **[SYY_3413377_12]** 

2. **$100 Million Annualized Savings and EPS Growth**  
   **Q:** Can you expand on the $100 million in annualized savings?  
   **A:** They have a clear line of sight to **$100 million** in annualized savings benefiting both gross profit and operating expenses. These savings come from strategic sourcing, supply chain efficiencies, and organizational optimization. The savings are structural, already included in the current guidance, and are a key driver for **high single-digit EPS growth** in the second half of the year.  **[SYY_3413377_10]** **[SYY_3413377_12]** 

3. **Impact of Compensation Change on Sales Force**  
   **Q:** How has the sales compensation change affected performance?  
   **A:** The compensation change disrupted underperforming sales staff in Q1, but this is now behind them. Retention has stabilized, and sales reps are earning more under the new program, which rewards top performers with more upside. This is expected to drive momentum and improve local sales as the year progresses.  **[SYY_3413377_13]** **[SYY_3413377_15]** 

4. **National vs Local Growth and Long-Term Goals**  
   **Q:** Is the gap between local and national growth acceptable for multiyear goals?  
   **A:** While national business is performing extremely well and provides route density and fixed cost coverage, management emphasizes the need to grow both local and national segments. Improving local performance is essential for achieving long-term goals, and they are confident in their strategies to drive growth in both areas.  **[SYY_3413377_15]** 

5. **Product Cost Inflation Outlook**  
   **Q:** Do you expect higher product cost inflation ahead?  
   **A:** They are seeing increased inflation in dairy and protein categories due to avian influenza affecting supply, and expect higher center-of-plate inflation over the next **90 days to six months**. While overall inflation is around **2.1%** company-wide, they acknowledge potential for higher inflation but currently operate in a normalized environment.  **[SYY_3413377_14]** 

6. **International Margin Opportunity**  
   **Q:** How do you view the international margin opportunity?  
   **A:** Management is extremely pleased with international business, expecting outsized top and bottom-line growth. There are no structural barriers limiting profit rates in international markets, and initiatives like Sysco Your Way expansion, specialty acquisitions, and technology investments are driving strong performance.  **[SYY_3413377_16]** 

7. **Sysco Brand Sales and Outlook**  
   **Q:** Can you comment on Sysco Brand sales performance?  
   **A:** Sysco Brand is performing as expected, and they remain confident in its long-term growth. The year-over-year decline is due to national branded suppliers improving their fill rates. Sysco Brand continues to offer value, especially when customers seek cost-effective options, and they anticipate stabilizing penetration rates as local performance improves.  **[SYY_3413377_12]** 

8. **January Sales Trends and Weather Impact**  
   **Q:** How have recent weather events affected January sales?  
   **A:** January is seasonally the lowest volume month, and while weather events like the Southern storms and California wildfires had some impact, management is not concerned. They are working through it and remain confident in their ability to serve customers and in their overall second-half outlook.  **[SYY_3413377_9]** 

6c87cede5df6523ebba3c84046cf73f53e09026a534b616cd17362ab17874163

Sysco sees second-half FY25 tailwinds from $100M in annualized savings despite Q2 local case volumes dropping 1.9%. Management targets high single-digit EPS growth as sales headcount expansions and improved compensation drive local performance.

a15944b748d0b4b9547898dbc4fd1adee640069dc7868adc0960d18c4fb24f55

**Annual guidance for FY 2025:**

- **Net Sales Growth**: 4% to 5%  **[SYY_3413377_7]**  (no change from 4% to 5%  **[SYY_3395012_6]** )  
- **Adjusted EPS Growth**: 6% to 7%  **[SYY_3413377_7]**  (no change from 6% to 7%  **[SYY_3395012_6]** )  
- **Second Half Adjusted EPS Growth**: High single-digit  **[SYY_3413377_7]**  (no prior guidance)  
- **Adjusted Tax Rate**: 24.5% to 25%  **[SYY_3413377_7]**  (lowered from ~25%  **[SYY_3395012_7]** )  
- **Adjusted Depreciation and Amortization**: $800 million  **[SYY_3413377_7]**  (no change from $800 million  **[SYY_3395012_7]** )  
- **Net Leverage Ratio**: 2.5x to 2.75x  **[SYY_3413377_7]**  (no change from 2.5x to 2.75x  **[SYY_3395012_7]** )  
- **Dividends**: Over $1 billion  **[SYY_3413377_7]**  (no change from Over $1 billion  **[SYY_3395012_7]** )  
- **Share Repurchases**: $1.25 billion  **[SYY_3413377_7]** **[SYY_3413377_5]**  (raised from ~$1 billion  **[SYY_3395012_7]** )  
- **Free Cash Flow Distribution**: Distribute essentially all annual free cash flow  **[SYY_3413377_7]**  (no change from distributing essentially all free cash flow  **[SYY_3395012_6]** )  
- **International Sales Impact**: Expected ~$500 million reduction from divestiture  **[SYY_3413377_7]**  (no prior guidance)  
- **Gross Profit and Operating Expense Savings**: Over $100 million  **[SYY_3413377_7]**  (no prior guidance)  
- **Cash Flow Conversion**: ~70% of adjusted EBITDA for operating cash flow, ~50% for free cash flow  **[SYY_3413377_6]**  (no prior guidance)  
- **Inflation**: ~2%  **[SYY_3413377_2]** **[SYY_3413377_6]**  (no prior guidance)  
- **Strategic Sourcing**: Expected expansion  **[SYY_3413377_6]**  (no prior guidance)  

10417a9b840d6c0a3a1856e2f4fae75af7139760ae708cd8ff07815263e5ce6c

f1c6da00f2da19dc801f2d9c13ff61020630f8b56a86d0d5876ce3e9be5f0df4

73cfe8271cade0e20d935eba4784b763f18be49e28bc8880813664854e800cbd

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2002  **[0000096021-24-000128_syy-20240629.htm:86]**    | Present  | Current auditor   |
```

6c83e3344cb77d41a8d3c0b78a901f358b34ab5778165887d91e75ac8d05750b

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Case volumes for U.S. Foodservice Operations (percentage)

Local customer case volume for U.S. Foodservice Operations (percentage)

National customer volume for U.S. Foodservice Operations (percentage)

Case volumes from Edward Don acquisition (percentage)

Local volumes from Edward Don acquisition (percentage)

Restaurant foot traffic (percentage)

Restaurant foot traffic in July (percentage)

Restaurant foot traffic in August (percentage)

Restaurant foot traffic in September (percentage)

Total enterprise-level inflation rate (percentage)

92dfaee56ced2b3644813f6228bfdd5ff3fc7527fc183228cceb4fbcec898909

d1bfecac4e14e5365efb32020905d10599c0b2d4be68fb311d594ddfeb74c778

| Year  | Amount Due (in millions) | Debt Type                                   | Interest Rate (%) | % of Total Debt                              |
|-------|--------------------------|---------------------------------------------|-------------------|---------------------------------------------|
| 2025  | $1,222                  | Current maturities of long-term debt        | N/A               | 9.7% = (1,222 / 12,600) * 100 **[0000096021-25-000010_syy-20241228.htm:17]** **[0000096021-25-000010_syy-20241228.htm:2]** |
| 2025  | $498                    | U.S. commercial paper issuances             | N/A               | 4.0% = (498 / 12,600) * 100 **[0000096021-25-000010_syy-20241228.htm:17]** **[0000096021-25-000010_syy-20241228.htm:2]**  |
| 2025  | €145 ($151)             | European commercial paper issuances         | N/A               | 1.2% = (151 / 12,600) * 100 **[0000096021-25-000010_syy-20241228.htm:17]** **[0000096021-25-000010_syy-20241228.htm:2]**  |
| N/A   | $11,393                 | Long-term debt excluding current maturities | N/A               | 90.4% = (11,393 / 12,600) * 100 **[0000096021-25-000010_syy-20241228.htm:17]** **[0000096021-25-000010_syy-20241228.htm:2]** |

57dcf3bd8cb6ee46b887c28424385ad5f39d6cb5ec49e71d4ed291ba1f0f9be2

- **Sysco is experiencing growth in its non-local case volume, driven by success in national sales and new customer wins**, which are expected to contribute positively in Q4 and into fiscal 2025.  **[SYY_3381493_14]**
- **The SYGMA segment is improving profitability**, with profit margins up **20% year-over-year**, and new profitable business wins expected to enhance growth in Q4 and fiscal 2025.  **[SYY_3381493_14]**
- **Sysco has a robust M&A pipeline** and is well-positioned to capitalize on consolidation opportunities in the industry, potentially driving further growth.  **[SYY_3381493_13]**

9f54e84df570a2c7d38bbb21a4498814f84a99b59047e3b9c8cf1455ea402d3b

- **Sysco is gaining market share and outperforming the industry**, with **local case volume growth of 2.9%**, a **300 basis point improvement from Q1**, and is **meaningfully outgrowing the market**, leveraging its **scale advantages** in broadline and specialty distribution.  **[SYY_3371138_17]** **[SYY_3371138_6]**
- **Sysco is confident in sustaining accelerating growth**, focusing on initiatives like **improving sales execution**, **increasing sales consultant headcount**, **refined compensation models**, and **total team selling**, which have led to **sequential improvement in local case volume growth each month in Q2**.  **[SYY_3371138_13]** **[SYY_3371138_6]**
- **Sysco is achieving profitable growth in its chain (CMU) business**, which accounts for **half of their business**, by focusing on profitable customer relationships and increasing margins, demonstrating their ability to win and grow profitably across multiple segments.  **[SYY_3371138_18]**

3e75d7d4e0b6eb037c756f5c3dca247e0858fff533e82d0c5bfbeb1b5525706d

1. **Gross Margin Outlook**  
   **Q:** Is margin pressure due to mix and will it persist?  
   **A:** Margin decline is primarily due to customer and product mix shifts, specifically increased growth in Corporate Multi-Unit (CMU) accounts, which, while profitable, dilute the margin rate.  **[SYY_3395012_13]**  Additionally, improved fill rates from national brand suppliers reduced Sysco Brand penetration, slightly impacting margin rate.  **[SYY_3395012_13]** **[SYY_3395012_19]**  We expect gross profit dollars per case to expand in 2025, with actions to drive Sysco Brand penetration and specialty growth.  **[SYY_3395012_13]** **[SYY_3395012_10]** 

2. **Sales Force Investments**  
   **Q:** Will new sales hires cause near-term disruption?  
   **A:** While there may be manageable disruption as existing sales associates transition some customers to new hires, each associate is giving up approximately one customer, minimizing impact.  **[SYY_3395012_12]**  New hires focus on acquiring new customers, and we're carefully managing change to mitigate disruption.  **[SYY_3395012_12]**  We're confident in our guidance and expect positive returns from these investments.  **[SYY_3395012_12]** 

3. **Guidance and Volume Growth**  
   **Q:** How should we think about guidance cadence and Q1 expectations?  
   **A:** We're confident in achieving Q1 numbers and full-year guidance.  **[SYY_3395012_15]**  Volume improvement is expected in the back half of the year due to benefits from investments in new associates and an anticipated modest improvement in industry traffic.  **[SYY_3395012_15]**  Productivity gains will be consistent throughout the year, supporting our guidance.  **[SYY_3395012_15]** 

4. **International Growth Momentum**  
   **Q:** What's driving international growth and expectations for 2025?  
   **A:** Improvement is driven by self-help initiatives like supply chain productivity, technology enhancements, and introducing Sysco Brand in new countries.  **[SYY_3395012_16]**  Local case growth was up **5%**.  **[SYY_3395012_16]**  We expect continued growth and profit improvement in 2025.  **[SYY_3395012_16]** 

5. **Macro Environment and Demand Trends**  
   **Q:** Are demand pressures consistent, and how is Sysco adapting?  
   **A:** Restaurant traffic is down **3%** for the quarter, consistent across all types.  **[SYY_3395012_8]**  We anticipate similar conditions in Q1, with some improvement in the second half of the fiscal year.  **[SYY_3395012_11]** **[SYY_3395012_8]**  We're focusing on new customer acquisition and leveraging our compensation model to drive growth.  **[SYY_3395012_11]** **[SYY_3395012_8]** 

6. **Corporate Cost Reductions**  
   **Q:** Are ongoing corporate cost improvements expected?  
   **A:** Yes, we have ongoing initiatives in digital, automation, shared services, and procurement savings.  **[SYY_3395012_17]**  After achieving over **$120 million** in savings last year, we have a robust pipeline to continue reducing costs throughout the fiscal year.  **[SYY_3395012_17]** 

7. **Inflation Outlook**  
   **Q:** Is the 2% inflation outlook consistent throughout the year?  
   **A:** We expect inflation to remain around **2%** throughout the year, with some fluctuations across categories.  **[SYY_3395012_18]**  This is already reflected in our current numbers.  **[SYY_3395012_18]** 

8. **Decline in Private Label Penetration**  
   **Q:** What's causing the decline in Sysco Brand penetration?  
   **A:** Improved fill rates from national brand suppliers reduced substitutions to Sysco Brand products.  **[SYY_3395012_19]**  While this slightly impacts margin rate, it's positive overall for operations and customer satisfaction.  **[SYY_3395012_19]** 

9. **Promotional Environment and Competition**  
   **Q:** Is there increased promotional activity affecting margins?  
   **A:** Competitive intensity has increased due to lower traffic, but we maintain disciplined pricing strategies.  **[SYY_3395012_10]**  While gross margin rate is slightly down due to mix, gross profit grew **4%**, and gross profit per case grew **1%**.  **[SYY_3395012_10]**  We focus on profitable growth and have plans to drive Sysco Brand penetration.  **[SYY_3395012_10]** 

10. **Menu Price Investments by Restaurants**  
    **Q:** Are restaurants lowering prices to drive volumes?  
    **A:** Pricing decisions are up to our customers, but we're seeing some movement, especially in QSRs with value menus.  **[SYY_3395012_19]**  We didn't factor lower menu prices into our guidance but expect consumer confidence to improve in the second half due to potential interest rate reductions.  **[SYY_3395012_19]** 

1a0c1e5f0b5bdec469d50de56b857fe46600508b84770092931baf893f2ce59e

- **Improved gross profit margins** with gross profit growing faster than sales due to **disciplined pricing**, **strategic sourcing**, and increased **Sysco brand penetration**, leading to **double-digit bottom line growth**.  **[SYY_3362966_13]**
- **Investing in expanding specialized sales force**, including adding more sales consultants and specialists, to drive future growth in local markets and improve sales effectiveness, expected to have a positive impact starting in **2025**.  **[SYY_3362966_16]**
- **Gaining market share** by outperforming the industry in volume growth, with international local sales growing **6%** in Canada and Europe; strong success in national sales driven by improvements in technology integration and dedicated sales teams, and maintaining **high customer retention rates**.  **[SYY_3362966_11]**

52562e762638b2aead2a9ea08b039cf23c875d6956cc2c41d129317dbb5c2be2

1. **Demand Environment**  
   **Q:** How is the current demand environment affecting Sysco?  
   **A:** Restaurant traffic was **down year-over-year**, starting with a tough January but sequentially improving throughout the quarter. Despite this, Sysco gained share versus the food-away-from-home sector in aggregate, but volumes were less than anticipated. The company is confident in operating in any environment and is focusing on initiatives to improve volume and profit margins.  **[SYY_3381493_8]** 

2. **Pricing Pressures**  
   **Q:** Are competitors being more aggressive with pricing amid industry headwinds?  
   **A:** There has been an increase in price shopping by restaurant operators seeking value due to rising labor costs. Customers are more aggressively shopping prices across distributors, especially on key commodities. Sysco is focusing on being competitive on price for top items and leveraging strategic pricing tools to respond promptly to customer needs.  **[SYY_3381493_12]** 

3. **Menu Prices Impact**  
   **Q:** Should restaurants lower menu prices, and how does this affect Sysco?  
   **A:** Sysco believes that restaurants need to **lower menu prices** to drive foot traffic growth. While food costs have moderated, labor costs at restaurants have not. Sysco is working to lower food costs by negotiating with suppliers and passing on savings to customers, aiming to help restaurants reduce menu prices and stimulate demand.  **[SYY_3381493_8]** ,  **[SYY_3381493_11]** 

4. **Sales Force Expansion**  
   **Q:** How is Sysco approaching sales force expansion, and what is the expected impact?  
   **A:** Sysco is increasing its sales force headcount by a net **100 positions** by year-end, representing about a **5% growth rate**. This investment is currently an expense greater than the immediate revenue contribution but is expected to positively impact fiscal 2025 financial outcomes with a positive return on investment.  **[SYY_3381493_10]** 

5. **M&A Opportunities**  
   **Q:** Are there new M&A opportunities due to industry slowdown?  
   **A:** Sysco is focused on integrating recent acquisitions like Edward Don and realizing synergies from them. While they have a robust pipeline and are open to accretive opportunities, their current priority is to integrate existing acquisitions and achieve synergy targets.  **[SYY_3381493_13]** 

6. **Private Label Expansion**  
   **Q:** What opportunities exist for private label expansion?  
   **A:** The primary focus for Sysco's private label growth is on local customers, where they can provide greater value. Expansion on the national side is more complex due to large chains negotiating directly with suppliers. Sysco is working on packaging and brand hierarchy overhauls to accelerate progress with Sysco-branded products, especially within the local segment.  **[SYY_3381493_9]** 

7. **Elasticity and Affordability**  
   **Q:** How is Sysco addressing price elasticity and affordability for customers?  
   **A:** Sysco is leveraging strategic pricing software to understand customer-level elasticity at the item level. They focus on being competitively priced on key commodities to meet customers' needs for sharp prices while managing less elastic items for profitability. This approach helps provide value to customers and encourages them to choose Sysco.  **[SYY_3381493_11]** 

8. **Impact on Margins**  
   **Q:** How are current market conditions affecting Sysco's margins?  
   **A:** Despite softer market conditions, Sysco delivered its profit expectations for the quarter. They are improving profitability by leveraging strategic sourcing, increasing Sysco brand penetration in local markets, and enhancing supply chain productivity. The company believes it can operate effectively in any environment and continue to enhance profit margins.  **[SYY_3381493_8]** ,  **[SYY_3381493_11]** 

9. **Forward Outlook**  
   **Q:** What is the outlook for April and beyond?  
   **A:** The growth rates from March are carrying into April, with **no deceleration** observed. Sysco has initiatives in place to improve volume and enhance profit margins. The company remains confident in its guidance and ability to take profitable market share in the upcoming periods.  **[SYY_3381493_8]** 

3354def7f875d8370334e30f3e7247be62446999348f96f67075a111496e79b5

- **Sysco's U.S. gross margin declined** due to unfavorable customer and product mix, with national accounts growing faster than local accounts, leading to margin rate pressure.  **[SYY_3395012_13]**
- **Increased competitive intensity** due to **decreased restaurant traffic** has led to more promotional activity and potential pressure on Sysco's margins as distributors compete for **profitable cases**.  **[SYY_3395012_10]**
- **Local case growth was only 0.7% year-over-year**, and the company is **not satisfied with its local performance**, indicating a need to improve in this important segment.  **[SYY_3395012_1]**

e92e286a05238ff799734a06c7244213f159b498c1dd9744aab75752414fbe75

1. **Fiscal '24 Guidance and EPS Growth**  
   **Q:** Any surprises in first half, challenges ahead?  
   **A:** Management affirmed their full-year guidance of **$4.20 to $4.40 EPS**, with **7% growth at midpoint**.  **[SYY_3371138_7]**  They managed operating margin expansion despite varying inflation environments.  **[SYY_3371138_7]**  They expect lower overall market volume growth but continued market share gains.  **[SYY_3371138_7]**  Inflation in the back half is expected to be slightly positive, aligning with their initial assumptions.  **[SYY_3371138_7]**  They are on track to reduce structural expenses by **$100 million**.  **[SYY_3371138_7]** 

2. **Local Case Volume Growth**  
   **Q:** Confidence in sustaining local growth?  
   **A:** Management is confident in improving local sales, with Q2 local case volume up **2.9%**.  **[SYY_3371138_6]**  Sequential improvement each month gives them confidence to make continued progress.  **[SYY_3371138_6]**  Key drivers are performance management of sales consultants, compensation changes, total team selling, and increased sales consultant headcount.  **[SYY_3371138_6]**  They acknowledge a January slowdown due to weather and calendar factors but view it as temporary.  **[SYY_3371138_6]** 

3. **Inflation Outlook and Pricing**  
   **Q:** How will inflation affect the business?  
   **A:** They expect slight positive inflation in the back half of the year, consistent with earlier forecasts.  **[SYY_3371138_7]** **[SYY_3371138_16]**  They monitor **12 main commodities**, managing both inflation and deflation daily.  **[SYY_3371138_16]**  As costs come down, they pass value to customers while maintaining profitability ratios.  **[SYY_3371138_16]**  Produce inflation returning to normal levels is expected to be a tailwind.  **[SYY_3371138_16]** 

4. **Supply Chain Improvements**  
   **Q:** Status of supply chain recovery?  
   **A:** Supply chain health has improved significantly, and they are now fully staffed.  **[SYY_3371138_14]**  Retention is up, and staffing challenges have eased.  **[SYY_3371138_14]**  Management believes they are in the "seventh inning" of recovery to pre-COVID levels, with room for further improvement.  **[SYY_3371138_14]** 

5. **Edward Don and Ready Chef Acquisitions**  
   **Q:** How are recent acquisitions performing?  
   **A:** The integration of Edward Don is progressing well, contributing **$1.3 billion** in profitable top-line revenue.  **[SYY_3371138_9]**  They anticipate synergies in purchasing, targeting joint customers, and enhancing digital platforms.  **[SYY_3371138_9]**  The acquisition of Ready Chef in Ireland strengthens their fresh produce capabilities, aligning with their strategy to expand specialty offerings.  **[SYY_3371138_9]** 

6. **Chain Business Growth and Profitability**  
   **Q:** Update on chain business performance?  
   **A:** Chain (CMU) business, which is half of their business, accelerated in Q2, and they are winning meaningfully in that space.  **[SYY_3371138_18]**  They focus on creating win-win relationships with customers that contribute to profitability.  **[SYY_3371138_18]**  The profitability gap between independents and chains has narrowed due to strategic sourcing and emphasis on profitable growth.  **[SYY_3371138_18]** 

7. **Operating Leverage Expectations**  
   **Q:** Will operating leverage continue in H2?  
   **A:** They expect operating leverage for the full year but anticipate a more challenging comparison in the second half due to prior cost reductions.  **[SYY_3371138_20]**  Investments and cost management initiatives are expected to offset pressures.  **[SYY_3371138_20]** 

8. **International Business Performance**  
   **Q:** Outlook for international operations?  
   **A:** International performance is strong, contributing to growth and profitability.  **[SYY_3371138_21]**  Canada has local case growth over **6%**.  **[SYY_3371138_21]**  Efforts in Great Britain and France are improving local penetration and overall performance.  **[SYY_3371138_21]** 

9. **Sales Force Additions**  
   **Q:** Progress on sales force hiring?  
   **A:** Initial progress is positive; they are not having challenges filling positions.  **[SYY_3371138_8]**  They are confident in hiring quality salespeople without significant impact from competitor hires.  **[SYY_3371138_8]** 

10. **Visit Frequency and Quality**  
    **Q:** How are sales visits impacting sales?  
    **A:** Increasing visit frequency and improving visit quality were key drivers of local case growth improvement from flat in Q1 to **2.9%** in Q2.  **[SYY_3371138_10]**  They have specific targets for visits per week and measure quality by close rates on jobs to be done, tracked through their CRM and performance scorecards.  **[SYY_3371138_10]** 

7256b19ea491f647cbf496d02c022433307618b34a99b213d3645e12cfe765ca

- **Sysco is confident in profitably growing its business by taking market share, acquiring new customers, and penetrating opportunities in produce and protein, even in current market conditions.**  **[SYY_3395012_19]**
- **The company is capitalizing on a significant $10+ billion opportunity through Total Team Selling and expanding its specialty products, where customers that buy both Broadline and Specialty products spend 3x more per week, enhancing growth potential.**  **[SYY_3395012_14]**
- **Sysco maintains strong pricing discipline, will not sell cases below cost, and is focusing on supply chain productivity improvements and investments in sales professionals, expecting low single-digit local volume growth for the year and modest industry traffic improvements in the back half of FY'25.**  **[SYY_3395012_15]** **[SYY_3395012_14]** **[SYY_3395012_10]**

deb5e7001cd31ff7d1e5efc607aa614be374c9fb7f866762fe27d32da6bee25c

- **Sysco acknowledged a slowdown in January sales due to weather disruptions and a two-year stack phenomenon, which may signal potential challenges in maintaining sales momentum.**  **[SYY_3371138_12]** **[SYY_3371138_6]**
- **The company expects overall market volume growth to be lower in fiscal 2024 compared to 2023, which could impact Sysco's ability to achieve strong top-line growth.**  **[SYY_3371138_7]**
- **Sysco's adjusted EPS growth guidance for fiscal 2024 is 7% at the midpoint, which is lower than their historical double-digit EPS growth, indicating potential headwinds in achieving past earnings performance.**  **[SYY_3371138_7]**

5bbab36ce92f1912376f3c984540a1c787c8d2c41760b67e34188b1eee87aef9

- **Softening restaurant foot traffic led to weaker-than-expected volume and sales growth in Q3, indicating demand challenges for Sysco.**  **[SYY_3381493_1]** **[SYY_3381493_8]** **[SYY_3381493_16]**
- **Sysco acknowledges the need to aggressively gain market share to achieve growth targets, suggesting organic growth is difficult in the current environment.**  **[SYY_3381493_1]** **[SYY_3381493_16]**
- **Management expressed uncertainty about future earnings due to the softer macro environment, reflected in a wide EPS guidance range and caution about the impact on fiscal 2025.**  **[SYY_3381493_1]** **[SYY_3381493_16]**

4effd3186b64c41fd2cf88b147b67b4fffc7b3de855fde0b7846ec561f462a31

1. **Full-Year Guidance Confidence**  
**Q:** Can you explain your confidence in achieving full-year guidance?  
**A:** Management is very confident in meeting full-year guidance, citing strong September results and positive trends continuing into the current quarter.  **[SYY_3404362_9]** **[SYY_3404362_10]**  Key levers include volume growth driven by increasing customer count and successful implementation of the new compensation model, gross margin improvements from strategic sourcing and increased Sysco brand penetration, and expense management through supply chain efficiencies.  **[SYY_3404362_9]** **[SYY_3404362_10]**  They expect most margin and growth improvements to come from their own actions rather than market lifts, especially in the back half of the fiscal year.  **[SYY_3404362_10]** 

2. **Gross Margin Outlook**  
**Q:** What factors are impacting gross margins and the outlook?  
**A:** Gross margins faced headwinds due to customer mix, strategic sourcing timing, and slight decline in Sysco brand penetration.  **[SYY_3404362_10]**  Management expects these pressures to ease, with improvements from strategic sourcing initiatives and efforts to increase Sysco brand penetration among small chain customers.  **[SYY_3404362_10]**  They are confident that gross margins will grow in the second half, driven by their own actions such as specialty business growth and total team selling.  **[SYY_3404362_10]** 

3. **Sales Force Compensation Changes**  
**Q:** How are sales force compensation changes affecting performance?  
**A:** The new compensation model, implemented on July 1, initially caused a transitory increase in turnover but has now stabilized.  **[SYY_3404362_9]** **[SYY_3404362_11]**  Top performers favor the new pay-for-performance model, which offers greater earnings potential.  **[SYY_3404362_11]**  Management believes the change will be a tailwind to performance, driving increased customer count and improved sales productivity.  **[SYY_3404362_9]** **[SYY_3404362_11]** 

4. **Volume Growth Expectations**  
**Q:** What are your expectations for volume growth, especially local vs national?  
**A:** While national business is currently growing faster than local, management expects local case performance to improve throughout the year.  **[SYY_3404362_10]**  Key regions are already hitting volume growth targets, and increasing sales headcount is correlated with volume growth.  **[SYY_3404362_9]** **[SYY_3404362_11]**  They anticipate volume growth to accelerate, narrowing the gap between local and national sales.  **[SYY_3404362_9]** **[SYY_3404362_11]** 

5. **Sales Force Hiring Plans**  
**Q:** Are you rethinking the pace or magnitude of sales force hiring?  
**A:** Management remains committed to growing the sales professional headcount but will pace hiring responsibly to ensure optimal return on investment.  **[SYY_3404362_11]** **[SYY_3404362_12]** **[SYY_3404362_14]**  They are focusing on high-growth markets and see a strong correlation between headcount additions and volume growth.  **[SYY_3404362_11]** **[SYY_3404362_14]**  The company is not experiencing challenges in hiring new sales colleagues from competitors and the industry.  **[SYY_3404362_11]** **[SYY_3404362_14]** 

6. **Sysco Brand Penetration**  
**Q:** How is Sysco brand penetration affecting margins?  
**A:** Sysco brand penetration is down slightly year-over-year, mainly among small chain customers due to improved fill rates from national brand suppliers.  **[SYY_3404362_10]**  However, penetration among local mom-and-pop customers is **up**.  **[SYY_3404362_10]**  Management is implementing trade management deals and product innovations to improve Sysco brand penetration, which they believe will enhance margins.  **[SYY_3404362_10]** **[SYY_3404362_16]** 

7. **Specialty Business Growth**  
**Q:** What is the impact of specialty business growth and total team selling?  
**A:** Growing specialty businesses have a higher margin attachment rate and contribute to both top-line and margin growth.  **[SYY_3404362_10]** **[SYY_3404362_9]**  Total team selling, which involves integrating specialty businesses into current accounts, is increasing due to the new compensation incentives.  **[SYY_3404362_9]** **[SYY_3404362_12]**  This strategy is expected to drive significant growth and profitability improvements.  **[SYY_3404362_9]** **[SYY_3404362_12]** 

e911b4cda9cb0dea6a2e9e530a3739ce7215820b32a81e9bc15989c11cea7d48

- **Sysco expects softer volume growth in fiscal 2024 compared to 2023**, particularly in the local market, which may impact short-term revenue growth.  **[SYY_3362966_14]**
- **Improvements in local sales, such as adding incremental headcount and enhanced sales compensation, are expected to yield benefits mainly in fiscal 2025**, indicating that near-term improvements may be limited.  **[SYY_3362966_8]**
- Despite progress, **Sysco acknowledges they are "not yet back to 2019 productivity levels"**, signaling ongoing challenges in fully restoring operational efficiency.  **[SYY_3362966_11]** **[SYY_3362966_20]**

6bef019b0865b6efbf6c7128d5bc58d98b30e5fdb631f48c4f6bd861d1c35999

Sysco Corp (SYY)

Financials