Sysco Corporation Reports Third Quarter Fiscal Year 2025 Results
Sysco Corporation, a global leader in selling, marketing, and distributing food products to various sectors, has released its financial results for the third quarter of fiscal year 2025, ending March 29, 2025. The company faced several challenges during this period, including adverse weather conditions and weakening consumer confidence, which impacted its performance.
Financial Highlights
For the third quarter of fiscal year 2025, Sysco reported the following key financial metrics:
- Sales increased by 1.1% to $19.6 billion compared to the same period in fiscal year 2024.
- Gross profit decreased by 0.8% to $3.6 billion.
- Operating income decreased by 5.7% to $681 million, while adjusted operating income decreased by 3.3% to $773 million.
- Net earnings decreased by 5.6% to $401 million, and adjusted net earnings decreased by 2.9% to $469 million.
- EBITDA decreased by 2.5% to $910 million, and adjusted EBITDA decreased by 0.8% to $969 million.
- EPS decreased by 3.5% to $0.82, with adjusted EPS remaining in line with the previous year at $0.96.
Business and Operational Highlights
Sysco's U.S. Foodservice Operations segment experienced a 0.7% increase in sales to $13.8 billion, despite a 2.0% decrease in total case volume. The International Foodservice Operations segment saw a 1.1% decrease in sales to $3.5 billion, although on a constant currency basis, sales increased by 2.2% to $3.6 billion.
Gross profit for the International Foodservice Operations segment increased by 1.1% to $728 million, with a gross margin increase of 45 basis points to 21.1%.
Strategic Initiatives and Corporate Developments
Sysco remains committed to returning approximately $2.25 billion to shareholders in fiscal year 2025 through share repurchases and dividends. The company also announced a 6% dividend increase, setting up fiscal year 2026 to be its 56th year of delivering dividend growth. Additionally, Sysco is driving improvements across its business, including $100 million in annualized cost savings that will carry into the next fiscal year.
Management's Perspective
Kevin Hourican, Sysco’s Chair of the Board and Chief Executive Officer, commented on the results, stating, "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 had a negative impact on foot traffic to restaurants which led the quarter, in total, to fall short of our internal expectations."
Kenny Cheung, Sysco’s Chief Financial Officer, added, "We are driving improvements across our business, which also include our previously announced $100 million of annualized cost savings that will carry into the next fiscal year."
Future Outlook
Sysco has updated its fiscal year 2025 guidance to include expected sales growth of approximately 3% and adjusted EPS growth of at least 1%. The company remains focused on long-term growth, supported by over $4 billion in liquidity and a disciplined approach to capital allocation.
SEC Filing: SYSCO CORP [ SYY ] - 8-K - Apr. 29, 2025