Sysco(US:SYY)2024-10-29 21:43Financial Performance - Net earnings for the 13-week period ended September 28, 2024, were $490 million, a decrease from $503 million in the same period last year[57]. - Total sales for Sysco in the 13-week period ended September 28, 2024, were $20,484 million, an increase from $19,620 million in the same period of the previous year, representing a growth of approximately 4.4%[80]. - Operating income for Sysco's U.S. Foodservice Operations was $908 million, a decrease from $941 million year-over-year, reflecting a decline of about 3.5%[81]. - The International Foodservice Operations segment reported operating income of $101 million, up from $93 million, indicating a growth of approximately 8.6%[81]. - Sysco's total operating income for the period was $808 million, slightly up from $804 million in the previous year[81]. Earnings Per Share - Basic and diluted earnings per share remained stable at $1.00 and $0.99, respectively, for the first quarter of fiscal 2025[57]. - The number of securities excluded from the diluted earnings per share calculation was approximately 3,338,000 for the first quarter of fiscal 2025[57]. Comprehensive Income - Comprehensive income increased to $663 million for the first quarter of fiscal 2025, compared to $429 million for the same period in fiscal 2024[58]. Share-Based Compensation - The total share-based compensation cost recognized was $30 million for the first 13 weeks of fiscal 2025, up from $24 million in the prior year[70]. - The weighted average grant-date fair value per option granted was $18.50, with 728,531 options granted in the first 13 weeks of fiscal 2025[66]. - The company granted 461,055 performance share units (PSUs) with a weighted average grant-date fair value of $82.63 during the same period[67]. - The total number of unrecognized compensation costs related to share-based compensation arrangements was $179 million, expected to be recognized over 2.10 years[70]. Taxation - The effective tax rate for the first quarter of fiscal 2025 was 23.7%, higher than the statutory rate of 21.0% due to state income taxes[71]. - For the first quarter of fiscal 2024, the effective tax rate was 24.0%, higher than the statutory tax rate due to state income taxes, partially offset by a foreign income tax benefit[72]. - Sysco recorded a benefit of $131 million related to foreign tax credits, which may need to be reversed if the company is unsuccessful in its ongoing tax litigation[73]. - The OECD's Pillar Two Model Rules, effective for Sysco at the beginning of fiscal 2025, mandate a minimum corporate income tax rate of 15%[74]. Legal Proceedings - The company is engaged in various legal proceedings, with potential losses ranging from remote to reasonably possible, but management does not expect a material adverse effect on financial results[76]. Market Risks - Sysco's market risks include interest rate risk, foreign currency exchange rate risk, fuel price risk, and investment risk, with no significant changes reported since June 29, 2024[82]. Interest Expense - Interest expense increased to $160 million from $134 million, representing a rise of about 19.4%[81].