Sysco(US:SYY)2025-10-28 12:05Financial Performance - Sales for the first quarter increased 3.2% to $21.1 billion compared to $20.5 billion in the same period last year[7]. - Gross profit increased 3.9% to $3.9 billion, with a gross margin of 18.5%, up 13 basis points[6][8]. - Adjusted EPS increased 5.5% to $1.15, while diluted EPS remained flat at $0.99[6][18]. - Operating income decreased 1.0% to $800 million, while adjusted operating income increased 2.9% to $898 million[6][9]. - Net earnings for the 13-week period ended September 27, 2025, were $476 million, a decrease of 2.9% compared to $490 million for the same period in 2024[27][34]. - Adjusted net earnings for Sysco Corporation increased to $551 million, up 2.0% from $540 million[35]. - Diluted earnings per share (EPS) adjusted for Certain Items rose to $1.15, reflecting a 5.5% increase from $1.09[35]. - Operating income for Sysco Corporation decreased to $800 million, down 1.0% from $808 million[37]. - Adjusted EBITDA for the 13-week period ended September 27, 2025, was $1,070 million, showing a slight increase of 0.1% from $1,069 million in the prior year[41]. Sales and Revenue - U.S. Foodservice volume increased 0.1%, with local case volume decreasing 0.2%[10][18]. - International Foodservice Operations sales increased 4.5% to $4.0 billion, with gross profit up 6.7% to $826 million[13][14]. - Comparable sales excluding the impact of the Mexico joint venture increased by 3.8% to $21,148 million for the 13-week period ended September 27, 2025, compared to $20,367 million in the prior year[34]. - U.S. Foodservice Operations sales reached $14.78 billion, a 2.9% increase from $14.36 billion[36]. - International Foodservice Operations sales grew to $3.97 billion, marking a 4.5% increase from $3.79 billion[36]. - Comparable sales excluding Mexico joint venture increased by 7.9% to $3.97 billion[36]. Expenses and Liabilities - Operating expenses rose to $3,101 million, an increase of 5.3% from $2,945 million in the previous year[34]. - Operating expenses adjusted for Certain Items were $3.00 billion, reflecting a 4.3% increase from $2.88 billion[37]. - Total current liabilities increased to $10,810 million as of September 27, 2025, compared to $9,916 million on June 28, 2025[26]. Cash Flow and Liquidity - Cash flow from operations was $86 million, while free cash flow was negative $50 million for the first quarter[15][16]. - Cash provided by operating activities was $86 million for the 13-week period, up from $53 million in the same period last year[27]. - Cash, cash equivalents, and restricted cash at the end of the period were $1,127 million, compared to $834 million at the end of the same period last year[27]. - Sysco had a cash balance of $844 million and total liquidity of $3.5 billion as of the end of the quarter[14]. - Free cash flow for the 13-week period ended September 27, 2025, was $(50) million, a decrease of $58 million compared to $8 million in the prior year[39]. Shareholder Returns - Sysco returned $259 million to shareholders via dividends during the first quarter[15]. Debt and Taxation - The company's total debt as of September 27, 2025, was $13,353 million, resulting in a Net Debt to Adjusted EBITDA ratio of 2.90[43]. - Interest expense for the 13-week period ended September 27, 2025, was $172 million, an increase of 7.5% from $160 million in the same period last year[41]. - Income tax expense for the 13-week period decreased by 18.4% to $124 million from $152 million in the prior year[41]. Future Outlook - The company expects full-year sales growth of 3%-5% and adjusted EPS growth of 1%-3%, with a potential headwind of approximately $100 million from lower incentive compensation[4][19]. - Sysco expects to calculate adjusted earnings per share for future periods similarly to historical reconciliations, although specific guidance cannot be provided at this time[45].