Sysco (SYY) FY 2025 Conference September 03, 2025 11:15 AM ET Company ParticipantsKevin Hourican - Chair of the Board & CEOKenny Cheung - EVP & CFOConference Call ParticipantsJeffrey Bernstein - MD - Senior Restaurant AnalystJeffrey BernsteinGood morning, everyone. My name is Jeff Bernstein, and I am the restaurant and foodservice distribution analyst at Barclays. I'm pleased to introduce our next presenting company, Sysco Corporation. With us this morning, we have Kevin Hurican, to my immediate right, Pres ...

Financial Data and Key Metrics Changes - Sysco reported $81 billion in sales for the most recent year, with over 60% of revenue coming from restaurants, reflecting a 3% year-on-year growth in the restaurant segment [2][41] - The company expects FY 2026 sales growth of 3% to 5% and EPS growth of 1% to 3%, with adjusted EPS growth projected at 5% to 7% [38][50] - Sysco achieved a gross margin of 18.4%, which is 1.3 times higher than the average core peer, and an adjusted operating margin of over 4%, approximately 1.5 times higher than peers [45][46] Business Line Data and Key Metrics Changes - Sysco's specialty business, valued at $9 billion, is more than three times the size of its next biggest competitor in that space [5] - The U.S. Broadline business has shown positive inflection, with expectations for continued growth in Q1 [17][60] - The FreshPoint produce business experienced a drag due to exiting a business line, impacting the overall U.S. Foodservice (USFS) performance [18][56] Market Data and Key Metrics Changes - Sysco's international business is growing faster than its domestic core business, with a significant opportunity for expansion valued at over $10 billion [12][13] - The company has seen double-digit growth in its international segment for seven consecutive quarters [71] - The local case growth is improving, with Sysco's local business performing better than large national chains [56][64] Company Strategy and Development Direction - Sysco aims to leverage its size and scale to maintain its market leadership and drive profitability across various segments [4][40] - The company is focused on expanding its specialty business and enhancing its operational efficiencies through strategic sourcing and total team selling [45][46] - Sysco is committed to a balanced capital allocation strategy, investing in growth while maintaining an investment-grade balance sheet [48][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving FY 2026 guidance based on self-help initiatives and momentum in local case growth [68][70] - The overall consumer health is stabilizing, with improvements in foot traffic to restaurants noted [74][75] - Sysco is cautiously optimistic about the full year, expecting to grow by taking market share profitably [76][78] Other Important Information - Sysco has implemented new initiatives such as the Perks loyalty program and AI360 sales tool to enhance customer service and sales productivity [28][34] - The company plans to invest approximately $1 billion in share repurchases under current market conditions [83] Q&A Session Summary Question: Local case growth and momentum - Management highlighted that local business is outperforming national chains, with positive expectations for USBL in Q1 [56][60] - The retention and productivity of the sales workforce have improved, contributing to the positive momentum [57][61] Question: Confidence in FY 2026 guidance and consumer health - Management emphasized that guidance is based on self-help initiatives and momentum across various business segments, including international growth [68][70] - The consumer health is stabilizing, with improvements noted in restaurant traffic and performance in non-commercial sectors [74][76]