Financial Data and Key Metrics Changes - Sysco reported Q4 sales of $21.1 billion, an increase of 2.8% on a reported basis and 3.7% excluding the divestiture of the Mexican business [6][26] - Adjusted operating income for the quarter was $1.1 billion, up 1.1% year-over-year, with adjusted EPS growth of $1.48, reflecting a 6.5% increase compared to last year [6][25] - The company achieved a gross profit of $4 billion, up 3.9%, with gross margins expanding by 19 basis points to 18.9% [30][25] Business Line Data and Key Metrics Changes - The international segment experienced 3.6% top-line growth on a reported basis and 8.3% growth excluding the divestiture of Mexico, with adjusted operating income increasing by 20.1% [7][29] - The U.S. Foodservice segment saw a 1.3% volume growth, with gross profit growing almost three times faster than volume due to improved profitability efforts [8][25] - Sigma business achieved top-line growth of 8.3% and bottom-line growth of 12.5%, marking a record year [10] Market Data and Key Metrics Changes - Restaurant traffic improved throughout the quarter, with a decline of 1.1% overall, which was an improvement of approximately 190 basis points compared to Q3 [5][6] - The company noted that the industry is stabilizing after a challenging start to the year, with traffic trends showing a gradual recovery [5][6] Company Strategy and Development Direction - Sysco plans to focus on improving local business performance and enhancing sales colleague productivity through training and retention initiatives [15][41] - The company is implementing strategic sourcing initiatives and expanding its international supply chain capacity, with a new facility set to open outside London [13][14] - Sysco aims to leverage its competitive advantages, including geographic diversity and a wide product assortment, to capture a larger share of the food away from home market [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver positive and profitable local case growth in fiscal 2026, driven by stabilized colleague retention and improved productivity [15][41] - The leadership team highlighted the importance of colleague retention in reducing customer loss rates and improving overall business performance [40][41] - Sysco anticipates continued strong performance in the international segment and expects to maintain momentum into fiscal 2026 [7][29] Other Important Information - Sysco repurchased $1.3 billion in shares and paid out $1 billion in dividends during fiscal 2025, demonstrating a commitment to shareholder returns [26][37] - The company expects reported net sales growth of approximately 3% to 5% for fiscal 2026, with adjusted EPS growth projected at 1% to 3% [34][36] Q&A Session Summary Question: On local case growth momentum and market share - Management noted that while Q4 showed improvement, the stabilization of colleague retention will significantly impact customer loss rates in 2026, leading to positive growth [48][50] Question: Broader industry trends and sustaining momentum - Management attributed recent improvements to a stabilization in consumer confidence and expects to sustain growth through new customer wins and improved retention strategies [60][62] Question: International growth momentum and specific drivers - Management expressed confidence that international growth will continue, driven by increased sales resources and strategic sourcing initiatives [75][79] Question: Sales force growth and local case growth relationship - Management plans to increase sales professional headcount by approximately 4% in fiscal 2026, expecting this to lead to positive local case growth [86][88] Question: Financial implications of price agility initiative - Management clarified that the goal of the price agility initiative is to improve volume profitably without sacrificing margin rates, emphasizing the importance of sales colleague training [94][96]

Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 was $2.6 billion, up just under 1% as reported, but up 2.3% on a same-day basis compared to the prior year [15] - Adjusted net income for the quarter was $18 million or $0.23 per share, representing about 20% growth compared to $15 million or $0.19 per share last year [19] - Adjusted EBITDA grew 5% to $122 million versus $116 million reported during Q1 2024 [19] Business Line Data and Key Metrics Changes - Patient Direct segment revenue was $674 million, growing by 6% compared to Q1 2024, with a same-day growth of 7.3% [15] - The Products and Healthcare Services segment reported a decline of 0.8%, while on a same sales day basis, it grew 0.7% compared to the first quarter last year [16] - Operating income for the Patient Direct segment grew by 31%, resulting in a 173 basis point expansion [6] Market Data and Key Metrics Changes - The Medical Distribution division saw continued growth in same-store sales, but lower glove prices and international sales offset this growth [16] - The company experienced a significant increase in proprietary product sales running through its distribution channel, a key strategic initiative [16] Company Strategy and Development Direction - The company is actively engaged in discussions regarding the potential sale of its Products and Healthcare Services segment while continuing to run this segment with commitment [9] - Investments in revenue cycle management have led to record collection rates in Q1, with plans to extend these learnings to other divisions [8] - The company is implementing price increases in response to tariffs, effective in early June, while ensuring high-quality product delivery [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance and reaffirmed guidance for the year, expecting improving results in each subsequent quarter [22] - The anticipated annual exposure of current tariffs on products is estimated to be between $100 million to $150 million, primarily affecting the Products and Healthcare Services segment [12][27] - Management noted that the first quarter typically marks the payment of incentive compensation, impacting cash flow, but expects significant improvement in cash flow for the remainder of the year [20] Other Important Information - The company opened new state-of-the-art distribution centers in Morgantown, West Virginia, and Sioux Falls, South Dakota, to enhance its distribution network [10] - The company is awaiting a final decision from regulators regarding the planned acquisition of RoTEK, expecting to close in the first half of 2025 [8] Q&A Session Summary Question: Can you discuss the discussions with customers regarding tariffs? - Management indicated that the tariff exposure is estimated between $100 million to $150 million, primarily from China and Thailand, and emphasized the need to work collaboratively with customers to address pricing adjustments [27][28] Question: How should we think about the FX impact progressing through the year? - Management noted that while there was volatility in the dollar, particularly in March, the situation has calmed, and they are comfortable with the guidance for the rest of the year regarding FX [31][32] Question: What is the split between the tariff exposure in the PNHS and PD segments? - Management clarified that virtually all tariff exposure is in the Products and Healthcare Services segment, with minimal exposure in the Patient Direct segment [40] Question: How is the RoTEK financing accounted for in guidance? - Management explained that none of the debt will appear on the balance sheet until the deal closes, and they will update guidance accordingly [47] Question: What happens if customers refuse price increases due to tariffs? - Management stated that they cannot sell products at a loss and will work with customers to find alternative products that are lower in cost [61][64]