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]

Financial Data and Key Metrics Changes - Net sales increased approximately 8.4% to $1,035 million from $954.7 million in the second quarter of 2024 [12] - Gross profit increased 11.1% to $254.3 million for 2025 compared to $229 million for 2024 [14] - GAAP net income was $21.2 million or $0.49 per diluted share for 2025 compared to $15.5 million or $0.37 per diluted share for 2024 [16] - Adjusted EBITDA for 2025 was $65.4 million compared to $56.2 million for the prior year [16] - Adjusted net income was $22.5 million or $0.52 per diluted share for 2025 compared to $17 million or $0.40 per diluted share for the prior year [17] Business Line Data and Key Metrics Changes - Specialty sales were up 8.7% over the prior year, driven by unique customer growth of approximately 3.6% and placement growth of 8.7% [9] - Center of the Plate pounds were approximately 4% lower than the prior year, but excluding the attrition related to the Texas commodity protein program, growth was 5.8% higher [10][36] - Gross profit margins increased approximately 59 basis points to 24.6% [14] Market Data and Key Metrics Changes - Net inflation was 7.2% in the second quarter, with 5% inflation in the specialty category and 10.8% in the center of the plate category [13] - Excluding the impact of attrition from the commodity poultry program, net inflation in the center of the plate category was 4.1% [13] Company Strategy and Development Direction - The company is focused on integrating Hardee's operations in Texas with its legacy operations to drive top-line and bottom-line improvements [8] - The company aims to create a $500 million CW business across Texas through cross-selling and expanding its customer base [71] - The company is exploring tuck-in acquisitions to utilize the capacity of its facilities while continuing to grow organically [77] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, noting that customers are generally resilient and the company is gaining market share [21][22] - The company raised its full-year guidance for 2025, estimating net sales in the range of $4 billion to $4.06 billion [19] - Management indicated that the second half of the year is expected to show typical seasonality with a projected 6% revenue growth [68] Other Important Information - The company achieved the Great Place to Work certification for the fourth consecutive year, highlighting its focus on people as its greatest asset [7] - Total liquidity at the end of the second quarter was $260.3 million, comprised of $96.9 million in cash and $163.4 million available under its ABL facility [18] Q&A Session Summary Question: Are there any pockets of weakness or elevated restaurant closures? - Management noted some choppiness but overall expressed satisfaction with market share gains and customer resilience [21][22] Question: Have you seen an uplift in business dining with the return to office policies? - Management indicated a net positive effect on lunch business in major cities but noted it is balanced with local market impacts [24][25] Question: How is summer travel impacting demand? - Management observed a good July, suggesting a rebalancing of tourism and local dining [30][32] Question: What should be expected regarding Hardee's planned attrition? - Management expects continued impacts on reported volume numbers but sees long-term profitability benefits from shedding low-margin programs [36][41] Question: What is the outlook for inflation in the second half? - Management indicated that aggregate inflation is expected to remain moderate, with potential unforeseen impacts from tariffs [47][60] Question: Can you elaborate on gross margin improvements? - Management acknowledged moving parts affecting gross margin but highlighted ongoing initiatives contributing to improvements [52][54] Question: What is the outlook for M&A activity? - Management remains opportunistic regarding M&A, looking for tuck-in acquisitions to complement organic growth [77] Question: Are the 2028 goals contributing to current results? - Management confirmed that several initiatives related to the 2028 goals are contributing positively to current performance [82]

Financial Data and Key Metrics Changes - Net sales increased by approximately 8.4% to $1,035 million from $954.7 million in Q2 2024 [10] - Gross profit increased by 11.1% to $254.3 million, with gross profit margins rising approximately 59 basis points to 24.6% [12] - GAAP net income was $21.2 million or $0.49 per diluted share, compared to $15.5 million or $0.37 per diluted share in Q2 2024 [13] - Adjusted EBITDA was $65.4 million for Q2 2025, up from $56.2 million in the prior year [14] Business Line Data and Key Metrics Changes - Specialty sales grew by 8.7% year-over-year, driven by unique customer growth of approximately 3.6% and placement growth of 8.7% [7] - Center of the Plate pounds were approximately 4% lower than the prior year, but excluding the impact of the Texas commodity protein program, growth was 5.8% [8][33] - Adjusted operating expenses increased by 9.3% year-over-year, representing 18.25% of net sales for Q2 2025 [13] Market Data and Key Metrics Changes - Net inflation was reported at 7.2%, with 5% inflation in the specialty category and 10.8% in the center of the plate category [11] - Excluding the impact of attrition from the commodity poultry program, net inflation in the center of the plate category was 4.1% [11] Company Strategy and Development Direction - The company is focused on integrating Hardee's operations in Texas with its legacy operations to drive top-line and bottom-line improvements [6] - The strategy includes shedding non-core programs to enhance distribution capacity and profitability [7][35] - The company aims to grow its business in Texas to over $500 million through cross-selling and expanding its customer base [70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of their customer base and the ability to gain market share despite industry challenges [19][20] - The company raised its full-year guidance for 2025, estimating net sales between $4 billion and $4.06 billion [17] - Management noted that the second half of the year is expected to show typical seasonality, with a projected 6% revenue growth [66] Other Important Information - The company achieved the Great Place to Work certification for the fourth consecutive year, highlighting its focus on employee culture [6] - Total liquidity at the end of Q2 was $260.3 million, including $96.9 million in cash [14] Q&A Session Summary Question: Are there any pockets of weakness or elevated restaurant closures? - Management noted some choppiness but overall expressed satisfaction with market share gains and customer resilience [19] Question: Have you seen an uplift in business dining with return to office policies? - Management indicated a net positive impact on lunch business in major cities but noted a balance with local markets [21] Question: How is summer travel impacting demand? - Management observed a good July, suggesting a rebalancing of tourism and restaurant spending [28][30] Question: What is the expected impact of Hardee's planned attrition on reported case growth? - Management expects continued impacts from the attrition, particularly in high-volume, low-margin programs [35][39] Question: What is the outlook for inflation in the second half? - Management indicated moderate inflation expectations, with potential unforeseen impacts from tariffs [46] Question: Can you elaborate on gross margin performance? - Management acknowledged moving parts affecting gross margin but highlighted improvements from various operational initiatives [52] Question: What is the outlook for M&A activity? - Management remains opportunistic regarding M&A, with ongoing evaluations of potential tuck-in acquisitions [72][75] Question: Are the 2028 goals contributing to current results? - Management confirmed that several initiatives related to the 2028 goals are contributing positively to current performance [80]

Market Trends & Consumer Behavior - Vince's Market customers have decisively moved away from US products following tariff threats [1] - Canadian flags and labels, along with apps like Maple Scan, help shoppers identify domestic goods [2] - Vince's Market prioritizes Canadian produce when available and of equal quality [3] Sourcing & Supply Chain - At peak times, Vince's Market could source 60%-70% of produce from the US, but is currently running at about 30% [1] - Certain produce items, like Anu and Bartlett pears, are exclusively sourced from the United States at certain times [2] - Berries, citrus, and greens (especially lettuce) are the most in-demand and hardest to replace from the US [3] Company Operations - Vince's Market started in Toronto in 1986 and serves approximately 30,000 customers weekly [1] - Vince's Market has always been pro-Canadian, even before recent events reinforced this stance [3]