Sysco (SYY) Morgan Stanley Global Consumer & Retail Conference summary

Market position and industry trends

• Holds leading market share in the U.S., Canada, and several international markets, with significant runway for growth given current shares of 17% in the U.S. and 25% in Canada.

• The total addressable global market is $400 billion, with the company currently at $80 billion, indicating substantial expansion potential.

• Industry is resilient, with only two periods of contraction in 54 years; current trends show consumers prioritizing value, affordability, and convenience.

• Non-restaurant segments like education, healthcare, and entertainment are high-growth, high-margin areas.

• Sequential improvement in industry foot traffic, with company volume growth outpacing industry declines.

Financial performance and guidance

• Reiterated FY 2025 guidance: 4%-5% top-line growth and 6%-7% EPS growth.

• Confident in achieving 2025-2027 algorithm: 4%-6% sales growth, 1.5%-3.5% case growth, and 6%-8% operating income and EPS growth.

• Inflation is normalized at 2%, and M&A is contributing above expectations.

• Local customer growth is below target but expected to improve in the second half due to new hires and compensation changes.

• Operating leverage expected to improve throughout the year, driven by strategic sourcing, supply chain productivity, and corporate expense reductions.

International and specialty business

• International accounts for 20% of top line, with strong positions in Canada, UK, Ireland, and Costa Rica.

• International growth: 3% sales, 6% gross profit, 12% operating income last quarter, driven by local customer focus, strategic sourcing, and shared service centers.

• Exited Mexico JV to redeploy capital to higher-return markets.

• No structural barriers to international margins reaching U.S. levels; Ireland already at parity.

• Specialty business and M&A are key drivers for high single-digit sales growth, with confidence in acceleration as new assets mature.