Sysco (SYY) Q1 2025 earnings summary

Executive summary

• Q1 revenue grew 4.4% to $20.5B, with U.S. Foodservice volume up 2.7% and adjusted EPS up 1.9% to $1.09.

• International segment sales rose 3% to $3.8B, with adjusted operating income up 12.1% and operating income up 8.6%.

• SYGMA segment sales increased 7.3% to $2.05B, with operating income up 38.5% driven by new customers.

• Management reiterated FY25 guidance for 4–5% sales growth and 6–7% adjusted EPS growth, expecting margin expansion and improved local volume in H2.

• Net earnings declined 2.6% to $490M; adjusted net earnings decreased 0.4% to $540M.

Financial highlights

• Gross margin decreased 27 bps year-over-year to 18.3%, mainly due to customer mix, strategic sourcing timing, and lower Sysco Brand penetration.

• Adjusted operating income reached $873M; adjusted EBITDA increased 4.4% to $1.1B.

• Operating expenses rose 3.6% to $2.9B, mainly from higher volumes and selling expenses.

• Free cash flow improved by $81M to $8M for the quarter.

• Returned $359M to shareholders in Q1 via share repurchases and dividends.

Outlook and guidance

• FY25 guidance reaffirmed: 4–5% net sales growth and 6–7% adjusted EPS growth, with margin expansion and improved local volume expected in H2.

• Plan to return $2B to shareholders in FY25 through dividends and share repurchases.

• Second half expected to benefit from improved macro, traffic, and strategic sourcing.