Sysco (SYY) Q2 2025 earnings summary

Executive summary

• Sales grew 4.5% year-over-year to $20.2 billion in Q2 FY25, with gross profit up 3.9% to $3.7 billion and adjusted operating income up 5.1% to $783 million.

• Adjusted EPS increased 4.5% to $0.93, while GAAP net earnings declined 2.2% to $406 million due to restructuring and acquisition costs.

• U.S. Foodservice, International, and SYGMA segments all delivered volume and profit growth, with international segment adjusted operating income up 26.5%.

• Leadership reiterated FY25 guidance and expressed confidence in delivering full-year targets, supported by ongoing strategic initiatives.

• Returned $803 million to shareholders in Q2 via share repurchases and dividends; targeting $2.25 billion for FY25.

Financial highlights

• Net sales grew 4.5% year-over-year to $20.2 billion; gross profit up 3.9% to $3.7 billion; adjusted operating income up 5.1% to $783 million; adjusted EBITDA up 4.4% to $969 million.

• Gross margin at 18.1%, down 11 bps year-over-year; adjusted operating margin at 3.9%.

• Net debt leverage ratio at 2.76x, with $11.8 billion in net debt and $3.1 billion in liquidity.

• Operating cash flow of $498 million and free cash flow of $331 million for the first half.

• Adjusted EPS rose 4.5% to $0.93; GAAP net earnings declined 2.2% to $406 million.

Outlook and guidance

• Reiterated FY25 guidance: net sales growth of 4–5% and adjusted EPS growth of 6–7%.

• Expect stronger adjusted EPS growth in the second half, with high single-digit rates in Q3 and Q4.

• Inflation expected to remain moderate at around 2%, with some risk of upside due to protein and dairy costs.

• $100 million in annualized savings from strategic sourcing, supply chain efficiencies, and organizational optimization to benefit H2 results.

• Share repurchase plan increased to $1.25 billion for FY25; total cash return to shareholders expected at $2.25 billion.