Sysco Corporation (NYSE: SYY) (“Sysco” or the “company”) today
announced financial results for its 13-week fourth fiscal quarter
and its fiscal year ended June 29, 2024.
Key financial results for the fourth quarter of
fiscal year 2024 include the following (comparisons are to the same
period in fiscal year 2023):
- Sales increased 4.2%; U.S.
Foodservice volume increased 3.5%; U.S. local volumes grew
0.7%;
- Gross profit increased 4.2% to $3.8
billion;
- Operating income increased 1.2% to
$977 million, and adjusted operating income increased 6.4% to $1.1
billion1;
- EBITDA decreased 7.7% to $1.2
billion, and adjusted EBITDA increased 5.4% to $1.3 billion1,2;
and
- EPS3 decreased 14.6% to $1.23,
compared to $1.44 in the same period last year, and adjusted EPS1
increased 3.7% to $1.39.
“Sysco’s financial performance for the quarter
and year included market share gains, strong profit growth,
investments in the business, and robust annual cash flow. Our
balanced efforts to grow top-line and manage margins enabled us to
deliver solid bottom-line results. In addition, we rewarded our
shareholders with share repurchases and dividends. I am proud of
our team for a steadfast focus on core business drivers, and
advancing our strategic initiatives. We remain on track with a
specific set of actions that we are confident will positively
increase local case performance in the upcoming fiscal year. I am
particularly pleased with our International business, which
delivered a 19.4% increase in operating income and 23.6% increase
in adjusted operating income for the year. I want to thank all
Sysco colleagues for their strong customer focus and hard work in
fiscal 2024. We are the leader in the Food Away From Home
distribution business because of you, our talented team,” said
Kevin Hourican, Sysco’s Chair of the Board and Chief Executive
Officer.
______________________________1 Adjusted
financial results, including adjusted operating expense, adjusted
operating income (loss), adjusted earnings per share (EPS) and
adjusted EBITDA, are non-GAAP financial measures that exclude
certain items, which primarily include acquisition-related costs,
restructuring and severance costs, and transformational project
costs. Last year’s Certain Items include a pension settlement
charge that resulted from the purchase of a nonparticipating single
premium group annuity contract that transferred defined benefit
plan obligations to an insurer, adjustments to our bad debt reserve
specific to aged receivables existing prior to the COVID-19
pandemic, adjustments to a product return allowance related to
COVID-related personal protection equipment inventory and a gain on
a litigation financing agreement.2 Earnings before interest, taxes,
depreciation and amortization (EBITDA) and adjusted EBITDA are
non-GAAP financial measures. Reconciliations of all non-GAAP
financial measures to the nearest corresponding GAAP financial
measure are included at the end of this release.3 Earnings per
share (EPS) are shown on a diluted basis, unless otherwise
specified.
“Our fourth quarter operating profit included
our seventh consecutive quarter of positive operating leverage.
Additionally, over $2.2 billion was returned to shareholders this
year. We plan to build on that momentum with continual improvements
expected this coming fiscal year. Fiscal 2025 kicks off the first
year of our three-year financial growth algorithm. Our plans for
consistent top- and bottom-line growth are built on our
expectations for sustainable growth, operational excellence, and a
balanced capital return profile. This long-term view reflects an
expected compounded annual growth rate of 4%-6% for net sales,
6%-8% for adjusted EPS, and 9-11% total shareholder returns,” said
Kenny Cheung, Sysco’s Chief Financial Officer.
Key financial results for fiscal year 2024
include the following (comparisons are to the same period in fiscal
year 2023):
- Sales increased 3.3%; U.S.
Foodservice volume increased 3.1%; U.S. local volumes grew
1.1%;
- Gross profit increased 4.7% to
$14.6 billion;
- Operating income increased 5.4% to
$3.2 billion, and adjusted operating income increased 8.4% to
$3.5 billion1;
- EBITDA increased 12.7% to
$4.0 billion, and adjusted EBITDA increased 9.0% to
$4.2 billion1,2;
- EPS increased 12.1% to $3.89, and
adjusted EPS increased 7.5% to $4.311,3;
- Cash flow from operations increased
4.2% to $3.0 billion and free cash flow increased 5.6% to $2.2
billion as compared to the same period last year4; and
- Net Debt to adjusted EBITDA5
improved to 2.7 times, within our target ratio; we returned
approximately $2.2 billion of capital to shareholders via $1.2
billion of share repurchases and $1.0 billion of dividends.
Fourth Quarter Fiscal
Year 2024 Results
(comparisons are to the same period in fiscal year 2023)
Total Sysco
Sales for the fourth quarter increased 4.2% to
$20.6 billion.
Gross profit increased 4.2% to $3.8 billion, and
gross margin decreased 1 basis point to 18.7%. Product cost
inflation was 1.6% at the total enterprise level, as measured by
the estimated change in Sysco’s product costs, primarily in the
poultry and meat categories. The increase in gross profit for the
fourth quarter was primarily driven by positive volumes, as well as
continued progress with effective management of product cost
inflation and our strategic sourcing initiative.
Operating expenses increased 5.2%, driven by
increased volumes and cost inflation. Adjusted operating expenses
increased 3.3%.
Operating income increased 1.2% to $977 million,
and adjusted operating income increased 6.4% to
$1.1 billion.
______________________________4 Free cash flow
is a non-GAAP financial measure that represents net cash provided
from operating activities less purchases of plant and equipment and
includes proceeds from sales of plant and equipment.
Reconciliations for all non-GAAP financial measures are included at
the end of this release.5 Net debt to adjusted EBITDA is a non-GAAP
financial measure frequently used by investors and credit rating
agencies. Our net debt to adjusted EBITDA ratio is calculated using
a numerator of our debt minus cash and cash equivalents, divided by
the sum of the most recent four quarters of adjusted EBITDA.
U.S. Foodservice Operations
The U.S. Foodservice Operations segment results
were driven by higher volumes, combined with effective margin
management and re-investments.
Sales for the fourth quarter increased 4.9% to
$14.4 billion. Total case volume within U.S. Foodservice grew 3.5%
for the fourth quarter, while local case volume within U.S.
Foodservice increased 0.7%.
Gross profit increased 3.1% to $2.8 billion, and
gross margin decreased 32 basis points to 19.4%.
Operating expenses increased 5.2%, and adjusted
operating expenses increased 4.4%.
Operating income decreased 0.1% to $1.0 billion,
and adjusted operating income increased 1.1% to $1.1 billion.
International Foodservice Operations
The International Foodservice Operations segment
delivered sales growth, along with outsized profit growth.
Sales for the fourth quarter increased 3.8% to
$3.8 billion. On a constant currency basis6, sales for the fourth
quarter were $3.8 billion, an increase of 4.5%. Foreign exchange
rates decreased both International Foodservice Operations sales by
0.7% and total Sysco sales by 0.1% during the quarter.
Gross profit increased 8.7% to $787 million, and
gross margin increased 93 basis points to 20.8%. On a constant
currency basis6, gross profit increased 9.3% to $791 million.
Foreign exchange rates decreased both International Foodservice
Operations gross profit by 0.6% and total Sysco gross profit by
0.1% during the quarter.
Operating expenses increased 11.3%, and adjusted
operating expenses increased 7.6%. On a constant currency basis6,
adjusted operating expenses increased 8.1%. Foreign exchange rates
decreased both International Foodservice Operations operating
expenses by 0.5% and total Sysco operating expenses by 0.1% during
the quarter.
Operating income decreased 4.2% to $115 million,
and adjusted operating income increased 13.1% to $164 million. On a
constant currency basis6, adjusted operating income was $165
million, an increase of 13.8%. Foreign exchange rates decreased
both International Foodservice Operations operating income by 0.7%
and total Sysco operating income by 0.1% during the quarter.
Fiscal Year
2024 Results (comparisons are to
the same period in fiscal year 2023)
Total Sysco
Sales for fiscal year 2024 increased 3.3% to
$78.8 billion.
______________________________6 Represents a
constant currency adjustment, which eliminates the impact of
foreign currency fluctuations on current year results. These
adjusted measures are non-GAAP financial measures. Reconciliations
of all non-GAAP financial measures to the nearest corresponding
GAAP financial measure are included at the end of this release.
Gross profit increased 4.7% to $14.6 billion,
and gross margin increased 25 basis points to 18.5%. Product cost
inflation was 1.5% at the total enterprise level, as measured by
the estimated change in Sysco’s product costs, primarily in the
poultry and meat categories. The increase in gross profit for the
year was primarily driven by positive volumes, as well as continued
progress with effective management of product cost inflation and
our strategic sourcing initiative.
Operating expenses increased 4.5%, driven by
increased volumes and cost inflation. Adjusted operating expenses
increased 3.6%.
Operating income increased 5.4% to $3.2 billion,
and adjusted operating income increased 8.4% to $3.5 billion.
U.S. Foodservice Operations
The U.S. Foodservice Operations segment results
were driven by higher volumes and effective margin management,
which resulted in continued profit growth.
Sales for fiscal year 2024 increased 3.1% to
$55.3 billion. Total case volume within U.S. Foodservice grew 3.1%
for fiscal year 2024, while local case volume within U.S.
Foodservice increased 1.1%.
Gross profit increased 3.4% to $10.7 billion,
and gross margin increased 5 basis points to 19.4%.
Operating expenses increased 3.9%, and adjusted
operating expenses increased 3.5%.
Operating income increased 2.4% to $3.7 billion,
and adjusted operating income increased 3.2% to $3.7 billion.
International Foodservice Operations
The International Foodservice Operations segment
delivered another strong year of sales and profit growth.
Sales for fiscal year 2024 increased 7.4% to
$14.6 billion. On a constant currency basis6, sales for fiscal year
2024 were $14.3 billion, an increase of 5.5%. Foreign exchange
rates increased both International Foodservice Operations sales by
1.9% and total Sysco sales by 0.3% during the year.
Gross profit increased 11.6% to $2.9 billion,
and gross margin increased 76 basis points to 20.2%. On a constant
currency basis6, gross profit increased 9.2% to $2.9 billion.
Foreign exchange rates increased both International Foodservice
Operations gross profit by 2.4% and total Sysco gross profit by
0.4% during the year.
Operating expenses increased 10.5%, and adjusted
operating expenses increased 9.5%. On a constant currency basis6,
adjusted operating expenses increased 6.8%. Foreign exchange rates
increased both International Foodservice Operations operating
expense by 2.7% and total Sysco operating expense by 0.6% during
the year.
Operating income increased 19.4% to $375
million, and adjusted operating income increased 23.6% to $492
million. On a constant currency basis6, adjusted operating income
was $488 million, an increase of 22.6%. Foreign exchange rates
increased both International Foodservice Operations operating
income by $4 million and total Sysco operating income by $1 million
during the year.
Balance Sheet, Cash Flow and Capital
Spending
As of the end of the quarter, the company had a
cash balance of $696 million.
During the year, Sysco returned $2.2 billion to
shareholders via $1.2 billion of share repurchases and $1.0 billion
of dividends.
Cash flow from operations was $3.0 billion for
the fiscal year, which was an increase of $121 million over the
prior year period.
Capital expenditures, net of proceeds from sales
of plant and equipment, for fiscal year 2024 were $753 million.
Free cash flow4 for fiscal year 2024 was $2.2
billion, which was an increase of $119 million over the prior year
period.
Conference Call &
Webcast
Sysco will host a conference call to review the
company’s fourth quarter and full fiscal year 2024 financial
results on Tuesday, July 30, 2024, at 10:00 a.m. Eastern
Daylight Time. A live webcast of the call, accompanying slide
presentation and a copy of this news release will be available
online at investors.sysco.com.
|
Key Highlights: |
|
|
13-Week Period Ended |
52-Week Period Ended |
|
|
|
|
|
|
|
Financial Comparison: |
June 29, 2024 |
Change |
June 29, 2024 |
Change |
|
GAAP: |
|
|
|
|
|
Sales |
$20.6 billion |
4.2% |
$78.8 billion |
3.3% |
|
Gross Profit |
$3.8 billion |
4.2% |
$14.6 billion |
4.7% |
|
Gross Margin |
18.7% |
-1 bp |
18.5% |
25 bps |
|
Operating Expenses |
$2.9 billion |
5.2% |
$11.4 billion |
4.5% |
|
Operating Income |
$977 million |
1.2% |
$3.2 billion |
5.4% |
|
Operating Margin |
4.8% |
-14 bps |
4.1% |
8 bps |
|
Net Earnings |
$612 million |
-16.5% |
$2.0 billion |
10.5% |
|
Diluted Earnings Per Share |
$1.23 |
-14.6% |
$3.89 |
12.1% |
|
|
|
|
|
|
|
Non-GAAP
(1): |
|
|
|
|
|
Gross Profit |
$3.8 billion |
4.2% |
$14.6 billion |
4.7% |
|
Gross Margin |
18.7% |
-1 bp |
18.5% |
25 bps |
|
Operating Expenses |
$2.8 billion |
3.3% |
$11.1 billion |
3.6% |
|
Operating Income |
$1.1 billion |
6.4% |
$3.5 billion |
8.4% |
|
Operating Margin |
5.3% |
11 bps |
4.4% |
21 bps |
|
EBITDA |
$1.2 billion |
-7.7% |
$4.0 billion |
12.7% |
|
Adjusted EBITDA |
$1.3 billion |
5.4% |
$4.2 billion |
9.0% |
|
Net Earnings |
$693 million |
1.5% |
$2.2 billion |
6.0% |
|
Diluted Earnings Per Share (2) |
$1.39 |
3.7% |
$4.31 |
7.5% |
|
|
|
|
|
|
|
Case Growth: |
|
|
|
|
|
U.S. Foodservice |
3.5% |
|
3.1% |
|
|
Local |
0.7% |
|
1.1% |
|
|
|
|
|
|
|
|
Sysco Brand Sales as a % of Cases
(3): |
|
|
|
|
|
U.S. Broadline |
36.6% |
-51 bps |
36.7% |
-19 bps |
|
Local |
47.1% |
-37 bps |
47.0% |
11 bps |
| Note: |
|
(1) Reconciliations of all non-GAAP financial measures to the
nearest respective GAAP financial measures are included at the end
of this release. |
|
(2) Individual components in the table above may not sum to the
totals due to the rounding. |
|
(3) Amounts reflect the impact of current customer classifications;
prior period history has been reclassified to match the current
period customer classification. |
|
|
Forward-Looking
Statements Statements made in this press release or
in our earnings call for the fourth quarter of fiscal year 2024
that look forward in time or that express management’s beliefs,
expectations or hopes are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements reflect the views of management at the
time such statements are made and are subject to a number of risks,
uncertainties, estimates, and assumptions that may cause actual
results to differ materially from current expectations. These
statements include statements concerning: our expectations
regarding future improvements in productivity; our belief that
improvements in our organizational capabilities will deliver
compelling outcomes in future periods; our expectations regarding
improvements in international volume; our expectations that our
transformational agenda will drive long-term growth; our
expectations regarding the continuation of an inflationary
environment; our expectations regarding improvements in the
efficiency of our supply chain; our expectations regarding the
impact of our Recipe for Growth strategy and the pace of progress
in implementing the initiatives under that strategy; our
expectations regarding Sysco’s ability to outperform the market in
future periods; our expectations that our strategic priorities will
enable us to grow faster than the market; our expectations
regarding our efforts to reduce overtime rates and the incremental
investments in hiring; our expectations regarding the expansion of
our Sysco Driver Academy and our belief that the academy will
enable us to provide upward career path mobility for our warehouse
colleagues and improve colleague retention; our expectations
regarding the benefits of the six-day delivery and last mile
distribution models; our plans to improve the capabilities of our
sales team; our plans to refine our engineering labor standards;
our expectations regarding the impact of our growth initiatives and
their ability to enable Sysco to consistently outperform the
market; our expectations to exceed our growth target by the end of
fiscal 2025; our ability to deliver against our strategic
priorities; economic trends in the United States and abroad; our
belief that there is further opportunity for profit in the future;
our future growth, including growth in sales and earnings per
share; the pace of implementation of our business transformation
initiatives; our expectations regarding our ability to execute our
balanced approach to capital allocation and rewarding our
shareholders; our plans to improve colleague retention, training
and productivity; our belief that our Recipe for Growth
transformation is creating capabilities that will help us
profitably grow for the long term; our expectations regarding our
long-term financial outlook; our expectations of the effects labor
harmony will have on sales and case volume, as well as mitigation
expenses; our expectations for customer acquisition in the
local/street space; our expectations regarding the effectiveness of
our Global Support Center expense control measures; and our
expectations regarding the growth and resilience of our food away
from home market.
It is important to note that actual results
could differ materially from those projected in such
forward-looking statements based on numerous factors, including
those outside of Sysco’s control. Therefore, you should not place
undue reliance on any of the forward-looking statements contained
herein. For more information concerning factors that could cause
actual results to differ from those expressed or forecasted, see
our Annual Report on Form 10-K for the year ended July 1, 2023, as
filed with the SEC, and our subsequent filings with the SEC. We do
not undertake to update our forward-looking statements, except as
required by applicable law.
About Sysco
Sysco is the global leader in selling, marketing
and distributing food products to restaurants, healthcare and
educational facilities, lodging establishments and other customers
who prepare meals away from home. Its family of products also
includes equipment and supplies for the foodservice and hospitality
industries. With more than 76,000 colleagues, the company operates
340 distribution facilities worldwide and serves approximately
730,000 customer locations. For fiscal year 2024 that ended June
29, 2024, the company generated sales of more than
$78 billion. Information about our Sustainability program,
including Sysco’s 2023 Sustainability Report and 2023 Diversity,
Equity & Inclusion Report, can be found at www.sysco.com.
For more information, visit
www.sysco.com or connect with Sysco on Facebook at
www.facebook.com/SyscoFoods. For important news and information
regarding Sysco, visit the Investor Relations section of the
company’s Internet home page at investors.sysco.com, which Sysco
plans to use as a primary channel for publishing key information to
its investors, some of which may contain material and previously
non-public information. In addition, investors should continue to
review our news releases and filings with the SEC. It is possible
that the information we disclose through any of these channels of
distribution could be deemed to be material information.
| |
| Sysco
Corporation and its Consolidated
SubsidiariesCONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)(In Millions, Except for Share and Per
Share Data) |
| |
Quarter Ended |
|
Year Ended |
| |
Jun. 29, 2024 |
|
Jul. 1, 2023 |
|
Jun. 29, 2024 |
|
Jul. 1, 2023 |
| |
|
|
|
|
|
|
|
|
Sales |
$ |
20,556 |
|
$ |
19,728 |
|
|
$ |
78,844 |
|
$ |
76,325 |
| Cost of sales |
|
16,718 |
|
|
16,043 |
|
|
|
64,236 |
|
|
62,370 |
| Gross profit |
|
3,838 |
|
|
3,685 |
|
|
|
14,608 |
|
|
13,955 |
| Operating expenses (1) |
|
2,861 |
|
|
2,720 |
|
|
|
11,406 |
|
|
10,916 |
| Operating income |
$ |
977 |
|
$ |
965 |
|
|
$ |
3,202 |
|
$ |
3,039 |
| Interest expense |
|
165 |
|
|
136 |
|
|
|
607 |
|
|
527 |
| Other expense (income), net
(1) (2) |
|
8 |
|
|
(128 |
) |
|
|
30 |
|
|
227 |
| Earnings before income
taxes |
|
804 |
|
|
957 |
|
|
|
2,565 |
|
|
2,285 |
| Income taxes |
|
192 |
|
|
224 |
|
|
|
610 |
|
|
515 |
| Net earnings |
$ |
612 |
|
$ |
733 |
|
|
$ |
1,955 |
|
$ |
1,770 |
| |
|
|
|
|
|
|
|
| Net earnings: |
|
|
|
|
|
|
|
| Basic earnings per share |
$ |
1.23 |
|
$ |
1.45 |
|
|
$ |
3.90 |
|
$ |
3.49 |
| Diluted earnings per
share |
|
1.23 |
|
|
1.44 |
|
|
|
3.89 |
|
|
3.47 |
| |
|
|
|
|
|
|
|
| Average shares
outstanding |
|
495,872,056 |
|
|
506,546,404 |
|
|
|
501,238,422 |
|
|
507,362,913 |
| Diluted shares
outstanding |
|
497,464,115 |
|
|
508,507,679 |
|
|
|
503,096,086 |
|
|
509,719,756 |
|
(1) |
Gains and losses related to the disposition of fixed assets have
been recognized within operating expenses. Prior year amounts for
the fourth quarter have been reclassified to conform to this
presentation. |
| (2) |
Sysco’s second quarter of fiscal 2023 included a charge of $315
million in other expense related to pension settlement charges.
Sysco’s fourth quarter of fiscal 2023 included $122 million in
other income related to a legacy litigation financing
agreement. |
| |
|
| |
| Sysco
Corporation and its Consolidated
SubsidiariesCONSOLIDATED BALANCE
SHEETS(In Millions, Except for Share
Data) |
| |
Jun. 29, 2024 |
|
Jul. 1, 2023 |
| |
(Unaudited) |
|
|
| ASSETS |
|
|
|
| Current
assets |
|
|
|
|
Cash and cash equivalents |
$ |
696 |
|
|
$ |
745 |
|
| Accounts receivable, less
allowances of $54 and $46 |
|
5,324 |
|
|
|
5,092 |
|
| Inventories |
|
4,678 |
|
|
|
4,481 |
|
| Prepaid expenses and other
current assets |
|
323 |
|
|
|
284 |
|
| Income tax receivable |
|
22 |
|
|
|
6 |
|
| Total current assets |
|
11,043 |
|
|
|
10,608 |
|
| Plant and equipment at cost,
less accumulated depreciation |
|
5,497 |
|
|
|
4,915 |
|
| Other long-term
assets |
|
|
|
| Goodwill |
|
5,153 |
|
|
|
4,646 |
|
| Intangibles, less
amortization |
|
1,188 |
|
|
|
860 |
|
| Deferred income taxes |
|
445 |
|
|
|
420 |
|
| Operating lease right-of-use
assets, net |
|
923 |
|
|
|
732 |
|
| Other assets |
|
668 |
|
|
|
640 |
|
| Total other long-term
assets |
|
8,377 |
|
|
|
7,298 |
|
| Total assets |
$ |
24,917 |
|
|
$ |
22,821 |
|
| |
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
| Current
liabilities |
|
|
|
| Accounts payable |
$ |
6,290 |
|
|
$ |
6,025 |
|
| Accrued expenses |
|
2,226 |
|
|
|
2,251 |
|
| Accrued income taxes |
|
131 |
|
|
|
102 |
|
| Current operating lease
liabilities |
|
125 |
|
|
|
99 |
|
| Current maturities of
long-term debt |
|
469 |
|
|
|
63 |
|
| Total current liabilities |
|
9,241 |
|
|
|
8,540 |
|
| Long-term
liabilities |
|
|
|
| Long-term debt |
|
11,513 |
|
|
|
10,348 |
|
| Deferred income taxes |
|
345 |
|
|
|
303 |
|
| Long-term operating lease
liabilities |
|
838 |
|
|
|
656 |
|
| Other long-term
liabilities |
|
1,089 |
|
|
|
932 |
|
| Total long-term
liabilities |
|
13,785 |
|
|
|
12,239 |
|
| Commitments and
contingencies |
|
|
|
| Noncontrolling interest |
|
31 |
|
|
|
33 |
|
| Shareholders’
equity |
|
|
|
| Preferred stock, par value $1
per share Authorized 1,500,000 shares, issued none |
|
— |
|
|
|
— |
|
| Common stock, par value $1 per
share Authorized 2,000,000,000 shares, issued 765,174,900
shares |
|
765 |
|
|
|
765 |
|
| Paid-in capital |
|
1,908 |
|
|
|
1,815 |
|
| Retained earnings |
|
12,260 |
|
|
|
11,311 |
|
| Accumulated other
comprehensive loss |
|
(1,339 |
) |
|
|
(1,253 |
) |
| Treasury stock at cost,
273,416,685 and 260,062,834 shares |
|
(11,734 |
) |
|
|
(10,629 |
) |
| Total shareholders’
equity |
|
1,860 |
|
|
|
2,009 |
|
| Total liabilities and
shareholders’ equity |
$ |
24,917 |
|
|
$ |
22,821 |
|
| |
| |
| Sysco
Corporation and its Consolidated
SubsidiariesCONSOLIDATED CASH FLOWS
(Unaudited)(In Millions) |
|
|
Year Ended |
| |
Jun. 29, 2024 |
|
Jul. 1, 2023 |
| Cash flows from operating
activities: |
|
|
|
|
Net earnings |
$ |
1,955 |
|
|
$ |
1,770 |
|
|
Adjustments to reconcile net earnings to cash provided by operating
activities: |
|
|
|
|
Pension settlement charge |
|
— |
|
|
|
315 |
|
|
Share-based compensation expense |
|
104 |
|
|
|
96 |
|
|
Depreciation and amortization |
|
873 |
|
|
|
776 |
|
|
Operating lease asset amortization |
|
124 |
|
|
|
113 |
|
|
Amortization of debt issuance and other debt-related costs |
|
19 |
|
|
|
20 |
|
|
Deferred income taxes |
|
27 |
|
|
|
(16 |
) |
|
Provision for losses on receivables |
|
57 |
|
|
|
36 |
|
|
Other non-cash items |
|
(12 |
) |
|
|
(7 |
) |
|
Additional changes in certain assets and liabilities, net of effect
of businesses acquired: |
|
|
|
|
Increase in receivables |
|
(110 |
) |
|
|
(271 |
) |
|
Increase in inventories |
|
(70 |
) |
|
|
(22 |
) |
|
(Increase) decrease in prepaid expenses and other current
assets |
|
(2 |
) |
|
|
2 |
|
|
Increase in accounts payable |
|
104 |
|
|
|
196 |
|
|
(Decrease) increase in accrued expenses |
|
(12 |
) |
|
|
22 |
|
|
Decrease in operating lease liabilities |
|
(144 |
) |
|
|
(134 |
) |
|
Increase in accrued income taxes |
|
13 |
|
|
|
92 |
|
|
Decrease in other assets |
|
38 |
|
|
|
6 |
|
|
Increase (decrease) in other long-term liabilities |
|
25 |
|
|
|
(126 |
) |
|
Net cash provided by operating activities |
|
2,989 |
|
|
|
2,868 |
|
| Cash flows from investing
activities: |
|
|
|
|
Additions to plant and equipment |
|
(832 |
) |
|
|
(793 |
) |
|
Proceeds from sales of plant and equipment |
|
79 |
|
|
|
42 |
|
|
Acquisition of businesses, net of cash acquired |
|
(1,210 |
) |
|
|
(37 |
) |
|
Purchase of marketable securities |
|
(33 |
) |
|
|
(16 |
) |
|
Proceeds from sales of marketable securities |
|
29 |
|
|
|
12 |
|
|
Other investing activities (1) |
|
5 |
|
|
|
7 |
|
|
Net cash used for investing activities |
|
(1,962 |
) |
|
|
(785 |
) |
| Cash flows from financing
activities: |
|
|
|
|
Bank and commercial paper borrowings, net |
|
200 |
|
|
|
— |
|
|
Other debt borrowings including senior notes |
|
1,362 |
|
|
|
249 |
|
|
Other debt repayments including senior notes |
|
(447 |
) |
|
|
(830 |
) |
|
Debt issuance costs |
|
(13 |
) |
|
|
— |
|
|
Proceeds from stock option exercises |
|
120 |
|
|
|
79 |
|
|
Stock repurchases |
|
(1,232 |
) |
|
|
(500 |
) |
|
Dividends paid |
|
(1,008 |
) |
|
|
(996 |
) |
|
Other financing activities (2) |
|
(20 |
) |
|
|
(58 |
) |
|
Net cash used for financing activities |
|
(1,038 |
) |
|
|
(2,056 |
) |
|
Effect of exchange rates on cash, cash equivalents and restricted
cash |
|
(10 |
) |
|
|
8 |
|
|
Net (decrease) increase in cash, cash equivalents and restricted
cash |
|
(21 |
) |
|
|
35 |
|
| Cash, cash equivalents and
restricted cash at beginning of period |
|
966 |
|
|
|
931 |
|
| Cash, cash equivalents and
restricted cash at end of period |
$ |
945 |
|
|
$ |
966 |
|
| |
|
|
|
| Supplemental disclosures of
cash flow information: |
|
|
|
| Cash paid during the period
for: |
|
|
|
|
Interest |
$ |
557 |
|
|
$ |
511 |
|
|
Income taxes, net of refunds |
|
564 |
|
|
|
444 |
|
|
(1) |
Change primarily includes proceeds from the settlement of
corporate-owned life insurance policies. |
| (2) |
Change includes cash paid for shares withheld to cover taxes,
settlement of interest rate hedges and other financing
activities. |
| |
|
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items
The discussion of our results includes certain
non-GAAP financial measures, including EBITDA and adjusted EBITDA,
that we believe provide important perspective with respect to
underlying business trends. Other than EBITDA and free cash flow,
any non-GAAP financial measures will be denoted as adjusted
measures to remove (1) restructuring charges; (2) expenses
associated with our various transformation initiatives; (3)
severance charges; and (4) acquisition-related costs consisting of:
(a) intangible amortization expense and (b) acquisition costs and
due diligence costs related to our acquisitions. Our results for
fiscal 2023 were also impacted by a pension settlement charge that
resulted from the purchase of a nonparticipating single premium
group annuity contract that transferred defined benefit plan
obligations to an insurer, adjustments to our bad debt reserve
specific to aged receivables existing prior to the COVID-19
pandemic, adjustments to a product return allowance related to
COVID-related personal protection equipment inventory and a gain on
a litigation financing agreement.
The results of our operations can be impacted
due to changes in exchange rates applicable in converting local
currencies to U.S. dollars. We measure our results on a constant
currency basis. Constant currency operating results are calculated
by translating current-period local currency operating results with
the currency exchange rates used to translate the financial
statements in the comparable prior-year period to determine what
the current-period U.S. dollar operating results would have been if
the currency exchange rate had not changed from the comparable
prior-year period.
Management believes that adjusting its operating
expenses, operating income, other (income) expense, net earnings
and diluted earnings per share to remove these Certain Items and
presenting its results on a constant currency basis provides an
important perspective with respect to our underlying business
trends and results. It provides meaningful supplemental information
to both management and investors that (1) is indicative of the
performance of the company’s underlying operations and (2)
facilitates comparisons on a year-over-year basis.
Sysco has a history of growth through
acquisitions and excludes from its non-GAAP financial measures the
impact of acquisition-related intangible amortization, acquisition
costs and due diligence costs for those acquisitions. We believe
this approach significantly enhances the comparability of Sysco’s
results for fiscal year 2024 and fiscal year 2023.
Set forth on the following page is a
reconciliation of sales, operating expenses, operating income,
other (income) expense, net earnings and diluted earnings per share
to adjusted results for these measures for the periods presented.
Individual components of diluted earnings per share may not be
equal to the total presented when added due to rounding. Adjusted
diluted earnings per share is calculated using adjusted net
earnings divided by diluted shares outstanding.
| |
| Sysco
Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain
Items(Dollars in Millions, Except for Share and
Per Share Data) |
| |
|
13-Week Period Ended Jun. 29, 2024 |
|
13-Week Period Ended Jul. 1, 2023 |
|
Change in Dollars |
|
%/bps Change |
|
Sales (GAAP) |
|
$ |
20,556 |
|
|
$ |
19,728 |
|
|
$ |
828 |
|
|
4.2 |
% |
| Impact of currency
fluctuations (1) |
|
|
25 |
|
|
|
— |
|
|
|
25 |
|
|
0.1 |
|
| Comparable sales using
a constant currency basis (Non-GAAP) |
|
$ |
20,581 |
|
|
$ |
19,728 |
|
|
$ |
853 |
|
|
4.3 |
% |
| |
|
|
|
|
|
|
|
|
| Cost of sales
(GAAP) |
|
$ |
16,718 |
|
|
$ |
16,043 |
|
|
$ |
675 |
|
|
4.2 |
% |
| |
|
|
|
|
|
|
|
|
| Gross profit
(GAAP) |
|
$ |
3,838 |
|
|
$ |
3,685 |
|
|
$ |
153 |
|
|
4.2 |
% |
| Impact of currency
fluctuations (1) |
|
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
0.1 |
|
| Comparable gross
profit adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
3,842 |
|
|
$ |
3,685 |
|
|
$ |
157 |
|
|
4.3 |
% |
| |
|
|
|
|
|
|
|
|
| Gross margin
(GAAP) |
|
|
18.67 |
% |
|
|
18.68 |
% |
|
|
|
-1 |
bp |
| Impact of currency
fluctuations (1) |
|
|
— |
|
|
|
— |
|
|
|
|
0 |
bps |
| Comparable gross
margin adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
|
18.67 |
% |
|
|
18.68 |
% |
|
|
|
-1 |
bp |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
2,861 |
|
|
$ |
2,720 |
|
|
$ |
141 |
|
|
5.2 |
% |
| Impact of restructuring and
transformational project costs (2) |
|
|
(61 |
) |
|
|
(25 |
) |
|
|
(36 |
) |
|
NM |
| Impact of acquisition-related
costs (3) |
|
|
(45 |
) |
|
|
(28 |
) |
|
|
(17 |
) |
|
(60.7 |
) |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
|
2,755 |
|
|
|
2,667 |
|
|
|
88 |
|
|
3.3 |
|
| Impact of currency
fluctuations (1) |
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
0.1 |
|
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
2,758 |
|
|
$ |
2,667 |
|
|
$ |
91 |
|
|
3.4 |
% |
| |
|
|
|
|
|
|
|
|
| Operating expense as a
percentage of sales (GAAP) |
|
|
13.92 |
% |
|
|
13.79 |
% |
|
|
|
13 bps |
| Impact of certain item
adjustments |
|
|
(0.52 |
) |
|
|
(0.27 |
) |
|
|
|
-25 bps |
| Adjusted operating
expense as a percentage of sales (Non-GAAP) |
|
|
13.40 |
% |
|
|
13.52 |
% |
|
|
|
-12 bps |
| |
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
977 |
|
|
$ |
965 |
|
|
$ |
12 |
|
|
1.2 |
% |
| Impact of restructuring and
transformational project costs (2) |
|
|
61 |
|
|
|
25 |
|
|
|
36 |
|
|
NM |
| Impact of acquisition-related
costs (3) |
|
|
45 |
|
|
|
28 |
|
|
|
17 |
|
|
60.7 |
|
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
|
1,083 |
|
|
|
1,018 |
|
|
|
65 |
|
|
6.4 |
|
| Impact of currency
fluctuations (1) |
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
0.1 |
|
| Comparable operating
income adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
1,084 |
|
|
$ |
1,018 |
|
|
$ |
66 |
|
|
6.5 |
% |
| |
|
|
|
|
|
|
|
|
| Operating margin
(GAAP) |
|
|
4.75 |
% |
|
|
4.89 |
% |
|
|
|
-14 bps |
| Operating margin
adjusted for Certain Items (Non-GAAP) |
|
|
5.27 |
% |
|
|
5.16 |
% |
|
|
|
11 bps |
| Operating margin
adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
|
5.27 |
% |
|
|
5.16 |
% |
|
|
|
11 bps |
| |
|
|
|
|
|
|
|
|
| Other expense (income)
(GAAP) |
|
$ |
8 |
|
|
$ |
(128 |
) |
|
$ |
136 |
|
|
NM |
| Impact of other non-routine
gains and losses |
|
|
— |
|
|
|
121 |
|
|
|
(121 |
) |
|
NM |
| Other expense (income)
adjusted for Certain Items (Non-GAAP) |
|
$ |
8 |
|
|
$ |
(7 |
) |
|
$ |
15 |
|
|
NM |
| |
|
|
|
|
|
|
|
|
| Net earnings
(GAAP) |
|
$ |
612 |
|
|
$ |
733 |
|
|
$ |
(121 |
) |
|
(16.5 |
)% |
| Impact of restructuring and
transformational project costs (2) |
|
|
61 |
|
|
|
25 |
|
|
|
36 |
|
|
NM |
| Impact of acquisition-related
costs (3) |
|
|
45 |
|
|
|
28 |
|
|
|
17 |
|
|
60.7 |
|
| Impact of other non-routine
gains and losses |
|
|
— |
|
|
|
(121 |
) |
|
|
121 |
|
|
NM |
| Tax impact of restructuring
and transformational project costs (4) |
|
|
(14 |
) |
|
|
(6 |
) |
|
|
(8 |
) |
|
NM |
| Tax impact of
acquisition-related costs (4) |
|
|
(11 |
) |
|
|
(7 |
) |
|
|
(4 |
) |
|
(57.1 |
) |
| Tax impact of other
non-routine gains and losses (4) |
|
|
— |
|
|
|
31 |
|
|
|
(31 |
) |
|
NM |
| Net earnings adjusted
for Certain Items (Non-GAAP) |
|
$ |
693 |
|
|
$ |
683 |
|
|
$ |
10 |
|
|
1.5 |
% |
| |
|
|
|
|
|
|
|
|
| Diluted earnings per
share (GAAP) |
|
$ |
1.23 |
|
|
$ |
1.44 |
|
|
$ |
(0.21 |
) |
|
(14.6 |
)% |
| Impact of restructuring and
transformational project costs (2) |
|
|
0.12 |
|
|
|
0.05 |
|
|
|
0.07 |
|
|
NM |
| Impact of acquisition-related
costs (3) |
|
|
0.09 |
|
|
|
0.06 |
|
|
|
0.03 |
|
|
50.0 |
|
| Impact of other non-routine
gains and losses |
|
|
— |
|
|
|
(0.24 |
) |
|
|
0.24 |
|
|
NM |
| Tax impact of restructuring
and transformational project costs (4) |
|
|
(0.03 |
) |
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
NM |
| Tax impact of
acquisition-related costs (4) |
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
(100.0 |
) |
| Tax impact of other
non-routine gains and losses (4) |
|
|
— |
|
|
|
0.06 |
|
|
|
(0.06 |
) |
|
NM |
| Diluted earnings per
share adjusted for Certain Items (Non-GAAP)
(5) |
|
$ |
1.39 |
|
|
$ |
1.34 |
|
|
$ |
0.05 |
|
|
3.7 |
% |
| |
|
|
|
|
|
|
|
|
| Diluted shares
outstanding |
|
|
497,464,115 |
|
|
|
508,507,679 |
|
|
|
|
|
|
(1) |
Represents a constant currency adjustment, which eliminates the
impact of foreign currency fluctuations on the current year
results. |
| (2) |
Fiscal 2024 includes $28 million related to restructuring and
severance charges and $33 million related to various transformation
initiative costs, primarily consisting of changes to our business
technology strategy. Fiscal 2023 includes $8 million related to
restructuring and severance charges and $17 million related to
various transformation initiative costs, primarily consisting of
changes to our business technology strategy. |
| (3) |
Fiscal 2024 includes $37 million of intangible amortization expense
and $8 million in acquisition and due diligence costs. Fiscal 2023
includes $27 million of intangible amortization expense and $1
million in acquisition and due diligence costs. |
| (4) |
The tax impact of adjustments for Certain Items are calculated by
multiplying the pretax impact of each Certain Item by the statutory
rates in effect for each jurisdiction where the Certain Item was
incurred. |
| (5) |
Individual components of diluted earnings per share may not equal
the total presented when added due to rounding. Total diluted
earnings per share is calculated using adjusted net earnings
divided by diluted shares outstanding. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
| Sysco
Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain
Items(Dollars in Millions, Except for Share and
Per Share Data) |
| |
|
52-Week Period Ended Jun. 29, 2024 |
|
52-Week Period Ended Jul. 1, 2023 |
|
Change in Dollars |
|
%/bps Change |
|
Sales (GAAP) |
|
$ |
78,844 |
|
|
$ |
76,325 |
|
|
$ |
2,519 |
|
|
3.3 |
% |
| Impact of currency
fluctuations (1) |
|
|
(253 |
) |
|
|
— |
|
|
|
(253 |
) |
|
(0.3 |
) |
| Comparable sales using
a constant currency basis (Non-GAAP) |
|
$ |
78,591 |
|
|
$ |
76,325 |
|
|
$ |
2,266 |
|
|
3.0 |
% |
| |
|
|
|
|
|
|
|
|
| Cost of sales
(GAAP) |
|
$ |
64,236 |
|
|
$ |
62,370 |
|
|
$ |
1,866 |
|
|
3.0 |
% |
| Impact of inventory valuation
adjustment (2) |
|
|
— |
|
|
|
3 |
|
|
|
(3 |
) |
|
— |
|
| Cost of sales adjusted
for Certain Items (Non-GAAP) |
|
$ |
64,236 |
|
|
$ |
62,373 |
|
|
$ |
1,863 |
|
|
3.0 |
% |
| |
|
|
|
|
|
|
|
|
| Gross profit
(GAAP) |
|
$ |
14,608 |
|
|
$ |
13,955 |
|
|
$ |
653 |
|
|
4.7 |
% |
| Impact of inventory valuation
adjustment (2) |
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
— |
|
| Gross profit adjusted
for Certain Items (Non-GAAP) |
|
|
14,608 |
|
|
|
13,952 |
|
|
|
656 |
|
|
4.7 |
|
| Impact of currency
fluctuations (1) |
|
|
(62 |
) |
|
|
— |
|
|
|
(62 |
) |
|
(0.4 |
) |
| Comparable gross
profit adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
14,546 |
|
|
$ |
13,952 |
|
|
$ |
594 |
|
|
4.3 |
% |
| |
|
|
|
|
|
|
|
|
| Gross margin
(GAAP) |
|
|
18.53 |
% |
|
|
18.28 |
% |
|
|
|
25 bps |
| Impact of inventory valuation
adjustment (2) |
|
|
— |
|
|
|
— |
|
|
|
|
0 bps |
| Gross margin adjusted
for Certain Items (Non-GAAP) |
|
|
18.53 |
|
|
|
18.28 |
|
|
|
|
25 bps |
| Impact of currency
fluctuations (1) |
|
|
(0.02 |
) |
|
|
— |
|
|
|
|
-2 bps |
| Comparable gross
margin adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
|
18.51 |
% |
|
|
18.28 |
% |
|
|
|
23 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
11,406 |
|
|
$ |
10,916 |
|
|
$ |
490 |
|
|
4.5 |
% |
| Impact of restructuring and
transformational project costs (3) |
|
|
(120 |
) |
|
|
(63 |
) |
|
|
(57 |
) |
|
(90.5 |
) |
| Impact of acquisition-related
costs (4) |
|
|
(159 |
) |
|
|
(116 |
) |
|
|
(43 |
) |
|
(37.1 |
) |
| Impact of bad debt reserve
adjustments (5) |
|
|
— |
|
|
|
5 |
|
|
|
(5 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
|
11,127 |
|
|
|
10,742 |
|
|
|
385 |
|
|
3.6 |
|
| Impact of currency
fluctuations (1) |
|
|
(61 |
) |
|
|
— |
|
|
|
(61 |
) |
|
(0.6 |
) |
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
11,066 |
|
|
$ |
10,742 |
|
|
$ |
324 |
|
|
3.0 |
% |
| |
|
|
|
|
|
|
|
|
| Operating expense as a
percentage of sales (GAAP) |
|
|
14.47 |
% |
|
|
14.30 |
% |
|
|
|
17 bps |
| Impact of certain item
adjustments |
|
|
(0.36 |
) |
|
|
(0.23 |
) |
|
|
|
-13 bps |
| Adjusted operating
expense as a percentage of sales (Non-GAAP) |
|
|
14.11 |
% |
|
|
14.07 |
% |
|
|
|
4 bps |
| |
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
3,202 |
|
|
$ |
3,039 |
|
|
$ |
163 |
|
|
5.4 |
% |
| Impact of inventory valuation
adjustment (2) |
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
NM |
| Impact of restructuring and
transformational project costs (3) |
|
|
120 |
|
|
|
63 |
|
|
|
57 |
|
|
90.5 |
|
| Impact of acquisition-related
costs (4) |
|
|
159 |
|
|
|
116 |
|
|
|
43 |
|
|
37.1 |
|
| Impact of bad debt reserve
adjustments (5) |
|
|
— |
|
|
|
(5 |
) |
|
|
5 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
|
3,481 |
|
|
|
3,210 |
|
|
|
271 |
|
|
8.4 |
|
| Impact of currency
fluctuations (1) |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
— |
|
| Comparable operating
income adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
3,480 |
|
|
$ |
3,210 |
|
|
$ |
270 |
|
|
8.4 |
% |
| |
|
|
|
|
|
|
|
|
| Operating margin
(GAAP) |
|
|
4.06 |
% |
|
|
3.98 |
% |
|
|
|
8 bps |
| Operating margin
adjusted for Certain Items (Non-GAAP) |
|
|
4.42 |
% |
|
|
4.21 |
% |
|
|
|
21 bps |
| Operating margin
adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
|
4.43 |
% |
|
|
4.21 |
% |
|
|
|
22 bps |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Other expense (income)
(GAAP) |
|
$ |
30 |
|
|
$ |
227 |
|
|
$ |
(197 |
) |
|
(86.8 |
)% |
| Impact of other non-routine
gains and losses (6) |
|
|
— |
|
|
|
(194 |
) |
|
|
194 |
|
|
NM |
| Other expense adjusted
for Certain Items (Non-GAAP) |
|
$ |
30 |
|
|
$ |
33 |
|
|
$ |
(3 |
) |
|
(9.1 |
)% |
| |
|
|
|
|
|
|
|
|
| Net earnings
(GAAP) |
|
$ |
1,955 |
|
|
$ |
1,770 |
|
|
$ |
185 |
|
|
10.5 |
% |
| Impact of inventory valuation
adjustment (2) |
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
NM |
| Impact of restructuring and
transformational project costs (3) |
|
|
120 |
|
|
|
63 |
|
|
|
57 |
|
|
90.5 |
|
| Impact of acquisition-related
costs (4) |
|
|
159 |
|
|
|
116 |
|
|
|
43 |
|
|
37.1 |
|
| Impact of bad debt reserve
adjustments (5) |
|
|
— |
|
|
|
(5 |
) |
|
|
5 |
|
|
NM |
| Impact of other non-routine
gains and losses (6) |
|
|
— |
|
|
|
194 |
|
|
|
(194 |
) |
|
NM |
| Tax impact of inventory
valuation adjustment (7) |
|
|
— |
|
|
|
1 |
|
|
|
(1 |
) |
|
NM |
| Tax impact of restructuring
and transformational project costs (7) |
|
|
(29 |
) |
|
|
(15 |
) |
|
|
(14 |
) |
|
(93.3) |
|
| Tax impact of
acquisition-related costs (7) |
|
|
(38 |
) |
|
|
(29 |
) |
|
|
(9 |
) |
|
(31.0) |
|
| Tax impact of bad debt
reserves adjustments (7) |
|
|
— |
|
|
|
1 |
|
|
|
(1 |
) |
|
NM |
| Tax impact of loss on
extinguishment of debt (7) |
|
|
— |
|
|
|
(49 |
) |
|
|
49 |
|
|
NM |
| Net earnings adjusted
for Certain Items (Non-GAAP) |
|
$ |
2,167 |
|
|
$ |
2,044 |
|
|
$ |
123 |
|
|
6.0 |
% |
| |
|
|
|
|
|
|
|
|
| Diluted earnings per
share (GAAP) |
|
$ |
3.89 |
|
|
$ |
3.47 |
|
|
$ |
0.42 |
|
|
12.1 |
% |
| Impact of inventory valuation
adjustment (2) |
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
NM |
| Impact of restructuring and
transformational project costs (3) |
|
|
0.24 |
|
|
|
0.12 |
|
|
|
0.12 |
|
|
100.0 |
|
| Impact of acquisition-related
costs (4) |
|
|
0.32 |
|
|
|
0.23 |
|
|
|
0.09 |
|
|
39.1 |
|
| Impact of bad debt reserve
adjustments (5) |
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
NM |
| Impact of other non-routine
gains and losses (6) |
|
|
— |
|
|
|
0.38 |
|
|
|
(0.38 |
) |
|
NM |
| Tax impact of restructuring
and transformational project costs (7) |
|
|
(0.06 |
) |
|
|
(0.03 |
) |
|
|
(0.03 |
) |
|
(100.0 |
) |
| Tax impact of
acquisition-related costs (7) |
|
|
(0.08 |
) |
|
|
(0.06 |
) |
|
|
(0.02 |
) |
|
(33.3 |
) |
| Tax impact of loss on
extinguishment of debt (7) |
|
|
— |
|
|
|
(0.10 |
) |
|
|
0.10 |
|
|
NM |
| Diluted earnings per
share adjusted for Certain Items (Non-GAAP)
(8) |
|
$ |
4.31 |
|
|
$ |
4.01 |
|
|
$ |
0.30 |
|
|
7.5 |
% |
| |
|
|
|
|
|
|
|
|
| Diluted shares
outstanding |
|
|
503,096,086 |
|
|
|
509,719,756 |
|
|
|
|
|
|
(1) |
Represents a constant currency adjustment which eliminates the
impact of foreign currency fluctuations on the current year
results. |
| (2) |
Fiscal 2023 represents an adjustment to a product return allowance
related to COVID-related personal protection equipment
inventory. |
| (3) |
Fiscal 2024 includes $56 million related to restructuring and
severance charges and $64 million related to various transformation
initiative costs, primarily consisting of changes to our business
technology strategy. Fiscal 2023 includes $20 million related to
restructuring and severance charges and $43 million related to
various transformation initiative costs, primarily consisting of
changes to our business technology strategy. |
| (4) |
Fiscal 2024 includes $128 million of intangible amortization
expense and $31 million in acquisition and due diligence costs.
Fiscal 2023 includes $105 million of intangible amortization
expense and $10 million in acquisition and due diligence
costs. |
| (5) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (6) |
Fiscal 2023 primarily includes a pension settlement charge of $315
million that resulted from the purchase of a nonparticipating
single premium group annuity contract that transferred defined
benefit plan obligations to an insurer and $122 million in income
from a litigation financing agreement. |
| (7) |
The tax impact of adjustments for Certain Items is calculated by
multiplying the pretax impact of each Certain Item by the statutory
rates in effect for each jurisdiction where the Certain Item was
incurred. |
| (8) |
Individual components of diluted earnings per share may not add up
to the total presented due to rounding. Total diluted earnings per
share is calculated using adjusted net earnings divided by diluted
shares outstanding. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
| Sysco
Corporation and its Consolidated
SubsidiariesSegment
ResultsNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items on Applicable
Segments(Dollars in Millions) |
| |
|
13-Week Period Ended Jun. 29, 2024 |
|
13-Week Period Ended Jul. 1, 2023 |
|
Change in Dollars |
|
%/bps Change |
| U.S. FOODSERVICE
OPERATIONS |
|
|
|
|
|
|
|
|
|
Sales (GAAP) |
|
$ |
14,413 |
|
|
$ |
13,746 |
|
|
$ |
667 |
|
|
4.9 |
% |
| Gross profit (GAAP) |
|
|
2,793 |
|
|
|
2,708 |
|
|
|
85 |
|
|
3.1 |
% |
| Gross margin (GAAP) |
|
|
19.38 |
% |
|
|
19.70 |
% |
|
|
|
-32 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
1,751 |
|
|
$ |
1,665 |
|
|
$ |
86 |
|
|
5.2 |
% |
| Impact of restructuring and
transformational project costs (1) |
|
|
(4 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
NM |
| Impact of acquisition-related
costs (2) |
|
|
(20 |
) |
|
|
(10 |
) |
|
|
(10 |
) |
|
(100.0 |
) |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
$ |
1,727 |
|
|
$ |
1,654 |
|
|
$ |
73 |
|
|
4.4 |
% |
| |
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
1,042 |
|
|
$ |
1,043 |
|
|
$ |
(1 |
) |
|
(0.1 |
)% |
| Impact of restructuring and
transformational project costs (1) |
|
|
4 |
|
|
|
1 |
|
|
|
3 |
|
|
NM |
| Impact of acquisition-related
costs (2) |
|
|
20 |
|
|
|
10 |
|
|
|
10 |
|
|
100.0 |
|
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
$ |
1,066 |
|
|
$ |
1,054 |
|
|
$ |
12 |
|
|
1.1 |
% |
| |
|
|
|
|
|
|
|
|
| INTERNATIONAL
FOODSERVICE OPERATIONS |
|
|
|
|
|
|
|
|
| Sales
(GAAP) |
|
$ |
3,789 |
|
|
$ |
3,649 |
|
|
$ |
140 |
|
|
3.8 |
% |
| Impact of currency
fluctuations (3) |
|
|
24 |
|
|
|
— |
|
|
|
24 |
|
|
0.7 |
|
| Comparable sales using
a constant currency basis (Non-GAAP) |
|
$ |
3,813 |
|
|
$ |
3,649 |
|
|
$ |
164 |
|
|
4.5 |
% |
| |
|
|
|
|
|
|
|
|
| Gross profit
(GAAP) |
|
$ |
787 |
|
|
$ |
724 |
|
|
$ |
63 |
|
|
8.7 |
% |
| Impact of currency
fluctuations (3) |
|
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
0.6 |
|
| Comparable gross
profit using a constant currency basis (Non-GAAP) |
|
$ |
791 |
|
|
$ |
724 |
|
|
$ |
67 |
|
|
9.3 |
% |
| |
|
|
|
|
|
|
|
|
| Gross margin
(GAAP) |
|
|
20.77 |
% |
|
|
19.84 |
% |
|
|
|
93 bps |
| Impact of currency
fluctuations (3) |
|
|
(0.03 |
) |
|
|
— |
|
|
|
|
-3 bps |
| Comparable gross
margin using a constant currency basis (Non-GAAP) |
|
|
20.74 |
% |
|
|
19.84 |
% |
|
|
|
90 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
672 |
|
|
$ |
604 |
|
|
$ |
68 |
|
|
11.3 |
% |
| Impact of restructuring and
transformational project costs (4) |
|
|
(30 |
) |
|
|
(8 |
) |
|
|
(22 |
) |
|
NM |
| Impact of acquisition-related
costs (5) |
|
|
(19 |
) |
|
|
(17 |
) |
|
|
(2 |
) |
|
(11.8 |
) |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
|
623 |
|
|
|
579 |
|
|
|
44 |
|
|
7.6 |
|
| Impact of currency
fluctuations (3) |
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
0.5 |
|
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
626 |
|
|
$ |
579 |
|
|
$ |
47 |
|
|
8.1 |
% |
| |
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
115 |
|
|
$ |
120 |
|
|
$ |
(5 |
) |
|
(4.2 |
)% |
| Impact of restructuring and
transformational project costs (4) |
|
|
30 |
|
|
|
8 |
|
|
|
22 |
|
|
NM |
| Impact of acquisition-related
costs (5) |
|
|
19 |
|
|
|
17 |
|
|
|
2 |
|
|
11.8 |
|
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
|
164 |
|
|
|
145 |
|
|
|
19 |
|
|
13.1 |
|
| Impact of currency
fluctuations (3) |
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
0.7 |
|
| Comparable operating
income adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
165 |
|
|
$ |
145 |
|
|
$ |
20 |
|
|
13.8 |
% |
| |
|
|
|
|
|
|
|
|
| SYGMA |
|
|
|
|
|
|
|
|
| Sales (GAAP) |
|
$ |
2,044 |
|
|
$ |
2,004 |
|
|
$ |
40 |
|
|
2.0 |
% |
| Gross profit (GAAP) |
|
|
163 |
|
|
|
161 |
|
|
|
2 |
|
|
1.2 |
% |
| Gross margin (GAAP) |
|
|
7.97 |
% |
|
|
8.03 |
% |
|
|
|
-6 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses (GAAP) |
|
$ |
137 |
|
|
$ |
143 |
|
|
$ |
(6 |
) |
|
(4.2 |
)% |
| Operating income (GAAP) |
|
|
26 |
|
|
|
18 |
|
|
|
8 |
|
|
44.4 |
% |
| |
|
|
|
|
|
|
|
|
| OTHER |
|
|
|
|
|
|
|
|
| Sales (GAAP) |
|
$ |
310 |
|
|
$ |
329 |
|
|
$ |
(19 |
) |
|
(5.8 |
)% |
| Gross profit (GAAP) |
|
|
85 |
|
|
|
88 |
|
|
|
(3 |
) |
|
(3.4 |
)% |
| Gross margin (GAAP) |
|
|
27.42 |
% |
|
|
26.75 |
% |
|
|
|
67 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
72 |
|
|
$ |
64 |
|
|
$ |
8 |
|
|
12.5 |
% |
| Impact of restructuring and
transformational project costs (6) |
|
|
(10 |
) |
|
|
— |
|
|
|
(10 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
$ |
62 |
|
|
$ |
64 |
|
|
$ |
(2 |
) |
|
(3.1 |
)% |
| |
|
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
13 |
|
|
$ |
24 |
|
|
$ |
(11 |
) |
|
(45.8 |
)% |
| Impact of restructuring and
transformational project costs (6) |
|
|
10 |
|
|
|
— |
|
|
|
10 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
$ |
23 |
|
|
$ |
24 |
|
|
$ |
(1 |
) |
|
(4.2 |
)% |
| |
|
|
|
|
|
|
|
|
| GLOBAL SUPPORT
CENTER |
|
|
|
|
|
|
|
|
| Gross profit (GAAP) |
|
$ |
9 |
|
|
$ |
4 |
|
|
$ |
5 |
|
|
NM |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
228 |
|
|
$ |
244 |
|
|
$ |
(16 |
) |
|
(6.6 |
)% |
| Impact of restructuring and
transformational project costs (7) |
|
|
(17 |
) |
|
|
(16 |
) |
|
|
(1 |
) |
|
(6.3 |
) |
| Impact of acquisition-related
costs (8) |
|
|
(6 |
) |
|
|
(1 |
) |
|
|
(5 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
$ |
205 |
|
|
$ |
227 |
|
|
$ |
(22 |
) |
|
(9.7 |
)% |
| |
|
|
|
|
|
|
|
|
| Operating loss
(GAAP) |
|
$ |
(219 |
) |
|
$ |
(240 |
) |
|
$ |
21 |
|
|
8.8 |
% |
| Impact of restructuring and
transformational project costs (7) |
|
|
17 |
|
|
|
16 |
|
|
|
1 |
|
|
6.3 |
|
| Impact of acquisition-related
costs (8) |
|
|
6 |
|
|
|
1 |
|
|
|
5 |
|
|
NM |
| Operating loss
adjusted for Certain Items (Non-GAAP) |
|
$ |
(196 |
) |
|
$ |
(223 |
) |
|
$ |
27 |
|
|
12.1 |
% |
| |
|
|
|
|
|
|
|
|
| TOTAL
SYSCO |
|
|
|
|
|
|
|
|
| Sales (GAAP) |
|
$ |
20,556 |
|
|
$ |
19,728 |
|
|
$ |
828 |
|
|
4.2 |
% |
| Gross profit (GAAP) |
|
|
3,838 |
|
|
|
3,685 |
|
|
|
153 |
|
|
4.2 |
% |
| Gross margin (GAAP) |
|
|
18.67 |
% |
|
|
18.68 |
% |
|
|
|
-1 bp |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
2,861 |
|
|
$ |
2,720 |
|
|
$ |
141 |
|
|
5.2 |
% |
| Impact of restructuring and
transformational project costs (1) (4) (6) (7) |
|
|
(61 |
) |
|
|
(25 |
) |
|
|
(36 |
) |
|
NM |
| Impact of acquisition-related
costs (2) (5) (8) |
|
|
(45 |
) |
|
|
(28 |
) |
|
|
(17 |
) |
|
(60.7 |
) |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
$ |
2,755 |
|
|
$ |
2,667 |
|
|
$ |
88 |
|
|
3.3 |
% |
| |
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
977 |
|
|
$ |
965 |
|
|
$ |
12 |
|
|
1.2 |
% |
| Impact of restructuring and
transformational project costs (1) (4) (6) (7) |
|
|
61 |
|
|
|
25 |
|
|
|
36 |
|
|
NM |
| Impact of acquisition-related
costs (2) (5) (8) |
|
|
45 |
|
|
|
28 |
|
|
|
17 |
|
|
60.7 |
|
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
$ |
1,083 |
|
|
$ |
1,018 |
|
|
$ |
65 |
|
|
6.4 |
% |
|
(1) |
Primarily represents severance and transformation initiative
costs. |
| (2) |
Fiscal 2024 and fiscal 2023
include intangible amortization expense and acquisition costs. |
| (3) |
Represents a constant currency adjustment, which eliminates the
impact of foreign currency fluctuations on current year
results. |
| (4) |
Includes restructuring and transformation costs primarily in
Europe. |
| (5) |
Represents intangible amortization expense. |
| (6) |
Primarily represents restructuring costs. |
| (7) |
Includes various transformation initiative costs, primarily
consisting of changes to our business technology strategy. |
| (8) |
Represents due diligence costs. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
| Sysco
Corporation and its Consolidated
SubsidiariesSegment
ResultsNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items on Applicable
Segments(Dollars in Millions) |
| |
|
52-Week Period Ended Jun. 29, 2024 |
|
52-Week Period Ended Jul. 1, 2023 |
|
Change in Dollars |
|
%/bps Change |
| U.S. FOODSERVICE
OPERATIONS |
|
|
|
|
|
|
|
|
|
Sales (GAAP) |
|
$ |
55,339 |
|
|
$ |
53,683 |
|
|
$ |
1,656 |
|
|
3.1 |
% |
| Gross profit (GAAP) |
|
|
10,709 |
|
|
|
10,359 |
|
|
|
350 |
|
|
3.4 |
% |
| Gross margin (GAAP) |
|
|
19.35 |
% |
|
|
19.30 |
% |
|
|
|
5 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
7,035 |
|
|
$ |
6,772 |
|
|
$ |
263 |
|
|
3.9 |
% |
| Impact of restructuring and
transformational project costs (1) |
|
|
(10 |
) |
|
|
(1 |
) |
|
|
(9 |
) |
|
NM |
| Impact of acquisition-related
costs (2) |
|
|
(61 |
) |
|
|
(46 |
) |
|
|
(15 |
) |
|
(32.6 |
) |
| Impact of bad debt reserve
adjustments (3) |
|
|
— |
|
|
|
5 |
|
|
|
(5 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
$ |
6,964 |
|
|
$ |
6,730 |
|
|
$ |
234 |
|
|
3.5 |
% |
| |
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
3,674 |
|
|
$ |
3,587 |
|
|
$ |
87 |
|
|
2.4 |
% |
| Impact of restructuring and
transformational project costs (1) |
|
|
10 |
|
|
|
1 |
|
|
|
9 |
|
|
NM |
| Impact of acquisition-related
costs (2) |
|
|
61 |
|
|
|
46 |
|
|
|
15 |
|
|
32.6 |
|
| Impact of bad debt reserve
adjustments (3) |
|
|
— |
|
|
|
(5 |
) |
|
|
5 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
$ |
3,745 |
|
|
$ |
3,629 |
|
|
$ |
116 |
|
|
3.2 |
% |
| |
|
|
|
|
|
|
|
|
| INTERNATIONAL
FOODSERVICE OPERATIONS |
|
|
|
|
|
|
|
|
| Sales
(GAAP) |
|
$ |
14,561 |
|
|
$ |
13,560 |
|
|
$ |
1,001 |
|
|
7.4 |
% |
| Impact of currency
fluctuations (4) |
|
|
(256 |
) |
|
|
— |
|
|
|
(256 |
) |
|
(1.9 |
) |
| Comparable sales using
a constant currency basis (Non-GAAP) |
|
$ |
14,305 |
|
|
$ |
13,560 |
|
|
$ |
745 |
|
|
5.5 |
% |
| |
|
|
|
|
|
|
|
|
| Gross profit
(GAAP) |
|
$ |
2,947 |
|
|
$ |
2,641 |
|
|
$ |
306 |
|
|
11.6 |
% |
| Impact of currency
fluctuations (4) |
|
|
(63 |
) |
|
|
— |
|
|
|
(63 |
) |
|
(2.4 |
) |
| Comparable gross
profit using a constant currency basis (Non-GAAP) |
|
$ |
2,884 |
|
|
$ |
2,641 |
|
|
$ |
243 |
|
|
9.2 |
% |
| |
|
|
|
|
|
|
|
|
| Gross margin
(GAAP) |
|
|
20.24 |
% |
|
|
19.48 |
% |
|
|
|
76 bps |
| Impact of currency
fluctuations (4) |
|
|
(0.08 |
) |
|
|
— |
|
|
|
|
-8 bps |
| Comparable gross
margin using a constant currency basis (Non-GAAP) |
|
|
20.16 |
% |
|
|
19.48 |
% |
|
|
|
68 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
2,572 |
|
|
$ |
2,327 |
|
|
$ |
245 |
|
|
10.5 |
% |
| Impact of restructuring and
transformational project costs (5) |
|
|
(45 |
) |
|
|
(19 |
) |
|
|
(26 |
) |
|
NM |
| Impact of acquisition-related
costs (6) |
|
|
(72 |
) |
|
|
(65 |
) |
|
|
(7 |
) |
|
(10.8 |
) |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
|
2,455 |
|
|
|
2,243 |
|
|
|
212 |
|
|
9.5 |
|
| Impact of currency
fluctuations (4) |
|
|
(59 |
) |
|
|
— |
|
|
|
(59 |
) |
|
(2.7 |
) |
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
2,396 |
|
|
$ |
2,243 |
|
|
$ |
153 |
|
|
6.8 |
% |
| |
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
375 |
|
|
$ |
314 |
|
|
$ |
61 |
|
|
19.4 |
% |
| Impact of restructuring and
transformational project costs (5) |
|
|
45 |
|
|
|
19 |
|
|
|
26 |
|
|
NM |
| Impact of acquisition-related
costs (6) |
|
|
72 |
|
|
|
65 |
|
|
|
7 |
|
|
10.8 |
|
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
|
492 |
|
|
|
398 |
|
|
|
94 |
|
|
23.6 |
|
| Impact of currency
fluctuations (4) |
|
|
(4 |
) |
|
|
— |
|
|
|
(4 |
) |
|
(1.0 |
) |
| Comparable operating
income adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
$ |
488 |
|
|
$ |
398 |
|
|
$ |
90 |
|
|
22.6 |
% |
| |
|
|
|
|
|
|
|
|
| SYGMA |
|
|
|
|
|
|
|
|
| Sales (GAAP) |
|
$ |
7,768 |
|
|
$ |
7,843 |
|
|
$ |
(75 |
) |
|
(1.0 |
)% |
| Gross profit (GAAP) |
|
|
617 |
|
|
|
631 |
|
|
|
(14 |
) |
|
(2.2 |
)% |
| Gross margin (GAAP) |
|
|
7.94 |
% |
|
|
8.05 |
% |
|
|
|
-11 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses (GAAP) |
|
$ |
545 |
|
|
$ |
575 |
|
|
$ |
(30 |
) |
|
(5.2 |
)% |
| Operating income (GAAP) |
|
|
72 |
|
|
|
56 |
|
|
|
16 |
|
|
28.6 |
% |
| |
|
|
|
|
|
|
|
|
| OTHER |
|
|
|
|
|
|
|
|
| Sales (GAAP) |
|
$ |
1,176 |
|
|
$ |
1,239 |
|
|
$ |
(63 |
) |
|
(5.1 |
)% |
| Gross profit (GAAP) |
|
|
307 |
|
|
|
326 |
|
|
|
(19 |
) |
|
(5.8 |
)% |
| Gross margin (GAAP) |
|
|
26.11 |
% |
|
|
26.31 |
% |
|
|
|
-20 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
267 |
|
|
$ |
269 |
|
|
$ |
(2 |
) |
|
(0.7 |
)% |
| Impact of restructuring and
transformational project costs (7) |
|
|
(10 |
) |
|
|
— |
|
|
|
(10 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
$ |
257 |
|
|
$ |
269 |
|
|
$ |
(12 |
) |
|
(4.5 |
)% |
| |
|
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
40 |
|
|
$ |
57 |
|
|
$ |
(17 |
) |
|
(29.8 |
)% |
| Impact of restructuring and
transformational project costs (7) |
|
|
10 |
|
|
|
— |
|
|
|
10 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
$ |
50 |
|
|
$ |
57 |
|
|
$ |
(7 |
) |
|
(12.3 |
)% |
| |
|
|
|
|
|
|
|
|
| GLOBAL SUPPORT
CENTER |
|
|
|
|
|
|
|
|
| Gross profit (loss)
(GAAP) |
|
$ |
28 |
|
|
$ |
(2 |
) |
|
$ |
30 |
|
|
NM |
| Impact of inventory valuation
adjustment (8) |
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
NM |
| Gross profit (loss)
adjusted for Certain Items (Non-GAAP) |
|
$ |
28 |
|
|
$ |
(5 |
) |
|
$ |
33 |
|
|
NM |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
986 |
|
|
$ |
973 |
|
|
$ |
13 |
|
|
1.3 |
% |
| Impact of restructuring and
transformational project costs (9) |
|
|
(55 |
) |
|
|
(43 |
) |
|
|
(12 |
) |
|
(27.9 |
) |
| Impact of acquisition-related
costs (10) |
|
|
(26 |
) |
|
|
(5 |
) |
|
|
(21 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
$ |
905 |
|
|
$ |
925 |
|
|
$ |
(20 |
) |
|
(2.2 |
)% |
| |
|
|
|
|
|
|
|
|
| Operating loss
(GAAP) |
|
$ |
(958 |
) |
|
$ |
(975 |
) |
|
$ |
17 |
|
|
1.7 |
% |
| Impact of inventory valuation
adjustment (8) |
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
NM |
| Impact of restructuring and
transformational project costs (9) |
|
|
55 |
|
|
|
43 |
|
|
|
12 |
|
|
27.9 |
|
| Impact of acquisition-related
costs (10) |
|
|
26 |
|
|
|
5 |
|
|
|
21 |
|
|
NM |
| Operating loss
adjusted for Certain Items (Non-GAAP) |
|
$ |
(877 |
) |
|
$ |
(930 |
) |
|
$ |
53 |
|
|
5.7 |
% |
| |
|
|
|
|
|
|
|
|
| TOTAL
SYSCO |
|
|
|
|
|
|
|
|
| Sales (GAAP) |
|
$ |
78,844 |
|
|
$ |
76,325 |
|
|
$ |
2,519 |
|
|
3.3 |
% |
| Gross profit (GAAP) |
|
|
14,608 |
|
|
|
13,955 |
|
|
|
653 |
|
|
4.7 |
% |
| Gross margin (GAAP) |
|
|
18.53 |
% |
|
|
18.28 |
% |
|
|
|
25 bps |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
|
$ |
11,406 |
|
|
$ |
10,916 |
|
|
$ |
490 |
|
|
4.5 |
% |
| Impact of restructuring and
transformational project costs (1) (5) (7) (9) |
|
|
(120 |
) |
|
|
(63 |
) |
|
|
(57 |
) |
|
(90.5 |
) |
| Impact of acquisition-related
costs (2) (6) (10) |
|
|
(159 |
) |
|
|
(116 |
) |
|
|
(43 |
) |
|
(37.1 |
) |
| Impact of bad debt reserve
adjustments (3) |
|
|
— |
|
|
|
5 |
|
|
|
(5 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
$ |
11,127 |
|
|
$ |
10,742 |
|
|
$ |
385 |
|
|
3.6 |
% |
| |
|
|
|
|
|
|
|
|
| Operating income
(GAAP) |
|
$ |
3,202 |
|
|
$ |
3,039 |
|
|
$ |
163 |
|
|
5.4 |
% |
| Impact of inventory valuation
adjustment (8) |
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
NM |
| Impact of restructuring and
transformational project costs (1) (5) (7) (9) |
|
|
120 |
|
|
|
63 |
|
|
|
57 |
|
|
90.5 |
|
| Impact of acquisition-related
costs (2) (6) (10) |
|
|
159 |
|
|
|
116 |
|
|
|
43 |
|
|
37.1 |
|
| Impact of bad debt reserve
adjustments (3) |
|
|
— |
|
|
|
(5 |
) |
|
|
5 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
$ |
3,481 |
|
|
$ |
3,210 |
|
|
$ |
271 |
|
|
8.4 |
% |
|
(1) |
Fiscal 2024 primarily represents severance and transformation
costs. |
| (2) |
Fiscal 2023 includes intangible amortization expense and
acquisition costs. |
| (3) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (4) |
Represents a constant currency adjustment, which eliminates the
impact of foreign currency fluctuations on current year
results. |
| (5) |
Includes restructuring and transformation costs primarily in
Europe. |
| (6) |
Represents intangible amortization expense. |
| (7) |
Primarily represents restructuring costs. |
| (8) |
Fiscal 2023 represents an adjustment to a product return allowance
related to COVID-related personal protection equipment
inventory. |
| (9) |
Includes various transformation initiative costs, primarily
consisting of changes to our business technology strategy. |
| (10) |
Represents due diligence costs. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Free Cash Flow(In
Millions)
Free cash flow represents net cash provided from
operating activities less purchases of plant and equipment and
includes proceeds from sales of plant and equipment. Sysco
considers free cash flow to be a liquidity measure that provides
useful information to management and investors about the amount of
cash generated by the business after the purchases and sales of
buildings, fleet, equipment and technology, which may potentially
be used to pay for, among other things, strategic uses of cash
including dividend payments, share repurchases and acquisitions.
However, free cash flow may not be available for discretionary
expenditures, as it may be necessary that we use it to make
mandatory debt service or other payments. Free cash flow should not
be used as a substitute for the most comparable GAAP financial
measure in assessing the company’s liquidity for the periods
presented. An analysis of any non-GAAP financial measure should be
used in conjunction with results presented in accordance with GAAP.
In the table that follows, free cash flow for each period presented
is reconciled to net cash provided by operating activities.
| |
| |
|
52-Week Period Ended Jun. 29, 2024 |
|
52-Week Period Ended Jul. 1, 2023 |
|
52-Week Period Change in Dollars |
|
Net cash provided by operating activities
(GAAP) |
|
$ |
2,989 |
|
|
$ |
2,868 |
|
|
$ |
121 |
|
| Additions to plant and
equipment |
|
|
(832 |
) |
|
|
(793 |
) |
|
|
(39 |
) |
| Proceeds from sales of plant
and equipment |
|
|
79 |
|
|
|
42 |
|
|
|
37 |
|
| Free Cash Flow
(Non-GAAP) |
|
$ |
2,236 |
|
|
$ |
2,117 |
|
|
$ |
119 |
|
| |
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items on Earnings
Before Interest, Taxes, Depreciation and Amortization
(EBITDA)(Dollars in Millions)
EBITDA represents net earnings (loss) plus (i)
interest expense, (ii) income tax expense and benefit, (iii)
depreciation and (iv) amortization. The net earnings (loss)
component of our EBITDA calculation is impacted by Certain Items
that we do not consider representative of our underlying
performance. As a result, in the non-GAAP reconciliations below for
each period presented, adjusted EBITDA is computed as EBITDA plus
the impact of Certain Items, excluding certain items related to
interest expense, income taxes, depreciation and amortization.
Sysco's management considers growth in this metric to be a measure
of overall financial performance that provides useful information
to management and investors about the profitability of the
business, as it facilitates comparison of performance on a
consistent basis from period to period by providing a measurement
of recurring factors and trends affecting our business.
Additionally, it is a commonly used component metric used to inform
on capital structure decisions. Adjusted EBITDA should not be used
as a substitute for the most comparable GAAP financial measure in
assessing the company’s financial performance for the periods
presented. An analysis of any non-GAAP financial measure should be
used in conjunction with results presented in accordance with GAAP.
In the tables that follow, adjusted EBITDA for each period
presented is reconciled to net earnings.
| |
|
13-Week Period Ended Jun. 29, 2024 |
|
13-Week Period Ended Jul. 1, 2023 |
|
Change in Dollars |
|
% Change |
|
Net earnings (GAAP) |
|
$ |
612 |
|
|
$ |
733 |
|
|
$ |
(121 |
) |
|
(16.5 |
)% |
| Interest (GAAP) |
|
|
165 |
|
|
|
136 |
|
|
|
29 |
|
|
21.3 |
|
| Income taxes (GAAP) |
|
|
192 |
|
|
|
224 |
|
|
|
(32 |
) |
|
(14.3 |
) |
| Depreciation and amortization
(GAAP) |
|
|
226 |
|
|
|
201 |
|
|
|
25 |
|
|
12.4 |
|
| EBITDA
(Non-GAAP) |
|
$ |
1,195 |
|
|
$ |
1,294 |
|
|
$ |
(99 |
) |
|
(7.7 |
)% |
| Certain Item adjustments: |
|
|
|
|
|
|
|
|
|
Impact of restructuring and transformational project costs (1) |
|
|
60 |
|
|
|
24 |
|
|
|
36 |
|
|
NM |
|
Impact of acquisition-related costs (2) |
|
|
8 |
|
|
|
1 |
|
|
|
7 |
|
|
NM |
|
Impact of other non-routine gains and losses |
|
|
— |
|
|
|
(121 |
) |
|
|
121 |
|
|
NM |
| EBITDA adjusted for
Certain Items (Non-GAAP) (3) |
|
$ |
1,263 |
|
|
$ |
1,198 |
|
|
$ |
65 |
|
|
5.4 |
% |
|
Other expense (income), net, as adjusted (Non-GAAP) (4) |
|
|
8 |
|
|
|
(7 |
) |
|
|
15 |
|
|
NM |
|
Depreciation and amortization, as adjusted (Non-GAAP) (5) |
|
|
(188 |
) |
|
|
(173 |
) |
|
|
(15 |
) |
|
(8.7 |
) |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
$ |
1,083 |
|
|
$ |
1,018 |
|
|
$ |
65 |
|
|
6.4 |
% |
|
(1) |
Fiscal 2024 and fiscal 2023 include charges related to
restructuring and severance, as well as various transformation
initiative costs, primarily consisting of changes to our business
technology strategy, excluding charges related to accelerated
depreciation. |
| (2) |
Fiscal 2024 and fiscal 2023 include acquisition and due diligence
costs. |
| (3) |
In arriving at adjusted EBITDA, Sysco does not adjust out interest
income of $10 million and $9 million or non-cash stock compensation
expense of $27 million and $22 million in fiscal 2024 and fiscal
2023, respectively. |
| (4) |
Fiscal 2024 represents $8 million in GAAP other expense (income),
net. Fiscal 2023 primarily represents $128 million in GAAP other
expense (income), net less $122 million in income from a litigation
financing agreement. |
| (5) |
Fiscal 2024 includes $226 million in GAAP depreciation and
amortization expense, less $38 million of Non-GAAP depreciation and
amortization expense primarily related to acquisitions. Fiscal 2023
includes $201 million in GAAP depreciation and amortization
expense, less $28 million of Non-GAAP depreciation and amortization
expense primarily related to acquisitions. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
| |
|
52-Week Period Ended Jun. 29, 2024 |
|
52-Week Period Ended Jul. 1, 2023 |
|
Change in Dollars |
|
% Change |
|
Net earnings (GAAP) |
|
$ |
1,955 |
|
|
$ |
1,770 |
|
|
$ |
185 |
|
|
10.5 |
% |
| Interest (GAAP) |
|
|
607 |
|
|
|
527 |
|
|
|
80 |
|
|
15.2 |
|
| Income taxes (GAAP) |
|
|
610 |
|
|
|
515 |
|
|
|
95 |
|
|
18.4 |
|
| Depreciation and amortization
(GAAP) |
|
|
873 |
|
|
|
776 |
|
|
|
97 |
|
|
12.5 |
|
| EBITDA
(Non-GAAP) |
|
$ |
4,045 |
|
|
$ |
3,588 |
|
|
$ |
457 |
|
|
12.7 |
% |
| Certain Item adjustments: |
|
|
|
|
|
|
|
|
|
Impact of inventory valuation adjustment (1) |
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
NM |
|
Impact of restructuring and transformational project costs (2) |
|
|
116 |
|
|
|
61 |
|
|
|
55 |
|
|
90.2 |
|
|
Impact of acquisition-related costs (3) |
|
|
31 |
|
|
|
10 |
|
|
|
21 |
|
|
NM |
|
Impact of bad debt reserve adjustments (4) |
|
|
— |
|
|
|
(4 |
) |
|
|
4 |
|
|
NM |
|
Impact of other non-routine gains and losses (5) |
|
|
— |
|
|
|
194 |
|
|
|
(194 |
) |
|
NM |
| EBITDA adjusted for
Certain Items (Non-GAAP) (6) |
|
$ |
4,192 |
|
|
$ |
3,846 |
|
|
$ |
346 |
|
|
9.0 |
% |
|
Other expense (income), net, as adjusted (Non-GAAP) (7) |
|
|
30 |
|
|
|
33 |
|
|
|
(3 |
) |
|
(9.1 |
) |
|
Depreciation and amortization, as adjusted (Non-GAAP) (8) |
|
|
(741 |
) |
|
|
(669 |
) |
|
|
(72 |
) |
|
(10.8 |
) |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
$ |
3,481 |
|
|
$ |
3,210 |
|
|
$ |
271 |
|
|
8.4 |
% |
|
(1) |
Fiscal 2023 represents an adjustment to a product return allowance
related to COVID-related personal protection equipment
inventory. |
| (2) |
Fiscal 2024 and 2023 include charges related to restructuring and
severance, as well as various transformation initiative costs,
primarily consisting of changes to our business technology strategy
and exclude charges related to accelerated depreciation. |
| (3) |
Fiscal 2024 and 2023 include acquisition and due diligence
costs. |
| (4) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (5) |
Fiscal 2023 primarily includes a pension settlement charge of $315
million that resulted from the purchase of a nonparticipating
single premium group annuity contract that transferred defined
benefit plan obligations to an insurer and $122 million in income
from a litigation financing agreement. |
| (6) |
In arriving at adjusted EBITDA, Sysco does not exclude interest
income of $38 million and $24 million or non-cash stock
compensation expense of $104 million and $95 million for fiscal
2024 and fiscal 2023, respectively. |
| (7) |
Fiscal 2024 represents $30 million in GAAP other expense (income),
net. Fiscal 2023 represents $227 million in GAAP other expense
(income), net less $315 million due to the certain items impact of
a pension settlement charge that resulted from the purchase of a
nonparticipating single premium group annuity contract that
transferred defined benefit plan obligations to an insurer and $122
million in income from a litigation financing agreement. |
| (8) |
Fiscal 2024 includes $873 million in GAAP depreciation and
amortization expense, less $132 million of Non-GAAP depreciation
and amortization expense primarily related to acquisitions. Fiscal
2023 includes $776 million in GAAP depreciation and amortization
expense, less $107 million of Non-GAAP depreciation and
amortization expense primarily related to acquisitions. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Net Debt to Adjusted
EBITDA(In Millions)
Net Debt to Adjusted EBITDA is a non-GAAP
financial measure frequently used by investors and credit rating
agencies. Our Net Debt to Adjusted EBITDA ratio is calculated using
a numerator of our debt minus cash and cash equivalents, divided by
the sum of the most recent four quarters of Adjusted EBITDA. In the
table that follows, we have provided the calculation of our debt
and net debt as a ratio of Adjusted EBITDA.
| |
|
Jun. 29, 2024 |
|
Current Maturities of long-term debt |
|
$ |
469 |
|
| Long-term debt |
|
|
11,513 |
|
| Total
Debt |
|
|
11,982 |
|
| Cash & Cash
Equivalents |
|
|
(696 |
) |
| Net Debt |
|
$ |
11,286 |
|
| |
|
|
| Adjusted EBITDA for
the previous 12 months |
|
$ |
4,192 |
|
| |
|
|
| Debt/Adjusted EBITDA
Ratio |
|
|
2.86 |
|
| Net Debt/Adjusted
EBITDA Ratio |
|
|
2.69 |
|
| |
|
|
|
|
| For more information contact: |
| |
|
|
| Kevin Kim |
|
Matt Stewart |
| Investor Contact |
|
Media Contact |
| kevin.kim@sysco.com |
|
matt.stewart@sysco.com |
| T 281-584-1219 |
|
T 281-584-1390 |
Sysco (NYSE:SYY)
過去 株価チャート
から 6 2024 まで 7 2024
Sysco (NYSE:SYY)
過去 株価チャート
から 7 2023 まで 7 2024
