FORM 8-K
|
Delaware | 1-06544 | 74-1648137 | ||||||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.)
|
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common stock, $1.00 Par Value | SYY | New York Stock Exchange |
Exhibit Number | Description | |||||||
99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Date: April 30, 2024 |
By: | /s/ Eve M. McFadden | ||||||
Eve M. McFadden | ||||||||
Senior Vice President, Legal, General Counsel and Corporate Secretary | ||||||||
Key Highlights: | ||||||||||||||
13-Week Period Ended | 39-Week Period Ended | |||||||||||||
Financial Comparison: | March 30, 2024 | Change | March 30, 2024 | Change | ||||||||||
GAAP: | ||||||||||||||
Sales | $19.4 billion | 2.7% | $58.3 billion | 3.0% | ||||||||||
Gross Profit |
$3.6 billion | 5.2% | $10.8 billion | 4.9% | ||||||||||
Gross Margin | 18.6% | 44 bps | 18.5% | 33 bps | ||||||||||
Operating Expenses |
$2.9 billion | 5.5% | $8.5 billion | 4.2% | ||||||||||
Operating Income | $722.0 million | 3.8% | $2.2 billion | 7.3% | ||||||||||
Operating Margin | 3.7% | 4 bps | 3.8% | 16 bps | ||||||||||
Net Earnings | $424.7 million | -1.1% | $1.3 billion | 29.6% | ||||||||||
Diluted Earnings Per Share | $0.85 | 1.2% | $2.66 | 31.0% | ||||||||||
Non-GAAP (1): |
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Gross Profit |
$3.6 billion | 5.2% | $10.8 billion | 4.9% | ||||||||||
Gross Margin | 18.6% | 44 bps | 18.5% | 34 bps | ||||||||||
Operating Expenses | $2.8 billion | 4.3% | $8.4 billion | 3.7% | ||||||||||
Operating Income | $799.3 million | 8.4% | $2.4 billion | 9.4% | ||||||||||
Operating Margin | 4.1% | 22 bps | 4.1% | 24 bps | ||||||||||
EBITDA | $933.0 million | 5.4% | $2.9 billion | 24.3% | ||||||||||
Adjusted EBITDA | $976.6 million | 8.5% | $2.9 billion | 10.6% | ||||||||||
Net Earnings | $483.4 million | 5.0% | $1.5 billion | 8.3% | ||||||||||
Diluted Earnings Per Share (2) |
$0.96 | 6.7% | $2.92 | 9.4% | ||||||||||
Case Growth: | ||||||||||||||
U.S. Foodservice | 2.9% | 3.0% | ||||||||||||
Local | 0.4% | 1.3% | ||||||||||||
Sysco Brand Sales as a % of Cases: | ||||||||||||||
U.S. Broadline | 36.3% | -19 bps | 36.8% | -6 bps | ||||||||||
Local | 46.5% | 3 bps | 46.9% | 26 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. | ||||||||||||||
Forward-Looking Statements | ||
Statements made in this press release or in our earnings call for the third 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 2024; 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 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. 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. |
Sysco Corporation and its Consolidated Subsidiaries CONSOLIDATED RESULTS OF OPERATIONS (Unaudited) (In Thousands, Except for Share and Per Share Data) | |||||||||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||||||||
Mar. 30, 2024 | Apr. 1, 2023 | Mar. 30, 2024 | Apr. 1, 2023 | ||||||||||||||||||||
Sales | $ | 19,379,500 | $ | 18,875,676 | $ | 58,287,896 | $ | 56,596,459 | |||||||||||||||
Cost of sales | 15,770,444 | 15,444,316 | 47,517,435 | 46,326,628 | |||||||||||||||||||
Gross profit | 3,609,056 | 3,431,360 | 10,770,461 | 10,269,831 | |||||||||||||||||||
Operating expenses | 2,887,010 | 2,735,633 | 8,544,790 | 8,196,480 | |||||||||||||||||||
Operating income | 722,046 | 695,727 | 2,225,671 | 2,073,351 | |||||||||||||||||||
Interest expense | 157,853 | 134,931 | 441,867 | 391,123 | |||||||||||||||||||
Other expense (income), net (1) (2) |
10,380 | 6,759 | 22,265 | 354,813 | |||||||||||||||||||
Earnings before income taxes | 553,813 | 554,037 | 1,761,539 | 1,327,415 | |||||||||||||||||||
Income taxes | 129,125 | 124,433 | 418,217 | 291,027 | |||||||||||||||||||
Net earnings | $ | 424,688 | $ | 429,604 | $ | 1,343,322 | $ | 1,036,388 | |||||||||||||||
Net earnings: | |||||||||||||||||||||||
Basic earnings per share | $ | 0.85 | $ | 0.85 | $ | 2.67 | $ | 2.04 | |||||||||||||||
Diluted earnings per share | 0.85 | 0.84 | 2.66 | 2.03 | |||||||||||||||||||
Average shares outstanding | 499,642,505 | 507,716,975 | 503,027,209 | 507,635,083 | |||||||||||||||||||
Diluted shares outstanding | 501,921,446 | 509,842,400 | 504,973,406 | 510,123,782 |
(1) |
Gains and losses related to the disposition of fixed assets have been recognized within operating expenses. Prior year amounts have been reclassified to conform to this presentation. |
||||
(2) |
Sysco’s second quarter of fiscal 2023 included a charge of $315.4 million in other expense related to pension settlement charges. |
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except for Share Data)
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Mar. 30, 2024 | Jul. 1, 2023 | ||||||||||
(Unaudited) |
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ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 598,322 | $ | 745,201 | |||||||
Accounts receivable, less allowances of $85,590 and $45,599 | 5,556,703 | 5,091,970 | |||||||||
Inventories | 4,733,966 | 4,480,812 | |||||||||
Prepaid expenses and other current assets | 310,069 | 284,566 | |||||||||
Income tax receivable | 5,815 | 5,815 | |||||||||
Total current assets | 11,204,875 | 10,608,364 | |||||||||
Plant and equipment at cost, less accumulated depreciation | 5,290,437 | 4,915,049 | |||||||||
Other long-term assets | |||||||||||
Goodwill | 5,220,989 | 4,645,754 | |||||||||
Intangibles, less amortization | 1,136,869 | 859,530 | |||||||||
Deferred income taxes | 442,256 | 420,450 | |||||||||
Operating lease right-of-use assets, net | 882,211 | 731,766 | |||||||||
Other assets | 534,703 | 640,232 | |||||||||
Total other long-term assets | 8,217,028 | 7,297,732 | |||||||||
Total assets | $ | 24,712,340 | $ | 22,821,145 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 5,869,479 | $ | 6,025,757 | |||||||
Accrued expenses | 2,246,595 | 2,251,181 | |||||||||
Accrued income taxes | 33,988 | 101,894 | |||||||||
Current operating lease liabilities | 122,984 | 99,051 | |||||||||
Current maturities of long-term debt | 93,225 | 62,550 | |||||||||
Total current liabilities | 8,366,271 | 8,540,433 | |||||||||
Long-term liabilities | |||||||||||
Long-term debt | 12,113,205 | 10,347,997 | |||||||||
Deferred income taxes | 312,927 | 302,904 | |||||||||
Long-term operating lease liabilities | 791,007 | 656,269 | |||||||||
Other long-term liabilities | 995,420 | 931,708 | |||||||||
Total long-term liabilities | 14,212,559 | 12,238,878 | |||||||||
Commitments and contingencies | |||||||||||
Noncontrolling interest | 32,557 | 33,212 | |||||||||
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 | 765,175 | 765,175 | |||||||||
Paid-in capital | 1,846,743 | 1,814,681 | |||||||||
Retained earnings | 11,898,772 | 11,310,664 | |||||||||
Accumulated other comprehensive loss | (1,231,221) | (1,252,590) | |||||||||
Treasury stock at cost, 266,250,088 and 260,062,834 shares | (11,178,516) | (10,629,308) | |||||||||
Total shareholders’ equity | 2,100,953 | 2,008,622 | |||||||||
Total liabilities and shareholders’ equity | $ | 24,712,340 | $ | 22,821,145 |
Sysco Corporation and its Consolidated Subsidiaries CONSOLIDATED CASH FLOWS (Unaudited) (In Thousands) | |||||||||||
39-Week Period Ended | |||||||||||
Mar. 30, 2024 | Apr. 1, 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings | $ | 1,343,322 | $ | 1,036,388 | |||||||
Adjustments to reconcile net earnings to cash provided by operating activities: | |||||||||||
Pension settlement charge | — | 315,354 | |||||||||
Share-based compensation expense | 76,688 | 73,765 | |||||||||
Depreciation and amortization | 646,848 | 574,945 | |||||||||
Operating lease asset amortization | 91,694 | 83,959 | |||||||||
Amortization of debt issuance and other debt-related costs | 13,695 | 15,019 | |||||||||
Deferred income taxes | (25,465) | (163,044) | |||||||||
Provision for losses on receivables | 43,409 | 21,899 | |||||||||
Other non-cash items | (2,488) | 2,787 | |||||||||
Additional changes in certain assets and liabilities, net of effect of businesses acquired: | |||||||||||
Increase in receivables | (325,108) | (405,372) | |||||||||
Increase in inventories | (125,859) | (172,117) | |||||||||
Decrease (increase) in prepaid expenses and other current assets | 23,267 | (6,242) | |||||||||
(Decrease) increase in accounts payable | (281,506) | 88,995 | |||||||||
Increase (decrease) in accrued expenses | 29,019 | (55,162) | |||||||||
Decrease in operating lease liabilities | (102,969) | (100,847) | |||||||||
(Decrease) increase in accrued income taxes | (67,906) | 119,784 | |||||||||
Decrease in other assets | 25,621 | 23,843 | |||||||||
Increase (decrease) in other long-term liabilities | 10,931 | (28,172) | |||||||||
Net cash provided by operating activities | 1,373,193 | 1,425,782 | |||||||||
Cash flows from investing activities: | |||||||||||
Additions to plant and equipment | (530,161) | (474,456) | |||||||||
Proceeds from sales of plant and equipment | 20,708 | 28,313 | |||||||||
Acquisition of businesses, net of cash acquired | (1,181,188) | (37,384) | |||||||||
Purchase of marketable securities | (11,422) | (15,078) | |||||||||
Proceeds from sales of marketable securities | — | 11,641 | |||||||||
Other investing activities (1) |
1,414 | 5,610 | |||||||||
Net cash used for investing activities | (1,700,649) | (481,354) | |||||||||
Cash flows from financing activities: | |||||||||||
Bank and commercial paper borrowings, net | 524,593 | — | |||||||||
Other debt borrowings including senior notes | 1,261,208 | 174,262 | |||||||||
Other debt repayments including senior notes | (338,721) | (81,345) | |||||||||
Debt issuance costs | (13,035) | — | |||||||||
Proceeds from stock option exercises | 103,496 | 67,115 | |||||||||
Stock repurchases | (699,947) | (377,800) | |||||||||
Dividends paid | (758,128) | (747,378) | |||||||||
Other financing activities (2) |
(19,206) | (57,906) | |||||||||
Net cash provided by (used for) financing activities | 60,260 | (1,023,052) | |||||||||
Effect of exchange rates on cash, cash equivalents and restricted cash | (6,206) | 1,713 | |||||||||
Net decrease in cash, cash equivalents and restricted cash | (273,402) | (76,911) | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 966,033 | 931,376 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 692,631 | $ | 854,465 | |||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 376,465 | $ | 343,402 | |||||||
Income taxes, net of refunds | 510,458 | 306,174 |
(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 Subsidiaries Non-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 adjustments to a product return allowance pertaining to COVID-related personal protection equipment inventory, 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 the reduction of bad debt expense previously recognized in fiscal 2020 due to the impact of the COVID-19 pandemic on the collectability of our pre-pandemic trade receivable balances. | ||
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, 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 Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
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13-Week Period Ended Mar. 30, 2024 | 13-Week Period Ended Apr. 1, 2023 | Change in Dollars | %/bps Change | ||||||||||||||||||||
Sales (GAAP) | $ | 19,379,500 | $ | 18,875,676 | $ | 503,824 | 2.7 | % | |||||||||||||||
Impact of currency fluctuations (1) |
(69,576) | — | (69,576) | (0.4) | |||||||||||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 19,309,924 | $ | 18,875,676 | $ | 434,248 | 2.3 | % | |||||||||||||||
Cost of sales (GAAP) | $ | 15,770,444 | $ | 15,444,316 | $ | 326,128 | 2.1 | % | |||||||||||||||
Gross profit (GAAP) | $ | 3,609,056 | $ | 3,431,360 | $ | 177,696 | 5.2 | % | |||||||||||||||
Impact of currency fluctuations (1) |
(15,662) | — | (15,662) | (0.5) | |||||||||||||||||||
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 3,593,394 | $ | 3,431,360 | $ | 162,034 | 4.7 | % | |||||||||||||||
Gross margin (GAAP) | 18.62 | % | 18.18 | % | 44 bps | ||||||||||||||||||
Impact of currency fluctuations (1) |
(0.01) | — | -1 bp | ||||||||||||||||||||
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 18.61 | % | 18.18 | % | 43 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 2,887,010 | $ | 2,735,633 | $ | 151,377 | 5.5 | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) |
(28,472) | (12,255) | (16,217) | NM | |||||||||||||||||||
Impact of acquisition-related costs (3) |
(48,734) | (29,004) | (19,730) | (68.0) | |||||||||||||||||||
Impact of bad debt reserve adjustments (4) |
— | (90) | 90 | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 2,809,804 | 2,694,284 | 115,520 | 4.3 | |||||||||||||||||||
Impact of currency fluctuations (1) |
(14,433) | — | (14,433) | (0.5) | |||||||||||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 2,795,371 | $ | 2,694,284 | $ | 101,087 | 3.8 | % | |||||||||||||||
Operating expense as a percentage of sales (GAAP) | 14.90 | % | 14.49 | % | 41 bps | ||||||||||||||||||
Impact of certain item adjustments | (0.40) | (0.22) | -18 bps | ||||||||||||||||||||
Adjusted operating expense as a percentage of sales (Non-GAAP) | 14.50 | % | 14.27 | % | 23 bps | ||||||||||||||||||
Operating income (GAAP) | $ | 722,046 | $ | 695,727 | $ | 26,319 | 3.8 | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) |
28,472 | 12,255 | 16,217 | NM | |||||||||||||||||||
Impact of acquisition-related costs (3) |
48,734 | 29,004 | 19,730 | 68.0 | |||||||||||||||||||
Impact of bad debt reserve adjustments (4) |
— | 90 | (90) | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | 799,252 | 737,076 | 62,176 | 8.4 | |||||||||||||||||||
Impact of currency fluctuations (1) |
(1,229) | — | (1,229) | (0.1) | |||||||||||||||||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 798,023 | $ | 737,076 | $ | 60,947 | 8.3 | % | |||||||||||||||
Operating margin (GAAP) | 3.73 | % | 3.69 | % | 4 bps | ||||||||||||||||||
Operating margin adjusted for Certain Items (Non-GAAP) | 4.12 | % | 3.90 | % | 22 bps | ||||||||||||||||||
Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 4.13 | % | 3.90 | % | 23 bps | ||||||||||||||||||
Other expense (GAAP) | $ | 10,380 | $ | 6,759 | $ | 3,621 | 53.6 | % | |||||||||||||||
Impact of other non-routine gains and losses | — | (448) | 448 | NM | |||||||||||||||||||
Other expense adjusted for Certain Items (Non-GAAP) | $ | 10,380 | $ | 6,311 | $ | 4,069 | 64.5 | % | |||||||||||||||
Net earnings (GAAP) | $ | 424,688 | $ | 429,604 | $ | (4,916) | (1.1) | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) |
28,472 | 12,255 | 16,217 | NM | |||||||||||||||||||
Impact of acquisition-related costs (3) |
48,734 | 29,004 | 19,730 | 68.0 |
Impact of bad debt reserve adjustments (4) |
— | 90 | (90) | NM | |||||||||||||||||||
Impact of other non-routine gains and losses | — | 448 | (448) | NM | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (5) |
(6,826) | (3,190) | (3,636) | NM | |||||||||||||||||||
Tax impact of acquisition-related costs (5) |
(11,684) | (7,550) | (4,134) | (54.8) | |||||||||||||||||||
Tax impact of bad debt reserves adjustments (5) |
— | (23) | 23 | NM | |||||||||||||||||||
Tax impact of other non-routine gains and losses (5) |
— | (117) | 117 | NM | |||||||||||||||||||
Net earnings adjusted for Certain Items (Non-GAAP) | $ | 483,384 | $ | 460,521 | $ | 22,863 | 5.0 | % | |||||||||||||||
Diluted earnings per share (GAAP) | $ | 0.85 | $ | 0.84 | $ | 0.01 | 1.2 | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) |
0.06 | 0.02 | 0.04 | NM | |||||||||||||||||||
Impact of acquisition-related costs (3) |
0.10 | 0.06 | 0.04 | 66.7 | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (5) |
(0.01) | (0.01) | — | — | |||||||||||||||||||
Tax impact of acquisition-related costs (5) |
(0.02) | (0.01) | (0.01) | (100.0) | |||||||||||||||||||
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (6) |
$ | 0.96 | $ | 0.90 | $ | 0.06 | 6.7 | % | |||||||||||||||
Diluted shares outstanding | 501,921,446 | 509,842,400 |
(1) |
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results. | ||||
(2) |
Fiscal 2024 includes $13 million related to restructuring and severance charges and $15 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2023 includes $2 million related to restructuring and severance charges and $10 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. | ||||
(3) |
Fiscal 2024 includes $32 million of intangible amortization expense and $17 million in acquisition and due diligence costs. Fiscal 2023 includes $27 million of intangible amortization expense and $2 million in 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) |
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. | ||||
(6) |
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 Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
| |||||||||||||||||||||||
39-Week Period Ended Mar. 30, 2024 | 39-Week Period Ended Apr. 1, 2023 | Change in Dollars | %/bps Change | ||||||||||||||||||||
Sales (GAAP) | $ | 58,287,896 | $ | 56,596,459 | $ | 1,691,437 | 3.0 | % | |||||||||||||||
Impact of currency fluctuations (1) |
(278,400) | — | (278,400) | (0.5) | |||||||||||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 58,009,496 | $ | 56,596,459 | $ | 1,413,037 | 2.5 | % | |||||||||||||||
Cost of sales (GAAP) | $ | 47,517,435 | $ | 46,326,628 | $ | 1,190,807 | 2.6 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) |
— | 2,571 | (2,571) | — | |||||||||||||||||||
Cost of sales adjusted for Certain Items (Non-GAAP) | $ | 47,517,435 | $ | 46,329,199 | $ | 1,188,236 | 2.6 | % | |||||||||||||||
Gross profit (GAAP) | $ | 10,770,461 | $ | 10,269,831 | $ | 500,630 | 4.9 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) |
— | (2,571) | 2,571 | — | |||||||||||||||||||
Gross profit adjusted for Certain Items (Non-GAAP) | 10,770,461 | 10,267,260 | 503,201 | 4.9 | |||||||||||||||||||
Impact of currency fluctuations (1) |
(66,029) | — | (66,029) | (0.6) | |||||||||||||||||||
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 10,704,432 | $ | 10,267,260 | $ | 437,172 | 4.3 | % | |||||||||||||||
Gross margin (GAAP) | 18.48 | % | 18.15 | % | 33 bps | ||||||||||||||||||
Impact of inventory valuation adjustment (2) |
— | (0.01) | 1 bp | ||||||||||||||||||||
Gross margin adjusted for Certain Items (Non-GAAP) | 18.48 | 18.14 | 34 bps | ||||||||||||||||||||
Impact of currency fluctuations (1) |
(0.03) | — | -3 bps | ||||||||||||||||||||
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 18.45 | % | 18.14 | % | 31 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 8,544,790 | $ | 8,196,480 | $ | 348,310 | 4.2 | % | |||||||||||||||
Impact of restructuring and transformational project costs (3) |
(59,567) | (38,288) | (21,279) | (55.6) | |||||||||||||||||||
Impact of acquisition-related costs (4) |
(113,193) | (87,419) | (25,774) | (29.5) | |||||||||||||||||||
Impact of bad debt reserve adjustments (5) |
— | 4,425 | (4,425) | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 8,372,030 | 8,075,198 | 296,832 | 3.7 | |||||||||||||||||||
Impact of currency fluctuations (1) |
(63,371) | — | (63,371) | (0.8) | |||||||||||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 8,308,659 | $ | 8,075,198 | $ | 233,461 | 2.9 | % | |||||||||||||||
Operating expense as a percentage of sales (GAAP) | 14.66 | % | 14.48 | % | 18 bps | ||||||||||||||||||
Impact of certain item adjustments | (0.30) | (0.21) | -9 bps | ||||||||||||||||||||
Adjusted operating expense as a percentage of sales (Non-GAAP) | 14.36 | % | 14.27 | % | 9 bps | ||||||||||||||||||
Operating income (GAAP) | $ | 2,225,671 | $ | 2,073,351 | $ | 152,320 | 7.3 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) |
— | (2,571) | 2,571 | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (3) |
59,567 | 38,288 | 21,279 | 55.6 | |||||||||||||||||||
Impact of acquisition-related costs (4) |
113,193 | 87,419 | 25,774 | 29.5 | |||||||||||||||||||
Impact of bad debt reserve adjustments (5) |
— | (4,425) | 4,425 | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | 2,398,431 | 2,192,062 | 206,369 | 9.4 | |||||||||||||||||||
Impact of currency fluctuations (1) |
(2,658) | — | (2,658) | (0.1) | |||||||||||||||||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 2,395,773 | $ | 2,192,062 | $ | 203,711 | 9.3 | % | |||||||||||||||
Operating margin (GAAP) | 3.82 | % | 3.66 | % | 16 bps | ||||||||||||||||||
Operating margin adjusted for Certain Items (Non-GAAP) | 4.11 | % | 3.87 | % | 24 bps | ||||||||||||||||||
Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 4.13 | % | 3.87 | % | 26 bps | ||||||||||||||||||
Other expense (GAAP) | $ | 22,265 | $ | 354,813 | $ | (332,548) | (93.7) | % |
Impact of other non-routine gains and losses (6) |
— | (315,326) | 315,326 | NM | |||||||||||||||||||
Other expense adjusted for Certain Items (Non-GAAP) |
$ | 22,265 | $ | 39,487 | $ | (17,222) | (43.6) | % | |||||||||||||||
Net earnings (GAAP) | $ | 1,343,322 | $ | 1,036,388 | $ | 306,934 | 29.6 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) |
— | (2,571) | 2,571 | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (3) |
59,567 | 38,288 | 21,279 | 55.6 | |||||||||||||||||||
Impact of acquisition-related costs (4) |
113,193 | 87,419 | 25,774 | 29.5 | |||||||||||||||||||
Impact of bad debt reserve adjustments (5) |
— | (4,425) | 4,425 | NM | |||||||||||||||||||
Impact of other non-routine gains and losses (6) |
— | 315,326 | (315,326) | NM | |||||||||||||||||||
Tax impact of inventory valuation adjustment (7) |
— | 648 | (648) | NM | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (7) |
(14,510) | (9,649) | (4,861) | (50.4) | |||||||||||||||||||
Tax impact of acquisition-related costs (7) |
(27,572) | (22,031) | (5,541) | (25.2) | |||||||||||||||||||
Tax impact of bad debt reserves adjustments (7) |
— | 1,115 | (1,115) | NM | |||||||||||||||||||
Tax impact of other non-routine gains and losses (7) |
— | (79,466) | 79,466 | NM | |||||||||||||||||||
Net earnings adjusted for Certain Items (Non-GAAP) | $ | 1,474,000 | $ | 1,361,042 | $ | 112,958 | 8.3 | % | |||||||||||||||
Diluted earnings per share (GAAP) | $ | 2.66 | $ | 2.03 | $ | 0.63 | 31.0 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) |
— | (0.01) | 0.01 | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (3) |
0.12 | 0.08 | 0.04 | 50.0 | |||||||||||||||||||
Impact of acquisition-related costs (4) |
0.22 | 0.17 | 0.05 | 29.4 | |||||||||||||||||||
Impact of bad debt reserve adjustments (5) |
— | (0.01) | 0.01 | NM | |||||||||||||||||||
Impact of other non-routine gains and losses (6) |
— | 0.62 | (0.62) | NM | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (7) |
(0.03) | (0.02) | (0.01) | (50.0) | |||||||||||||||||||
Tax impact of acquisition-related costs (7) |
(0.05) | (0.04) | (0.01) | (25.0) | |||||||||||||||||||
Tax impact of other non-routine gains and losses (7) |
— | (0.16) | 0.16 | NM | |||||||||||||||||||
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (8) |
$ | 2.92 | $ | 2.67 | $ | 0.25 | 9.4 | % | |||||||||||||||
Diluted shares outstanding | 504,973,406 | 510,123,782 |
(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 $22 million related to restructuring and severance charges and $38 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2023 includes $12 million related to restructuring and severance charges and $26 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. | ||||
(4) |
Fiscal 2024 includes $91 million of intangible amortization expense and $22 million in acquisition and due diligence costs. Fiscal 2023 includes $78 million of intangible amortization expense and $9 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. | ||||
(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 Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments
(Dollars in Thousands)
| |||||||||||||||||||||||
13-Week Period Ended Mar. 30, 2024 | 13-Week Period Ended Apr. 1, 2023 | Change in Dollars | %/bps Change | ||||||||||||||||||||
U.S. FOODSERVICE OPERATIONS | |||||||||||||||||||||||
Sales (GAAP) | $ | 13,707,108 | $ | 13,257,519 | $ | 449,589 | 3.4 | % | |||||||||||||||
Gross profit (GAAP) | 2,652,847 | 2,545,859 | 106,988 | 4.2 | % | ||||||||||||||||||
Gross margin (GAAP) | 19.35 | % | 19.20 | % | 15 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 1,800,403 | $ | 1,688,836 | $ | 111,567 | 6.6 | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) |
(6,134) | (159) | (5,975) | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) |
(16,214) | (11,463) | (4,751) | (41.4) | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | (81) | 81 | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 1,778,055 | $ | 1,677,133 | $ | 100,922 | 6.0 | % | |||||||||||||||
Operating income (GAAP) | $ | 852,444 | $ | 857,023 | $ | (4,579) | (0.5) | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) |
6,134 | 159 | 5,975 | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) |
16,214 | 11,463 | 4,751 | 41.4 | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | 81 | (81) | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 874,792 | $ | 868,726 | $ | 6,066 | 0.7 | % | |||||||||||||||
INTERNATIONAL FOODSERVICE OPERATIONS | |||||||||||||||||||||||
Sales (GAAP) | $ | 3,493,232 | $ | 3,344,121 | $ | 149,111 | 4.5 | % | |||||||||||||||
Impact of currency fluctuations (4) |
(69,521) | — | (69,521) | (2.1) | |||||||||||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 3,423,711 | $ | 3,344,121 | $ | 79,590 | 2.4 | % | |||||||||||||||
Gross profit (GAAP) | $ | 719,681 | $ | 642,778 | $ | 76,903 | 12.0 | % | |||||||||||||||
Impact of currency fluctuations (4) |
(15,637) | — | (15,637) | (2.5) | |||||||||||||||||||
Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 704,044 | $ | 642,778 | $ | 61,266 | 9.5 | % | |||||||||||||||
Gross margin (GAAP) | 20.60 | % | 19.22 | % | 138 bps | ||||||||||||||||||
Impact of currency fluctuations (4) |
(0.04) | — | -4 bps | ||||||||||||||||||||
Comparable gross margin using a constant currency basis (Non-GAAP) | 20.56 | % | 19.22 | % | 134 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 635,783 | $ | 594,542 | $ | 41,241 | 6.9 | % | |||||||||||||||
Impact of restructuring and transformational project costs (5) |
(6,775) | (2,103) | (4,672) | NM | |||||||||||||||||||
Impact of acquisition-related costs (6) |
(18,686) | (16,585) | (2,101) | (12.7) | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | (9) | 9 | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 610,322 | 575,845 | 34,477 | 6.0 | |||||||||||||||||||
Impact of currency fluctuations (4) |
(13,641) | — | (13,641) | (2.4) | |||||||||||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 596,681 | $ | 575,845 | $ | 20,836 | 3.6 | % | |||||||||||||||
Operating income (GAAP) | $ | 83,898 | $ | 48,236 | $ | 35,662 | 73.9 | % | |||||||||||||||
Impact of restructuring and transformational project costs (5) |
6,775 | 2,103 | 4,672 | NM | |||||||||||||||||||
Impact of acquisition-related costs (6) |
18,686 | 16,585 | 2,101 | 12.7 | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | 9 | (9) | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | 109,359 | 66,933 | 42,426 | 63.4 | |||||||||||||||||||
Impact of currency fluctuations (4) |
(1,996) | — | (1,996) | (3.0) | |||||||||||||||||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 107,363 | $ | 66,933 | $ | 40,430 | 60.4 | % | |||||||||||||||
SYGMA | |||||||||||||||||||||||
Sales (GAAP) | $ | 1,903,922 | $ | 1,972,058 | $ | (68,136) | (3.5) | % | |||||||||||||||
Gross profit (GAAP) | 153,258 | 166,104 | (12,846) | (7.7) | % | ||||||||||||||||||
Gross margin (GAAP) | 8.05 | % | 8.42 | % | -37 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 136,453 | $ | 140,486 | $ | (4,033) | (2.9) | % | |||||||||||||||
Operating income (GAAP) | 16,805 | 25,618 | (8,813) | (34.4) | % | ||||||||||||||||||
OTHER | |||||||||||||||||||||||
Sales (GAAP) | $ | 275,238 | $ | 301,978 | $ | (26,740) | (8.9) | % | |||||||||||||||
Gross profit (GAAP) | 71,030 | 79,451 | (8,421) | (10.6) | % | ||||||||||||||||||
Gross margin (GAAP) | 25.81 | % | 26.31 | % | -50 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 64,659 | $ | 67,615 | $ | (2,956) | (4.4) | % | |||||||||||||||
Operating income (GAAP) |
6,371 | 11,836 | (5,465) | (46.2) | % | ||||||||||||||||||
GLOBAL SUPPORT CENTER | |||||||||||||||||||||||
Gross profit (loss) (GAAP) | $ | 12,240 | $ | (2,832) | $ | 15,072 | NM | ||||||||||||||||
Operating expenses (GAAP) | $ | 249,712 | $ | 244,154 | $ | 5,558 | 2.3 | % | |||||||||||||||
Impact of restructuring and transformational project costs (7) |
(15,563) | (9,993) | (5,570) | (55.7) | |||||||||||||||||||
Impact of acquisition-related costs (8) |
(13,834) | (956) | (12,878) | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 220,315 | $ | 233,205 | $ | (12,890) | (5.5) | % | |||||||||||||||
Operating loss (GAAP) | $ | (237,472) | $ | (246,986) | $ | 9,514 | 3.9 | % | |||||||||||||||
Impact of restructuring and transformational project costs (7) |
15,563 | 9,993 | 5,570 | 55.7 | |||||||||||||||||||
Impact of acquisition-related costs (8) |
13,834 | 956 | 12,878 | NM | |||||||||||||||||||
Operating loss adjusted for Certain Items (Non-GAAP) | $ | (208,075) | $ | (236,037) | $ | 27,962 | 11.8 | % | |||||||||||||||
TOTAL SYSCO | |||||||||||||||||||||||
Sales (GAAP) | $ | 19,379,500 | $ | 18,875,676 | $ | 503,824 | 2.7 | % | |||||||||||||||
Gross profit (GAAP) | 3,609,056 | 3,431,360 | 177,696 | 5.2 | % | ||||||||||||||||||
Gross margin (GAAP) | 18.62 | % | 18.18 | % | 44 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 2,887,010 | $ | 2,735,633 | $ | 151,377 | 5.5 | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) (5) (7) |
(28,472) | (12,255) | (16,217) | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) (6) (8) |
(48,734) | (29,004) | (19,730) | (68.0) | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | (90) | 90 | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 2,809,804 | $ | 2,694,284 | $ | 115,520 | 4.3 | % | |||||||||||||||
Operating income (GAAP) | $ | 722,046 | $ | 695,727 | $ | 26,319 | 3.8 | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) (5) (7) |
28,472 | 12,255 | 16,217 | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) (6) (8) |
48,734 | 29,004 | 19,730 | 68.0 | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | 90 | (90) | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 799,252 | $ | 737,076 | $ | 62,176 | 8.4 | % | |||||||||||||||
(1) |
Primarily represents severance and transformation initiative costs. | ||||
(2) |
Fiscal 2024 and fiscal 2023 include 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 costs primarily in Europe. | ||||
(6) |
Represents intangible amortization expense. | ||||
(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 Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Applicable Segments (Dollars in Thousands) | |||||||||||||||||||||||
39-Week Period Ended Mar. 30, 2024 | 39-Week Period Ended Apr. 1, 2023 | Change in Dollars | %/bps Change | ||||||||||||||||||||
U.S. FOODSERVICE OPERATIONS | |||||||||||||||||||||||
Sales (GAAP) | $ | 40,925,350 | $ | 39,937,055 | $ | 988,295 | 2.5 | % | |||||||||||||||
Gross profit (GAAP) | 7,915,316 | 7,651,291 | 264,025 | 3.5 | % | ||||||||||||||||||
Gross margin (GAAP) | 19.34 | % | 19.16 | % | 18 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 5,282,865 | $ | 5,107,587 | $ | 175,278 | 3.4 | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) |
(6,361) | (203) | (6,158) | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) |
(40,680) | (35,563) | (5,117) | (14.4) | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | 4,170 | (4,170) | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 5,235,824 | $ | 5,075,991 | $ | 159,833 | 3.1 | % | |||||||||||||||
Operating income (GAAP) | $ | 2,632,451 | $ | 2,543,704 | $ | 88,747 | 3.5 | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) |
6,361 | 203 | 6,158 | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) |
40,680 | 35,563 | 5,117 | 14.4 | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | (4,170) | 4,170 | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 2,679,492 | $ | 2,575,300 | $ | 104,192 | 4.0 | % | |||||||||||||||
INTERNATIONAL FOODSERVICE OPERATIONS | |||||||||||||||||||||||
Sales (GAAP) | $ | 10,772,900 | $ | 9,910,267 | $ | 862,633 | 8.7 | % | |||||||||||||||
Impact of currency fluctuations (4) |
(279,622) | — | (279,622) | (2.8) | |||||||||||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 10,493,278 | $ | 9,910,267 | $ | 583,011 | 5.9 | % | |||||||||||||||
Gross profit (GAAP) | $ | 2,159,820 | $ | 1,916,503 | $ | 243,317 | 12.7 | % | |||||||||||||||
Impact of currency fluctuations (4) |
(66,475) | — | (66,475) | (3.5) | |||||||||||||||||||
Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 2,093,345 | $ | 1,916,503 | $ | 176,842 | 9.2 | % | |||||||||||||||
Gross margin (GAAP) | 20.05 | % | 19.34 | % | 71 bps | ||||||||||||||||||
Impact of currency fluctuations (4) |
(0.10) | — | -10 bps | ||||||||||||||||||||
Comparable gross margin using a constant currency basis (Non-GAAP) | 19.95 | % | 19.34 | % | 61 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 1,899,509 | $ | 1,723,874 | $ | 175,635 | 10.2 | % | |||||||||||||||
Impact of restructuring and transformational project costs (5) |
(15,181) | (11,597) | (3,584) | (30.9) | |||||||||||||||||||
Impact of acquisition-related costs (6) |
(52,430) | (48,534) | (3,896) | (8.0) | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | 255 | (255) | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 1,831,898 | 1,663,998 | 167,900 | 10.1 | |||||||||||||||||||
Impact of currency fluctuations (4) |
(61,384) | — | (61,384) | (3.7) | |||||||||||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 1,770,514 | $ | 1,663,998 | $ | 106,516 | 6.4 | % | |||||||||||||||
Operating income (GAAP) | $ | 260,311 | $ | 192,629 | $ | 67,682 | 35.1 | % | |||||||||||||||
Impact of restructuring and transformational project costs (5) |
15,181 | 11,597 | 3,584 | 30.9 | |||||||||||||||||||
Impact of acquisition-related costs (6) |
52,430 | 48,534 | 3,896 | 8.0 | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | (255) | 255 | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | 327,922 | 252,505 | 75,417 | 29.9 | |||||||||||||||||||
Impact of currency fluctuations (4) |
(5,091) | — | (5,091) | (2.0) | |||||||||||||||||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 322,831 | $ | 252,505 | $ | 70,326 | 27.9 | % | |||||||||||||||
SYGMA | |||||||||||||||||||||||
Sales (GAAP) | $ | 5,723,651 | $ | 5,839,051 | $ | (115,400) | (2.0) | % | |||||||||||||||
Gross profit (GAAP) | 454,575 | 470,458 | (15,883) | (3.4) | % | ||||||||||||||||||
Gross margin (GAAP) | 7.94 | % | 8.06 | % | -12 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 408,657 | $ | 432,297 | $ | (23,640) | (5.5) | % | |||||||||||||||
Operating income (GAAP) | 45,918 | 38,161 | 7,757 | 20.3 | % | ||||||||||||||||||
OTHER | |||||||||||||||||||||||
Sales (GAAP) | $ | 865,995 | $ | 910,086 | $ | (44,091) | (4.8) | % | |||||||||||||||
Gross profit (GAAP) | 222,012 | 237,600 | (15,588) | (6.6) | % | ||||||||||||||||||
Gross margin (GAAP) | 25.64 | % | 26.11 | % | -47 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 195,431 | $ | 204,356 | $ | (8,925) | (4.4) | % | |||||||||||||||
Operating income (GAAP) | 26,581 | 33,244 | (6,663) | (20.0) | % | ||||||||||||||||||
GLOBAL SUPPORT CENTER | |||||||||||||||||||||||
Gross profit (loss) (GAAP) | $ | 18,738 | $ | (6,021) | $ | 24,759 | NM | ||||||||||||||||
Impact of inventory valuation adjustment (7) |
— | (2,571) | 2,571 | NM | |||||||||||||||||||
Gross profit (loss) adjusted for Certain Items (Non-GAAP) | $ | 18,738 | $ | (8,592) | $ | 27,330 | NM | ||||||||||||||||
Operating expenses (GAAP) | $ | 758,328 | $ | 728,366 | $ | 29,962 | 4.1 | % | |||||||||||||||
Impact of restructuring and transformational project costs (8) |
(38,025) | (26,488) | (11,537) | (43.6) | |||||||||||||||||||
Impact of acquisition-related costs (9) |
(20,083) | (3,322) | (16,761) | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 700,220 | $ | 698,556 | $ | 1,664 | 0.2 | % | |||||||||||||||
Operating loss (GAAP) | $ | (739,590) | $ | (734,387) | $ | (5,203) | (0.7) | % | |||||||||||||||
Impact of inventory valuation adjustment (7) |
— | (2,571) | 2,571 | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (8) |
38,025 | 26,488 | 11,537 | 43.6 | |||||||||||||||||||
Impact of acquisition-related costs (9) |
20,083 | 3,322 | 16,761 | NM | |||||||||||||||||||
Operating loss adjusted for Certain Items (Non-GAAP) | $ | (681,482) | $ | (707,148) | $ | 25,666 | 3.6 | % | |||||||||||||||
TOTAL SYSCO | |||||||||||||||||||||||
Sales (GAAP) | $ | 58,287,896 | $ | 56,596,459 | $ | 1,691,437 | 3.0 | % | |||||||||||||||
Gross profit (GAAP) | 10,770,461 | 10,269,831 | 500,630 | 4.9 | % | ||||||||||||||||||
Gross margin (GAAP) | 18.48 | % | 18.15 | % | 33 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 8,544,790 | $ | 8,196,480 | $ | 348,310 | 4.2 | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) (5) (8) |
(59,567) | (38,288) | (21,279) | (55.6) | |||||||||||||||||||
Impact of acquisition-related costs (2) (6) (9) |
(113,193) | (87,419) | (25,774) | (29.5) | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | 4,425 | (4,425) | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 8,372,030 | $ | 8,075,198 | $ | 296,832 | 3.7 | % | |||||||||||||||
Operating income (GAAP) | $ | 2,225,671 | $ | 2,073,351 | $ | 152,320 | 7.3 | % | |||||||||||||||
Impact of inventory valuation adjustment (7) |
— | (2,571) | 2,571 | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (1) (5) (8) |
59,567 | 38,288 | 21,279 | 55.6 | |||||||||||||||||||
Impact of acquisition-related costs (2) (6) (9) |
113,193 | 87,419 | 25,774 | 29.5 | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | (4,425) | 4,425 | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 2,398,431 | $ | 2,192,062 | $ | 206,369 | 9.4 | % | |||||||||||||||
(1) |
Primarily represents severance and transformation costs. | ||||
(2) |
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 severance costs, primarily in Europe. | ||||
(6) |
Represents intangible amortization expense. | ||||
(7) |
Fiscal 2023 represents an adjustment to a product return allowance related to COVID-related personal protection equipment inventory. | ||||
(8) |
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy. | ||||
(9) |
Represents due diligence costs. | ||||
NM | Represents that the percentage change is not meaningful. |
39-Week Period Ended Mar. 30, 2024 | 39-Week Period Ended Apr. 1, 2023 | 39-Week Period Change in Dollars | |||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 1,373,193 | $ | 1,425,782 | $ | (52,589) | |||||||||||
Additions to plant and equipment | (530,161) | (474,456) | (55,705) | ||||||||||||||
Proceeds from sales of plant and equipment | 20,708 | 28,313 | (7,605) | ||||||||||||||
Free Cash Flow (Non-GAAP) | $ | 863,740 | $ | 979,639 | $ | (115,899) |
13-Week Period Ended Mar. 30, 2024 | 13-Week Period Ended Apr. 1, 2023 | Change in Dollars | % Change | ||||||||||||||||||||
Net earnings (GAAP) | $ | 424,688 | $ | 429,604 | $ | (4,916) | (1.1) | % | |||||||||||||||
Interest (GAAP) | 157,853 | 134,931 | 22,922 | 17.0 | |||||||||||||||||||
Income taxes (GAAP) | 129,125 | 124,433 | 4,692 | 3.8 | |||||||||||||||||||
Depreciation and amortization (GAAP) | 221,383 | 195,996 | 25,387 | 13.0 | |||||||||||||||||||
EBITDA (Non-GAAP) | $ | 933,049 | $ | 884,964 | $ | 48,085 | 5.4 | % | |||||||||||||||
Certain Item adjustments: | |||||||||||||||||||||||
Impact of restructuring and transformational project costs (1) |
26,538 | 11,890 | 14,648 | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) |
17,008 | 2,349 | 14,659 | NM | |||||||||||||||||||
Impact of bad debt reserve adjustments (3) |
— | 90 | (90) | NM | |||||||||||||||||||
Impact of other non-routine gains and losses | — | 448 | (448) | NM | |||||||||||||||||||
EBITDA adjusted for Certain Items (Non-GAAP) (4) |
$ | 976,595 | $ | 899,741 | $ | 76,854 | 8.5 | % | |||||||||||||||
Other expense (income), net, as adjusted (Non-GAAP) (5) |
10,380 | 6,311 | 4,069 | 64.5 | |||||||||||||||||||
Depreciation and amortization, as adjusted (Non-GAAP) (6) |
(187,723) | (168,976) | (18,747) | (11.1) | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 799,252 | $ | 737,076 | $ | 62,176 | 8.4 | % |
(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) |
Fiscal 2023 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. | ||||
(4) |
In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $7 million and $7 million or non-cash stock compensation expense of $24 million and $21 million in fiscal 2024 and fiscal 2023, respectively. | ||||
(5) |
Fiscal 2024 and Fiscal 2023 primarily represent $10 million and $7 million, respectively, in GAAP other expense (income), net. | ||||
(6) |
Fiscal 2024 includes $221 million in GAAP depreciation and amortization expense, less $34 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2023 includes $196 million in GAAP depreciation and amortization expense, less $27 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. | ||||
NM | Represents that the percentage change is not meaningful. |
39-Week Period Ended Mar. 30, 2024 | 39-Week Period Ended Apr. 1, 2023 | Change in Dollars | % Change | ||||||||||||||||||||
Net earnings (GAAP) | $ | 1,343,322 | $ | 1,036,388 | $ | 306,934 | 29.6 | % | |||||||||||||||
Interest (GAAP) | 441,867 | 391,123 | 50,744 | 13.0 | |||||||||||||||||||
Income taxes (GAAP) | 418,217 | 291,027 | 127,190 | 43.7 | |||||||||||||||||||
Depreciation and amortization (GAAP) | 646,848 | 574,945 | 71,903 | 12.5 | |||||||||||||||||||
EBITDA (Non-GAAP) | $ | 2,850,254 | $ | 2,293,483 | $ | 556,771 | 24.3 | % | |||||||||||||||
Certain Item adjustments: | |||||||||||||||||||||||
Impact of inventory valuation adjustment (1) |
— | (2,571) | 2,571 | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (2) |
56,387 | 37,192 | 19,195 | 51.6 | |||||||||||||||||||
Impact of acquisition-related costs (3) |
21,862 | 8,944 | 12,918 | NM | |||||||||||||||||||
Impact of bad debt reserve adjustments (4) |
— | (4,425) | 4,425 | NM | |||||||||||||||||||
Impact of other non-routine gains and losses (5) |
— | 315,326 | (315,326) | NM | |||||||||||||||||||
EBITDA adjusted for Certain Items (Non-GAAP) (6) |
$ | 2,928,503 | $ | 2,647,949 | $ | 280,554 | 10.6 | % | |||||||||||||||
Other expense (income), net, as adjusted (Non-GAAP) (7) |
22,265 | 39,487 | (17,222) | (43.6) | |||||||||||||||||||
Depreciation and amortization, as adjusted (Non-GAAP) (8) |
(552,337) | (495,374) | (56,963) | (11.5) | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 2,398,431 | $ | 2,192,062 | $ | 206,369 | 9.4 | % |
(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 represents 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. | ||||
(6) |
In arriving at adjusted EBITDA, Sysco does not exclude interest income of $28 million and $15 million or non-cash stock compensation expense of $77 million and $73 million for fiscal 2024 and fiscal 2023, respectively. | ||||
(7) |
Fiscal 2024 represents $22 million in GAAP other expense (income), net. Fiscal 2023 represents $355 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. | ||||
(8) |
Fiscal 2024 includes $647 million in GAAP depreciation and amortization expense, less $95 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2023 includes $575 million in GAAP depreciation and amortization expense, less $80 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. | ||||
NM | Represents that the percentage change is not meaningful. |
Mar. 30, 2024 | ||||||||
Current Maturities of long-term debt | $ | 93,225 | ||||||
Long-term debt | 12,113,205 | |||||||
Total Debt | 12,206,430 | |||||||
Cash & Cash Equivalents | (598,322) | |||||||
Net Debt | $ | 11,608,108 | ||||||
Adjusted EBITDA for the previous 12 months | $ | 4,127,132 | ||||||
Debt/Adjusted EBITDA Ratio | 2.96 | |||||||
Net Debt/Adjusted EBITDA Ratio | 2.81 |