Company: SYY
Filing Date: 2025-08-22
Form Type: 10-K
Source: 0000096021-25-000099
Chunk: 142

Company: SYSCO CORP
Filing Date: 2025-08-22
Form: 10-K
Item: Item 7
Chunk 142
---
 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 be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See “Liquidity and 

29

Capital Resources” for discussions of GAAP metrics, including net cash provided by operating activities and our reconciliation of this non-GAAP financial measure. 

Trends

Economic and Industry Trends 

During fiscal 2025, Sysco was impacted by negative year-over-year foot traffic to restaurants. Foot traffic trends improved in the fourth quarter of fiscal 2025. We expect foot traffic in fiscal 2026 to be similar to foot traffic trends in the fourth quarter of fiscal 2025. We believe the food-away-from-home sector is a healthy long-term growth market, and Sysco is diversified and well positioned as a market leader in food service. 

Sales and Gross Profit Trends

Our sales and gross profit performance are influenced by multiple factors including price, volume, inflation, customer mix and product mix. The most significant factor affecting our sales and gross profit performance in fiscal 2025 was product cost inflation, as we experienced 2.5% inflation at the total enterprise level. U.S. Foodservice experienced a 0.5% improvement in total case volume and a 1.4% decrease in local case volume as compared to fiscal 2024. This volume reflects our broadline and specialty businesses, except for our specialty meats business, which measures its volume in pounds. We experienced growth in local case volume in our International Foodservice segment of approximately 4.0% in fiscal 2025, as compared to fiscal 2024.

We experienced inflation at a rate of 3.5% and 2.5% in the fourth quarter and for fiscal 2025, respectively, at the total enterprise level, primarily driven by inflation in the dairy, poultry, and meat categories. We have been successful in managing inflation, resulting in an increase in gross profit dollars. Gross margin decreased 13 basis points in fiscal 2025 as compared to fiscal 2024, primarily as a result of a shift in our customer mix driven by national sales volumes outpacing local sales volumes and a decrease