Company: SYY
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000096021-25-000037
Chunk: 9

Company: SYSCO CORP
Filing Date: 2025-04-30
Form: 10-Q
Item: Item 2
Chunk 9
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service Operations decreased 2.0% and increased 0.7% in the third quarter and first 39 weeks of fiscal 2025, respectively, as compared to the third quarter and first 39 weeks of fiscal 2024. This included a 3.5% decrease in local customer case volume in the third quarter of fiscal 2025 and a 1.4% decrease in the first 39 weeks of fiscal 2025. Case volumes have been negatively impacted by foot traffic to restaurant trends in the third quarter and first 39 weeks of fiscal 2025.

33

Operating Income

The decrease in operating income for the third quarter and first 39 weeks of fiscal 2025, respectively, as compared to the third quarter and first 39 weeks of fiscal 2024, was primarily driven by an increase in operating expenses. The decrease in operating income in the third quarter of fiscal 2025 was also driven by a decrease in case volume and gross profit dollars. The decrease in operating income in the first 39 weeks of fiscal 2025 was partially offset by gross profit dollar growth and case volume growth, inclusive of benefits from acquisitions.

Gross profit dollars decreased in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024, primarily as a result of case volume decreases and changes in customer mix. Gross profit dollars increased in the first 39 weeks of fiscal 2025 as compared to the first 39 weeks of fiscal 2024 as a result of case volume growth inclusive of benefits from acquisitions and effective management of product cost fluctuations. The estimated change in product costs, an internal measure of inflation or deflation, increased in the third quarter and first 39 weeks of fiscal 2025. Gross margin, which is gross profit as a percentage of sales, was 18.9% and 19.0% in the third quarter and first 39 weeks of fiscal 2025, respectively, for our U.S. Foodservice Operations, which was a decrease of 50 basis points compared to gross margin of 19.4% in the third quarter of fiscal 2024, and a decrease of 38 basis points compared to a gross margin of 19.3% in the first 39 weeks of fiscal 2024, primarily due to a shift in our customer mix driven by national sales volumes outpacing local sales volumes and a decrease in Sysco brand penetration rates.

The increase in operating expenses for the third quarter and first 39 weeks of