Company: SYY
Filing Date: 2025-01-29
Form Type: 10-Q
Source: 0000096021-25-000010
Chunk: 2

Company: SYSCO CORP
Filing Date: 2025-01-29
Form: 10-Q
Item: Item 2
Chunk 2
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 fiscal 2024 items discussed above are collectively referred to as “Certain Items.” The results of our operations can be impacted by changes in exchange rates applicable to converting from local currencies to U.S. dollars. We measure our results on a constant currency basis. 

Trends

Economic and Industry Trends 

Foot traffic to restaurants decreased approximately 2% for the second quarter of fiscal 2025, which represents a moderate improvement compared to the decrease of 3.6% experienced in the first quarter of fiscal 2025. We expect to see continued improvements in foot traffic trends in the second half of fiscal 2025. Despite the current macroeconomic landscape, we expect to grow both sales and net earnings in 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. We experienced a 1.4% and 2.1% improvement in U.S. Foodservice Operations case volume in the second quarter and first 26 weeks of fiscal 2025, respectively, as compared to the second quarter and first 26 weeks of fiscal 2024. Our volume growth was primarily attributable to national volume growth of 4.3% and 4.9% in the second quarter and first 26 weeks of fiscal 2025, respectively, as compared to the second quarter and first 26 weeks of fiscal 2024. Our volume reflects our broadline and specialty businesses, except for our specialty meats business, which measures its volume in pounds.

We experienced inflation at a rate of 2.1% in the second quarter of fiscal 2025, at the total enterprise level, primarily driven by inflation in the dairy and poultry categories. We continued to be successful in managing this inflation, resulting in an increase in gross profit dollars. Gross margin decreased 11 and 18 basis points in the second quarter and first 26 weeks of fiscal 2025, respectively, as compared to the second quarter and first 26 weeks of fiscal 2024, primarily due to a shift in our customer mix driven by national volume growth, a decrease in Sysco brand penetration, and the timing of benefits from strategic sourcing initiatives.

Operating Expense Trends

Total operating expenses increased 4.4% and 4.0% during the second quarter and first 26 weeks