Company: SYY
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000096021-25-000037
Chunk: 2

Company: SYSCO CORP
Filing Date: 2025-04-30
Form: 10-Q
Item: Item 2
Chunk 2
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) acquisition-related costs consisting of (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions.

The fiscal 2025 and 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 3.1% for the third quarter of fiscal 2025, as compared to a decrease of 1.6% experienced in the second quarter of fiscal 2025. Winter storms throughout the U.S. and wildfires in the California region negatively affected foot traffic to restaurants during the third quarter of fiscal 2025. In addition, lower levels of consumer confidence due to macroeconomic conditions adversely impacted foot traffic trends during the quarter. Industry traffic trends, while still in a year-over-year decline, improved in March as compared to February. These trends have further modestly improved in April in comparison to March. 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

Sales increased 1.1% in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024. Our sales and gross profit performance are influenced by multiple factors, including price, volume, inflation, customer mix and product mix. We experienced a 2.0% decrease and a 0.7% increase in U.S. Foodservice Operations case volume 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. Our volume growth trends were attributable to national volume growth remaining flat and local volume performance decreasing 3.5% in the third quarter of fiscal 2025 as compared to the third quarter 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 third quarter of fiscal 2025, at the total enterprise level, primarily driven by inflation in the dairy and meat categories. We continue to manage inflation by successfully passing on cost increases to our customers in a timely manner. We now expect net sales growth of approximately 3% for