Company: SYY
Filing Date: 2025-01-29
Form Type: 10-Q
Source: 0000096021-25-000010
Chunk: 9

Company: SYSCO CORP
Filing Date: 2025-01-29
Form: 10-Q
Item: Item 2
Chunk 9
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 expenses, partially offset by gross profit dollar growth and case volume growth, inclusive of benefits from acquisitions.

Gross profit dollar growth in the second quarter and first 26 weeks of fiscal 2025, as compared to the second quarter and first 26 weeks of fiscal 2024, was driven primarily by case volume growth as a result of acquisitions and effective management of product cost fluctuations. The estimated change in product costs, an internal measure of inflation or deflation, increased in the second quarter and first 26 weeks of fiscal 2025. Gross margin, which is gross profit as a percentage of sales, was 18.9% and 19.0% in the second quarter and first 26 weeks of fiscal 2025, respectively, for our U.S. Foodservice Operations, which was a decrease of 20 basis points compared to gross margin of 19.1% in the second quarter of fiscal 2024, and a decrease of 32 basis points compared to a gross margin of 19.3% in the first 26 weeks of fiscal 2024, primarily due to a change in customer mix, a decrease in Sysco brand penetration, and timing of benefits from strategic sourcing initiatives.

The increase in operating expenses for the second quarter and first 26 weeks of fiscal 2025, as compared to the second quarter and first 26 weeks of fiscal 2024, was primarily driven by increases in colleague-related costs and freight costs, which are largely correlated with the increase in volumes, depreciation expense, and bad debt expense, partially offset by gains related to sale leaseback transactions.

33

Results of International Foodservice Operations

The following table sets forth a summary of the components of operating income and adjusted operating income expressed as a percentage increase or decrease over the comparable period in the prior year:

 13-Week Period Ended Dec. 28, 202413-Week Period Ended Dec. 30, 2023Change in Dollars% Change (Dollars in millions)Sales$3,728 $3,597 $131 3.6 %Gross profit760 708 52 7.3 Operating expenses665 625 40 6.4 Operating income$95 $83 $12 14.5 %Gross profit$760 $708 $52 7.3 %Adjusted operating expenses (Non-GAAP)631 606 25 4.1 Adjusted operating income (Non-GAAP)$129 $102