Sysco Corporation (NYSE: SYY), the global leader in foodservice distribution, announced its financial results for the 13-week third fiscal quarter ended March 29, 2025. This comprehensive report reveals the company’s performance under several external headwinds, including California wildfires, adverse weather conditions, and weakening consumer confidence, which collectively impacted the foodservice industry foot traffic and volume.
Who: Sysco Corporation, a major foodservice distributor with approximately 76,000 employees and 730,000 customer locations internationally.
What: Third quarter fiscal 2025 results including sales, profits, operating income, and key financial metrics.
When: Quarter ended March 29, 2025.
Where: Operations span 10 countries with 340 distribution centers; report covers both U.S. and International segments.
Total sales increased by 1.1% year-over-year to $19.6 billion.
Gross profit slightly decreased by 0.8% to $3.6 billion with gross margin contracting 35 basis points to 18.3%, driven mainly by volume and mix impacts.
Operating income decreased 5.7% to \(681 million, while adjusted operating income was down 3.3% to \)773 million.
Net earnings declined 5.6% to \(401 million; adjusted net earnings decreased 2.9% to \)469 million.
EBITDA declined by 2.5% to \(910 million; adjusted EBITDA was nearly flat, down only 0.8% at \)969 million.
Diluted earnings per share (EPS) decreased 3.5% to \(0.82, with adjusted EPS steady at \)0.96.
U.S. Foodservice Operations: Sales rose slightly by 0.7% to \(13.8 billion, but case volume fell by 2.0%. Gross profit dropped 1.9% to \)2.6 billion; operating income fell 11.5% to $754 million.
International Foodservice Operations: Sales declined 1.1% to \(3.5 billion, impacted by foreign exchange rates and divestiture of the Mexico joint venture. However, on a constant currency basis, sales grew 2.2%. Gross profit increased 1.1% to \)728 million with operating income rising 14.3% to $96 million.
Cash and cash equivalents totaled $1.5 billion, reflecting strong liquidity.
Free cash flow increased 10% to $954 million for the first 39 weeks of fiscal 2025.
The company returned \(1.5 billion to shareholders through \)700 million share repurchases and $752 million dividends.
Long-term debt stood at $12.2 billion, with total debt to adjusted EBITDA of 3.15x, maintaining a solid investment-grade financial profile.
Sysco’s Q3 financial results were challenged by macroeconomic and environmental factors reducing consumer foot traffic and supply chain costs, impacting profitability. Despite a 2% volume decrease in U.S. Foodservice, sales growth of 1.1% indicates successful price management in inflationary conditions, notably 2.1% product cost inflation primarily in dairy and meat.
Management’s commentary during previous earnings calls emphasized ongoing transformational initiatives aimed at cost savings, supply chain efficiencies, and technology enhancements to drive long-term profitability. Consistent with this, Sysco disclosed an expected FY25 sales growth of approximately 3% and adjusted EPS growth of at least 1%, underscoring a confident recovery trajectory amid a challenging environment.
The recent 6% dividend increase, marking 56 consecutive years of dividend growth, signals management’s commitment to shareholder value. The company’s robust liquidity, with over $4 billion available alongside disciplined capital allocation, positions it well to navigate ongoing economic uncertainties including tariff impacts, inflation, and government efficiency measures.
Key financial ratios such as adjusted EBITDA margin, net debt to EBITDA, gross margin contraction (35 bps), and operating expense increases were analyzed to provide deeper insights into operational leverage and cost structure amidst volume pressures.
Sysco Corporation’s Q3 fiscal 2025 report illustrates resilience in a volatile market affected by uncontrollable external disruptions. While volume declines present near-term challenges, strategic initiatives and strong financial discipline lay the foundation for sustainable growth. The company’s clear focus on innovation, supply chain transformation, and customer engagement reflects a proactive approach to market dynamics. Investors should watch for continued execution on cost savings and sales growth initiatives as indicators of successful long-term performance.
For the detailed SEC filing and source details, visit Sysco Q3 FY 2025 8-K report.
SyscoFinancialResults, FoodserviceIndustry, SupplyChainTransformation, InflationImpact, DividendGrowth