Sysco (SYY) Q2 2025 earnings summary

Executive summary

• Sales grew 4.5% year-over-year to $20.2 billion in Q2 FY25, driven by U.S. Foodservice volume growth and moderate inflation.

• Adjusted EPS increased 4.5% to $0.93, supported by volume growth, margin management, and efficiency improvements.

• International and SYGMA segments delivered strong profit growth, with international adjusted operating income up 26.5%.

• Net earnings declined 2.2% to $406 million due to higher restructuring and acquisition costs; adjusted net earnings rose 2.0%.

• Returned $803 million to shareholders in Q2 via share repurchases and dividends; targeting $2.25 billion for FY25.

Financial highlights

• Net sales grew 4.5% year-over-year to $20.2 billion; gross profit up 3.9% to $3.7 billion.

• Adjusted operating income increased 5.1% to $783 million; adjusted EBITDA up 4.4% to $969 million.

• Gross margin at 18.1%, down 11 bps year-over-year; adjusted operating margin at 3.9%.

• Net debt to adjusted EBITDA ratio was 2.76x at quarter end; $11.8 billion in net debt and $3.1 billion in liquidity.

• Free cash flow for the first half was $331 million, down from the prior year.

Outlook and guidance

• FY25 guidance reiterated: sales growth of 4–5% and adjusted EPS growth of 6–7%.

• Second half anticipated to deliver higher EPS growth (high single digits) due to self-help initiatives and margin expansion.

• Share repurchase plan increased to $1.25 billion for FY25; total cash return to shareholders expected at $2.25 billion.

• Strategic sourcing, supply chain efficiencies, and organizational optimization expected to yield $100 million in annualized savings starting in the second half.

• Adjusted tax rate for FY25 guided at 24.5%-25%; depreciation and amortization at ~$800 million.