EX-99.1 2 syy2024q3pressrelease.htm EX-99.1 Document

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SYSCO REPORTS THIRD QUARTER OPERATING INCOME AND EPS GROWTH

HOUSTON, April 30, 2024 - Sysco Corporation (NYSE: SYY) (“Sysco” or the “company”) today announced financial results for its 13-week third fiscal quarter ended March 30, 2024.

Key financial results for the third quarter of fiscal year 2024 include the following (comparisons are to the same period in fiscal year 2023):
Sales increased 2.7%; U.S. Foodservice volume increased 2.9%; U.S. local volumes grew 0.4%;
Gross profit increased 5.2% to $3.6 billion;
Operating income increased 3.8% to $722.0 million, and adjusted1 operating income increased 8.4% to $799.3 million;
EBITDA increased 5.4% to $933.0 million, and adjusted EBITDA increased 8.5% to $976.6 million2;
EPS3 increased 1.2% to $0.85, compared to $0.84 in the same period last year, and adjusted1 EPS increased 6.7% to $0.96;
Raising cost-out targets from $100 million to $120 million for fiscal year 2024; and
Sysco returned approximately $753 million of capital to shareholders via $500 million of share repurchases and $253 million of dividends and remains on target to return approximately $2.25 billion back to shareholders in fiscal year 2024.

“Our third quarter performance demonstrated disciplined efforts to deliver strong profit growth, despite a softer macro backdrop. I am proud of our team for taking actions in the quarter to deliver strong gross profit margins and manage expenses. The agility and accountability of the leadership team enabled us to deliver our profit objectives for the quarter, despite softer sales and case volumes. Lower traffic to restaurants year over year negatively impacted case volumes, but sequentially improved during the quarter. We converted the negative traffic at restaurants into sales and case growth at Sysco by taking market share, profitably. With that said, we are focused upon improving local case volume performance through a set of specific actions, inclusive of continued investments into our people, process, and technology in local sales,” said Kevin Hourican, Sysco’s Chair of the Board and Chief Executive Officer.

“Our third quarter operating profit included our sixth consecutive quarter of positive operating leverage, as gross profit expanded at a faster rate than operating expenses. Our teams proactively addressed variable and structural operating expenses this quarter, giving us confidence in raising our cost-out targets to $120 million this fiscal year. Additionally, our balanced approach to capital allocation demonstrates the importance of investing in the business and rewarding our shareholders. We continue to re-invest in the business and remain on target to return approximately $2.25 billion back to shareholders in fiscal year 2024, including our recently raised dividend. We remain confident
1 Adjusted financial results, including adjusted operating expense, adjusted operating income (loss), adjusted earnings per share (EPS) and adjusted EBITDA, are non-GAAP financial measures that exclude certain items, which primarily include acquisition-related costs, restructuring and severance costs, and transformational project costs. Last year’s Certain Items include a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer, adjustments to our bad debt reserve specific to aged receivables existing prior to the COVID-19 pandemic and adjustments to a product return allowance related to COVID-related personal protection equipment inventory.
2 Earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA are non-GAAP financial measures. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.
3 Earnings per share (EPS) are shown on a diluted basis, unless otherwise specified.
1


in our fiscal year 2024 guidance of five to ten percent adjusted EPS growth to $4.20 to $4.40,” said Kenny Cheung, Sysco’s Chief Financial Officer.

Third Quarter Fiscal Year 2024 Results (comparisons are to the same period in fiscal year 2023)

Total Sysco

Sales for the third quarter increased 2.7% to $19.4 billion.

Gross profit increased 5.2% to $3.6 billion, and gross margin increased 44 basis points to 18.6%. Product cost inflation was 1.9% at the total enterprise level, as measured by the estimated change in Sysco’s product costs, primarily in the meat and frozen categories. The increase in gross profit for the third quarter was primarily driven by positive volumes, as well as continued progress with effective management of product cost inflation and our strategic sourcing initiative.

Operating expenses increased 5.5%, driven by increased volumes and cost inflation. Adjusted operating expenses increased 4.3%.

Operating income increased 3.8% to $722.0 million, and adjusted operating income increased 8.4% to $799.3 million.

U.S. Foodservice Operations

The U.S. Foodservice Operations segment results were driven by higher volumes and effective margin management, which resulted in continued profit growth.

Sales for the third quarter increased 3.4% to $13.7 billion. Total case volume within U.S. Foodservice grew 2.9% for the third quarter, while local case volume within U.S. Foodservice increased 0.4%.

Gross profit increased 4.2% to $2.7 billion, and gross margin increased 15 basis points to 19.4%.

Operating expenses increased 6.6%, and adjusted operating expenses increased 6.0%.

Operating income decreased 0.5% to $852.4 million, and adjusted operating income increased 0.7% to $874.8 million.

International Foodservice Operations

The International Foodservice Operations segment delivered another strong quarter of sales and profit growth.

Sales for the third quarter increased 4.5% to $3.5 billion. On a constant currency basis4, sales for the third quarter were $3.4 billion, an increase of 2.4%. Foreign exchange rates increased both International Foodservice Operations sales by 2.1% and total Sysco sales by 0.4% during the quarter.

Gross profit increased 12.0% to $719.7 million, and gross margin increased 138 basis points to 20.6%. On a constant currency basis4, gross profit increased 9.5% to $704.0 million. Foreign exchange rates increased both International Foodservice Operations gross profit by 2.5% and total Sysco gross profit by 0.5% during the quarter.

Operating expenses increased 6.9%, and adjusted operating expenses increased 6.0%. On a constant currency basis4, adjusted operating expenses increased 3.6%. Foreign exchange rates increased both International Foodservice Operations operating expenses by 2.4% and total Sysco operating expenses by 0.5% during the quarter.

4 Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. These adjusted measures are non-GAAP financial measures. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.

2


Operating income increased 73.9% to $83.9 million, and adjusted operating income increased 63.4% to $109.4 million. On a constant currency basis4, adjusted operating income was $107.4 million, an increase of 60.4%. Foreign exchange rates increased both International Foodservice Operations operating income by 3.0% and total Sysco operating income by 0.1% during the quarter.

Balance Sheet, Cash Flow and Capital Spending

As of the end of the quarter, the company had a cash balance of $598.3 million.

During the first 39 weeks of fiscal year 2024, Sysco returned $1.5 billion to shareholders via $699.9 million of share repurchases and $758.1 million of dividends.

Cash flow from operations was $1.4 billion for the first 39 weeks of fiscal year 2024, which was a decrease of $52.6 million over the prior year period.

Capital expenditures, net of proceeds from sales of plant and equipment, for the first 39 weeks of fiscal year 2024 were $509.5 million.

Free cash flow5 for the first 39 weeks of fiscal year 2024 was $863.7 million, which was a decrease of $115.9 million over the prior year period.
5 Free cash flow is a non-GAAP financial measure that represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Reconciliations for all non-GAAP financial measures are included at the end of this release.
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Conference Call & Webcast

Sysco will host a conference call to review the company’s third quarter fiscal year 2024 financial results on Tuesday, April 30, 2024, at 10:00 a.m. Eastern Daylight Time. A live webcast of the call, accompanying slide presentation and a copy of this news release will be available online at investors.sysco.com.

Key Highlights:
13-Week Period Ended39-Week Period Ended
Financial Comparison:March 30, 2024ChangeMarch 30, 2024Change
GAAP:
Sales$19.4 billion2.7%$58.3 billion3.0%
Gross Profit
$3.6 billion5.2%$10.8 billion4.9%
Gross Margin18.6%44 bps18.5%33 bps
Operating Expenses
$2.9 billion5.5%$8.5 billion4.2%
Operating Income$722.0 million3.8%$2.2 billion7.3%
Operating Margin3.7%4 bps3.8%16 bps
Net Earnings$424.7 million-1.1%$1.3 billion29.6%
Diluted Earnings Per Share$0.851.2%$2.6631.0%
Non-GAAP (1):
Gross Profit
$3.6 billion5.2%$10.8 billion4.9%
Gross Margin18.6%44 bps18.5%34 bps
Operating Expenses$2.8 billion4.3%$8.4 billion3.7%
Operating Income$799.3 million8.4%$2.4 billion9.4%
Operating Margin4.1%22 bps4.1%24 bps
EBITDA$933.0 million5.4%$2.9 billion24.3%
Adjusted EBITDA$976.6 million8.5%$2.9 billion10.6%
Net Earnings$483.4 million5.0%$1.5 billion8.3%
Diluted Earnings Per Share (2)
$0.966.7%$2.929.4%
Case Growth:
U.S. Foodservice2.9%3.0%
Local0.4%1.3%
Sysco Brand Sales as a % of Cases:
U.S. Broadline36.3%-19 bps36.8%-6 bps
Local46.5%3 bps46.9%26 bps
Note:
(1) Reconciliations of all non-GAAP financial measures to the nearest respective GAAP financial measures are included at the end of this release.
(2) Individual components in the table above may not sum to the totals due to the rounding.
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Forward-Looking Statements
Statements made in this press release or in our earnings call for the third quarter of fiscal year 2024 that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made and are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations. These statements include statements concerning: our expectations regarding future improvements in productivity; our belief that improvements in our organizational capabilities will deliver compelling outcomes in future periods; our expectations regarding improvements in international volume; our expectations that our transformational agenda will drive long-term growth; our expectations regarding the continuation of an inflationary environment; our expectations regarding improvements in the efficiency of our supply chain; our expectations regarding the impact of our Recipe for Growth strategy and the pace of progress in implementing the initiatives under that strategy; our expectations regarding Sysco’s ability to outperform the market in future periods; our expectations that our strategic priorities will enable us to grow faster than the market; our expectations regarding our efforts to reduce overtime rates and the incremental investments in hiring; our expectations regarding the expansion of our Sysco Driver Academy and our belief that the academy will enable us to provide upward career path mobility for our warehouse colleagues and improve colleague retention; our expectations regarding the benefits of the six-day delivery and last mile distribution models; our plans to improve the capabilities of our sales team; our plans to refine our engineering labor standards; our expectations regarding the impact of our growth initiatives and their ability to enable Sysco to consistently outperform the market; our expectations to exceed our growth target by the end of fiscal 2024; our ability to deliver against our strategic priorities; economic trends in the United States and abroad; our belief that there is further opportunity for profit in the future; our future growth, including growth in sales and earnings per share; the pace of implementation of our business transformation initiatives; our expectations regarding our balanced approach to capital allocation and rewarding our shareholders; our plans to improve colleague retention, training and productivity; our belief that our Recipe for Growth transformation is creating capabilities that will help us profitably grow for the long term; our expectations regarding our long-term financial outlook; our expectations of the effects labor harmony will have on sales and case volume, as well as mitigation expenses; our expectations for customer acquisition in the local/street space; our expectations regarding the effectiveness of our Global Support Center expense control measures; and our expectations regarding the growth and resilience of our food away from home market.
It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of Sysco’s control. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see our Annual Report on Form 10-K for the year ended July 1, 2023, as filed with the SEC, and our subsequent filings with the SEC. We do not undertake to update our forward-looking statements, except as required by applicable law.
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About Sysco

Sysco is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. With more than 72,000 colleagues, the company operates 334 distribution facilities worldwide and serves approximately 725,000 customer locations. For fiscal year 2023 that ended July 1, 2023, the company generated sales of more than $76 billion. Information about our Sustainability program, including Sysco’s 2023 Sustainability Report and 2023 Diversity, Equity & Inclusion Report, can be found at www.sysco.com.

For more information, visit www.sysco.com or connect with Sysco on Facebook at www.facebook.com/SyscoFoods. For important news and information regarding Sysco, visit the Investor Relations section of the company’s Internet home page at investors.sysco.com, which Sysco plans to use as a primary channel for publishing key information to its investors, some of which may contain material and previously non-public information. In addition, investors should continue to review our news releases and filings with the SEC. It is possible that the information we disclose through any of these channels of distribution could be deemed to be material information.
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Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In Thousands, Except for Share and Per Share Data)
Quarter EndedYear Ended
 Mar. 30, 2024Apr. 1, 2023Mar. 30, 2024Apr. 1, 2023
Sales$19,379,500 $18,875,676 $58,287,896 $56,596,459 
Cost of sales15,770,444 15,444,316 47,517,435 46,326,628 
Gross profit3,609,056 3,431,360 10,770,461 10,269,831 
Operating expenses2,887,010 2,735,633 8,544,790 8,196,480 
Operating income722,046 695,727 2,225,671 2,073,351 
Interest expense157,853 134,931 441,867 391,123 
Other expense (income), net (1) (2)
10,380 6,759 22,265 354,813 
Earnings before income taxes553,813 554,037 1,761,539 1,327,415 
Income taxes129,125 124,433 418,217 291,027 
Net earnings$424,688 $429,604 $1,343,322 $1,036,388 
Net earnings:  
Basic earnings per share$0.85 $0.85 $2.67 $2.04 
Diluted earnings per share0.85 0.84 2.66 2.03 
Average shares outstanding499,642,505 507,716,975 503,027,209 507,635,083 
Diluted shares outstanding501,921,446 509,842,400 504,973,406 510,123,782 
(1)
Gains and losses related to the disposition of fixed assets have been recognized within operating expenses. Prior year amounts have been reclassified to conform to this presentation.
(2)
Sysco’s second quarter of fiscal 2023 included a charge of $315.4 million in other expense related to pension settlement charges.
7


Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except for Share Data)
 Mar. 30, 2024Jul. 1, 2023
(Unaudited)
ASSETS
Current assets  
Cash and cash equivalents$598,322 $745,201 
Accounts receivable, less allowances of $85,590 and $45,5995,556,703 5,091,970 
Inventories4,733,966 4,480,812 
Prepaid expenses and other current assets310,069 284,566 
Income tax receivable5,815 5,815 
Total current assets11,204,875 10,608,364 
Plant and equipment at cost, less accumulated depreciation5,290,437 4,915,049 
Other long-term assets  
Goodwill5,220,989 4,645,754 
Intangibles, less amortization1,136,869 859,530 
Deferred income taxes442,256 420,450 
Operating lease right-of-use assets, net882,211 731,766 
Other assets534,703 640,232 
Total other long-term assets8,217,028 7,297,732 
Total assets$24,712,340 $22,821,145 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities  
Accounts payable$5,869,479 $6,025,757 
Accrued expenses2,246,595 2,251,181 
Accrued income taxes33,988 101,894 
Current operating lease liabilities122,984 99,051 
Current maturities of long-term debt93,225 62,550 
Total current liabilities8,366,271 8,540,433 
Long-term liabilities  
Long-term debt12,113,205 10,347,997 
Deferred income taxes312,927 302,904 
Long-term operating lease liabilities791,007 656,269 
Other long-term liabilities995,420 931,708 
Total long-term liabilities14,212,559 12,238,878 
Commitments and contingencies
Noncontrolling interest32,557 33,212 
Shareholders’ equity  
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none— — 
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares765,175 765,175 
Paid-in capital1,846,743 1,814,681 
Retained earnings11,898,772 11,310,664 
Accumulated other comprehensive loss(1,231,221)(1,252,590)
Treasury stock at cost, 266,250,088 and 260,062,834 shares(11,178,516)(10,629,308)
Total shareholders’ equity2,100,953 2,008,622 
Total liabilities and shareholders’ equity$24,712,340 $22,821,145 
8


Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS (Unaudited)
(In Thousands)
 39-Week Period Ended
 Mar. 30, 2024Apr. 1, 2023
Cash flows from operating activities:  
Net earnings$1,343,322 $1,036,388 
Adjustments to reconcile net earnings to cash provided by operating activities: 
Pension settlement charge— 315,354 
Share-based compensation expense76,688 73,765 
Depreciation and amortization646,848 574,945 
Operating lease asset amortization91,694 83,959 
Amortization of debt issuance and other debt-related costs13,695 15,019 
Deferred income taxes(25,465)(163,044)
Provision for losses on receivables43,409 21,899 
Other non-cash items(2,488)2,787 
Additional changes in certain assets and liabilities, net of effect of businesses acquired:
Increase in receivables(325,108)(405,372)
Increase in inventories(125,859)(172,117)
Decrease (increase) in prepaid expenses and other current assets23,267 (6,242)
(Decrease) increase in accounts payable(281,506)88,995 
Increase (decrease) in accrued expenses29,019 (55,162)
Decrease in operating lease liabilities(102,969)(100,847)
(Decrease) increase in accrued income taxes(67,906)119,784 
Decrease in other assets25,621 23,843 
Increase (decrease) in other long-term liabilities10,931 (28,172)
Net cash provided by operating activities1,373,193 1,425,782 
Cash flows from investing activities:
Additions to plant and equipment(530,161)(474,456)
Proceeds from sales of plant and equipment20,708 28,313 
Acquisition of businesses, net of cash acquired(1,181,188)(37,384)
Purchase of marketable securities(11,422)(15,078)
Proceeds from sales of marketable securities— 11,641 
Other investing activities (1)
1,414 5,610 
Net cash used for investing activities(1,700,649)(481,354)
Cash flows from financing activities:
Bank and commercial paper borrowings, net524,593 — 
Other debt borrowings including senior notes1,261,208 174,262 
Other debt repayments including senior notes(338,721)(81,345)
Debt issuance costs(13,035)— 
Proceeds from stock option exercises103,496 67,115 
Stock repurchases(699,947)(377,800)
Dividends paid(758,128)(747,378)
Other financing activities (2)
(19,206)(57,906)
Net cash provided by (used for) financing activities60,260 (1,023,052)
Effect of exchange rates on cash, cash equivalents and restricted cash(6,206)1,713 
Net decrease in cash, cash equivalents and restricted cash(273,402)(76,911)
Cash, cash equivalents and restricted cash at beginning of period966,033 931,376 
Cash, cash equivalents and restricted cash at end of period$692,631 $854,465 
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Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest$376,465 $343,402 
Income taxes, net of refunds510,458 306,174 
(1)
Change primarily includes proceeds from the settlement of corporate-owned life insurance policies.
(2)
Change includes cash paid for shares withheld to cover taxes, settlement of interest rate hedges and other financing activities.
10


Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove (1) restructuring charges; (2) expenses associated with our various transformation initiatives; (3) severance charges; and (4) acquisition-related costs consisting of: (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions. Our results for fiscal 2023 were also impacted by adjustments to a product return allowance pertaining to COVID-related personal protection equipment inventory, a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer and the reduction of bad debt expense previously recognized in fiscal 2020 due to the impact of the COVID-19 pandemic on the collectability of our pre-pandemic trade receivable balances.
The results of our operations can be impacted due to changes in exchange rates applicable in converting local currencies to U.S. dollars. We measure our results on a constant currency basis. Constant currency operating results are calculated by translating current-period local currency operating results with the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period.
Management believes that adjusting its operating expenses, operating income, net earnings and diluted earnings per share to remove these Certain Items and presenting its results on a constant currency basis provides an important perspective with respect to our underlying business trends and results. It provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company’s underlying operations and (2) facilitates comparisons on a year-over-year basis.
Sysco has a history of growth through acquisitions and excludes from its non-GAAP financial measures the impact of acquisition-related intangible amortization, acquisition costs and due diligence costs for those acquisitions. We believe this approach significantly enhances the comparability of Sysco’s results for fiscal year 2024 and fiscal year 2023.
Set forth on the following page is a reconciliation of sales, operating expenses, operating income, other (income) expense, net earnings and diluted earnings per share to adjusted results for these measures for the periods presented. Individual components of diluted earnings per share may not be equal to the total presented when added due to rounding. Adjusted diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.
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Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
 13-Week Period Ended Mar. 30, 202413-Week Period Ended Apr. 1, 2023Change in Dollars%/bps Change
Sales (GAAP)$19,379,500 $18,875,676 $503,824 2.7 %
Impact of currency fluctuations (1)
(69,576)— (69,576)(0.4)
Comparable sales using a constant currency basis (Non-GAAP)$19,309,924 $18,875,676 $434,248 2.3 %
Cost of sales (GAAP)$15,770,444 $15,444,316 $326,128 2.1 %
Gross profit (GAAP)$3,609,056 $3,431,360 $177,696 5.2 %
Impact of currency fluctuations (1)
(15,662)— (15,662)(0.5)
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP)$3,593,394 $3,431,360 $162,034 4.7 %
Gross margin (GAAP)18.62 %18.18 %44 bps
Impact of currency fluctuations (1)
(0.01)— -1 bp
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP)18.61 %18.18 %43 bps
Operating expenses (GAAP)$2,887,010 $2,735,633 $151,377 5.5 %
Impact of restructuring and transformational project costs (2)
(28,472)(12,255)(16,217)NM
Impact of acquisition-related costs (3)
(48,734)(29,004)(19,730)(68.0)
Impact of bad debt reserve adjustments (4)
— (90)90 NM
Operating expenses adjusted for Certain Items (Non-GAAP)2,809,804 2,694,284 115,520 4.3 
Impact of currency fluctuations (1)
(14,433)— (14,433)(0.5)
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)$2,795,371 $2,694,284 $101,087 3.8 %
Operating expense as a percentage of sales (GAAP)14.90 %14.49 %41 bps
Impact of certain item adjustments(0.40)(0.22)-18 bps
Adjusted operating expense as a percentage of sales (Non-GAAP)14.50 %14.27 %23 bps
Operating income (GAAP)$722,046 $695,727 $26,319 3.8 %
Impact of restructuring and transformational project costs (2)
28,472 12,255 16,217 NM
Impact of acquisition-related costs (3)
48,734 29,004 19,730 68.0 
Impact of bad debt reserve adjustments (4)
— 90 (90)NM
Operating income adjusted for Certain Items (Non-GAAP)799,252 737,076 62,176 8.4 
Impact of currency fluctuations (1)
(1,229)— (1,229)(0.1)
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)$798,023 $737,076 $60,947 8.3 %
Operating margin (GAAP)3.73 %3.69 %4 bps
Operating margin adjusted for Certain Items (Non-GAAP)4.12 %3.90 %22 bps
Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP)4.13 %3.90 %23 bps
Other expense (GAAP)$10,380 $6,759 $3,621 53.6 %
Impact of other non-routine gains and losses— (448)448 NM
Other expense adjusted for Certain Items (Non-GAAP)$10,380 $6,311 $4,069 64.5 %
Net earnings (GAAP)$424,688 $429,604 $(4,916)(1.1)%
Impact of restructuring and transformational project costs (2)
28,472 12,255 16,217 NM
Impact of acquisition-related costs (3)
48,734 29,004 19,730 68.0 
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Impact of bad debt reserve adjustments (4)
— 90 (90)NM
Impact of other non-routine gains and losses— 448 (448)NM
Tax impact of restructuring and transformational project costs (5)
(6,826)(3,190)(3,636)NM
Tax impact of acquisition-related costs (5)
(11,684)(7,550)(4,134)(54.8)
Tax impact of bad debt reserves adjustments (5)
— (23)23 NM
Tax impact of other non-routine gains and losses (5)
— (117)117 NM
Net earnings adjusted for Certain Items (Non-GAAP)$483,384 $460,521 $22,863 5.0 %
Diluted earnings per share (GAAP)$0.85 $0.84 $0.01 1.2 %
Impact of restructuring and transformational project costs (2)
0.06 0.02 0.04 NM
Impact of acquisition-related costs (3)
0.10 0.06 0.04 66.7 
Tax impact of restructuring and transformational project costs (5)
(0.01)(0.01)— — 
Tax impact of acquisition-related costs (5)
(0.02)(0.01)(0.01)(100.0)
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (6)
$0.96 $0.90 $0.06 6.7 %
Diluted shares outstanding501,921,446 509,842,400 
(1)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results.
(2)
Fiscal 2024 includes $13 million related to restructuring and severance charges and $15 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2023 includes $2 million related to restructuring and severance charges and $10 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(3)
Fiscal 2024 includes $32 million of intangible amortization expense and $17 million in acquisition and due diligence costs. Fiscal 2023 includes $27 million of intangible amortization expense and $2 million in acquisition and due diligence costs.
(4)
Fiscal 2023 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(5)
The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred.
(6)
Individual components of diluted earnings per share may not equal the total presented when added due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.
NMRepresents that the percentage change is not meaningful.
13


Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
 39-Week Period Ended Mar. 30, 202439-Week Period Ended Apr. 1, 2023Change in Dollars%/bps Change
Sales (GAAP)$58,287,896 $56,596,459 $1,691,437 3.0 %
Impact of currency fluctuations (1)
(278,400)— (278,400)(0.5)
Comparable sales using a constant currency basis (Non-GAAP)$58,009,496 $56,596,459 $1,413,037 2.5 %
Cost of sales (GAAP)$47,517,435 $46,326,628 $1,190,807 2.6 %
Impact of inventory valuation adjustment (2)
— 2,571 (2,571)— 
Cost of sales adjusted for Certain Items (Non-GAAP)$47,517,435 $46,329,199 $1,188,236 2.6 %
Gross profit (GAAP)$10,770,461 $10,269,831 $500,630 4.9 %
Impact of inventory valuation adjustment (2)
— (2,571)2,571 — 
Gross profit adjusted for Certain Items (Non-GAAP)10,770,461 10,267,260 503,201 4.9 
Impact of currency fluctuations (1)
(66,029)— (66,029)(0.6)
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP)$10,704,432 $10,267,260 $437,172 4.3 %
Gross margin (GAAP)18.48 %18.15 %33 bps
Impact of inventory valuation adjustment (2)
— (0.01)1 bp
Gross margin adjusted for Certain Items (Non-GAAP)18.48 18.14 34 bps
Impact of currency fluctuations (1)
(0.03)— -3 bps
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP)18.45 %18.14 %31 bps
Operating expenses (GAAP)$8,544,790 $8,196,480 $348,310 4.2 %
Impact of restructuring and transformational project costs (3)
(59,567)(38,288)(21,279)(55.6)
Impact of acquisition-related costs (4)
(113,193)(87,419)(25,774)(29.5)
Impact of bad debt reserve adjustments (5)
— 4,425 (4,425)NM
Operating expenses adjusted for Certain Items (Non-GAAP)8,372,030 8,075,198 296,832 3.7 
Impact of currency fluctuations (1)
(63,371)— (63,371)(0.8)
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)$8,308,659 $8,075,198 $233,461 2.9 %
Operating expense as a percentage of sales (GAAP)14.66 %14.48 %18 bps
Impact of certain item adjustments(0.30)(0.21)-9 bps
Adjusted operating expense as a percentage of sales (Non-GAAP)14.36 %14.27 %9 bps
Operating income (GAAP)$2,225,671 $2,073,351 $152,320 7.3 %
Impact of inventory valuation adjustment (2)
— (2,571)2,571 NM
Impact of restructuring and transformational project costs (3)
59,567 38,288 21,279 55.6 
Impact of acquisition-related costs (4)
113,193 87,419 25,774 29.5 
Impact of bad debt reserve adjustments (5)
— (4,425)4,425 NM
Operating income adjusted for Certain Items (Non-GAAP)2,398,431 2,192,062 206,369 9.4 
Impact of currency fluctuations (1)
(2,658)— (2,658)(0.1)
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)$2,395,773 $2,192,062 $203,711 9.3 %
Operating margin (GAAP)3.82 %3.66 %16 bps
Operating margin adjusted for Certain Items (Non-GAAP)4.11 %3.87 %24 bps
Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP)4.13 %3.87 %26 bps
Other expense (GAAP)$22,265 $354,813 $(332,548)(93.7)%
14


Impact of other non-routine gains and losses (6)
— (315,326)315,326 NM
Other expense adjusted for Certain Items (Non-GAAP)
$22,265 $39,487 $(17,222)(43.6)%
Net earnings (GAAP)$1,343,322 $1,036,388 $306,934 29.6 %
Impact of inventory valuation adjustment (2)
— (2,571)2,571 NM
Impact of restructuring and transformational project costs (3)
59,567 38,288 21,279 55.6 
Impact of acquisition-related costs (4)
113,193 87,419 25,774 29.5 
Impact of bad debt reserve adjustments (5)
— (4,425)4,425 NM
Impact of other non-routine gains and losses (6)
— 315,326 (315,326)NM
Tax impact of inventory valuation adjustment (7)
— 648 (648)NM
Tax impact of restructuring and transformational project costs (7)
(14,510)(9,649)(4,861)(50.4)
Tax impact of acquisition-related costs (7)
(27,572)(22,031)(5,541)(25.2)
Tax impact of bad debt reserves adjustments (7)
— 1,115 (1,115)NM
Tax impact of other non-routine gains and losses (7)
— (79,466)79,466 NM
Net earnings adjusted for Certain Items (Non-GAAP)$1,474,000 $1,361,042 $112,958 8.3 %
Diluted earnings per share (GAAP)$2.66 $2.03 $0.63 31.0 %
Impact of inventory valuation adjustment (2)
— (0.01)0.01 NM
Impact of restructuring and transformational project costs (3)
0.12 0.08 0.04 50.0 
Impact of acquisition-related costs (4)
0.22 0.17 0.05 29.4 
Impact of bad debt reserve adjustments (5)
— (0.01)0.01 NM
Impact of other non-routine gains and losses (6)
— 0.62 (0.62)NM
Tax impact of restructuring and transformational project costs (7)
(0.03)(0.02)(0.01)(50.0)
Tax impact of acquisition-related costs (7)
(0.05)(0.04)(0.01)(25.0)
Tax impact of other non-routine gains and losses (7)
— (0.16)0.16 NM
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (8)
$2.92 $2.67 $0.25 9.4 %
Diluted shares outstanding504,973,406 510,123,782 
(1)
Represents a constant currency adjustment which eliminates the impact of foreign currency fluctuations on the current year results.
(2)
Fiscal 2023 represents an adjustment to a product return allowance related to COVID-related personal protection equipment inventory.
(3)
Fiscal 2024 includes $22 million related to restructuring and severance charges and $38 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2023 includes $12 million related to restructuring and severance charges and $26 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(4)
Fiscal 2024 includes $91 million of intangible amortization expense and $22 million in acquisition and due diligence costs. Fiscal 2023 includes $78 million of intangible amortization expense and $9 million in acquisition and due diligence costs.
(5)
Fiscal 2023 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(6)
Fiscal 2023 primarily includes a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(7)
The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred.
(8)
Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.
NMRepresents that the percentage change is not meaningful.

15


Sysco Corporation and its Consolidated Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments
(Dollars in Thousands)
13-Week Period Ended Mar. 30, 202413-Week Period Ended Apr. 1, 2023Change in Dollars%/bps Change
U.S. FOODSERVICE OPERATIONS
Sales (GAAP)$13,707,108 $13,257,519 $449,589 3.4 %
Gross profit (GAAP)2,652,847 2,545,859 106,988 4.2 %
Gross margin (GAAP)19.35 %19.20 %15 bps
Operating expenses (GAAP)$1,800,403 $1,688,836 $111,567 6.6 %
Impact of restructuring and transformational project costs (1)
(6,134)(159)(5,975)NM
Impact of acquisition-related costs (2)
(16,214)(11,463)(4,751)(41.4)
Impact of bad debt reserve adjustments (3)
— (81)81 NM
Operating expenses adjusted for Certain Items (Non-GAAP)$1,778,055 $1,677,133 $100,922 6.0 %
Operating income (GAAP)$852,444 $857,023 $(4,579)(0.5)%
Impact of restructuring and transformational project costs (1)
6,134 159 5,975 NM
Impact of acquisition-related costs (2)
16,214 11,463 4,751 41.4 
Impact of bad debt reserve adjustments (3)
— 81 (81)NM
Operating income adjusted for Certain Items (Non-GAAP)$874,792 $868,726 $6,066 0.7 %
INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)$3,493,232 $3,344,121 $149,111 4.5 %
Impact of currency fluctuations (4)
(69,521)— (69,521)(2.1)
Comparable sales using a constant currency basis (Non-GAAP)$3,423,711 $3,344,121 $79,590 2.4 %
Gross profit (GAAP)$719,681 $642,778 $76,903 12.0 %
Impact of currency fluctuations (4)
(15,637)— (15,637)(2.5)
Comparable gross profit using a constant currency basis (Non-GAAP)$704,044 $642,778 $61,266 9.5 %
Gross margin (GAAP)20.60 %19.22 %138 bps
Impact of currency fluctuations (4)
(0.04)— -4 bps
Comparable gross margin using a constant currency basis (Non-GAAP)20.56 %19.22 %134 bps
Operating expenses (GAAP)$635,783 $594,542 $41,241 6.9 %
Impact of restructuring and transformational project costs (5)
(6,775)(2,103)(4,672)NM
Impact of acquisition-related costs (6)
(18,686)(16,585)(2,101)(12.7)
Impact of bad debt reserve adjustments (3)
— (9)NM
Operating expenses adjusted for Certain Items (Non-GAAP)610,322 575,845 34,477 6.0 
Impact of currency fluctuations (4)
(13,641)— (13,641)(2.4)
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)$596,681 $575,845 $20,836 3.6 %
Operating income (GAAP)$83,898 $48,236 $35,662 73.9 %
Impact of restructuring and transformational project costs (5)
6,775 2,103 4,672 NM
Impact of acquisition-related costs (6)
18,686 16,585 2,101 12.7 
Impact of bad debt reserve adjustments (3)
— (9)NM
Operating income adjusted for Certain Items (Non-GAAP)109,359 66,933 42,426 63.4 
Impact of currency fluctuations (4)
(1,996)— (1,996)(3.0)
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)$107,363 $66,933 $40,430 60.4 %
16


SYGMA
Sales (GAAP)$1,903,922 $1,972,058 $(68,136)(3.5)%
Gross profit (GAAP)153,258 166,104 (12,846)(7.7)%
Gross margin (GAAP)8.05 %8.42 %-37 bps
Operating expenses (GAAP)$136,453 $140,486 $(4,033)(2.9)%
Operating income (GAAP)16,805 25,618 (8,813)(34.4)%
OTHER
Sales (GAAP)$275,238 $301,978 $(26,740)(8.9)%
Gross profit (GAAP)71,030 79,451 (8,421)(10.6)%
Gross margin (GAAP)25.81 %26.31 %-50 bps
Operating expenses (GAAP)$64,659 $67,615 $(2,956)(4.4)%
Operating income (GAAP)
6,371 11,836 (5,465)(46.2)%
GLOBAL SUPPORT CENTER
Gross profit (loss) (GAAP)$12,240 $(2,832)$15,072 NM
Operating expenses (GAAP)$249,712 $244,154 $5,558 2.3 %
Impact of restructuring and transformational project costs (7)
(15,563)(9,993)(5,570)(55.7)
Impact of acquisition-related costs (8)
(13,834)(956)(12,878)NM
Operating expenses adjusted for Certain Items (Non-GAAP)$220,315 $233,205 $(12,890)(5.5)%
Operating loss (GAAP)$(237,472)$(246,986)$9,514 3.9 %
Impact of restructuring and transformational project costs (7)
15,563 9,993 5,570 55.7 
Impact of acquisition-related costs (8)
13,834 956 12,878 NM
Operating loss adjusted for Certain Items (Non-GAAP)$(208,075)$(236,037)$27,962 11.8 %
TOTAL SYSCO
Sales (GAAP)$19,379,500 $18,875,676 $503,824 2.7 %
Gross profit (GAAP)3,609,056 3,431,360 177,696 5.2 %
Gross margin (GAAP)18.62 %18.18 %44 bps
Operating expenses (GAAP)$2,887,010 $2,735,633 $151,377 5.5 %
Impact of restructuring and transformational project costs (1) (5) (7)
(28,472)(12,255)(16,217)NM
Impact of acquisition-related costs (2) (6) (8)
(48,734)(29,004)(19,730)(68.0)
Impact of bad debt reserve adjustments (3)
— (90)90 NM
Operating expenses adjusted for Certain Items (Non-GAAP)$2,809,804 $2,694,284 $115,520 4.3 %
Operating income (GAAP)$722,046 $695,727 $26,319 3.8 %
Impact of restructuring and transformational project costs (1) (5) (7)
28,472 12,255 16,217 NM
Impact of acquisition-related costs (2) (6) (8)
48,734 29,004 19,730 68.0 
Impact of bad debt reserve adjustments (3)
— 90 (90)NM
Operating income adjusted for Certain Items (Non-GAAP)$799,252 $737,076 $62,176 8.4 %
(1)
Primarily represents severance and transformation initiative costs.
(2)
Fiscal 2024 and fiscal 2023 include intangible amortization expense and acquisition costs.
(3)
Fiscal 2023 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(4)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(5)
Includes restructuring costs primarily in Europe.
(6)
Represents intangible amortization expense.
(7)
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(8)
Represents due diligence costs.
NMRepresents that the percentage change is not meaningful.
17


Sysco Corporation and its Consolidated Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments
(Dollars in Thousands)
39-Week Period Ended Mar. 30, 202439-Week Period Ended Apr. 1, 2023Change in Dollars%/bps Change
U.S. FOODSERVICE OPERATIONS
Sales (GAAP)$40,925,350 $39,937,055 $988,295 2.5 %
Gross profit (GAAP)7,915,316 7,651,291 264,025 3.5 %
Gross margin (GAAP)19.34 %19.16 %18 bps
Operating expenses (GAAP)$5,282,865 $5,107,587 $175,278 3.4 %
Impact of restructuring and transformational project costs (1)
(6,361)(203)(6,158)NM
Impact of acquisition-related costs (2)
(40,680)(35,563)(5,117)(14.4)
Impact of bad debt reserve adjustments (3)
— 4,170 (4,170)NM
Operating expenses adjusted for Certain Items (Non-GAAP)$5,235,824 $5,075,991 $159,833 3.1 %
Operating income (GAAP)$2,632,451 $2,543,704 $88,747 3.5 %
Impact of restructuring and transformational project costs (1)
6,361 203 6,158 NM
Impact of acquisition-related costs (2)
40,680 35,563 5,117 14.4 
Impact of bad debt reserve adjustments (3)
— (4,170)4,170 NM
Operating income adjusted for Certain Items (Non-GAAP)$2,679,492 $2,575,300 $104,192 4.0 %
INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)$10,772,900 $9,910,267 $862,633 8.7 %
Impact of currency fluctuations (4)
(279,622)— (279,622)(2.8)
Comparable sales using a constant currency basis (Non-GAAP)$10,493,278 $9,910,267 $583,011 5.9 %
Gross profit (GAAP)$2,159,820 $1,916,503 $243,317 12.7 %
Impact of currency fluctuations (4)
(66,475)— (66,475)(3.5)
Comparable gross profit using a constant currency basis (Non-GAAP)$2,093,345 $1,916,503 $176,842 9.2 %
Gross margin (GAAP)20.05 %19.34 %71 bps
Impact of currency fluctuations (4)
(0.10)— -10 bps
Comparable gross margin using a constant currency basis (Non-GAAP)19.95 %19.34 %61 bps
Operating expenses (GAAP)$1,899,509 $1,723,874 $175,635 10.2 %
Impact of restructuring and transformational project costs (5)
(15,181)(11,597)(3,584)(30.9)
Impact of acquisition-related costs (6)
(52,430)(48,534)(3,896)(8.0)
Impact of bad debt reserve adjustments (3)
— 255 (255)NM
Operating expenses adjusted for Certain Items (Non-GAAP)1,831,898 1,663,998 167,900 10.1 
Impact of currency fluctuations (4)
(61,384)— (61,384)(3.7)
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)$1,770,514 $1,663,998 $106,516 6.4 %
Operating income (GAAP)$260,311 $192,629 $67,682 35.1 %
Impact of restructuring and transformational project costs (5)
15,181 11,597 3,584 30.9 
Impact of acquisition-related costs (6)
52,430 48,534 3,896 8.0 
Impact of bad debt reserve adjustments (3)
— (255)255 NM
Operating income adjusted for Certain Items (Non-GAAP)327,922 252,505 75,417 29.9 
Impact of currency fluctuations (4)
(5,091)— (5,091)(2.0)
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)$322,831 $252,505 $70,326 27.9 %
18


SYGMA
Sales (GAAP)$5,723,651 $5,839,051 $(115,400)(2.0)%
Gross profit (GAAP)454,575 470,458 (15,883)(3.4)%
Gross margin (GAAP)7.94 %8.06 %-12 bps
Operating expenses (GAAP)$408,657 $432,297 $(23,640)(5.5)%
Operating income (GAAP)45,918 38,161 7,757 20.3 %
OTHER
Sales (GAAP)$865,995 $910,086 $(44,091)(4.8)%
Gross profit (GAAP)222,012 237,600 (15,588)(6.6)%
Gross margin (GAAP)25.64 %26.11 %-47 bps
Operating expenses (GAAP)$195,431 $204,356 $(8,925)(4.4)%
Operating income (GAAP)26,581 33,244 (6,663)(20.0)%
GLOBAL SUPPORT CENTER
Gross profit (loss) (GAAP)$18,738 $(6,021)$24,759 NM
Impact of inventory valuation adjustment (7)
— (2,571)2,571 NM
Gross profit (loss) adjusted for Certain Items (Non-GAAP)$18,738 $(8,592)$27,330 NM
Operating expenses (GAAP)$758,328 $728,366 $29,962 4.1 %
Impact of restructuring and transformational project costs (8)
(38,025)(26,488)(11,537)(43.6)
Impact of acquisition-related costs (9)
(20,083)(3,322)(16,761)NM
Operating expenses adjusted for Certain Items (Non-GAAP)$700,220 $698,556 $1,664 0.2 %
Operating loss (GAAP)$(739,590)$(734,387)$(5,203)(0.7)%
Impact of inventory valuation adjustment (7)
— (2,571)2,571 NM
Impact of restructuring and transformational project costs (8)
38,025 26,488 11,537 43.6 
Impact of acquisition-related costs (9)
20,083 3,322 16,761 NM
Operating loss adjusted for Certain Items (Non-GAAP)$(681,482)$(707,148)$25,666 3.6 %
TOTAL SYSCO
Sales (GAAP)$58,287,896 $56,596,459 $1,691,437 3.0 %
Gross profit (GAAP)10,770,461 10,269,831 500,630 4.9 %
Gross margin (GAAP)18.48 %18.15 %33 bps
Operating expenses (GAAP)$8,544,790 $8,196,480 $348,310 4.2 %
Impact of restructuring and transformational project costs (1) (5) (8)
(59,567)(38,288)(21,279)(55.6)
Impact of acquisition-related costs (2) (6) (9)
(113,193)(87,419)(25,774)(29.5)
Impact of bad debt reserve adjustments (3)
— 4,425 (4,425)NM
Operating expenses adjusted for Certain Items (Non-GAAP)$8,372,030 $8,075,198 $296,832 3.7 %
Operating income (GAAP)$2,225,671 $2,073,351 $152,320 7.3 %
Impact of inventory valuation adjustment (7)
— (2,571)2,571 NM
Impact of restructuring and transformational project costs (1) (5) (8)
59,567 38,288 21,279 55.6 
Impact of acquisition-related costs (2) (6) (9)
113,193 87,419 25,774 29.5 
Impact of bad debt reserve adjustments (3)
— (4,425)4,425 NM
Operating income adjusted for Certain Items (Non-GAAP)$2,398,431 $2,192,062 $206,369 9.4 %
19


(1)
Primarily represents severance and transformation costs.
(2)
Includes intangible amortization expense and acquisition costs.
(3)
Fiscal 2023 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(4)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(5)
Includes restructuring and severance costs, primarily in Europe.
(6)
Represents intangible amortization expense.
(7)
Fiscal 2023 represents an adjustment to a product return allowance related to COVID-related personal protection equipment inventory.
(8)
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(9)
Represents due diligence costs.
NMRepresents that the percentage change is not meaningful.

20


Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Free Cash Flow
(In Thousands)

Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Sysco considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases and sales of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of cash including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for discretionary expenditures, as it may be necessary that we use it to make mandatory debt service or other payments. Free cash flow should not be used as a substitute for the most comparable GAAP financial measure in assessing the company’s liquidity for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. In the table that follows, free cash flow for each period presented is reconciled to net cash provided by operating activities.

39-Week Period Ended Mar. 30, 202439-Week Period Ended Apr. 1, 202339-Week Period Change in Dollars
Net cash provided by operating activities (GAAP)$1,373,193 $1,425,782 $(52,589)
Additions to plant and equipment(530,161)(474,456)(55,705)
Proceeds from sales of plant and equipment20,708 28,313 (7,605)
Free Cash Flow (Non-GAAP)$863,740 $979,639 $(115,899)
21


Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(Dollars in Thousands)

EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain Items that we do not consider representative of our underlying performance. As a result, in the non-GAAP reconciliations below for each period presented, adjusted EBITDA is computed as EBITDA plus the impact of Certain Items, excluding certain items related to interest expense, income taxes, depreciation and amortization. Sysco's management considers growth in this metric to be a measure of overall financial performance that provides useful information to management and investors about the profitability of the business, as it facilitates comparison of performance on a consistent basis from period to period by providing a measurement of recurring factors and trends affecting our business. Additionally, it is a commonly used component metric used to inform on capital structure decisions. Adjusted EBITDA should not be used as a substitute for the most comparable GAAP financial measure in assessing the company’s financial performance for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. In the tables that follow, adjusted EBITDA for each period presented is reconciled to net earnings.

13-Week Period Ended Mar. 30, 202413-Week Period Ended Apr. 1, 2023Change in Dollars% Change
Net earnings (GAAP)$424,688 $429,604 $(4,916)(1.1)%
Interest (GAAP)157,853 134,931 22,922 17.0 
Income taxes (GAAP)129,125 124,433 4,692 3.8 
Depreciation and amortization (GAAP)221,383 195,996 25,387 13.0 
EBITDA (Non-GAAP)$933,049 $884,964 $48,085 5.4 %
Certain Item adjustments:
Impact of restructuring and transformational project costs (1)
26,538 11,890 14,648 NM
Impact of acquisition-related costs (2)
17,008 2,349 14,659 NM
Impact of bad debt reserve adjustments (3)
— 90 (90)NM
Impact of other non-routine gains and losses— 448 (448)NM
EBITDA adjusted for Certain Items (Non-GAAP) (4)
$976,595 $899,741 $76,854 8.5 %
Other expense (income), net, as adjusted (Non-GAAP) (5)
10,380 6,311 4,069 64.5 
Depreciation and amortization, as adjusted (Non-GAAP) (6)
(187,723)(168,976)(18,747)(11.1)
Operating income adjusted for Certain Items (Non-GAAP) $799,252 $737,076 $62,176 8.4 %
(1)
Fiscal 2024 and fiscal 2023 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of changes to our business technology strategy, excluding charges related to accelerated depreciation.
(2)
Fiscal 2024 and fiscal 2023 include acquisition and due diligence costs.
(3)
Fiscal 2023 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(4)
In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $7 million and $7 million or non-cash stock compensation expense of $24 million and $21 million in fiscal 2024 and fiscal 2023, respectively.
(5)
Fiscal 2024 and Fiscal 2023 primarily represent $10 million and $7 million, respectively, in GAAP other expense (income), net.
(6)
Fiscal 2024 includes $221 million in GAAP depreciation and amortization expense, less $34 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2023 includes $196 million in GAAP depreciation and amortization expense, less $27 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions.
NMRepresents that the percentage change is not meaningful.

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39-Week Period Ended Mar. 30, 202439-Week Period Ended Apr. 1, 2023Change in Dollars% Change
Net earnings (GAAP)$1,343,322 $1,036,388 $306,934 29.6 %
Interest (GAAP)441,867 391,123 50,744 13.0 
Income taxes (GAAP)418,217 291,027 127,190 43.7 
Depreciation and amortization (GAAP)646,848 574,945 71,903 12.5 
EBITDA (Non-GAAP)$2,850,254 $2,293,483 $556,771 24.3 %
Certain Item adjustments:
Impact of inventory valuation adjustment (1)
— (2,571)2,571 NM
Impact of restructuring and transformational project costs (2)
56,387 37,192 19,195 51.6 
Impact of acquisition-related costs (3)
21,862 8,944 12,918 NM
Impact of bad debt reserve adjustments (4)
— (4,425)4,425 NM
Impact of other non-routine gains and losses (5)
— 315,326 (315,326)NM
EBITDA adjusted for Certain Items (Non-GAAP) (6)
$2,928,503 $2,647,949 $280,554 10.6 %
Other expense (income), net, as adjusted (Non-GAAP) (7)
22,265 39,487 (17,222)(43.6)
Depreciation and amortization, as adjusted (Non-GAAP) (8)
(552,337)(495,374)(56,963)(11.5)
Operating income adjusted for Certain Items (Non-GAAP) $2,398,431 $2,192,062 $206,369 9.4 %
(1)
Fiscal 2023 represents an adjustment to a product return allowance related to COVID-related personal protection equipment inventory.
(2)
Fiscal 2024 and 2023 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of changes to our business technology strategy and exclude charges related to accelerated depreciation.
(3)
Fiscal 2024 and 2023 include acquisition and due diligence costs.
(4)
Fiscal 2023 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(5)
Fiscal 2023 primarily represents a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(6)
In arriving at adjusted EBITDA, Sysco does not exclude interest income of $28 million and $15 million or non-cash stock compensation expense of $77 million and $73 million for fiscal 2024 and fiscal 2023, respectively.
(7)
Fiscal 2024 represents $22 million in GAAP other expense (income), net. Fiscal 2023 represents $355 million in GAAP other expense (income), net less $315 million due to the certain items impact of a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(8)
Fiscal 2024 includes $647 million in GAAP depreciation and amortization expense, less $95 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2023 includes $575 million in GAAP depreciation and amortization expense, less $80 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions.
NMRepresents that the percentage change is not meaningful.
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Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Net Debt to Adjusted EBITDA
(In Thousands)

Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated using a numerator of our debt minus cash and cash equivalents, divided by the sum of the most recent four quarters of Adjusted EBITDA. In the table that follows, we have provided the calculation of our debt and net debt as a ratio of Adjusted EBITDA.

Mar. 30, 2024
Current Maturities of long-term debt$93,225 
Long-term debt12,113,205 
Total Debt12,206,430 
Cash & Cash Equivalents(598,322)
Net Debt$11,608,108 
Adjusted EBITDA for the previous 12 months$4,127,132 
Debt/Adjusted EBITDA Ratio2.96
Net Debt/Adjusted EBITDA Ratio2.81
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