SYSCO CORP
For the period ended Mar 30, 2024. Filed May 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 30, 2024 · Filed May 1, 2024
SYY$76.86+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-30; filed 2024-01-31.
0000096021-24-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-30; filed 2024-05-01.
0000096021-24-000043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 200 previous paragraphs and 201 current paragraphs.
139 unchanged; 40 reworded; 22 added; 21 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 33 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
◦increased 2.7%, or $503.8 million, to $19.4 billion;
Current report
◦increased 3.8%, or $26.3 million, to $722.0 million;
Current report
◦adjusted operating income increased 8.4%, or $62.2 million, to $799.3 million;
Current report
◦decreased 1.1%, or $4.9 million, to $424.7 million;
Current report
◦adjusted net earnings increased 5.0%, or $22.9 million, to $483.4 million;
Current report
◦unchanged, at $0.85 per share;
Current report
◦increased 1.2%, or $0.01, to $0.85 per share;
Current report
◦adjusted diluted earnings per share increased 6.7%, or $0.06, to $0.96;
Current report
◦increased 5.4%, or $48.1 million, to $933.0 million; and
Current report
◦adjusted EBITDA increased 8.5%, or $76.9 million, to $976.6 million.
Current report
◦increased 3.0%, or $1.7 billion, to $58.3 billion;
Current report
◦increased 7.3%, or $152.3 million, to $2.2 billion;
Current report
◦adjusted operating income increased 9.4%, or $206.4 million, to $2.4 billion;
Current report
◦increased 29.6%, or $306.9 million, to $1.3 billion;
Current report
◦increased 30.9%, or $0.63, to $2.67 per share;
Current report
◦increased 31.0%, or $0.63, to $2.66 per share;
Current report
◦adjusted diluted earnings per share increased 9.4%, or $0.25, to $2.92;
Current report
◦increased 24.3%, or $556.8 million, to $2.9 billion; and
Current report
◦adjusted EBITDA increased 10.6%, or $280.6 million, to $2.9 billion.
Current report
Total operating expenses increased 5.5% and 4.2% during the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023, primarily due to volumes and recent costs associated with severances, transformation projects, and acquisitions. We have been successful in managing expenses through supply chain improvements, continued improvements with retention and productivity, successful labor planning, and delivery of our cost-out measures.
Current report
In the third quarter of fiscal 2024, we acquired Ready Chef, a fresh produce distributor in Ireland. This company’s results are included within the International Foodservice Operations segment.
Current report
The results of our acquired companies in fiscal 2024 were not material to our results for the third quarter and first 39 weeks of fiscal 2024.
Removed paragraphs (21)
Previous report
◦increased 3.7%, or $694.0 million, to $19.3 billion;
Previous report
◦increased 9.2%, or $59.2 million, to $700.0 million;
Previous report
◦adjusted operating income increased 9.2%, or $62.6 million, to $744.9 million;
Previous report
◦increased 194.0%, or $274.0 million, to $415.2 million;
Previous report
◦adjusted net earnings increased 10.1%, or $41.1 million, to $449.0 million;
Previous report
◦increased 192.9%, or $0.54, to $0.82 per share;
Previous report
◦increased 192.9%, or $0.54, to $0.82 per share;
Previous report
◦adjusted diluted earnings per share increased 11.3%, or $0.09, to $0.89;
Previous report
◦increased 82.7%, or $413.7 million, to $914.3 million; and
Previous report
◦adjusted EBITDA increased 11.6%, or $96.2 million, to $927.5 million.
Previous report
◦increased 3.1%, or $1.2 billion, to $38.9 billion;
Previous report
◦adjusted operating income increased 9.9%, or $144.2 million, to $1.6 billion;
Previous report
◦increased 51.4%, or $311.9 million, to $918.6 million;
Previous report
◦adjusted net earnings increased 10.0%, or $90.1 million, to $1.0 billion;
Previous report
◦increased 51.7%, or $0.62, to $1.82 per share;
Previous report
◦increased 52.1%, or $0.62, to $1.81 per share;
Previous report
◦adjusted diluted earnings per share increased 11.4%, or $0.20, to $1.96;
Previous report
◦increased 36.1%, or $508.7 million, to $1.9 billion; and
Previous report
◦adjusted EBITDA increased 11.7%, or $203.7 million, to $2.0 billion.
Previous report
Total operating expenses increased 3.9% and 3.6% during the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023, driven by increased volumes. We continued to improve the performance of our supply chain, while investing in colleague retention and training. These efficiency efforts are expected to continue to improve in fiscal 2024. We believe the advancements we are making in our physical capabilities, and the investments we are making in improved training, will provide higher service levels to our customers and strengthen Sysco’s ability to profitably increase market share.
Previous report
•the implications of the COVID-19 pandemic and any expectations we may have with respect thereto, including our ability to withstand and recover from the crisis;
Reworded paragraphs (40)
Previous wording
Our improved second quarter of fiscal 2024 results were attributable to sales growth that surpassed second quarter of fiscal 2023 levels by 3.7%. The increase in sales was driven by a combination of positive case volume growth and product cost inflation. Our gross profit growth this quarter outpaced operating expense due to effective management of product cost fluctuations, strategic sourcing, progress achieved in improving the performance of our supply chain, and delivery of our cost-out measures. See below for a comparison of our fiscal 2024 results to our fiscal 2023 results, both including and excluding Certain Items (as defined below).
Current wording
Our third quarter of fiscal 2024 results were driven by sales growth that surpassed third quarter of fiscal 2023 levels by 2.7%. The increase in sales was driven by inflation at the enterprise level and sales from recent acquisitions. Our gross profit growth this quarter outpaced adjusted operating expense growth due to effective management of product cost fluctuations through margin management, incremental progress from our strategic sourcing efforts, disciplined and rational pricing, and delivery of our cost-out measures. See below for a comparison of our fiscal 2024 results to our fiscal 2023 results, both including and excluding Certain Items (as defined below).
Previous wording
Comparisons of results from the second quarter of fiscal 2024 to the second quarter of fiscal 2023 are presented below:
Current wording
Comparisons of results from the third quarter of fiscal 2024 to the third quarter of fiscal 2023 are presented below:
Previous wording
Comparisons of results from the first 26 weeks of fiscal 2024 to the first 26 weeks of fiscal 2023 are presented below:
Current wording
Comparisons of results from the first 39 weeks of fiscal 2024 to the first 39 weeks of fiscal 2023 are presented below:
Previous wording
◦increased 9.1%, or $126.0 million, to $1.5 billion;
Current wording
◦adjusted net earnings increased 8.3%, or $113.0 million, to $1.5 billion;
Previous wording
Sysco continues to outperform the foodservice market. The food-away-from-home sector is a healthy, long-term growth market. Sysco is diversified and well positioned as a market leader in food service. We expect slightly positive rates of industry volume growth for fiscal 2024.
Current wording
Sysco continues to outperform the foodservice market and successfully grew its market share in the third quarter of fiscal 2024. The food-away-from-home sector is a healthy, long-term growth market. Sysco is diversified and well positioned as a market leader in food service. Softer industry trends during the quarter were impacted by unfavorable weather in January across the U.S and restaurant traffic that was lower in the most recent quarter as compared to fiscal 2023.
Previous wording
Our sales and gross profit performance are influenced by multiple factors, including price, volume, inflation, customer mix and product mix. The most significant factor affecting performance in the second quarter and first 26 weeks of fiscal 2024 was volume growth. We experienced a 3.4% and 2.5% improvement in U.S. Foodservice case volume in the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023. Local case volume within our U.S. Foodservice segment increased 2.9% and 1.3% in the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023. This volume reflects our broadline and specialty businesses, except for our specialty meats and equipment businesses which are measured in different units.
Current wording
Our sales and gross profit performance are influenced by multiple factors, including price, volume, inflation, customer mix and product mix. We experienced a 2.9% and 3.0% improvement in U.S. Foodservice case volume in the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023. Local case volume within our U.S. Foodservice Operations segment increased 0.4% and 1.3% in the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023. Our volume growth for the third quarter was primarily from acquisitions. Our volume reflects our broadline and specialty businesses, except for our specialty meats business, which measures its volume in pounds.
Previous wording
We experienced inflation at a rate of 1.1% in the second quarter of fiscal 2024, at the total enterprise level, primarily driven by inflation in the meat and frozen categories. We continued to be successful in managing our inflation, resulting in an increase in gross profit dollars. Gross margin increased 21 and 28 basis points in the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023. This was primarily driven by higher volumes, the effective management of product cost fluctuations and progress from our strategic sourcing efforts. We expect total enterprise level inflation to be slightly positive in fiscal 2024.
Current wording
We experienced inflation at a rate of 1.9% in the third quarter of fiscal 2024, at the total enterprise level, primarily driven by inflation in the meat and frozen categories. We continued to be successful in managing our inflation, resulting in an increase in gross profit dollars. Gross margin increased 44 and 33 basis points in the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023. This was primarily driven by effective management of product cost fluctuations, progress from our strategic sourcing efforts, disciplined and rational pricing, and improved penetration from Sysco Brand products within our local customer base.
Previous wording
Interest expense for fiscal 2024 is expected to increase by approximately $70 million, as compared to fiscal 2023, primarily due to higher debt associated with our acquisition of Edward Don.
Current wording
Interest expense for fiscal 2024 is expected to increase by approximately $70 million, as compared to fiscal 2023, primarily due to higher debt associated with our acquisition of Edward Don and share repurchases.
Previous wording
We continue to focus on mergers and acquisitions as a part of our growth strategy, where we plan to reinforce our existing businesses, while cultivating new channels, new segments and new capabilities.
Current wording
We continue to focus on mergers and acquisitions as a part of our growth strategy, where we plan to reinforce our existing businesses, while cultivating new growth opportunities.
Previous wording
In the first quarter of fiscal 2024, we acquired BIX Produce Company, a leading produce specialty distributor based in Minnesota. This acquisition is expected to provide a strategic opportunity for specialty produce operations to expand its geographic footprint in an area of the country where it does not currently have operations. This company’s results are included within U.S. Foodservice Operations and were not material to our results for the second quarter and first 26 weeks of fiscal 2024.
Current wording
In the first quarter of fiscal 2024, we acquired BIX Produce Company, a leading produce specialty distributor based in Minnesota. This acquisition is expected to provide a strategic opportunity for specialty produce operations to expand its geographic footprint in an area of the country where it does not currently have operations. This company’s results are included within the U.S. Foodservice Operations.
Previous wording
In the second quarter of fiscal 2024, we acquired Edward Don, one of the largest kitchen equipment and supplies distributors, based out of Chicago. Edward Don has a robust supply chain that is expected to enable cost effective distribution of restaurant equipment and supplies. This acquisition further demonstrates our Recipe for Growth strategy of focusing on building strategic specialty platforms that help us better support restaurant and hospitality customers. This company’s results are included within the U.S. Foodservice Operations segment and were not material to our results for the second quarter and first 26 weeks of fiscal 2024.
Current wording
In the second quarter of fiscal 2024, we acquired Edward Don, one of the largest kitchen equipment and supplies distributors, based out of Chicago. Edward Don has a robust supply chain that is expected to enable cost effective distribution of restaurant equipment and supplies. This acquisition further demonstrates our Recipe for Growth strategy of focusing on building strategic specialty platforms that help us better support restaurant and hospitality customers. This company’s results are included within the U.S. Foodservice Operations segment.
Previous wording
Our various business transformation initiatives remain on track, including promoting our specialty programs for produce, protein and Italian products and our customer growth initiatives. Our strategic initiative to enable omni-channel inventory fulfillment is operating in our first test region, and we have made progress in expanding to deliveries six days a week. From these actions as a part of our Recipe for Growth, the benefits of our developing capabilities are apparent in the new customers we are winning and in the progress we are making toward increasing market share. We expect that, as our Recipe for Growth matures, the impact on our top-line growth will deliver profitable and consistent growth.
Current wording
Our various business transformation initiatives remain on track, including promoting our specialty programs for produce, protein and Italian products and our customer growth initiatives. From these actions as a part of our Recipe for Growth, the benefits of our developing capabilities are apparent in the new customers we are winning and in the progress we are making toward increasing market share. We expect that, as our Recipe for Growth matures, the impact on our top-line growth will deliver profitable and consistent growth.
Previous wording
Based on information in Note 15, “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q, in the second quarter and first 26 weeks of fiscal 2024, U.S. Foodservice Operations and International Foodservice Operations, collectively, represented approximately 88.6% and 88.7% of Sysco’s overall sales and 97.4% and 97.5% of total segment operating income, respectively. This illustrates that these segments represent a substantial majority of our total segment results when compared to other reportable segments.
Current wording
Based on information in Note 15, “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q, U.S. Foodservice Operations and International Foodservice Operations, collectively, represented approximately 88.7% of Sysco’s overall sales in both the third quarter and first 39 weeks of fiscal 2024. U.S. Foodservice Operations and International Foodservice Operations, collectively, represented approximately 97.5% and 97.6% of total segment operating income, in the third quarter and first 39 weeks of fiscal 2024, respectively. This illustrates that these segments represent a substantial majority of our total segment results when compared to other reportable segments.
Previous wording
The sales growth in our U.S. Foodservice Operations was fueled by volume growth. Case volumes from our U.S. Foodservice Operations increased 3.4% and 2.5% in the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023. This included a 2.9% increase in local customer case volume in the second quarter of fiscal 2024 and a 1.3% increase in the first 26 weeks of fiscal 2024.
Current wording
The sales growth in our U.S. Foodservice Operations was fueled by inflation and by volume growth, inclusive of benefits from acquisitions. Case volumes from our U.S. Foodservice Operations increased 2.9% and 3.0% in the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023. This included a 0.4% increase in local customer case volume in the third quarter of fiscal 2024 and a 1.3% increase in the first 39 weeks of fiscal 2024. Our volume growth for the third quarter was primarily from acquisitions.
Previous wording
The increase in operating income for the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023, was driven by gross profit dollar growth and case volume growth, partially offset by an increase in operating expenses.
Current wording
The decrease in operating income for the third quarter fiscal 2024 as compared to the third quarter of fiscal 2023 was driven by an increase in operating expenses, partially offset by gross profit dollar growth and case volume growth, inclusive of benefits from acquisitions. On an adjusted basis, the increase in operating income for the third quarter fiscal 2024 as compared to the third quarter of fiscal 2023 was driven by gross profit dollar growth and case volume growth as a result of acquisitions. The increase in operating income in the first 39 weeks of fiscal 2024 as compared to the first 39 weeks of fiscal 2023 was driven by gross profit dollar growth and case volume growth as a result of acquisitions, partially offset by an increase in operating expenses.
Previous wording
Gross profit dollar growth in the second quarter and first 26 weeks of fiscal 2024, as compared to the second quarter and first 26 weeks of fiscal 2023, was driven primarily by case volume growth, improvements in supply chain productivity and our strategic sourcing efforts. The estimated change in product costs, an internal measure of inflation or deflation, decreased in the second quarter and first 26 weeks of fiscal 2024. Gross margin, which is gross profit as a percentage of sales, was 19.1% and 19.3% in the second quarter and first 26 weeks of fiscal 2024, respectively, for our U.S. Foodservice Operations, which was an increase of 4 basis points compared to gross margin of 19.1% in the second quarter of fiscal 2023, and an increase of 19 basis points compared to gross margin of 19.1% in the first 26 weeks of fiscal 2023.
Current wording
Gross profit dollar growth in the third quarter and first 39 weeks of fiscal 2024, as compared to the third quarter and first 39 weeks of fiscal 2023, was driven primarily by case volume growth as a result of acquisitions, effective management of product cost fluctuations, and progress from our strategic sourcing efforts. The estimated change in product costs, an internal measure of inflation or deflation, increased in the third quarter and first 39 weeks of fiscal 2024. Gross margin, which is gross profit as a percentage of sales, was 19.4% and 19.3% in the third quarter and first 39 weeks of fiscal 2024, respectively, for our U.S. Foodservice Operations, which was an increase of 15 basis points compared to gross margin of 19.2% in the third quarter of fiscal 2023, and an increase of 18 basis points compared to gross margin of 19.2% in the first 39 weeks of fiscal 2023.
Previous wording
The increase in operating expenses for the second quarter and first 26 weeks of fiscal 2024, as compared to the second quarter and first 26 weeks of fiscal 2023, was primarily driven by increased volumes.
Current wording
The increase in operating expenses for the third quarter and first 39 weeks of fiscal 2024, as compared to the third quarter and first 39 weeks of fiscal 2023, was primarily driven by increased volumes and recent costs associated with severances, transformation projects, and acquisitions.
Previous wording
Sales for the second quarter and first 26 weeks of fiscal 2024 were higher, as compared to the second quarter and first 26 weeks of fiscal 2023, due to inflation, a positive impact of foreign currency translation, and an improvement in volume primarily attributable to our Recipe for Growth initiatives.
Current wording
Sales for the third quarter and first 39 weeks of fiscal 2024 were higher, as compared to the third quarter and first 39 weeks of fiscal 2023, due to inflation, a positive impact of foreign currency translation, and an improvement in volume primarily attributable to our Recipe for Growth initiatives.
Previous wording
The increase in operating income for the second quarter and first 26 weeks of fiscal 2024, as compared to the second quarter and first 26 weeks of fiscal 2023, was due to the continuing increase in sales volumes, along with specific efforts to optimize our gross profit, including the ability to effectively manage product cost fluctuations, incremental progress from our strategic sourcing efforts and local case volume growth.
Current wording
The increase in operating income for the third quarter and first 39 weeks of fiscal 2024, as compared to the third quarter and first 39 weeks of fiscal 2023, was due to an increase in sales, which is mainly attributable to inflation and the impact of changes in foreign exchange rates, along with specific efforts to optimize our gross profit. This includes the ability to effectively manage product cost fluctuations, progress from our strategic sourcing efforts, and local case volume growth.
Previous wording
The increase in gross profit dollars in the second quarter and first 26 weeks of fiscal 2024, as compared to the second quarter and first 26 weeks of fiscal 2023, was attributable to the increase in sales volume and the management of inflation, along with specific efforts to optimize our gross profit dollars.
Current wording
The increase in gross profit dollars in the third quarter and first 39 weeks of fiscal 2024, as compared to the third quarter and first 39 weeks of fiscal 2023, was attributable to the effective management of inflation and progress from our strategic sourcing efforts.
Previous wording
The increase in operating expenses for the second quarter and first 26 weeks of fiscal 2024, as compared to the second quarter and first 26 weeks of fiscal 2023, was primarily due to increased volumes, colleague-related costs and the impact of foreign currency translation.
Current wording
The increase in operating expenses for the third quarter and first 39 weeks of fiscal 2024, as compared to the third quarter and first 39 weeks of fiscal 2023, was primarily due to increases in colleague-related costs and the impact of foreign currency translation.
Previous wording
For SYGMA, sales were 1.0% and 1.2% lower in the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023, primarily driven by the planned exit of customers that did not meet our disciplined profit thresholds. Operating income increased by $9.5 million and $16.6 million in the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023, due to decreases in operating expenses driven by the planned exit of customers.
Current wording
For SYGMA, sales were 3.5% and 2.0% lower in the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023, primarily driven by negative traffic trends across the industry and the planned exit of customers that did not meet our disciplined profit thresholds. Operating income decreased by $8.8 million in the third quarter of fiscal 2024 as compared to the third quarter of fiscal 2023. Operating income increased by $7.8 million in the first 39 weeks of fiscal 2024 as compared to the first 39 weeks of fiscal 2023, due to decreases in operating expenses driven by the planned exit of customers.
Previous wording
For the operations that are grouped within Other, operating income decreased $1.5 million and $1.2 million in the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023. The operations of this group mainly consist of our hospitality business, Guest Worldwide.
Current wording
For the operations that are grouped within Other, operating income decreased $5.5 million and $6.7 million in the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023. The operations of this group mainly consist of our hospitality business, Guest Worldwide.
Previous wording
Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service operations. These expenses in the second quarter of fiscal 2024 increased $34.4 million, or 15.7%, as compared to the second quarter of fiscal 2023, primarily due to increases in self-insurance reserves and colleague-related costs. These expenses in the first 26 weeks of fiscal 2024 increased $24.4 million, or 5.0%, as compared to the first 26 weeks of fiscal 2023, primarily due to increases in self-insurance reserves, colleague-related costs, and depreciation expense, partially offset by decreases in fuel hedging program expenses.
Current wording
Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service operations. These expenses in the third quarter of fiscal 2024 increased $5.6 million, or 2.3%, as compared to the third quarter of fiscal 2023, primarily due to increases in self-insurance reserves, partially offset by decreases in colleague-related costs, professional fees, and fuel hedging program expenses. These expenses in the first 39 weeks of fiscal 2024 increased $30.0 million, or 4.1%, as compared to the first 39 weeks of fiscal 2023, primarily due to increases in self-insurance reserves, depreciation expense, and colleague-related costs, partially offset by decreases in fuel hedging program expenses and professional fees.
Previous wording
Included in Global Support Center expenses are Certain Items that totaled $13.3 million and $28.7 million in the second quarter and first 26 weeks of fiscal 2024, as compared to $10.2 million and $16.3 million in the second quarter and first 26 weeks of fiscal 2023, respectively. Certain Items impacting the second quarter and first 26 weeks of fiscal 2024 were primarily expenses associated with our business technology transformation initiatives and expenses associated with acquisitions. Certain Items impacting the second quarter and the first 26 weeks of fiscal 2023 were primarily expenses associated with our business technology transformation initiatives.
Current wording
Included in Global Support Center expenses are Certain Items that totaled $29.4 million and $58.1 million in the third quarter and first 39 weeks of fiscal 2024, as compared to $10.9 million and $27.2 million in the third quarter and first 39 weeks of fiscal 2023, respectively. Certain Items impacting the third quarter and first 39 weeks of fiscal 2024 were primarily expenses associated with severances, our business technology transformation initiatives, and expenses associated with acquisitions. Certain Items impacting the third quarter and the first 39 weeks of fiscal 2023 were primarily expenses associated with our business technology transformation initiatives.
Previous wording
Interest expense increased $17.6 million and $27.8 million for the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023. The increase was primarily due to new issuances of senior notes, an increase in commercial paper borrowing activity and increased interest rates on borrowings.
Current wording
Interest expense increased $22.9 million and $50.7 million for the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023. The increase was primarily due to new issuances of senior notes, an increase in commercial paper borrowing activity and increased interest rates on borrowings. This higher debt is primarily associated with our acquisition of Edward Don and share repurchases.
Previous wording
Other expense, net decreased $325.1 million and $336.2 million for the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023, primarily due to a one-time pension settlement charge that was incurred in the second quarter and first 26 weeks of fiscal 2023 and an increase in interest income earned in the second quarter and first 26 weeks of fiscal 2024.
Current wording
Other expense, net decreased $332.5 million in the first 39 weeks of fiscal 2024 as compared to the first 39 weeks of fiscal 2023, primarily due to a one-time pension settlement charge that was incurred in the first 39 weeks of fiscal 2023 and an increase in interest income earned in the first 39 weeks of fiscal 2024.
Previous wording
Net earnings increased 194.0% and 51.4% in the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023, primarily due to the items noted above for operating income and other expense, as well as items impacting our income taxes that are discussed in Note 13, “Income Taxes,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q. Adjusted net earnings, excluding Certain Items, increased 10.1% and 10.0% in the second quarter and first 26 weeks of fiscal 2024, respectively, primarily due to an increase in sales volume.
Current wording
Net earnings decreased 1.1% and increased 29.6% in the third quarter and first 39 weeks of fiscal 2024, respectively, as compared to the third quarter and first 39 weeks of fiscal 2023, primarily due to the items noted above for operating income and other expense, as well as items impacting our income taxes that are discussed in Note 13, “Income Taxes,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q. Adjusted net earnings, excluding Certain Items, increased 5.0% and 8.3% in the third quarter and first 39 weeks of fiscal 2024, respectively, primarily due to an increase in sales volume as a result of acquisitions.
Previous wording
Basic earnings per share in the second quarter of fiscal 2024 were $0.82, a 192.9% increase from the comparable prior year amount of $0.28 per share. Diluted earnings per share in the second quarter of fiscal 2024 were $0.82, a 192.9% increase from the comparable prior year period amount of $0.28 per share. Adjusted diluted earnings per share, excluding Certain Items, in the second quarter of fiscal 2024 were $0.89, an 11.3% increase from the comparable prior year amount of $0.80 per share.
Current wording
Basic earnings per share in the third quarter of fiscal 2024 were $0.85, which is unchanged from the comparable prior year amount of $0.85 per share. Diluted earnings per share in the third quarter of fiscal 2024 were $0.85, a 1.2% increase from the comparable prior year period amount of $0.84 per share. Adjusted diluted earnings per share, excluding Certain Items, in the third quarter of fiscal 2024 were $0.96, a 6.7% increase from the comparable prior year amount of $0.90 per share.
Previous wording
Basic earnings per share in the first 26 weeks of fiscal 2024 were $1.82, a 51.7% increase from the comparable prior year amount of $1.20 per share. Diluted earnings per share in the first 26 weeks of fiscal 2024 were $1.81, a 52.1% increase from the comparable prior year amount of $1.19 per share. Adjusted diluted earnings per share, excluding Certain Items, in the first 26 weeks of fiscal 2024 were $1.96, an 11.4% increase from the comparable prior year amount of $1.76 per share.
Current wording
Basic earnings per share in the first 39 weeks of fiscal 2024 were $2.67, a 30.9% increase from the comparable prior year amount of $2.04 per share. Diluted earnings per share in the first 39 weeks of fiscal 2024 were $2.66, a 31.0% increase from the comparable prior year amount of $2.03 per share. Adjusted diluted earnings per share, excluding Certain Items, in the first 39 weeks of fiscal 2024 were $2.92, a 9.4% increase from the comparable prior year amount of $2.67 per share.
Previous wording
We produced positive free cash flow, impacted by higher capital expenditures, timing and historical seasonality, and investments toward our Recipe for Growth strategy. In the table that follows, free cash flow for each period presented is reconciled to net cash provided by operating activities and comparisons of the significant cash flows from the first 26 weeks of fiscal 2024 to the first 26 weeks of fiscal 2023 are provided.
Current wording
We produced positive free cash flow, impacted by higher capital expenditures, timing and historical seasonality, and investments toward our Recipe for Growth strategy. In the table that follows, free cash flow for each period presented is reconciled to net cash provided by operating activities and comparisons of the significant cash flows from the first 39 weeks of fiscal 2024 to the first 39 weeks of fiscal 2023 are provided.
Previous wording
We are increasing our share repurchase expectations from the prior guidance of $750.0 million to $1.25 billion for fiscal 2024. Including both share repurchases and dividends, Sysco is expected to return $2.25 billion to its shareholders in fiscal 2024.
Current wording
In the second quarter of fiscal 2024, we increased our share repurchase expectations for fiscal 2024 from the prior guidance of $750.0 million to $1.25 billion. Including both share repurchases and dividends, Sysco is expected to return $2.25 billion to its shareholders in fiscal 2024.
Previous wording
Sysco generates cash in the U.S. and internationally. As of December 30, 2023, we had $962.2 million in cash and cash equivalents, approximately 57% of which was held by our international subsidiaries. Sysco’s strategic objectives are funded primarily by cash from operations and external borrowings. Traditionally, our operations have produced significant cash flow. Due to our strong financial position, we believe we will continue to be able to effectively access capital markets, as needed. Cash is generally allocated to working capital requirements, investments compatible with our overall growth strategy (organic and inorganic), debt management, and shareholder return. The remaining cash balances are invested in high-quality, short-term instruments.
Current wording
Sysco generates cash in the U.S. and internationally. As of March 30, 2024, we had $598.3 million in cash and cash equivalents, approximately 83% of which was held by our international subsidiaries. Sysco’s strategic objectives are funded primarily by cash from operations and external borrowings. Traditionally, our operations have produced significant cash flow. Due to our strong financial position, we believe we will continue to be able to effectively access capital markets, as needed. Cash is generally allocated to working capital requirements, investments compatible with our overall growth strategy (organic and inorganic), debt management, and shareholder return. The remaining cash balances are invested in high-quality, short-term instruments.
Previous wording
We generated $855.9 million in cash flows from operations in the first 26 weeks of fiscal 2024, compared to cash flows from operations of $503.5 million in the first 26 weeks of fiscal 2023. In the first 26 weeks of fiscal 2024, these amounts included year-over-year favorable comparisons on working capital of $172.1 million due to a favorable comparison on inventory and accounts receivable, partially offset by an unfavorable comparison on accounts payable. Accrued expenses also had a favorable comparison, primarily from accrued payroll in the first 26 weeks of fiscal 2024 in comparison to the first 26 weeks of fiscal 2023. Income taxes negatively impacted cash flows from operations, as estimated payments made in the first 26 weeks of fiscal 2024 increased compared to the first 26 weeks of fiscal 2023.
Current wording
We generated $1.37 billion in cash flows from operations in the first 39 weeks of fiscal 2024, compared to cash flows from operations of $1.43 billion in the first 39 weeks of fiscal 2023. In the first 39 weeks of fiscal 2024, these amounts included year-over-year unfavorable comparisons on working capital of $244.0 million due to an unfavorable comparison on accounts payable, partially offset by favorable comparisons on accounts receivable and inventory. Accrued expenses also had a favorable comparison, primarily from accrued payroll in the first 39 weeks of fiscal 2024 in comparison to the first 39 weeks of fiscal 2023. Income taxes negatively impacted cash flows from operations, as estimated payments made in the first 39 weeks of fiscal 2024 increased compared to the first 39 weeks of fiscal 2023.
Previous wording
Our capital expenditures in the first 26 weeks of fiscal 2024 consisted primarily of investments in buildings and building improvements, technology equipment, warehouse equipment, and fleet. Our capital expenditures in the first 26 weeks of fiscal 2024 were $37.1 million higher than in the first 26 weeks of fiscal 2023, as we made investments to advance our Recipe for Growth strategy.
Current wording
Our capital expenditures in the first 39 weeks of fiscal 2024 consisted primarily of investments in buildings and building improvements, technology equipment, warehouse equipment, and fleet. Our capital expenditures in the first 39 weeks of fiscal 2024 were $55.7 million higher than in the first 39 weeks of fiscal 2023, as we made investments to advance our Recipe for Growth strategy.
Previous wording
During the first 26 weeks of fiscal 2024, we paid $1.2 billion, net of cash acquired, for acquisitions compared to $37.7 million in acquisitions made in the first 26 weeks of fiscal 2023. These payments increased in the first 26 weeks of fiscal 2024 compared to the first 26 weeks of fiscal 2023 primarily due to the acquisition of Edward Don.
Current wording
During the first 39 weeks of fiscal 2024, we paid $1.2 billion, net of cash acquired, for acquisitions compared to $37.4 million in acquisitions made in the first 39 weeks of fiscal 2023. These payments increased in the first 39 weeks of fiscal 2024 compared to the first 39 weeks of fiscal 2023 primarily due to the acquisition of Edward Don.
Previous wording
Proceeds from exercises of share-based compensation awards were $57.3 million in the first 26 weeks of fiscal 2024, as compared to $47.3 million in the first 26 weeks of fiscal 2023. The level of option exercises, and thus proceeds, will vary from period to period and is largely dependent on movements in our stock price and the time remaining before option grants expire.
Current wording
Proceeds from exercises of share-based compensation awards were $103.5 million in the first 39 weeks of fiscal 2024, as compared to $67.1 million in the first 39 weeks of fiscal 2023. The level of option exercises, and thus proceeds, will vary from period to period and is largely dependent on movements in our stock price and the time remaining before option grants expire.
Previous wording
In May 2021, our Board of Directors approved a share repurchase program to authorize the repurchase of up to $5.0 billion of the company’s common stock, which will remain available until fully utilized. We repurchased 2,862,667 shares for $199.9 million during the first 26 weeks of fiscal 2024, and intend to repurchase $1.25 billion in fiscal 2024. As of December 30, 2023, we had a remaining authorization of approximately $3.8 billion. We repurchased 6,026,110 additional shares for $500.0 million under our authorization through January 12, 2024.
Current wording
In May 2021, our Board of Directors approved a share repurchase program to authorize the repurchase of up to $5.0 billion of the company’s common stock, which will remain available until fully utilized. We repurchased 8,888,777 shares for $699.9 million during the first 39 weeks of fiscal 2024, and intend to repurchase $1.25 billion in fiscal 2024. As of March 30, 2024, we had a remaining authorization of approximately $3.3 billion. We repurchased 1,092,409 additional shares for $85.0 million under our authorization and received 323,109 incremental shares from the ASR Program through April 12, 2024.
Previous wording
Dividends paid in the first 26 weeks of fiscal 2024 were $505.6 million, or $1.00 per share, as compared to $498.3 million, or $0.98 per share, in the first 26 weeks of fiscal 2023. In November 2023, we declared our regular quarterly dividend for the second quarter of fiscal 2024 of $0.50 per share, which was paid in January 2024.
Current wording
Dividends paid in the first 39 weeks of fiscal 2024 were $758.1 million, or $1.50 per share, as compared to $747.4 million, or $1.47 per share, in the first 39 weeks of fiscal 2023. In February 2024, we declared our regular quarterly dividend for the third quarter of fiscal 2024 of $0.50 per share, which was paid in April. In April 2024, we declared our regular quarterly dividend for the fourth quarter of fiscal 2024 of $0.51 per share, representing an increase of $0.01 per share. This dividend will be payable in July 2024.
Previous wording
•the impact and effects of public health crises, pandemics and epidemics, such as the outbreak of COVID-19, and the adverse impact thereof on our business, financial condition and results of operations;
Current wording
•the impact and effects of public health crises, pandemics and epidemics and the adverse impact thereof on our business, financial condition and results of operations;