Docoh
Loading...

SYY Sysco

Participants
Neil A. Russell Sysco Corp.
William J. DeLaney Sysco Corp.
Thomas L. Bené Sysco Corp.
Joel T. Grade Sysco Corp.
John Heinbockel Guggenheim Securities LLC
Edward J. Kelly Wells Fargo
Kelly Ann Bania BMO Capital Markets (United States)
Vincent J. Sinisi Morgan Stanley & Co. LLC
Ryan Gilligan Barclays Capital, Inc.
Christopher Mandeville Jefferies LLC
Marisa Sullivan Bank of America Merrill Lynch
Karen Holthouse Goldman Sachs & Co. LLC
Andrew Wolf Loop Capital Markets LLC
William Kirk RBC Capital Markets LLC
Shane Higgins Deutsche Bank Securities, Inc.
Ajay Jain Pivotal Research Group LLC
John William Ivankoe JPMorgan Securities LLC
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good morning and welcome to Sysco's First Quarter Fiscal 2018 Conference Call.

As a reminder, today's call is being recorded.

We will begin today's call with opening remarks and introductions. I would like to turn the call over to Neil Russell, Vice President of Investor Relations and Communications. Please go ahead.

Neil A. Russell

Tiffany. Thanks, and first everyone, earnings fiscal to call. welcome morning, quarter Sysco's XXXX Good

Houston DeLaney, Officer; are Officer; me today Joining in Bill our Financial our and Grade, Tom President our Chief Joel Operating and Chief Officer. Bené, Executive Chief

results statements are note state or the differ Private of forward-looking could beliefs, statements begin, intentions, this predictions or Securities company's during Act the that within we material presentation made Litigation and a Before of manner. management's expectations please that the the actual Reform in future meaning

on Additional the A results includes, information ended year in in news morning. statements cause our copy limited in about XXXX, Form the X, factors filings, that this July and Report factors is contained but release to the SEC XX-K could the risk for is This of earlier those differ in to, from the filings. issued subsequent not company's SEC contained forward-looking Annual at found be comments or these in end today be our to the The the materials our Non-GAAP website. Sysco's and in presentation measures IR the of reconciliation and Sysco.com via slides in can GAAP section non-GAAP included presentation are in measures included the measures also these app. our of at slides. Investors financial are of can the corresponding Investors section found

for one not our for give exception still results year's excluding original acquisition referencing income, July a previously plan on plan referenced going The have did we've to include the XXXX, results, will financial and total. as target three-year fiscal as to of due in we operating this we both financial acquisition Brakes worth be now the including results closed Additionally, forward, in XXXX. full we quarter financial and Brakes. that will be Group performance visibility which Beginning for our Sysco

we have question Officer, Investor and like we'd We the seeing all answer there. Bill sufficient to York. limit ask that questions, Executive scheduled look each Day At X I'd to time call December participant follow-up. turn our like one have you today to we over To Chief to DeLaney. this forward to one our to time, their ensure Additionally, time for in New to

William J. DeLaney

Neil, I'm our to quarter first Sysco fiscal everyone. very the and earlier reflected solid good in you, the as reported financial Thank reflected morning, with – start this pleased XXXX solid morning. in as results

markets. approximately in financial higher key Harvey, Maria. Irma, quarter not additional sales provide the For increased several million Joel the We of earnings reduced the several were results the lost achieved and impact will X% increased and These operating the events income for quarter the for devastating of estimate $XX unprecedented have and to our impacted income Tom the perspective that in latter increased been these $X.XX. our disasters adjusted nearly to quarter, that $XXX midst adversely business in $XX.X per which sales of natural billion; caused of to million; call. would our on operating adjusted productivity and later customers share if X% on by Hurricanes XX% the part during and

of amongst shelters. critical one Foundation. been hospitals outpouring witness of to such it needs another personally support customers through our our me Disaster and Additionally, dedicated volunteers also like responders, who who gratifying support and first Further, to charitable to incredibly take thousands of all I'd express tirelessly the worked as to the of with Sysco's thank I'd for our like ensure gratitude a to to to organizations in associates those delivery Relief to product moment associates those tremendous sacrificed has need. for

the we operate. which to in environments current economic now Moving and market

lift demand United the reported that hopeful lead recently customer for our base. and States domestic improved GDP in are trends could We to the ultimately

somewhat conditions to to economic and sizes growth United Texas lower appears the Florida current it's more counts traffic high in September, While market are favorable. Larger States the relatively difficult it for levels. in that offset impact European of is experience weather the in isolate extreme modestly Conversely, remains operators we while totally check at restaurants sentiment muted. in consumer markets in at continue the operate foodservice

our growth In to our addition, our and food inflation which UK gross pricing, exchange-driven cost foreign margins. has volume significant continues pressure impacted in business

these addressing is to We are and both highly beneficial that our engaged and manner Sysco. actively customers focused to challenges a in in

over our closing, strong to best to and to Officer. as business fundamentals customers' and we're our our will a summarize, the to current in penetrate be trusted profitable sales good our efforts now Turning implementation our in for most at domestic like we enhance years over are deliver to I to prospects see continually valued state, currently and off strive XXXX sustainable confident their the able targets. and strong level. contributions few reduction I'll and for business to our to footprint. The ongoing by realize all quality associates serve, appreciation operating growth of my strategy our I'm we and our customer-centric business disciplined, express be partner. would And President Chief supply our continue international ability improving call plan growth for Bené, Foodservice a confident vision and to practices, our the and to year to are commercial, well-positioned Tom to of the markets high the we next turn Operating potential our strategic leverage Sysco: we of fully Sysco's current and cost geographic The initiatives. further that In compelling we are start also execute as significant we three-year another financial future. chain in in remain continue to expand To achieve businesses fiscal achieve

Thomas L. Bené

continued progress operating against Thank and everyone. financial several Sysco's performance morning you, initiatives. multi-year Bill, and key good this reflect of announced our morning, results solid

some impact ultimately target. and on rising deliver hurricanes and headwinds, While we challenging customers, inflation, we remain on to achieve our including a of the track freight of some operating inbound three-year income on a year our successful environment, the did experience temporary

Looking at by for U.S. to from The Adjusting have dollars gross been first beginning quarter, profit the balanced flat. X.X% gross in the X.X%, can profit Operations, with with margins gross our approximately focus continued attributed Brand gross remain a hurricanes, profit segment, the X.X%. ongoing including results growth on revenue growth and efforts. for business and positive Sysco grew management management approach sales grew to our category quarter would dollar pricing be momentum Foodservice

and business consecutive XX at hurricanes, been case our grown X.X% in that Adjusting for remained local For growth strong has the now quarter, local over Broadline case growth quarters. for have believe U.S. would X%. we

case to a overall driving declined, segment customer modest multi-unit growth X.X%. Our

discussed, our business proactively we've more we customers. As in disciplined, a with have profitable managed manner multi-unit

multi-unit in We add customers to and have and see second should growth recently build remainder begin new some continue year. quarter throughout the the to begun of the

terms points preference multi-unit benefit in we dining offer consumers, – unique both fresh quality, consumers' new, low that and our portfolio new our reasonable effort environment, revitalization preferences While a Sysco for our include products. emerging prior combined customers continuing along branded larger growth, for Brand cleaner, and invest another preferences XX positively and cost have familiarity. that changes, basis also strength up price product part are versus convenience, options in From to customers' to of do These in and customizable perspective, restaurants offers brand see provide we reinvigoration and contributed concepts These as fresher a with we value our see who a point. local that of of relative including a continue healthy, in images brand to innovation, year.

supplier community, support us who were were there where to of in and examples many were also thanks And to the Regarding our recent share our customers supplier to supported all us. storms those need. there I during our want partners our who

to support continues in Our for our accounts training. technology and together has levels and to we and guide have is now business. improved system and Sysco with including our working begun multi-unit product both the local of efficiencies cases of tools improved model management, increased platform our solid see enhanced customers to digital as to such presence as Also, the order XX% of drive centralized increased benefits utilization capabilities, ordered. approximately content, result of ordering This images a grow

to Turning our operating cost, X.X%. attention our adjusted was the for expense quarter growth

headwinds drove supply and ongoing definite that we see chain positive our some were to productivity there from costs, continue process While initiatives momentum improvements.

efficiencies. growth to a assessment market expenses and throughout deliver We for to and evolution on perspective, we the remains the are to of structure and us, is Sysco's improve of to an streamline cost overall strategy implementing warehouse From organization. creation drive cost of for a key priority administrative we of variety A pillar hours, opportunities improvement. focus Effectively key focus these now managing value managing new opportunities. continuous tools continue delivery, on help continue next

As disciplined, family. to with many in strategy excited know, Hawaiian acquired clear Guam market profitable and HFM annual we over is broadline access We're FoodService, with business. Sysco Acquiring years. in distributor has alignment and approximately HFM million of for to of been to them with $XXX Sysco Hawaii direct HFM to our welcome growing Hawaii-based provides quality growth the you for sales. a service providing recently XX the

forward. our segment We business going this will in report U.S. Foodservice

X%, quarter. and in transition With currency the by operating results sales income Foodservice translation operating a expenses European adjusted International Driven transformation, mixed investments large customer Mexico, adjusted increasing to growing costs with declined in growing X%, by Moving Operations, associated in Overall we profit quarter. chain supply the X%. X% Canada. new for our gross and had for

to Canada business this start Our year. great in a off is

in are most We growth case markets. in experiencing especially regions, major local

business, business. to strategic a customers, including local management accelerated also to more online focused capabilities, case revenue growth. our ordering, local customer-centric have initiatives These translated solutions, and such approach from sharing are into thoughtfully their U.S. We as and along other implementing with

help are overall drive our supply structure to we gross cost and effectively to improving growth efficiencies expense maintain and managing profit chain healthy a gap our growth performance. between Additionally,

an is business Food UK. Home traffic in Away are as the headwinds, European some From facing slowdown Our in slower customers restaurant macroeconomic experiencing and overall

Additionally, inflation quarter. which first of weakness during continues in X% the to the the to pound high sterling, experience UK acute about in cost food due inflation resulted

these impacts. headwinds expect actively throughout UK business these our fiscal to the to mitigate we While we year, are the managing continue in

large about business earlier. customer we excited in the a weakness for continue footprint. to we solid the in we are earthquakes due as Rica, continued Carry expanding in see that growth were there of & As region, Latin this expenses City I growth opportunities Mexico mentioned our related Cash although in and addition recent Mexico Costa to our In some to the America,

Rica. have our of close the business Costa of to purchase quarter, remaining Mayca subsequent XX% first Additionally, the the we completed of in the

complete levels the thus to adjusted cash use transaction, EBITDA this XX% will the debt doubled has as are very in business to of in far, and continued past affected. purchased be the not the we We We initially years. pleased and team. look three forward We with Mayca our will performance XXXX, success with

Lastly, segment continues grow. our SYGMA to

$XXX operational In to that target we and on and about improvements to the weather-related high plan. of to to for of three-year our ability will remain continue feel we end the focused implementing I on of that improve out the to Despite are adjusted business fiscal contribute close experience, customer's good our about challenges income summary, in growth severe the we operating and strategies on We our in XXXX, make $XXX operational our to our QX, improvement. faced long-term confident deliver operating trajectory we're progress our million. income fundamentals customer

Now Joel I'd call turn Officer. to our Financial Chief the like over Grade, to

Joel T. Grade

Tom. Thank morning, you, everyone. Good

the are for As results Bill pleased and with earlier, we Tom first mentioned the quarter.

our good growth This and earnings a momentum growth on continued comparable basis. morning, business, growth strong including quarterly dollar from case cost start our with I'll gross and XX-week profit Our reflects results local management.

sales grew to earnings For XX.X%, the X.X%; $X.XX. grew grew operating adjusted resulted income adjusted grew gross in per quarter, X.X%, of while X.X%, share operating and expense which X.X%; profit adjusted growth

with factored lower by per tax of expectations. our quarter, a growth our that, than the hurricanes when planned share impact results line and operating together, of were in rate income would the multiple have which is resulted impacted X% of During both $X.XX, more and in earnings

inflation business. For quarter categories, and in dairy, XXXX, inflation. as such driving poultry been we Broadline inflation X.X% meat, few has pace saw U.S. fiscal for the rapid of of overall ultimately a our The first

year. growth debt for lower profit Sysco bad and gross by prior During the the driven Brand improved we case quarter, transportation Adjusted local had and of in expense penetration. the driven expenses operating unusually by grew X.X%, quarter, increased growth expenses X.X%

include lower expenses areas. to in our the those costs addition, the during that storms impact volumes of despite In continued affected labor related and pay, we

operating gross continued and maintain profit a expense adjusted dollar We gap growth. growth to between

gap translation about the goods. which can leverage hurricanes not While cost of freight, Part operating and of continued good we performance was into impact compression by objectives. feel inbound impacted prior in the the gap our adjusted income achieving as progress strong toward as and quarters, still explained and the three-year be the ultimate of of that plan negatively

for the gap of In dollars is fact, gross hurricanes, adjusting the impact approximately X expenses the profit and point. between

the compared As to XX last for Free flat effective $XX period. million. first to important It's CapEx XX quarter million the first it first XX.X% of roughly million Cash fiscal was taxes, XX.X% free to for Net weeks the in cash from the XXXX. cash prior-year note flow was $XX quarter or for first often in negative negative operations about largely weeks investments relates was flow rate which the flow, $XXX quarter tax due sales was was that in to of to produces capital. the working X% XXXX fiscal year. of

we full year the fiscal for However, strong cash flow expect to continue XXXX.

(sic) Now, business to [four] updates. transition to I'd like three (XX:XX)

Group followed quarter we stronger our the expect of by year segment the Brakes align see fiscal half year. second we in calendar as regarding to expectations, further to softness year First, the a International second modestly

$XX one-time we realize will four as be to over previously benefit related we million technology Second, This quarters. recognized expense depreciation benefit and will evenly discussed, approximately changes. a net

balance been fiscal we've as year. this repurchase approach market our in repurchases, We've shares purchasing seen the we that Third, for but pace to shares we've in the maintained regarding opportunistically, of to expect aggressive opportunities share not quarter. the do continue

to accounting Finally, tax detriments access income income benefits fiscal new compensation in within the tax statement be the from – standard line. stock excess recognized a became or XXXX applicable in that requires

and business tax fiscal For option tax in as These a plan the reduction to we first adjusted strong are and exercises quarter. Brakes. deliver operating stock quarter income of million difficult recognized cost to our (XX:XX) had factors track and $XXX to dollar between our XXXX we predict income of high the business. I comparing occurred tax the benefits, and the activity. as and confident remain are remain million benefit management. quarter fiscal financial that rate to of solid profit XXXX the continued of first to good to expect depend be we XXXX, fiscal our strong effective XX% that in million of continue reflected excluding option XX%. $XX stock from largely case to growth The achieve such fundamentals momentum end benefits on local exercise gross on that of the improved continue range our three-year Absent objectives, growth In tax including we price a these we as our summary, $XXX

all before I'll now areas Q&A. to it of to over a in Bill execution back We we customers delivering our level go of turn are and committed serving our to high business.

William J. DeLaney

Thanks, Joel.

be know, the call. stepping at a XX-year over will past an serving so years the calendar that the CEO of CEO has public sixth capacity in and the as final you been As Sysco's is history company, honor. down Sysco's this I'm in I earnings year, as nine my end

and just remains opportunity $XX needed international We increased committed footprint, of throughout like change, and XX I've our would and nearly CFO the over challenging great CEO. to the well-served like CEO. of revenues level, I've of is challenges of wish Most transformational The with our your capitalization. one leadership past Sysco me times. paths crossed during in Sysco, you been thank we good confident driven am respect would leadership the years those supported I with all tenure involved domestic forward. career, To nearly you of and and team Tom together program Operator the of that the Sysco's throughout alongside as the and career. especially together. have thank my together, best. Sysco's market to and, many now I Today, that good XX-year to lot I associates Q&A. take my whom Investor addition, and both importantly, for you ready Sysco highly-capable have my note in years billion, in privileged person work early much faced who expanded closing, next by me is for hundreds absolutely with work truly do. very I In provided you years, we're by will as my news I a significant right to now all Treasury much to course, interest for Relations In going actively there and associates various have doubled been our and functions Bené really his as to including ahead be you've

Operator

question of first comes the Guggenheim Your John Securities. Heinbockel with from line

open. line your Your Heinbockel, open. John line is is

John Heinbockel

Can you hear me?

William J. DeLaney

Yeah.

John Heinbockel

(XX:XX) hear you me, guys? Can

John Heinbockel

I going inflation a the margin rate outcome. in U.S., actually in decent was light was fairly to gross So, say X% of flat the

So, on about you're where kind we the maybe elasticity? what sit here And evolution doing of revenue with talk the management. price at margin of

Thomas L. Bené

poultry, in because It's What last the is is seeing lot the what all talked of in dairy. reiterate inflation couple lot of morning. I area a a of years us would categories both good tools So, some in is those we've meat, just and that that that help would couple they these deflationary the – heavy we are what Joel a And fairly to in and inflationary going that felt about times. highlighted: ones we John, I the that tools over we revenue that been say building were management good Tom.

do but well. a can, is we that on us significant pass the it the customers over where our And so pricing do such to feeling they as what impacts balanced way effectively really allow short-term in aren't

So, right week-by-week basically matter it's information, providing salespeople insight our of how the the to price and be really marketplace. a guidance in competitive on and

John Heinbockel

needs be you've there. follow-up, as – then done and And you changes what when to Okay. made Brakes, management the maybe know look at some obviously a at right, I

Sysco where three best to the what the terms look U.S.? margin what Brakes at in or when sharing, practice the they? And are at If can that the today is about delta opportunity think sit versus in of things you you two Brakes you guys bring

Thomas L. Bené

– lot about margin, between cost affects kind which starting When of margin. share So, of we start how the around structures team you're they the we've margin. operating margin. that about speaking, approach a more to you let's talking might team – to the U.S. be U.S. their their category have to the tend than the started But margin management probably share, think generally program, ultimately Europe the that forward. with information but and higher going well, own margin process talk I is and European A tends we're activity to be gross higher in what it And assume little in gross as about

we and best that Brand, capability, portfolio share things model to Europe. about over there bigger we be all or benefits leverage started how leverage think, some we've of sales I'd how solutions learnings management those review years built whether opportunities the or think some the we've the that those of it of practices could And the So, around costs. couple Sysco the probably I like out process last with that business regarding that say out here. in remain, about for in around revenue We've us our the team. we've out, solutions be the talked building product and the help U.S. the are of built areas even already some But branded

Joel T. Grade

Tom, I one just thing It's to if other that. And, could add Joel.

that. piece I is chain think I that to part the the other supply probably just add would

in well their I that best on around think, place. putting continue some continuing that we've as practices (XX:XX) obviously, talked to are to as, work some to around transformational of chain the enhance the of those we supply investments side again, make about

think, other I just thing to point. add one to So, Tom's

– the would part would I out an single is I think for other us. I opportunity

John Heinbockel

And, Okay. Bill, your you. on Thank retirement. congratulations

William J. DeLaney

Thank you, John.

Operator

comes the Fargo. with Your from next question of Wells line Edward Kelly

line open. Your is

Edward J. Kelly

guys. future luck And, good hi. as Yeah, morning, the in Bill, Good well.

William J. DeLaney

you. Thank

Edward J. Kelly

I the Can that impacts debt line mentioned it impact the So, diesel basically we wanted And of here? points you It talk XX mean? start How SG&A, up bad the about side, quarter the more you – color certainly within and that well? Foodservice that what what start basis particularly side on expense item? business. as that in growth. expecting, case on on then much just were higher just X.X% did costs can the had on to hurricane was you comparison hurt that provide of The did the actually the than

Joel T. Grade

Yes, to This Joel. Ed. sure, is start. going I'm

to relates think of cost that. I what areas. productivity. continue we're I'll on volumes couple some case certainly in as words, costs case was we admin pay there other In to parts again, part impact there's per one, shipping Number those where our to, overall not that it that, a there as call are just

And prior to leverage. in would us. bad impact that what lot the relative a on a debt From that's significant some normal so, we I positive for to year were, negative had would perspective, would results debt that actually have bad say, related a of be that

would So, growth our elevates when admin hits, this in be what it. that year of comparison actually side for on a that costs it

the there, into some have not segment into perspective, factored There's that International about. some We as been what Again, to cost investment which actually I in – we'd all something talked our we've Brakes you U.S. about I've are a feel collection things. some to I primary a would now few that impact did say businesses, callouts have productivity with and Mexico area is some still ability that, hurricane, levels think had – really of been we've the our the some again, our a doubt. always of obviously, cost But but, and start-up mostly in and, I think talked side. used costs so, going this last again, growth because new about to of much of about UK certainly costs structure, that includes all few customer of a much put good certainly without so those have a in it's manage couple again, higher would seeing a We from talked ex other expense year relates of pieces the forward. did as still

Thomas L. Bené

only other The thing...

Edward J. Kelly

Yes, got it.

Thomas L. Bené

only mentioned... The Yeah. you thing

Edward J. Kelly

I'm sorry, Tom.

Thomas L. Bené

... was fuel.

business (XX:XX) our – And cost any of without run impacts fuel a et about prior of that those storms, drivers, perspective, so the detriment paying comments operating versus the about the penny way on when basically our you where's year. all Joel think And and warehouse, the the during cetera, case we the associates, buildout, of times. an from are some we activity made still

what that's operating some from that so, incremental drove of And an expense perspective well. as

Edward J. Kelly

you seemed notably as you then quarters that a months some been for And strong. Profit the but the strong how talk about Can been And last U.S. new case couple quarters Great. has coming then of Okay. does few just the change on the Foodservice that business strong per have really momentum? just – one next while, over in? acceleration last follow-up. and

Thomas L. Bené

So, per gross Ed, I talking case. you're assume about profit

Edward J. Kelly

Yeah.

Thomas L. Bené

Yeah.

a it's experiencing. the we're really So, given good environment question inflationary

case per expansion during see time haven't seen to our improve, of margin we obviously, this though, profit we inflation. even gross So, continue

going. the our seeing, again, Brand, you talked is of a while a also win-win Sysco management as them is of improved about which about that's combination So, we've to think cost, that customers, there. about help local margins increase in had effort XX-basis-point Brand, in customers earlier challenges It's we and delivering inflation another category maintain on things. kind improvement us, continue to the We ability with options, our good we're and for the including give a their feel Sysco

be see And increase, us manage to see would to our accordingly. that we case so, actually able expect to volume we continue as

go we do throughout we improvements the side, predominantly like so, see to multi-unit continue to in forward as you're year. going there, this And some feel

Edward J. Kelly

Thank Great. you.

Operator

comes question Capital. with line next of Kelly Your from the Bania BMO

Your line is open.

Kelly Ann Bania

Good morning. taking questions. for Thanks my

little international comments. a elaborate to wanted the Just on further

I if Did think the you – correctly, but and expected an half? you in further XQ, second that? can hear improvement some in on mentioned elaborate that softness I

Joel T. Grade

Kelly. Yes,

moving think, year I I I'll talked to what of the that fact really with of calendar with now fiscal – mean, cause aligns is that fiscal changing year year our as of to I was again, some their the where Brakes on some essentially this some related a call some way fiscal timing things the just basis. does recognized. about elements And are previous

of from which in the think, most used year. level we'll impact be to I expect And us year. is our second hit perspective, again, again, in timing but that so second And notably going of calendar – again, quarter, quarter a to their in some final – pickup their that, certainly the the half of

Kelly Ann Bania

let obviously, Kelly. been going definitely, been trends. starting margin multi-unit the of So, on improvement those okay? next or we've business. we've there. U.S. high multi-unit some the It's, had, over business, I – I as where And – continue going trend's some Foodservice? take from approach guess have was me lost very some a at positive on level, corporate that expect So, to an way the a Do the not think, negative gross year there, to and we we segment you Can what's the within quantify or you just the ask question a quarter? that I to the other of wanted XX:XX: the this and is to Okay, situations business magnitude improve, for thoughtful renewed last talked, our improve, we've about

lap well. picked and of QX, we new to ready we we some are as now as have into of do so, And a what is that go couple getting up customers

kind to – in you we've been three sales of trends those fact the four combination so the that things improve for last seeing quarters. And the multi-unit of will

overall, margin, local is that As than our business obviously, as a margin gross lower far customers.

growing, As that And overall we gross a expect, could it But have some be far there benefits certainly to for would sharing dollar line. to be will that. as us difficult some you do impact margin. really profit the get volume customer on specific us with it will number growth as you,

Kelly Ann Bania

you. Thank

Operator

comes question Vincent Morgan next of Stanley. Your Sinisi from the with line

Your is open. line

Vincent J. Sinisi

and, Hey. much for very next Good taking best chapter the morning, guys. course, Bill, here. question luck of to my Thanks you of in

William J. DeLaney

Vinnie. you, Thank

Vincent J. Sinisi

Just – absolutely.

going – Just wanted just guess, first to I back inflation. to

above of what Just line you the estimates on sense guys the X.X% into bit of your were Obviously, quarter. most was to get our expecting versus kind here. heading a probably

been changes maybe some kind of Just expectations, meaningful have versus of And where promote changes your Has internal you wanted there's can the any if that kind a to inflation? been of private with change – since. see happened some higher kind I and of mentioned your label. you know

Joel T. Grade

Here, of let question the and first part on in let other. the Tom your I'll me chime take then

the – Joel. it's think I

to things I that called – speed that fair think the I – it I'd than seen I we've few we But categories of that as say and, Tom at happened certainly the – I mean, think certainly Tom? in guess that strong relatively some of than which as us day, say, our fairly the I we've I we margin excuse Foodservice, the out and that something Vinnie, to called – the a it's end add U.S. tools to was anticipated. And you anticipated. of the to perspective, provided we that faster Broadline opportunities certainly, than our was, well here from think, in to I out, is U.S. and Do particular, happened earlier, you say, resources, CatMan, RevMan, team segment pretty where happened anything faster out fact want a QX is with provided I the to level manage despite, I flat (XX:XX) sales that that would actually out, me, certainly, the somebody – this pointed would say our that, things say, higher anticipated. again, we with relative done, in again, probably the think, certainly the pointed it

Thomas L. Bené

Yeah.

given we be continue might year. see fires calendar I'd add, is think the only Vinnie, recent through of the least produce, balance I more, that some the are thing think at California. the There in things, some we obviously, that to impacted like inflation

and categories we're that just move run work as as Joel that to there think biggest (XX:XX) good job. to So, going place areas But we've be I into and are pretty you this. challenge the continued I to we think first got through – a little the the from quickly good fairly around deal feel doing question in with. it, but again, is tools a – to talked we maneuver and have going said, time fairly where aggressively manage these about always through – some w we And we're need

Vincent J. Sinisi

regions, you Okay. more UK, of in of any Great. of in Would the front there. seems sure here, basis a a like (XX:XX) over pretty relatively of business And of your with if on I'm been issues now, expectations? line the macro maybe the there's Brakes much the has more to according competitive just we'll side, plan? the on just But obviously, or fast just helpful. into International question get around has changes – in it kind year that integration any Very say, then, just a and going And the the though, just December. more color kind

Thomas L. Bené

Hey, Vinnie.

So, on yeah, I would as plan. relatively we and expected had say it's

making investments make that, including the other continue. said The there, Europe, the are talked. We're we in of looking having France. some transformation we've of as in other parts efforts UK some over to Now, investments

of we've need think get things And not lots want, potential way – continue and of. But believe that we so, we of to one business, type it's we only have, operating the macroeconomic a of issues the great there challenges inflation we'd the are future. in there in to some some other see in UK talked that about significant. the I currency particular, place to thing driven with The by get they already out the and and growth the are

massive that are inflation So, that. a we for is impacts period here. X% And we unfortunately, continuing from some time seeing of And see number.

had we but say knew I'd of that while fairly at than high with this Obviously, – it's So, or other Brexit there that's some be hoped for to expected. that's the going now. impacts sustained piece quite was what levels we only happening, a different

Vincent J. Sinisi

helpful. luck, guys. Very of Okay. Best

Thomas L. Bené

Thanks.

William J. DeLaney

Thanks.

Operator

the line next Barclays. comes with of Short from Your question Karen

Your line is open.

Ryan Gilligan

math the generate it our million million, this We're now rough need operating trying Did the of the say up just to is three-year by year what on Karen. Brakes? Ryan for you're profit so would to you rest It's like high seems sound morning. excluding right? $XXX profit taking $XXX to Gilligan thanks to for and was incremental operating you to And Good what almost Hi. get to Does end. get question. the that

Joel T. Grade

Yeah.

actually that the million a the us added – for is Brakes Brakes, ex of total Joel. for, million of three-year $XX ex mean, I income the you to takes we we quarters if take the $XXX so nine to now, plan. this and dollars dollars, again, want operating – So,

Ryan Gilligan

the And benefit would $XX plan (XX:XX) well? the it. as towards D&A contribute Got million

Joel T. Grade

and, spread of again, four going be the Yes evenly year. quarters that's across Yes. the

Ryan Gilligan

rates line tax lowered, not drop if Got it. and corporate computed are whether dollars versus your (XX:XX) the get or profit And on are will on reform passed it's bottom views incremental what away? to

Joel T. Grade

Well, yes.

coming positive speculate that all, now to think look, Washington a the United First I a that in based of yeah, – certainly, has But seems – is bit of company just certainly and profits so, a the large like States us. right of our for percentage we're anything opportunity interesting. obviously on a fact out you it it's little on

don't a thinking bit. the time – along, this honest I the reform necessarily. of I asked our about fair customers that in of most you, passing of spend with think some I lot whole tax a of question that terms to – prices be I and correlation get of know

it to a think our this. to don't positive issue that were opportunities significant personally certainly, that I us. some But, again, certainly as either there's happen, I again, being relates company's overall, for way, from anticipate perspective, So,

Ryan Gilligan

you, Thank helpful. Bill. and congratulations, That's

William J. DeLaney

Ryan. you, Thank

Operator

from comes Your the next with question line Mandeville of Jefferies. Chris

Your open. line is

Christopher Mandeville

Hey. morning. Good

providing penetration when local, feel goal you the in you're think or if suppliers, it are how maybe value-added product? to next you go? you over days? concessions receive out could guys going greater that like these penetration are necessarily if innovative having Broadline your to that Do on ultimate about maybe And five both Just the not years able of discussions itself, conversations we do or some your where those they're them think private and three with label within brand context,

Thomas L. Bené

the know, points Chris, grow total over from we've XX to our years points our couple and a continued Sysco business you last see Brand perspective, is with as customers. basis this of up local XX basis and

have rate And view market high of So, to think good the products And be is whether reason I I wage we pricing. impacts high that. And get we how say Sysco continue customers going our at – very the focus is of that we costs' feel to And cost quality to is a And what might there. in go? product don't or could feel see that's they continue often we asked challenges we other with this as there. it bring on very is really I continue solutions opportunities competitive labor, different to always the Brand. think their alternative increases them business, bringing

continues Sysco these things bringing that's we've about the – by customers done on innovative products be well-received talked I the to solutions been So, And think we've the those Brand we've is we our why of focused and combination and increases. see thing with other market. to

those didn't around you to effort. continue fresh (XX:XX) making that or what here. a this trend types brands whether they're the talked that's directly, ripe refreshing whether and that be it. We've that invest the products. I we on been lot We doing with answer of products look of good type about know I and but wholesome say about with products, the So, work feel I'd revitalization is and brand local sure feel or that's of organic

– nicely customers. work we're be appears of our to in a that lot – with resonating we doing So, it's area and

Christopher Mandeville

terms the Brakes, the for in numbers quarter All what was with right. those? in and ROIC quickly me for then one of calculate last very you without as And

Joel T. Grade

Yeah, overall XX.X%, my off the don't enterprise. Actually, of in number number, Brakes. aggregate without Chris, think, the that was have I I head, as an top

Christopher Mandeville

guys. That's Thanks, up. okay. We follow (XX:XX) can

Operator

line Your Sullivan next of Merrill Lynch. question America comes from with Bank of Marisa the

Your line is open.

Marisa Sullivan

some to for Thanks you on When looks like the in question. exclude other Broadlines there pricing Broadline I wanted inflation U.S. were to negative impact Morning. growth. my touch sales taking U.S. case growth, it business.

just be us an this little Just a get all Sysco you bit was on the a more was decision through to a it color So, it great. give inflation more was sharper on competitive inability pass to it or would by related detail to or more can there environment? and pricing

Thomas L. Bené

sure to. you're I'm Marisa. not what Hey, exactly referring

Foodservice we some profit Broadline obviously both the and And Operations I about and U.S. on think on talked the we good of it feel given the talk volume about in of here of about impacts and context as well. on U.S. dollars, costs segment. our storms business really impacts gross we the

that continue the about So, I some went in we we're think in including inflation think how very everything feel you business when quarter. first about through that this to good quarter, pretty significant it, managing

we're basically business. given actually our those circumstances, – on flat all I fact margin that good gross we the So, about that very feel

Marisa Sullivan

– the pass on customers to you inflation back have that you're Right. ability close are it's now push And at then to any you onto the point getting where X%?

Thomas L. Bené

that's as say talk, I'd always we an Again, average.

category, about like of by they to isn't why we things share moving time lot category are candidly, sure, time where categories our what's with Sysco and just we that's we Brand. from so in and on challenges And, going lot some up suppliers our customers, with information costs information leverage this of We industry the So, them, us are. run a the going pricing. share way a various the from into

can So, a area educate our educating our obviously of we spend try it's that fair amount customers. so to and in own people – time transparent we're they pretty

Joel T. Grade

Marisa we all those a say, I'd thing I things, well. case very a despite we had as – only again, strong the had mean, – growth still And local

this of can during – But we combine the – basis, good some a think I flat a – certainly, overall there I be holding could done a Sure. margin So, overall pushback? I time, there. job good with some we've really customer-by-customer that when mean, again, on

Marisa Sullivan

sales about And thinking that the it. margin more customer non-restaurant on just can and opportunities I'm if your us segment. color little you're and how Got give wondering you sales bit of performance lastly, then, within a

Thomas L. Bené

When just you non-restaurant about segments other are say customers, within... you talking

Marisa Sullivan

the Like – like hospitals, customers. of schools, some it'd hospitals. of Well, the institutional be kind

Thomas L. Bené

good them. We about feel

in, we of mix there we broad this our fortunate is big represent customer got it, are think continue segments. our segments, that while that of certainly chunk a I other that and that – we've customer we're operate lots segment such restaurants

in past, the we've the in talked As also and growth we the management like foodservice. in areas retail foodservice see

continue well segments pretty Healthcare's grow. I been us are also. the to there performing So, a we for other segment always and think good-sized

So, I are. think customers, mention we like some I'd around making we we segments. the decisions (XX:XX), feel about certain the really good multi-unit feel where about balance other great to And than across exists that

Marisa Sullivan

Thanks much and best of Bill. luck, so

William J. DeLaney

Thank you.

Operator

the from line of Karen comes Sachs. Goldman question next Your Holthouse with

is open. line Your

Karen Holthouse

Hi. blended One what quick rate you on quarter? idea housekeeping one. interest us this of debt Could the give your was an

Joel T. Grade

back to on Yeah. Karen, you get to have we'll that.

Karen Holthouse

food comment dining on in And then, maybe are casual convenient relative familiar, earlier commentary looking that your in that customers? with of some value, in at some about a really category as fast your a Okay. what to seeing strengths brands is seeing you're strengths

Thomas L. Bené

continue fast they independent to necessarily believe well it's and on think commentary are but positioned restaurants why is I what food grow. on we to not

there of consumers. creating so, right menus, are, the ease flexible obviously, for more more environment And

in that the because And continuing they are are to so, newer restaurant for to small market. these see bringing they to growth whether they're has independent lots concepts, or it do acknowledging still multi-unit that happening with things looking are space are kind more just that things there and chains, of of the consumers

Karen Holthouse

next one any year? Eve lose we of quarter shifts I the weekend? compared New to last – about Christmas off then And housekeeping. should And Are calendar the also, you then be other thinking Year's think into with moving quick switching there

Joel T. Grade

there. say would that I significant we Karen, anticipate anything Yeah, don't

Karen Holthouse

you. Thank right. All

Operator

question next Capital the with Loop of comes Wolf Your Andrew line from Markets.

Your line is open.

Andrew Wolf

Thanks. morning. Good

your Bill, career. First, congrats on

William J. DeLaney

Thanks, Andy.

Andrew Wolf

And luck everything. best of with

very You're welcome.

William J. DeLaney

appreciate it. I Thank you.

Andrew Wolf

sounded and a your in Tom, it gross think, a business ex the on side. hurricane, like introductory the margin side comments, I So, better U.S. case the was little on accelerated little

growth, in that X%? just markets hurricanes, local the you case kind if check the was by of that, case were impacted to growth first, the fact over take not So –

Thomas L. Bené

In Yes. many cases it was.

Andrew Wolf

to Okay. then thing other But get I'm estimates to mean, total are I one – and some trying because, sort of just there's obviously, – ways get... in

Thomas L. Bené

(XX:XX) Well.

Andrew Wolf

doing I way lot markets it – ask related so, hurricane? of post There's guess, is I it's these a another how and of is different hurricane sort are – to want theories, out some they to moving. those want people people they is are are and Are Others normalizing? go is businesses And eat. markets decently? to up closed, are pent are running

Thomas L. Bené

the I of So of of Keys, whether like Florida Much the are southeast to closed still in closed. things right? market geographies, starting a key back normalized get are Yeah. a ex it's say, parts where in to here the still would where things couple are restaurants there are state. or that many is –

So, I would say yes, in general.

Andrew Wolf

and looked And of really to said, Okay. operating some also But math out also commentary, came it what, if might been the what related side have side expected. to the the hurricane would in of of million the impact profits sounded the take $XX math, like the which just have also case the you it I OpEx you gross profits. your like, that, Joel, it from

a kind or a, that? talk to you did it you that about million? of, estimate how could a hard So, get Is little $XX

Joel T. Grade

it you we gross look, profit park. volume think looked is impact. – high what think, it level. yeah, it's mostly I Well, It's along said, of so I I and from it (XX:XX) our you I a from all a It's lines Certainly a want – whether again or ball fairly up, reasonably, paying whether it's, some It's shipping cases costs get directional. the had didn't it. – it's and accurate, Because to productivity it administrative mean people, I described it's not. people, – we're them, impact, it's go extent to whether call we're if of we drivers, earlier, we're we irregardless interesting, that. paying again, as at

And Andy, again, from general, got we a had what it's science not – again, conservative an of we case certainly basis, it a pretty mostly we impact what reasonable probably, we quantified standpoint per our thought but I on part was was so, on gross happened. And what profit a of maybe that. thought in was so actually reasonable little view some the – I But say, of but we view on there. a piece exact a productivity And it's it. would

Thomas L. Bené

all that case... was Andy, And, based on

Andrew Wolf

it. Got

Thomas L. Bené

right. didn't estimate, All that's what case. given basis We profit on project any per markets. gross our were those the at based cases. on in purely a run X%, volume, just fairly from impact we We asked rate rates And a about think case conservative you at looked

Andrew Wolf

just some or – is on obviously And the you and you. follow mentioned my you're fiscal up – Brakes, is it. years, last to Joel, like, as to it. question Got But you reconciling harmonizing and tweaks consumer Thank has just wanted that the on most side, fundamental UK? timing how – from slowing, there what's going reconciliations with in or you would slowing? with inflation slowing the it, and of between and a Or going the fundamentals portion on just fundamental what's some little cost look

Joel T. Grade

But Which of calling rebound would I extent, particular of in. the then to start both. some which of second the half the say, what and accelerated become in some is Yeah, really that we're year. second is quarter, I'll chime Again, why issue Andy, this more both. to again, some out. say you in going for is I'd Tom that some to it quarter, the can of say will was would I think I it's timing

Thomas L. Bené

the other to add. incremental anything from the have inflation I as in mentioned, of and the mentioned some – UK. macros I some really from you don't of impacts earlier

Andrew Wolf

Okay. Thank you.

Operator

Your line Kirk RBC of next Markets. Capital comes question the Bill with from

is open. line Your

William Kirk

mainland of rationale the HFM, you talk would or versus core some your the the be, on more details think and and completion the Could U.S.? stake around Rica about you. existing about kind Thank little You Costa of, do gave deal in recent a for you how infrastructure? that deals off opportunities but this

Thomas L. Bené

I'll on Costa the about The strategy in Joel let – let's – me Rica. talk kind our I'll and broader Let of then Mayca those there. two, with embellish start

And we've So, shared, as the as the years. couple folks great I at have feel that positive Mayca. of into venture we back I a results very the been last about the mentioned, XXXX. that partnership was a over We went with business with had joint in

our option exercised that recently. business completely basically we So to acquire

obviously a and in their And that's great of than so, partner within from them they for and doing it that's have an white and could Hawaii, Sysco, can there, space in a which white a example and They're into distributor a Other way is what the with of so we market really just business very we that about much leveraging the islands, we export liked acquisition business really been some progressed, outright opportunity what of path don't We'd started businesses excited with really terrific a we're Hawaii. have that are where them a a footprint. lot the down a job us. about. no marketplace. HFM, space Separate U.S. from of an do didn't do and a there, we excited together on lot footprint it's

it we how bit you other and might acquisition, think about of Joel as let types about far where a As little see focusing. I'll talk us

Joel T. Grade

Yeah.

domestic those and areas expansion. – consistent around businesses, our continue We're – way markets, would tell here. focused would as we supplement overall would think general, or strategy I acquisitions it, announced we M&A, terms geographic it's our existing on very mean, But I to be islands timing, coincidental, might core that. I that as a our very both think the I that that that little are in own very within bit two I well it's say, both on characterize opportunities in I of you with were had

the little strategy deals a much remained on so, very And probably I would our overall acquisition two very And those has those two consistent. a are our but part timing just strategy. say, of coincidental again, things,

William Kirk

it That's you. for me. Thank

William J. DeLaney

Thank you.

Operator

with line Higgins of Shane question next comes Deutsche Your from Bank. the

is open. line Your

Shane Higgins

Yeah, good morning.

by some Just impacted trends during quarter on the clarification the those a in and markets how question accelerate case weren't volume here, the the the Did local throughout hurricanes? quarter? were that

Thomas L. Bené

– break did we're Shane, you I our accelerate? markets. So, out when think into U.S. this, mean, six they we about

drive things mean, business population the overall economic not is in growth, you so, which impact. the markets, least And different as know, I different guys

So, U.S. as markets, growth other said we we of good what in speaking, those generally saw – the earlier, outside

in with numbers hurricane regarding markets. pretty feel primarily so, impacts the in South shared and And what comfortable the our call we the due we to we've Southeast

Shane Higgins

Okay. that. trending how volumes for And XQ case to Thanks are date?

Thomas L. Bené

we've that both about the change – We continue I in in growth the local, good and to mentioned, feel very as multi-unit. had

Shane Higgins

mitigate you what a just during you freight had little just some question color these on of changed And quarter, the the of Could Thanks. what Great. Okay. on – bit a guys kind doing and challenging inbound you out environment. headwinds? guys called to give are there

Joel T. Grade

would there's happening been that. I Joel. just weather. – that general, drivers It's say in about take is that's that got somewhat the to I would shortage bad the the hurricane, and And Yeah, I'll level accelerated in and way think freight, that it just some of then to inbound prior was of by something

pinches being So, more side. loads, to always opportunity and that – say our I would taking move supply moved, more lots carriers necessarily that expensive the and are sheetrock doesn't on

the There's our as that's something, inbound basically at to move – increases and, forward, it's the end as – quarter. was And find to is and into our inbound we certainly, plus an continue of again, ways there costs the here something costs we products somewhat of freight moved continued day, some from so, the cost freight. perspective that that this product of mitigate

Shane Higgins

Thanks. That's for congratulations, it then And me. Bill. Great. Okay.

William J. DeLaney

Thanks very much.

Operator

line Your the of next Pivotal Group. with Jain from Research Ajay question comes

Your line is open.

Ajay Jain

also you your and in say congratulations Yeah. morning. retirement. Good I Bill, wish wanted luck good Hi. to

William J. DeLaney

Ajay. you, Thank

Ajay Jain

earlier that I it, missed performance out Brakes Now operating in terms that be profit? operating a that actual and after especially you of it currency in. of impact, Maybe might out in be nice the you've and get to operates the currency possible revenues sense stripping have but it mentioned would International the both anniversaried to markets for the impact, would Brakes, break already actual

overall So, cycled can trends great. you've International case also easily comment currency impact, assuming that things that you on more lot can if those be you that Brakes. track would a the now I'm and for

Joel T. Grade

for again, out give this I breaking negligible we mean, I don't exchange Ajay, been the you, color – – so general, impact would that. Yes, What we're and has so actually the typically for us – though. overall of again, we don't foreign relatively here's specifically – what quarter. do

More our income the operating relatively on on been there's overall, a on our there income the stuff been which sterling really and to to weakness been terms impact itself impact So, line minimal line has is some margins, weaken. dollar's of the dollar, has much are that the in but the Canadian has top line, yet margins. of certainly in impacted if sterling Because the at as Tom exchange. somewhat – the impact on look aggregate again, the out top operating selling of has than that about played out a the overall fairly foreign there the overall, weaker not we've or this U.S. UK, the but overall well But euro. again, everything. when talked the on products of there's percentage you there, actually UK, – continued referred as – bought Then some of outside you foreign the selling where sizable that exchange

Ajay Jain

Okay.

the going you're not So, should breaking the comparisons? on out going forward impact be based we currency year-over-year that infer

Joel T. Grade

in case, break probably it it's Well, If say I something particular it. this significant, guess, significant was we it out. it's I – would not do we'll and didn't really

Ajay Jain

Okay. And local case in now just one had case a terms run growth, of pretty terms U.S. you've follow-up impressive in local volume. of the

of little at of from past shift since the terms from great. in it's is been is more selling case but this So, has be you'll say point? comment, new noticeable local that the more growth there can couple of your you of over plan, three-year that to would volume years the where coming a Are any start probably existing sure I'm both, coming you customers cases if growth business? or

Thomas L. Bené

generally, it there fair And track as to that I customers are say very well Sure. for year both. in as Foodservice would In each sales is cycle new business because business. new areas, various of more obviously grow. and those We lost important amount to continued each of reasons. penetration existing both which is customers means they've a And

we what – that stickiness is from I'd more more it's products a because those a – actually believe good to And focus tried of say though. pretty thing maybe call can that And us also that I'd so, penetration that the balance both for provides on obviously, the really we've and we we provide loyalty customer, service or customers.

improvement You heard first a our about past the about me talk the and X-point including positive a continue we trend metrics, loyalty loyalty in have in in quarter. to

feel good providing our hearing what as customers we're we So, as far about what from them. we're

Ajay Jain

Great. Thank you.

Operator

from comes the Your Ivankoe of JPMorgan. next question line with John

Your is line open.

John William Ivankoe

Hi.

in, that easily I his organic is. interpreted remarks food that preferences more necessarily low of other terms made Tom healthy, operations move hybrid think, I towards or obviously like around convenience, my is their that in of familiarity. terms this of the understood. also the which cost, think is could question either maybe comments convenience around which what terms limited comment and well also Foodservice of aren't types fast that but approach are consumer pretty is things local, stores point restaurants, some to prepared done traditional mean in it in just I very But at cycle, over this not

on elaborate to of how segment you're opportunity you sub that is the that relative business could big and So, an currently that serving?

Thomas L. Bené

Sure.

articulated pretty First think you of actually I well. it all,

it good right by – guess, to is the what so, I think you translated, was that's was that we that way. – And I in said hear

I both cases some these segment is all kind folks to see of now is growing also either in go are or And but delivered about to is your certainly dine to – think, continue go different outlets you other there's versus and even up. that of lots of that. foodservice retail And we to now is in handling this there the the in continuing having many that to that know restaurant foods this it whatever retail, we've into segment we pick to favorite there that getting do space movement get think this We happening. that prepared are are that in meals ability see as your to it – grow. talked prepared about. But

folks provides And customers grow opportunities more those that grow, things like more enjoy. our just the to so to continue access get to think for for and that I consumers to they and

really refer that's were we so, And to – trying to is what there.

John William Ivankoe

that and segment? kits be And you what is to Or that doing? also sounds different or chains restaurants as to that that segment are includes chains more you meal well? some than alluding a So, smaller maybe independent want in

Thomas L. Bené

comment. as fairly first I your all growth in It's yeah, there's that movement got some going question seen, And as think a segment now. small as part of still it's while and to Yes kits, it, of and your meal in it's space it. on lot right we've a part far of

what think are where local we're having there it, there seeing, like to though, I of – shipped you're think Apron a are about you, someone outlets to get is instead something Blue a of an who local type that are accomplishing solution that for be for service. same chain independent on consumers whether same providing type a are of customers or level, or that that

John William Ivankoe

Thank you.

William J. DeLaney

Yes.

Operator

today's conference concludes call. This

disconnect. You may now