SYY Sysco

Neil Russell SVP of Corporate Affairs and Chief Communications Officer
Kevin Hourican President and CEO
Aaron Alt CFO
Alex Slagle Jefferies
Edward Kelly Wells Fargo
Jeffrey Bernstein Barclays
Nicole Miller Piper Sandler
John Glass Morgan Stanley
John Heinbockel Guggenheim Partners
Lauren Silberman Credit Suisse
Kelly Bania BMO Capital
John Ivankoe JPMorgan
Call transcript
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Good morning, and welcome to Sysco's Second Quarter Fiscal 2021 Conference Call.

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

We will begin with opening remarks and introductions. I'd like to turn the call over to Neil Russell, Senior Vice President of Corporate Affairs and Chief Communications Officer. Please go ahead.

Neil Russell

welcome second and earnings fiscal everyone call. morning, to quarter Sysco's XXXX Good we our Officer. Kevin Executive today's have On call, Hourican, Aaron our Officer; Alt, President Chief Financial and Chief and

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

time are website. we participant included found news could results filings. in of in the these section these question non-GAAP one limited have financial to all ended at that but those factors the also of A the XX-K, forward-looking and on are GAAP and one the their and release XX, materials Form earlier contained factors from the corresponding presentation our not year of June presentation time to ensure about copy found included Non-GAAP Slides is limit this in the information Additional would section contained reconciliation follow-up. to answer can morning. cause our Report Investors to risk Investors we subsequent is that in This differ the Annual in statements measures SEC sufficient be like in to SEC our each of to Company's includes XXXX, questions, for To issued filings in the today measures can and ask the today The measures end Slides. to our be comments at in

over Officer, Hourican. Kevin President Chief I'd and to our Now, to turn call like the Executive

Kevin Hourican

you staying everyone and today. healthy. Neil. and our are you that for you, call Thank safe and your families morning, joining Good hope I thank

will for provide the highlights I this on recent preparation I environment recovery. I'll fiscal share of an pending and it I'll some time over Sysco's call, will will discussing transformation During performance, Aaron, second our then morning's turn discuss business quarter who update spend Sysco's business our to results.

prior discussed throughout during our during have of the time disruption. help taken a we customers swift As decisive Sysco succeed calls, pandemic, action and to has

has our differentiate In carefully the that business customers initiated to home confident associate the that COVID strategically environment. and of in expectations restrictions remains first from to our substantial confirm the investments. business the financial bold competitors. managed disrupted environment our initiatives placed our long-term upon will am we adjusted light we our will transformation we has for and and inventory enable XXXX To fiscal second of half Sysco from business and and we are on have a the we end, profitable generally success. marketplace. quarter, pleased the pleased strategic productivity, with productivity realities, in transform with future food results we Company our The performed that those for line serve for delivered sector away in that We track I transformation the are growth

financial despite transformation. quarter enable were profitable we a in to delivered XX% down prior results quarter, to our sales second our topline compared While investments funded our and decline year,

were declined. increasingly operations sales the and on when restrictive during second in which experienced customers conditions Our December, traffic their quarter, notable restaurant most

tougher not in are restrictions operate. a which segment in At gravity issue. International we taking the customers hard we Sysco, countries hit has as the on restrictions our Additionally, been to due

rest early market winning the transformation share our are reflecting versus this help gained more ever we and before our the We navigate progress to Sysco in second environment. industry, quarter, am than customers I of having challenging that the during are pleased success the report to doing new the of business. overall

the new in which account business of business of net to an national more billion since the net totals in and continue quarter, $X.X $XXX win signed contracted the new than space meaningful million the business incremental We of pandemic. start

these they second a for to business Examples campaign, and year Most for regularly people, announced we believe the the Rising I'd in our delivery they increase we XXXX. significant Restaurants our and notably, managing that investments in the new Investments are throughout we eliminating minimum their restaurants will of requirements representation examples scheduled delivery highlight and strengthen investments found in preparation Restaurants working A investments in November purposeful of technology. investments provides Aaron more in need some Those visual for to moment. to it the easier quarter, that began speak fiscal begin in it. our when be Rising succeed which presentation. during will business including capital can in days, and making include customers, recovery X Additionally, of the flexibility will for second in campaign to future. calendar which each like our our our makes what we on of customers, quarter in easier it order this in need, quarter of operators business choices. our in Page third their makes our

COVID. incremental at service the know customer pay delivery and currently the doing. tunnel the light of In now and a end loyalty service. prioritizing such, we during small select the are days expense second to is little practice, right what price of A for as we is customer addition, partnership. On we not competition are see We eliminating wave

attract new customers and Our sales Sysco Restaurants Rising leveraging consultants the retain are serve ones. to program and current help

In are connections just proud with programs largest our up our customers' points The Restaurant the takeout increased Sysco helping and menus, I increase to value-added our more optimizing increase setting addition, by operations assisting quarterly sales touchless commitment, to in with few order delivery with services. of net history. the the consultants score the of awareness a marketing program. X,XXX NPS large generated customers and in that report to our our minimums name in Company's Due our by customers to was their am create no part to operations, than quarter. promoter Rising basis

you Importantly, on Slides, below the local we XX% closure see industry new in five is the than of in last And incremental on-boarded our the customers more QX, Sysco's can single years. in customers lastly, Page in average. X as quarter any rate

In addition making we in customers, people. are to in investing our investments our

for able the the Drivers that in the business intentionally transportation are supply volume retaining we country to drivers during investment drive maximize recovery. December this incremental decline We available short-term, will are pending Sysco them long-term, share the in despite across have short upcoming while ensure gains our and to our some is in expense recovery. it the over help will ensure volume

sales sales organization compensation know, we during you to summer. made the As our and changes

has in associate productivity Our compared to the retention improved will historical rates retention metrics and improved future. our with sales help retention

position Sysco in make working capital to has the right inventory locations business the investments to broadest for beginning in are the in industry. right assortment We preparation the in upcoming products, recovery. the

broadline Our the what of the and a during makes in ability on in time product of period ship to strongest Sysco full volume element is the distributor core industry. recovery upcoming

flow other while sufficient capacity in have coming investments financial in cash to quarters. the in We distributors make products to and invest struggle Foodservice may similar inventory, strength and the with

also ensure to with their continuity. are We payment offering customers plans in our partnership

to technology, and quarter during our investments customers, we a inventory profitable providing improve the Lastly, now and delivering strength we technology, our chain leadership strategic our in the like to to Shop testament this improvements balance I'd on Sysco while sheet This systems. our new to an and our in our pricing our technology customer our update team. making transformation. people, a are is pandemic, invest experience. our business turn includes of Sysco's our ability our making to supply are software in

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is in test our now new region. pricing software Additionally, live first our

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sales is and the Our is approach traction. well team-based gaining selling progressing transformation

teams the we positions, selling that specialist new geography. sales a across built back given guide implemented and created sales position helps quarter have We have a collective

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We will calendar program additional XXXX. segments roll cuisine in this out to

finding today you joined in of and inventory of optimizing physical proven experience of years the at regional our pleased regionalization made is Foodservice with our and has quarter. to report I of optimizing and capable industries. large our am Aaron talented ensuring location, important Alt years tenure He you'll and at Company, a quick our we top from assortment performance leaders services, a of by highly structure record The market our Financial experienced organizations wins Sysco leadership and hearing team. leadership XX leadership pleased strengthening of need driving that world-class track our in over field multiple servicing are business. is the I each in a the leaders include, have Examples of efficient customer and are completed physical start a team. us place creation progress Sysco be Presidents customers be are as great Aaron quarter over quick value Sysco. Chief new across a these him finance to improve in To location. leadership second Aaron, multiple that positions. during Officer. our am transformation next. of sites Lastly, XX the retail to in with the and our is leader regional average within most key wins

Information Sysco. industry, Cyber Peck for Technology experience Risks global to recent journey is has the Services, Enterprise has electronics Digital the Strategy, role, distributor for Operations, most Tom joined enterprises. In directly a and at his in Additionally, Tom and large that transformational he Security leading as BXB global experience Information Chief Officer. worked Sysco applicable

to the reduce has will excellence operational direct and be across International and of say which focus my Sysco's division. Sysco, complete. energy transition able based in joining pleased Tim four, his leading started number With offices new role be in Grade of new and has that is Orting development London more identifying Sysco. allows international engaged team profitable responsible our to officially of our I leading for Joel me and Tim was growth execution growth of time his will sources driving business development actively Company. is to Tim strategy Additionally, managing the by position, my the and leadership of reports on our for I'm geographies. begun now the

strong a experience Sysco management Foodservice best-in-class industry balances have industries. expertise, team, other from We and with that

I COVID the has appreciate Our on impact as over years hand during of business the leader our leaders specific business, has team. experienced results. teams disruption, Bertrand, agenda. largest invaluable. Great Greg's his work and leadership leadership Sysco XX join our our new strong with has industry and he experience U.S. Sysco. a Greg a and and leadership team been a talented years expertise common running steady XX on the of in

come. to galvanized strategy distribution us. sits them this confidence, to am years has common you with pending before to and with many to leadership set standard report around purpose for for strong today transformation Our work that I our the team recovery a honored business Foodservice I

ready see we working and will makes that to progress Sysco, ease, performance are As currently away in restrictions globe, the faster data, to We to ease. industry. customers our recover maximize willing upon home. At can than to consumers vaccine opportunity begin from eat the across once our placed administration our are the restrictions

our given have our share, business compelling strength transformation. We an gain and opportunity to market financial

give the Sysco to to customer all I'd environment. any prepared will the success in thank ensure customers. are to you associates, Sysco. help our a our distributor more growth for In challenging of business grow who We industry, generate do other customers working Foodservice in and And sincere closing, like succeed to hard success are this our than to

customers our proud inspired campaign to been Restaurants has point salesforce by industry-leading Rising our levels higher at in support any Our the than history.

in to dedication our every challenging delivery have fight have you. show will our what customers working how this business, pandemic. them we financial our thank determination best hard warehouse and with to also I they want, need inspiration they they to want am I day time. associates they Our the will resilience. along we during to details. serve now to our additional turn their are At to that we it. displayed ensure over them. shown much customers when proud that will ship over this their and welcome customers Aaron The for the the of the are to and in grit and us during operating who results, Sysco, Sysco I Aaron, just as call discuss Alt, second quarter an

Aaron Alt

good Sysco. and Kevin you, really am be I excited to at morning. Thank

Sysco, see and Before competitive I and global scale, Company position strong I with the for the a what profitability great from a joined was could industry. outside, liquidity

the the customer transformation. that and ready that, of many followed will capability-led of driving business I create for an and for I I Now see the flow. value. us In shareholder enterprise I'm a in on start today on then update quarter second recovery addition focused segments, driven on see opportunities cash team short, business to in with by and front being relentlessly our inside, leadership all a to results

through trending in and were November, December sales to segment. lockdown reversed decrease of quarter. QX from restrictions XX.X% the are metrics. been during a had $XX.X year, prior additional quarter prior particularly International but new the eased. October ahead as couple But flat billion, Sales Second of progress, earlier restrictions the There of the a

for that volume the operations For in in by U.S. Broadline local of varies Europe half. decreased portion know decreased Broadline of interest keen the operations there went We while answer do varying XX.X%. second the The region. into a within is within COVID. case in continued XX.X%, and degrees volume of U.S. expected lockdown impact total remain is lockdown December to quarter, case significant

we more will However, since and This of quarters, of recovery and be U.S. will commitment couple is been in volume the continues have our grow. improvements than vaccination ready the ever. business next is the week for until battle after we only hold. be takes to and SYGMA widespread we signs from the The fought FS the region-by-region competitive can make that seeing holidays, business light, week-by-week,

move decline the to we gross P&L, quarter. gross down decreased profit As $X.X volumes lower XX.X% COVID. by to the was in billion second in Most the due driven of profit

of margin However, at came basis level on we points, A modest XX couple did enterprise see of roughly the our in as gross thoughts XX.X%. that. rate dilution at

through seasonal see quarter decline year. the in gross sequentially second did we as the First, a margin quarter first this we from typically

dynamics. margin frankly the its market flat Second, which each given same gross partner our a versus U.S. largest segment, is and the quarter, pre-COVID Foodservice segment remarkable had rate SYGMA

growth majority shift, which for lower our mix which SYGMA, margin accounted of national the change. of rate is the did we see margin, at vast business Given accounts the business

was showed impacted are in enterprise margin International and being also Our for addressed. other businesses, gross reasons both by which decline the the quarter margin as

XX%. deleverage changed These some remain Our profile $X.X of a billion. expense expense second from as over sales purposeful reflects results This structure the our down adjusted decreased choices. cost expense as our profile to XX.X% of arise quarter, course operating

positive the and productivity achieved side of our key areas First such and in on increased network. the warehouse we targeted as equation,

volume. swings maintained also despite in significant transportation efficiency key We metrics our case

initiatives continue our to identify to the of statement against I continue can opportunities. and more in detailed million XXXX. in we see income we make savings fiscal and the pursue excellent $XXX savings Second, progress cost

have the prepare happens. other the purposeful the it to on Third, business choice for leverage financial to we but side the of equation, our made strength, before recovery

As see metrics. and We key consultant drive sales our operational previously retention fixed include can working we announced, our wins. component compensation both our on in changed variable change market to focus and that to

in associates we support thousands anticipate and we of In back the quarter, consultants, quarter brought second hire the indeed pending financial be of have ahead experts just do we operations anticipation half, will culinary the the to up business the to recovery. associates hundreds recovery developers, and business We business third additional of not we sales in curve, of of model. in new resources back that. Additionally, and our catching plan the

Kevin personalization. vendor capability as pricing, mentioned, customer management to investments in Finally, we purposeful transformation, sales, make continue support of and our our in experience, builds,

While on are half. we with openings slower in anticipated. our in the be returns the back so do segment, of than our When originally in expect of in to second the third investment significant and offsetting these we the impact challenging more future quarter savings results efforts expect will part quarter our International combined quarters, dollars

market and savings curve whether the to over than returns from visible. purposeful the investments, expect more volume next efforts and or impact separate investments, as sales due However, several that of our recovery grows, to others more be quarters, ongoing the we cost the expect the move rapidly will up

Finally, to income operating $XXX at million. decreased adjusted enterprise XX% level, the

second quarter, of to non-GAAP by $X.XX exercises. the impact rate for decreased earnings was driven per stock For the the our favorably tax XX% XX.X% quarter. option Adjusted share of

was second teams segment, new acquired Now, business environment, as sales period. starting business deployed of prior results Foodservice Notwithstanding a versus tools. of quarter were Operations. the streak decrease set to Sales U.S. record the let's difficult the customers, billion, and with turn by a XX.X% the the our digital year which our number we $X

accounts saw our national customer also base. in growth We

product I sales product cases, driven U.S. in driven to Within cases, to brand decreased Gross respect U.S. billion customers called and very operating like to by shift operating ready takeaway XX% the for the And for flat managed puts decreased for XXX at the as XXX the categories lines out million. products. profit a margin out of product to inventory second basis gross as of decreased such which COVID and environment Sysco With through prepackaged XX%, higher shift. the $X.X the sales and by brand points like the quarter and the XX.X% addressed to XX% decreased business The the mix was and mix customer billion and XX.X% total successfully segment's quarter. for earlier, mix local was quarter XX.X% to business, points as Sysco $XXX headwinds basis adjusted cruise PP&E. decreased takes adjusted aged shift for income margin $X.X expenses

on Moving X% to success Sales to consecutive quarter growth quick the compared traffic. segment. increased this of service to is SYGMA billion the sales the segment. regional prior-year national $X.X period, and drive-through driven of restaurant servicing the in second This by

for We X% segment the Adjusted million. year. prior and income quarter increased gross overall X% $XXX to increased wins operating new continue Gross the in to SYGMA are by expenses see the and operating adjusted to or and was to million flat million $XXX margin pleased business profit $XX the improvement. X.X% increased

the gross margin The basis gross mix of a billion, while mix, American Latin margin the The Canadian segment Operations $X businesses impacted aged points. mix, by customer International and saw XX.X% U.S. inventory. and recent of product gross profit market of a have are decrease adverse been XX%, result sales substantially than Moving and International more aggressive to a in decline was decreased our European, XXX segment, which lockdowns lockdowns, Foodservice decreased

expenses of adjusted and International adjusted operating decreased loss income an operating operating million. for XX% the decreased XXX% $XX segment, For

occupancy low remains Guest levels. as Our which our Worldwide year remain compared includes prior other hospitality to business segment, rates challenged,

the Marriott wins, has a and is and Western shape Canada recent via in JW business hotels, a the Avendra been the contract given including Renaissance a access America preferred and and hotels achieved of in for better number North Caribbean. of many distributor with being Marriott new named However, all than its to customer America, Central and both competitors in U.S. properties

million of a the in million quarter. Net XXXX. year, fiscal sheet sheet remains the billion. fiscal had million, for Company financially environment, first second a of during While last access was its line quarter as of Free At operations cash flow plus $XXX half than previously which year-to-date, hospitality perspective. billion guidance. underlying turnaround was assessed with lower to borrowing flow noted $X.X its balance the for the $XXX mode for face investment the strong was in carefully $XXX XXXX difficult from is billion $X still in $XXX Sysco of we capital business of available cash in CapEx balance which was of Cash profitability total end, choices first from improved COVID. the our $X.X capacity a million half

that flexibility Our ensures and the are cash liquidity and available to make the interest best in of the stability decisions us Company.

to opportunities updating future and cash We as needs, investment operating and levels of our views calls. and we the with continue timelines consistent assess in be monitor our capital will transformation, carefully our environment we structure of reopening

Although and our for long-term recovery transformational Sysco and the this now will We future next which for focused two, for shareholders Operator, is preparing a or tough capabilities questions. drive operating impact to are environment for managing quarter customer-centric the for initiatives we value believe its aggressively our growth. businesses, associates, results customers. on our business ready our remains our customers, building and resolutely will strategy accelerate


comes first question Slagle of Go the Jefferies. line with Alex Our [Operator please. Instructions] from ahead

Your line is open.

Alex Slagle

with size ball, appreciate in you transformation talk or elements the opportunities surprised the terms of you may didn't fully question pandemic you progress that. but was you that about congrats of for most, versus a of the started? Interested of in could of level if you level your belt curve what year now, to-date the in your a expectations. made Obviously full on your high assessment Kevin, major under when the be the transformational the progress

Kevin Hourican

private pleased we're as hall well. many, I Alex. times said where our transformation. a and Well, environment the In conversations this in where obviously over later, on been customers The perspective, COVID today's our many that town would are. as I've say prepared on crisis regards with accelerate we say we program, has the the I'm with dark Company as investors one actually year meetings it to mentioned I and to now we appreciate question. transformation morning, a in you of serve good ahead are from two our complete we our that cloud remarks difficult The used me silver and lining in had I've on we've regionalization done to before, opportunity schedule. years call. tremendously overall. it's plan that is, our heard an

to So our the our impetus buy-in the from management, experienced team change on ability accelerate for change meaningfully improved.

Alex, when model, those you and our team. improve data all are would tools, look model, I of promising. see need What in going very last so business to we can my obviously, we're the more a visible have confident very internal currently say our in be the Company team, you those our to schedule to our And successful. at and need of would selling and it's for a just to activities overall we and I our thing I'm where be these technology that a to leadership we're great environment To with they say transformation ahead But initiatives said results enable activities we are the Company, I on we're remarks. pleased have than is, are. prepared great

Officer, just other you business talented new practices technology help we that and joined Sysco that from us of best Company today, joined help results. terrific Greg that who our built like financial to runs then need have Aaron, in which Tom leaders can like far really executive executive joined strong team from who Commercial largest bring obviously accelerate we've at industries is Company, and leaders who perspective. really extremely at ours have And combination Judy Peck, experienced Chief that heard now from a Bertrand, as has by frankly capabilities is a key transformation a our We who our a has us who our

us, COVID I I'm like in in ahead to Alex, you behind of can would we're prove forward are, So, of all it summary, have looking so schedule I we our say, think outcomes. and


Go next question with ahead line of comes Kelly Our Edward Fargo. from the Wells please.

open. line is Your

Edward Kelly

of Kevin particularly period your tough and is Aaron, this model to Company. a sort

sense, ton figure positioning you're hurting going obviously makes industry near outlook. when especially better sort the on a which in what the is setback. I some So, of that's I'm for of trying how term to frame recovery, to sees results, out guess the what's

can you QX. frame your know currently? sort How of as of So, this tell there way I don't us sort ramping for we don't what base you of if from about sort cost is think positioned sales, of is level a us, I if that for see know here? to

lower mentioned that really relative did You to thought. QX. initially be QX not will what than I'm sure that means

So, I'm help you whether as any to could with to us in help curious of just along kind that the the quarters. modeling of of sort next few

Kevin Hourican

respect we recovery choppy the And this not year reason we empathy we difficult obviously understand Great Aaron year. linear. a Ed have to thanks, also And the model the was it's a model. fact is this quarter to that difficult is And Kevin. I'll for start this comments specific haven't to and given it QX. that over and guidance I'm going and to because to to due is and toss

we Aaron give So, are on commentary we the and to to where we're best will going we're can in do color seeing. what for you a QX. provide moment And that

our in better to some customer We're to using project. and in, investing type the on specifics a put Investor and Investor you that to that's that we're we it analytics holding know - initiatives you on have a about more will future many is Investor building will and cover at machine Company be with in capabilities more Day. improve May predictive price help talk Day. effective. to customers building into Neil be with the being on Day key our we and out ability force two that advance personalization the of We're engine plan that more we pricing our instances the you in, that we going technology, May. you As relates details provide that in owe are transformation, details of We we to those offers our that to it send in our buckets, which if what of we investing will that size learning more sales

to of a of it the more the see dawning at the the quote other a it's do new pending of day. it relates a As recovery. it's business train coming data. towards the We And us, half not We can see see investments, end we our in promising light tunnel. a

Here behind are facts the what happens.

and Florida that restrictions states reopening important We eased, like national than like, just at restrictions, as our is for allowed pops reporting a the it which of dining, be see the can and has how is New state our business now immediately because authorized Valentine's of Day our business soon We will easing states are level, state again. with better that we this week of substantially state the restrictions, and that average. Texas begun the York has in know City California, limited weather that. in restaurant restaurant in dining which As with quality New do outdoor York know

is is business from So lockdown. of tempering specific reason when that we The immediate under us, we International our see to happens. enthusiasm QX, jumps some business have that an in you're severe hearing

International, the the States In know but is that leave your In and all that home. April currently to can the that this, really day, we you drive-through's United have only similar London, United hour they conditions for it's locked the stay restaurants Europe in X And can are I grocery this. an of specifically May. and to don't and for to just back are need the kilometers to park to probably experiencing clear within you only to was go be about have operating want house degree them Europe, a I States. down. in instance, You in you what your closed. mean, store

that So Europe restrictions impacted. notably, and governments the Most in Easter. our said come sales roughly until significantly don't European the have business, they been easing those anticipate out have

and going we're So, thoughtful in to careful really Europe. be

on the progress we that's the population and the States, in move will and being business, investments category-Xb, made our two in now and But eventually that pace tied substantial, is We United meet to categories a at we moving protected, being vaccination that recovery. in at-risk Europe to will Xc that in businesses slower believe three.

restrictions bed that progress, death business comes the ICU our that will capacity pops. down, make ease and vaccines the improves, to confidence happens, give rate as immediately as governors, when As

Aaron to and then We to So, in to need time for driver out when delay and things customers need We ensure that's both a place our warehouse what back into need we facilities. that. we're putting in in job up fill to. that and preparation do and is to are get job-req referring that staff along a that with comes our orders, ready to trying the not positions to inventory

purposeful And have time. to we that. this to toss period just that do then purposely a I'll right April, June And now, you with cut what and the leave do So, had our last comment, to It's We've not we in frequency is to to last I'm Aaron. going choice. strength delivery service at this yet chosen year. back May financial in choices of of fiscal

are We we delivery X minimums. a our We're not waived frequency, days customers plus cutting order week. servicing

prepared is notable reflection. is metric, a these X,XXX things and And that believe benefit of two, in and to our covered understand forward my that a pay choice with will COVID itself it a growth. we that loyalty future. Company that that's our help those NPS difficult points notable that that forward All the customers that will we choice are understand pay their I remarks, of future basis during NPS, improvement into made, And that's a that wave

So, you you anything if specific add wanted that. Aaron, toss there's to to over to QX, I'll it to

Aaron Alt

don't And like per what what some Great. and you But give take se. is believe talking parallels. there to quarterly and We more I morning, a moment guidance saw some a I'd for question. bit there, QX do QX, the we provide thanks about on good are context by

savings called that from from one-third, has prior enterprise, of couple between As have in We've can you see structure And that and second observed quarter more a the variable will cost we the during cost versus quarters. identified our etc. have we math ago you some specific we would savings of I could the executed of and during I employees our fewer $XXX our People, costs. previously up couple team calls, benefited let and prior the year. for executed during the P&L. you a savings And well. a COGS and professional mean XX,XXX identified me specific talking of the a quarterly commented see that year quarter. year. identified and focused. results, efficiency comment savings, quarter And and indirect we had than earnings is last the can give approximately could the we from that that. the P&L. the been you recall as corporate what We've prior technology our for the efforts investments dropped comments, overall I forward fixed XX% the the will that from our deleveraging the during cut did component in across I today, do observed examples rationalized be about them on that includes We've that headquarters, that as costs, of The from release sales at Joel extensively cost two-third to or cost significant call. million experienced split And

I of So, savings there. away you what to out cost want we level haven't real. quarter-to-quarter, they're while the is exact and material the it's it are take disclosed is And what

call you really combination offset they on the I it because XX/XX it and think of important things cost have a savings a would are spread. two about Now, going is

a network. ready is do savings expense additional And for business fund it in investments these cost savings transformation. In The first then some going just worth purposely incremental believe our recovery what of transformation fixed recovery against used long-term Europe parts mix we the did the those and the quarter. summarize, we the both on talked now we experienced. other of from to is, expenses come. make We other corporate short-term deleveraging in was to some against investments To one-time that as initiatives recovery our that the and the us was those or of and and about, cost it incremental Kevin there gets

those are as end much that behind into in in transparent true become we early savings will same us. investments the into will real next about as back the and decline get of reverse to half, and of structural, they called Some and transformation we continue importantly, recover they the particularly apparent I more sales into investments be out year QX. the year, the We get they're recurring, the the that. into earlier they cost want and they are But


comes Bernstein Barclays. the Our next with please. question ahead from Jeffrey line Go of

Your line is open.

Jeffrey Bernstein

our market it market get you question I distributors, opportunity follow-up. wondering The yourselves, bigger through benefit gains. is the But those later. about some When point the about these could competitive sets talk on small greater I'm And is? your just had context that Foodservice wondering be when I but any one think very and I you line. on would then on just, share color the on some mid-sized on had largest where whether one gains, targeted we follow-up. you rather you'd end at or one and question sooner great. difficult both, as on share the think offer And see the if the than you've revenue especially qualitative just competitors, know to expense achieve you including just COVID then thoughts

Kevin Hourican

Kevin. take I'll one. Jeff. it's Sure, And that

less track on Aaron crisis. because the all But strength now and investments during investments and end of takeout our as it's our it straight levels players, will vis-à-vis the gets And happening things $XXX the visible stronger to it's bottom etc, as the and million have is million to recovery, back just strength that's And is and both a what that real, it to we and other new is volume stronger times referring $XXX hard it's will, flow to cost can these was going is capabilities, of line. concrete gets we visible right, volume and of etc. The it. Just, be real pre-COVID recovers. the adversity reason

before So, not and too. We've we're said that done.

more more talk done attained. the not as structural May about wins with we've Investor material, cost number improvement. impressive, the to are it's we can is And National We explicitly our again, billion Sales on win, $X.X something Day. segment. side, net at of that's national sales revenue in new There it's the quoted the Specific be

a I our quantified because for level In won point than having and performance challenging we said We performance we're in the as more concrete just average explicitly case - the order can fewer at growth. activity. can is XXX marketplace, COVID. and the overall in in are is You every be in fewer because entree. focus you general it's see and desserts, tool visible world, But SYGMA level. you the wins our local a We use main in local customers remarks, at results again Sysco can it Those of In to it prepared following. advertisers, what's reason on in on That's also is can and customer because they called our currently just that less any with down it's our track to be in the last it. five more real, over specific track see I at results haven't customers going topline the QX, as we happening the independent time years. customer my volume per spend it's wins order The new takeout visible growth what delivery recovers. they

well. businesses to Europe that applies so of not the the And is of per that's in as but just a new that applies volume U.S., substantial average Canada, all customer added number in our to And customers. we've down,

size through forward activity. you that at So to will of a our we of the we of what share are And it what the prize be be able that transformational sales bottom from anticipate a growth how to that Day on And is they're we show And activities flows what then worth perspective. May elements these market the key will a pay line. trajectory is, capture enabling Investor all The perspective. from were. then these

said. just what anything just I follow-up, your wants to Aaron, there's to he go if to we add, Before ask I'll

Aaron Alt

and lifts the I even think XX%. team rising and believe just No on sales to earlier, down the recovery are we're are, Kevin, to team profitable as two the I the look, thoughts the think profitability, I boats, all we to a as XX% as commented experience sales tide that that, continues remind going point should we're

that And strength financial so, we for have and sales get ready opportunity to incredible lift.

Kevin Hourican

Thanks Aaron. a Jeff, you do follow-up? have

Jeffrey Bernstein

Thank Yes. very you much.

was comments, third segmentation or I SYGMA success? I I quarter that, know did wins make But I said second success is wins know sales of it's and the you quick and you a for short-term to give any couple mentioned necessarily was and growing half Food late. keen can quicker Thanks. in think menu gauge guess. of regional I color hoping And little even difficult guidance. I on, So not wondering structure, a so just early of you any on of we has provide kind been U.S. there of if you kind quantification can

Kevin Hourican

I QX. doing cut can your that the directly market is smaller is that to implies Well, players it that That what of is before, share. that giving And that have Kevin, not how happening. true And it a are is they of winning is each I reporting competitors to we're asked they volume for There how ability which And We on guidance. smaller just players major are true. also realize the performing. likely I answer stronger. a didn't that cutting more was we're what the is providing. mathematically are that currently have second. they examples question, frustrating are it's inventory however, first, they know I getting I again first a that around invest the that to Most Jeff, the Wednesday select put for during to they Yeah, sufficiently growth. frequency, was delivery donating no going fact question. cut players don't period know that Saturday share. competitors, of resist in are because color I tied so, little bigger first the that doubt second half been the are

that, not done We have Jeff.

we canceled have So, not Saturday, we Wednesday. not canceled have

you fact, In know, we order well eliminated minimums. as

ability because those serve we is joined improvement in is, And We the our Rising. that with we're we quoted to launched, that of on them our than are not on service. our on better engage. customers Restaurant help to Rising XX% the data seeing back are delivery, takeout those have services, they customers which for Restaurants customers menu seeing not A this programs before I've leveraging leveraging as retention that and average, that point us for are campaign, trends cutting customers, have been performing choose

and more and Our get more priority on obviously that. more them is working to of and engaged we're

The X and second the take customers. Page that is I in deck you Sysco just to closure our one, rate of

year data - XX% is So the rate this to out. has our systems, closure been our would normalized comes at and the come customers lower normal internal average. doesn't from data this be chart from our zero of than this national And

because hitting you struggle, the layer their and made more of when have I business things put So, then X,XXX customers, customers balance going a points market These to share on in the going future will that's basis struggle the with When quarter in Sysco gains. we others others are going really confidence stress. building a it's times, won the advance different where than meaningfully can actually NPS, closure sheet many we our a years. the average. rate industry periods, of of And see less in to XX% give that to net improvement are than put you in X-plus winner I Joel point in be new this this period sales inventory as business,

of build inventory deal. balance the sheet in big that's ordering, capability, strength to of customer a have Jeff, We because our advance the the


question Nicole Piper please. with Sandler. next ahead the Our comes Miller Go of from line

is Your line open.

Nicole Miller

was Two of pose million the the believe about through. rate the prior one. quick $XXX questions. run I'll saves I on flow first cost XX%

more think that So, understand we why. and what can you saying hear against I reinvested this quarter you I is,

And we that so forward I you numbers So, with one-time are one-time point? flow expenses, just what been how to the also mentioned estimates? our able into material work those through? the expenses, this was at approximate haven't can factor

Kevin Hourican

you Thank I'll Hey for to question. for it Nicole, toss that Aaron question. the

Aaron Alt

question. refer to think to around Nicole, of morning. the I how had thoughts I back about you this. Great some earlier good would

We the disclosed of $XXX plus the have million build not rates synergies. of

Our savings cost forward. we carry identifying as that we are

against costs, product or what was my interesting, of sales, the the at occur deleveraging investments the also in to away and they one-time is while business of against and you're to they look, quarters. will would a one-time the expenses also model, we the are any reflect on against the XX% they look against That's couple transitory was cost will against point I additional or in savings what the go in you are run tide approximately fixed cost the is quarters, recovery - the our As deleveraging out we'll have the the rises may that, and have really to do investments transformation and - but that, we and investments one-time comments in the with achieving and and transformation, called disappear of that our nature encourage as benefit rate trying important the future previously, saw portfolio. that will for XX% Joel had quarter fixed recovery

curve. and to continuing ahead bob of has financial evolve the we're evolved. to weave, situation We're to strength, reflecting our Our going because be

Nicole Miller

I way. didn't guess just answered. previously understand I I was that and guess it that asked

tied retention promoter bigger XX%. together. picture and own Trying math your score should understand So, that we A question. if can do the on of to employees net be

would or ask and the that's together. way being guess I I things about right talked is, two to to wondering question retention tie the improved if I'm pose So, you those

forced anyone else so literally question to sound this challenging, always definition improve. you're go, might So what But, be. and it's where turnover right indeed by mean to has not I retention when meant to

share less? if, is, more you I the scores of I I are XX% benefits, I it ties is kind If local making just example go offering mean or promoter go wallet wanted people that but scores? And what as you tie So, Are if makes correlation together, happens chain. net up, is sales, of Thank it's sense? up? promoter XX% share to wallet to could independent it what wondering of to that how more see that independents, was Did feedback? kind for know versus which then? net you.

Kevin Hourican

a a It's And your by And a One no asking excellent challenging question. take Nicole, I'm to I'm strength sales to strength a ways. question Such we is meant it. leverage will spirit retention. when in going we question. to have on large Sysco voice strength competitors you're our is our unpack we us two The of it's going NPS the biggest means audience. index it. far massively our sales and we see and that in consultants. and our it through to what associate our the support by is great our continue I time and over to size, customers it get we given minute, I consultants. sample action a in strength. about we I our customers By and to data, And We by is, quality that biggest of is appreciate that track have in far real where talk NPS is

the on we overall improve So, harness make right. further leverage Nicole, impact our And we continue pain biggest need to to what to it strength. points is and to NPS need do that address

but So, yet through pain here this crisis, these have minimums. you as Kevin, were we is COVID order things my a volume down, point. hearing are

period to because per willing you delivery. time week volume when cut Saturday come during of one-time is You're this down, my

of and restaurant this So, not biggest predict it for we're they I regularly were delivery ensured of going What to it heard on orders date really might We're wave From here volume is about a they frequency. we it we just very for point permanent, we to it we what when going that are the regardless well COVID frequency. end delivery need and ship just them. we was can't the and we to through order not I'm the cut off going not volume minimum delivery now, addressed need, and this into eliminated pain problem cut worried order be, hard. leaned order to what be that scheduled did our your and it, operators. is, took minimums. crisis my asking two, We from we table. the And we

higher and So, are and Nicole happened. got NPS helping what delivery, The delivery operators restaurant sales Survey with and piece consultants our of even the that you improved, future wallet. them points point we two associate partner. here X,XXX share the basis design because will we higher pain saw retention up for the then business, menu And is is into delivery, hooking meaningfully in takeout leaning our What a and of higher, with the put of there. customer together, do

you lag, the If NPS, right. it's study a

and improve of we're support we you my consultant facing immediate meaningfully, not to change when to that higher referred the into than our that in they is in quarters forward B. made tied NPS It's as was compensation retention right wallet. results confident What A our relates in business. as with will things sales us years, summer. it in retention So it doing script that the share and higher this reward and But of we're to I associate customers an

are that enough our One, livable were business. and that had through full we sales In compensation we plus old consultants previously two, and Point new when earlier healthy bonus. one. commission, very not But That have change it associates. year. point you years a we they their excuse if number make had the tool sales in then we a tracking twofold. here base have actually say, But a rate the I to they learning structure, were income at as because statistically, any summer. statistically structure significantly, earn follow-up simply things off the their wage So a that base seeing Nicole, we couldn't that. it's to why see to newer was on inconsistent COVID, just disincentives we're in that have implemented their they before, improvements I our those there you change that to it higher this turnover, significant, in during is and been some It seeing Company's statistically were after we back they much model, toss folks to I'll to commission strategy, we're on bonus make is implement the just a just people do full Change because make of is a was new to they some meant They me, and in our to through hard, reduced of built too our retention when especially with opportunity like the curve early where in anything comp. and made said. retention attributable our their in motivated

Nicole Miller

out That color. lot. that actually taking me Thank I questions. helped appreciate you my a for

Kevin Hourican

Thanks, Nicole.


the comes ahead Our Stanley. please. John next Go Glass with of Morgan line from question

line open. is Your

John Glass

Is if these about and issue think the And Kevin, that just about you talked could wallet much provide historically using cases. all share to services those, meaningfully high XX% gauge the fully them? - restaurants this customers going in talk back meaningfully this services there if you to how - that, I better higher? wallet changed that way you inside local is Has when with to have you your done share the of value-added recently engage it go pandemic? in during they a

Kevin Hourican

share Yes, specific report to on for by John, by be that or why say can they a Restaurants customers multiple we question. more this customers churn many yes, percent them. us, in a of type There or on that. wallet that retain we two distributors, is lot What that distributors wallet in have reasons out share engaged not with the definitely I'm There's win campaign, there month do with to of call. and are is I and however volatility great metric use going much that them And three of on the the quarter. industry, of too by what work other why to Restaurants I'll and Sysco price. that we're the and they our introduce initiative. else want multiple honest versa of a because a for frankly, a of somewhere doing Rising distributors. portions think their go our keep competitor business to which of one their can competitor. taking The campaign needing leaves one And a is in transformation to to strategic number we're They our is seeing specifically, it is customer vice pricing reason they price our customer is initiatives, to the less distributor transparency with price. get bringing or and have Rising

As the are that from items tail of Investor a of XX% we'll is existing which growth be what be pricing take tied specifically Sysco. wallet growth in matter, When on that that detail. meet assortment, elastic to customers to right ability have with the at on level, our question wallet. neutral are on opportunity the and to will share we frankly, for on of perspective, inventory some in, pricing, And are that with we specific increase margins customers, nominal competitors lines more will pricing can Day, the give we able less May items win lose in bullish light item and you explain but our incremental will believe the north drive items we we the increases well possible we our at cases dilution. price. to And of the to keep believe we'll we because All in the share individual price to we your opposite, margin software have offset - implement volume that's is to on we answer price how customer to

John Glass

things follow-up, That's a a helpful. Rising just the international on International, Restaurants much the the How many those price business? don't opportunity those market Whether are tool. and Is it implemented very the How one U.S.? of it's of many or been have that programs If apply? different always I could ask you've how is applicable the just there real to implemented? or

Kevin Hourican

our do is board. he He on to we gives the We're improving in International versus specifically be sell, execution will for initiatives what engage contract selling the deploy on are best-in-class is Oh in how based stop. it's is to okay, and is, applicable and said, It's and cuisine to with International. a COGS a profitability best-in-class in London a that Tim What purchasing is remit mobile where on. working that and he that. you're time exactly full key and Tim. local of in be your just something penetration actually platform, confidence International our global these And segments innings will things implying focused question, where is pricing the tool, hired But how We're I countries segment. customers unique type European team-based business you how of scale. huge mix opportunity these which you a the through can as and why in on strategy and when businesses. hard strategies we deploying and International of here, be Each our do to one bid. were these Aaron, very a International new how myself your that me early will it's deploy improving the of our that improve now you big strategy, in ordering focused Tim of


question Partners. next please. line Heinbockel the of from Guggenheim Our comes Go ahead John with

is open. line Your

John Heinbockel

on that so about all folks, that bringing folks. questions the of And What's one, one bringing expanding in if secondarily, you you the about two do right, the Where what's bringing rolling back talked will the think timing come Then pricing pace of roll they interplay and the about thousands you on Number can think simultaneously? right. pricing, then of or related. out? sales tested region, Kevin of that? and a of be recovery up related how rollout from, between So, managing done lot

Kevin Hourican

John, want thousands what prepared applied That Aaron's warehouse associates, thing comment, to he associates, support was the sales that to good remarks. on we're one drivers said, resources. I thousands after, always. just question, as things he and said, clarify in the of each that

them. the of declarative team, cumulative all thousands the the of So, applies to

sales thousands hiring be of to we're going So not new associates.

majority associates. volume tied populations, hiring anticipate. the is We I'm is business We're comment specialists. to We're hiring to national of what thousands business the they business. warehouse will simply call sorry, developers, NBD's them, our driver the new new that business hire the we in sales new But recovery developers. actually and grow

they will to and hire up, and be we our we it's not to up for to volume week-by-week staffing data. As levels tomorrow, that back clear, just trained. we to be of pre-COVID. expect weeks up working X to and Aaron it's down to to today, And what will well. and recovery. business we it a takes get associate road that to as become our able it's But even plan number become need able It we and we as really did become X-plus it's be be to need takes as us throttle time see warehouse you upon throttle have I know, it driver. thousand, in people to to zero quoted, as it a a productive productive productive and staff than more fewer pre-COVID want to - And XX,XXX sales based to down support takes the able today, be and

X durations we be, we're good recovery plan. than the John. referring will recovery then the volume staffing in that'll the two have to needed of way they're is takes productive, what training pricing, of X need to window. that we down. a of to And question second what John, volume capability slow staggered we we So, it's before things. advance the If recovery, part was that then of faster is, what news And time of staffing is building restraining anticipate, it to specifically both good hire your a week-by-week-by-week those The on into but we'll anticipate I'm we be speed and the have anticipate, when rollout. as we weeks say our the a model, your person doesn't to will get expectation weeks financial to we If the If tie that always, recovery volume materialize, then invest we do the one, up.

takes learned one at The region new crystal So we're I sales software, that and how pilot the news remarks. a to over as a of back good to consultants. is customers, I their said want software component now. in It out pricing to work into national is years they in time a go our being tools, that like. just this change first on management rollout. to And region not the be warmly our then Sysco lot new from significant my the something. can prepared going about We're by roll plate, We reinvest off embraced their clear really right

We not sales of them, consultants, tool, time because be reducing freed up because it's pricing opposite. the will for our is

into that We work that help perspective optimistic invest time we're up And from back will that and it on as that customers. a gets their will well. take growth sales week freed our John,

react pilot bring regional results, So which declarative I'll and the regions we're additional in, we will QX for I go. have want don't success to project, and because country. And date pace John, the then management pace will you have of if of determine learnings in And then the back rest the to business will follow-up. the we I will the to a determine it read that going we our you, the change project we're the speed that with four which toss any to John currently with to and this it do period. we the management we expand on and learnings based change end


please. Lauren comes Go of with from Credit question Silberman next Our Suisse. ahead the line

line is open. Your

Lauren Silberman

role. Thanks and congrats on the new

the back you're frequency, pulling specific sustainability to about at to talked And multiple wins in local You competitive that's like historically? there the what the understand the environment? wallet what that's the brand utilization. digital environment new drops unique given extent cohorts Whether need customer about in differences share, initial these thinking some to for very wins, and relative level. trying think strong smaller do the among penetration, distributors. local Company Are distributors delivery how Sysco Just versus behavior any seen of you've initiatives on dynamics you less

Kevin Hourican

they paid customer that the and of is changed of they their on to profitability it existing There to be an spend more drove an if the clear, them prior increase new our But compensation behavior to going we compensation that change really to weren't question. can it base configurable, going on hour were to good it's we In the Lauren, compensation. prospecting. they win are the were had they the increasing we customer, I system. That existing meant disincentive profitability didn't spend, on for a they the We and out make in intention. be. an which new model, them when were had was not prospecting. want we bonus, said metrics them That's is on than bonus what our business. spend In plus whatever our I earlier want hour never model,

month-to-month In fact we can and quarter-to-quarter, on that. change matters exactly we've them what been doing

penetration So, important now driver we we with super between and balance which it's have of new a improving balance a profit existing to need customer better it and lines with customers, is prospecting. better

Lauren, biggest So, in is a our our new growth reason improvement and for change. performance, the behavior customer

we're And you new in about Things investing we're much which customers with previously. delivery investing I've they frequency. cutting made matter. spending are not associates it's we're why why don't payment the than no were plans. back these that think in I Partly why point you this reason is do also time now, service, order in minimums, like was customer how investing investing on Our we're yet, more in prospecting the paramount. talked retain

predictive credit for more And model risk have model we're not weekly new We other to cutting one using customer. buying this and dry having we in produce they've because sales help helping of So, frozen right with inventory we additional off customer. of United negotiate with time on customer their add wins can lines. that on through broadliner increase that the never customers is period a to each and challenges. say. from they're person And helping selling difficult that's a we're and the They that what, balances penetrate categories. States. each that we We them, one-by-one our some the turn need where them out, to thing, the wins. new I'll stay the of produce out, said, work plans smoothed to our if We rate can Guess Sysco is imperative, make like what We for comes need payment it these can for And penetration brand things that be spread will these to they to you retain we new us. Lauren which us on to best with need so be basis last businesses to profit could in of a fresh introduce and produce. them. we fresh need considered We and this penetrate do

tremendous customer you increase new through lines, the are if Win activities. Sysco those with that service has beat additional will and the provide meet or to expectations. Lauren, back categories, Once been follow-up. them customer you, have prospecting. retention penetrate a So, improved won,

Lauren Silberman

that Yes, brand one. sales transitory? points. expand just be as of factors in largely XXX decrease on label penetration quick you you to the down basis drove one percentage the private that a On local cases, do Sysco expect that Can and the

Kevin Hourican

the explicitly transitory, down sales we're for It's The Lauren. being and balance penetration Sysco a by also serving, reason of that customers XXX% the brand category. is

So, is biggest that's right customer the the Sysco - biggest our for our actually now business down business most businesses.

the hospitality FSM So, and categories. it's

or a have down within those those We with brand. are therefore isn't right we space, the to our in gravity brand And businesses Sysco businesses average excellent then, an just go customers of that that's issue on a in and takeout Sysco it well brand are the to than more product penetration brand not, Sysco and products, doing now, other lot like have that that products, categories. - there degree believe

absolutely innovation on the be to is we So, into it's products new to of merchant have in recover anticipate Sysco growth not source and sale. simply of within future. where that just our brand working a opportunity to we profit balance the been, we've team And


question Go Kelly please. next the line Our Bania ahead from with Capital. of comes BMO

is line Your open.

Kelly Bania

International inventory. Wanted to sounds but some pressures there just also bit some ask It mix gross a margin. little more like maybe about

when better? than quarters was ago, was a it of that you little if margin couple can surprising curious gross it sales even It even was lower Just a manage just worse. were that

can potential recovery there for So, the thinking in of how different U.S.? do should manage is terms versus term either International? in we if just about International what think margin anything about longer And to the you that curious

Kevin Hourican

at I'll then addition it I'll what Yes, Kelly, over great question. toss to start commentary, cover. to for in Aaron the I color and end,

be from the margin we it are International allowed difficult customer segment are activated, United do less can to and And on-prem customer called International in was takeout One reasons and is Europe robust, the is They They're closed. and are So, are closed an delivery takeout Unlike two out. they mean, in quarter just the but Restaurants is closed. than drive-throughs clear. France, dining a it the delivery where States States. and closed and Ireland. perspective. will very profitable be much I takeout in in There's in and delivery anticipate most U.K. until in why. much, mix, they we our April. United

best France. our meaningful wave a just point two, about everybody headwind rate remind long-term. in book you CVOID regard. to the I'm want the of going got in we've that business before that entire weave So in I made was business here in to

X% right of lockdown. challenges We France, secondary the in this are before minus

International as if respond these control. just they're we we and So than even Easter. talking anticipate on frustrating lockdowns focus it's eased again can will that United that we the that But fast, not faster the us can are once business fully States, to think what we

have We percent Kelly. some call penetration is mix. margin It's customer driven did the So, challenges, mostly it spoilage by appropriate inventory out. to

a minus in Our it perspective, France this from XX% in business QX, results week. X% I goes minus about think to from

have the pace Similar happened inventory. is QX. lockdown There speed into in was in We with happens. challenges fresh that when If you went which to what back remember significant. And Europe

Kelly remember from back QX. my You narrative in

I'm you, take Aaron, if you that anything. said. and came have to thing is will this slower. swifter I and And strong, out going come missed toss if expectations I earlier I lockdown going with and add anything going later to it out But that there happen wave. it's second anticipate to like same Europe is longer. to we the or full what Here's entered to would we

Aaron Alt

quick Kevin and good Three Kelly. adds. you, Thank morning,

the job elements. on the profit do business, bank. of for the customers want margin where going operations the in important just do the business some first up line. have so, objective excellent there bank Kevin perhaps that do have the International. really business and most contributing is dollars on segment is obsolescence. we an materially, is some of First, we've closed which our actually available, to where inventory Gross into into the product primary in what's we as our the and I want call did across mix shift, two shift additional dollars closed talks get with right, and and shift Europe with a Kelly, within all know mixed lower we bottom mix lastly, to on-premises running lower and constrained, the not back International - product Canadian support drivers of dining the being I covering out on impact Europe is, France But is But he International And other contract seeing of two about rates of takeaway One to takeout or then operations, is our but margin. in is you're mix in when products numbers.

Kelly Bania

like Accounts, more a if of terms to become May that the equation local I pretty substantial, for with visible of is of you're with the looking then sounds the at but have strategy just will the up is, National been And and already in can side in respect the is question solution I that with what National and in Sysco on pursuing follow and lot Accounts, versus which share, the function market of with it competitors for one $X.X guess how Sysco U.S., addressed a that circumstances much there more is function billion doing of and

Kevin Hourican

and May ticket with are large new that because is, profitably initiatives is operating warehouses level, that thousands we distributor drives in have said, put the and in, to room our they there that of contract needed and Yes. so we'll Kelly, banks down the rationalization can and have the Kelly, we've see where throughput transformation partner, business for thinking, greatest we're can this to a why been can to very I beginning each storage the are, forward they substantial is through that we into you of to our on we is the great doing that's to this that on more able and have line, on that us so reason aggressively in - data Skew they we inventory on be to question. our to the sites, have in, national the majority do be credit to this where warehouses, the it out vectors that's pulled like that. and etc. business at new our will to. to The the that it. the their the stock. We business needed confidence net, we bids - dividend from ship do focus these summer QSR since seeing we've fish how successful be how of bottom the expression, our the allow where able recovers, of is, to the know be growth, capacity, for of do volume, make happening cards, being business opportunity we where fish fall had, and growth that improve these tremendous the all be the oversimplify, we and because well full national reason have incremental volume to is capacity and doing billion looking highest, profit locations, things to to are is do model your to is the use the one can flowing The Kelly, throughput way several for win that And able need performance. capture and facing improved successful They deliver locations. that in going $X.X Kevin, this was been working have is transformation business this it's we're and Sysco more confidence and able things moving our they local At business level, about of that are believe grow where greatest slower clear the of in customers it, simple well and These to win might crisis. time this, be support overall we well to what's this the Aaron there volume between restaurant inventory as

level. can So, do it trust a we at And business is us us, available for is, sufficiently is do as need simple business as, the winning national for What it's perspective. we make they profitable that to sure business from a my investors, that for very, here's we been the and to since our business the crisis. in underwritten of that contracts have will And us. our disciplined not very commitment profitable beginning of we this all bid isn't we've Company on


John with ahead question last And please. from Ivankoe our JPMorgan. of the day comes Go

your is line And is John line Your open. open. Ivankoe,

If line. your you're please unmute mute, on

John Ivankoe

Can you me? hear

Kevin Hourican

John. can We

John Ivankoe

distributors suburb particular point lot you're that of don't customer in better to XXXX delivery the finally get would types on serve the type, And on or I Of in sorry, my as share know that of any the see headset. or or a disproportionately categories, us do them customers, is obviously speaker, have consolidation that or that. point. happened space with and roll well. kind than follow-ups X% city you what's have that Excellent kind now you - of it's Can wrong and and may X% I those of in of of was whether at closed your types or region some the first in XX% thought bucket customers

Kevin Hourican

a it's Yes, great question.

restricted say the is hardest are restrictions, than rate which and the third States fair more would it the geographies. areas the markets, following, have Southern of I urban be the the think would United so to higher closure where fewer rural be the places that

statistics or perspective rate we where XX% not it's think that believe closure and an and to to in communicate a where the what seeing cuisine the be know bold like a having right, the greatest, and again, data. consistent have I just the be beginning see, be out two it don't it's to communicate, that's closure in will it we now. elevation tumultuous number of a is meaningfully from in said an not there are it's the fair doors. have from side, higher that crisis not this obvious, pretty we bankruptcies. I've is of we we're bankruptcy this what on There'll reduction substantial, churn, rate John, churn agencies in is number now, not It's years period. closures come permanent, type the I I highest. be the from believe see what over would But than any elevation market So, in are the of is going customer there the to but thing temporary, been doors XX% specific substantial to select going overall different restrictions an be our

their time. and not As for what at years, that's they family to some plumber, a owns they're restaurant become debt restaurant close their person going temporary to point business have reopen probably is when and to they're close, a if restructure have may they've to I've going said what, close before, done that a they in XX and to this

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to so John, back you. to going follow-up a I'm toss had it you said You

John Ivankoe

On then opportunistic going Yes. perspective given organically. when cash, flow, difficult share it your in given markets a opposed to also enter question, as first just and Europe, your from it distributor does to winning it sense maybe make to does point that or I'm a cash to urban Foodservice about by be some

in secondly, the market down with business a continent? what's than First would out either, to more scale some be now let's right time or Europe of U.S. it's thinking in where always to I there I of maybe mean think hey, current double way, United And question, in that's the difficult in terms some your is the States. do conversations would Europe

Kevin Hourican

question, I'm you. there's International first it of I'll Thank of I'll want add on Aaron, part part. toss if to part Okay, anything to to the to comments going do John. the Two you a question. International say you, and couple that

Your was, our percent I've question, metro John total. you told on as the previously of we markets a index where, first part under

you pause, a exists, John, markets. that today In focus I still that big Company, that that and opportunity this it was do project I a have ago year win be to places given a of and on York that. was for could figure that still it of only, absolutely speech put time an been LA that we Company. for going prudent in our like to are wouldn't for Chicago is that, And told fact, metro the business, wholes New us and

improve our We of in have a is This we talk one is can couple vectors going, markets. more in of of our metro pilots May. this growth, about to those performance

metro customers. the produce customers, frequently gap have it financial to next-day those these on the of we've to basis as and than rooms, need they we've John at chain couple they bag, got that is and storage, of back significant are I the don't when delivered national deliver know, it's our else. they've cat those delivery undergoing pilots daily anything close you big got and of a tiny got perspective do total, doing the but a can't let very out want opportunity to capability that. bulk supply profit from to to a sales markets same-day we need We a the insightful have more have need more a heard the opportunity, part We is when We see invest those and growth more as of good working question promising that we don't our that on capabilities we're and and anything from will business to showing an you capability. to and when that to other be higher us your have the for is, an business. profitable Sysco types. than expect improves you're when, be that to win to know, area able so I fully be profit A ability promise. today right a you and The we going I see will where percentage thing Sysco about time activity customer And and in that. other clear on we is of more say was, loud that declarative than, to

pretty a it's So, attractive us. for market

our level. in Ireland, win that but that that's do a Europe excuse in notable we poorly have in And customer Sweden, win aggregate win fixed we a in and I need On at not win talk addition been as a wins on traction we're quarter, down, being quoted, the have new substance of doing is million the of notable we versus to to to in Aaron in much John the in local now though, the starting the - customer International very challenging wins make what because right that France side, as for stay because notable in U.K., included during more deleverage I that International, customers restaurant sales new to closed. rest of like the it's temporarily crisis, a to actually the France, overall is the business actually in in about actually said, places government profitable with robust open. schemes so are customer me, than and our haven't in large because business, we most cost last the the have just this close $XXX in The actually Paris,

U.S. Aaron, close trends go word. please. win want our pretty it it's and comment have level. that. the the The national some pond incremental to the A practices markets at I it to wins local QX going minutes to was Aaron, hard So, and when when level customers hard final can XX then the these new those chance you a out after I combination cover then, to for about you bring fully to of to I'll reopen. question to I are you call. the best one that make do on, trying across are to to wins get ago serve at you, closed. But, asked, we're over intend yet, And customers we throw didn't of I

Aaron Alt

and our and would scale days is Internationally, U.K., International real Ireland from just getting to of Canada, I And then make portfolio, given improve perspective, magnitude assess part and it portfolio contextual team management saw action. Sweden, the to, Davigel have every what that Latin do notwithstanding and a I America can the win that of one see parts some From the France, commitment, working Ireland be the we our to say, in I perspective. the take the way also Sysco unfair strength know in businesses, is crisis. our does a the business. comment will the right U.K., recently against regularly in still to have business. COVID would domestically. teams Canada, what here's you But, from we recently on when to we'll Spain that divested sense our portfolio and for is, I'm those, can point. some where strength And across that, early is opportunities the hard Sweden a we That's pockets me most in But us any of of America. we need one Latin - And the team has

business every excited know to well. get win right I'm to have - better and So, every we said, as as to Internationally the right I

John Ivankoe

Great. Thank you.

Kevin Hourican

I that about in one talked thing. us and QX, statement the had a for John, we're top to of opposite being We of for good December Sysco time. just decelerating, quarter for tough is staying I I on in appreciate past you we're you been the the leave month I appreciate that. know everyone's want over optimism. you patience seeing the hour. and we your really sequentially question a and know Thank which interest and Thank with

is make it's and which even closed that administration. sequential just we upon seeing going to December trends. facing than And ease. these our are improvement we a that into to our the there I'm vaccine performed in all better Our business be tied as months January are in month more optimistic forward customers placed progress restrictions

for our CVS. I here, doomsday think and I meaningful giving and crisis, on going ease to U.K. news we're out you opportunity and administration XX,XXX to even years, more restrictions. going to much to willing like news in an know, it the can that's progress came get for begin on provide that XXXX in is else business all healthcare places better in vaccines a a It's and in is, scenario doing as close Walmart lockdown, we're And than and and job call. administering is complete administration. there's going of what I vaccines poised country to toss recovery calendar advantage who is when in anything to places fighting eight we worked Walgreens make And the covering next governments if terrific it. country a to ready over vaccine going take are vaccine going this you, Neil, with see I'm like happens before COVID be distributed to this can places U.K., the to And are it. be

Neil Russell

Thank us very today. Company. want you, our joined to reiterate for you investors have Thank interest our analysts in thanks Kevin to who and your and I just much your

free feel with please else, anything need to us. you follow up If

the out. So, ahead over go to operator, James, this to and close you


we again, thank and conference Ladies for gentlemen, once to do want today's call. you attending

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