Sysco Corporation Reports Q3 Fiscal 2025 Results: Sales Up 1.1%, Profitability Down 5.6%

Sysco Corporation reported its financial results for the third quarter of fiscal 2025, revealing a modest increase in sales but a decline in profitability compared to the same period last year. The company generated $19.6 billion in sales for the quarter, a 1.1% increase from $19.4 billion in the prior year. However, net earnings fell to $401 million, down 5.6% from $425 million in the third quarter of fiscal 2024. Basic and diluted earnings per share also decreased by 3.5%, settling at $0.82 per share.

In the first 39 weeks of fiscal 2025, Sysco's sales reached $60.2 billion, reflecting a 3.3% increase from $58.3 billion in the same period last year. Despite this growth in sales, net earnings for the year-to-date period decreased by 3.4% to $1.3 billion, compared to $1.34 billion in the previous year. The decline in profitability was attributed to increased operating expenses and a shift in customer mix, which negatively impacted gross margins.

Strategically, Sysco completed the acquisition of Edward Don & Company in November 2023 for $965 million, enhancing its capabilities in foodservice equipment and supplies. The company also divested its joint venture in Mexico during the second quarter of fiscal 2025, a move aimed at improving its return on invested capital. Additionally, Sysco reported a significant increase in cash flow from operations, generating $1.3 billion in the first 39 weeks of fiscal 2025, although this was slightly lower than the $1.4 billion reported in the same period last year.

Operationally, Sysco's U.S. Foodservice Operations segment saw a slight sales increase of 0.7% to $13.8 billion, while the International Foodservice Operations segment experienced a decline of 1.1% to $3.5 billion. The SYGMA segment, which serves quick-service restaurants, reported a 9.5% increase in sales. The company noted that foot traffic to restaurants decreased by 3.1% in the third quarter, influenced by adverse weather conditions and lower consumer confidence.

Looking ahead, Sysco has adjusted its sales growth expectations for fiscal 2025 to approximately 3%, down from a previous target of 4-5%. The company anticipates continued challenges in the restaurant industry but remains optimistic about long-term growth prospects, supported by its strategic initiatives and market leadership in foodservice distribution.