On this page of StockholderLetter.com we present the latest annual shareholder letter from SYSCO CORP — ticker symbol SYY. Reading current and past SYY letters to shareholders can bring important insights into the investment thesis.

 •  10/3/2024 Letter Continued (Full PDF)
 •  10/5/2023 SYY Stockholder Letter
 •  More "Grocery & Drug Stores" Category Stockholder Letters
 •  SYY Benford's Law Stock Score = 85

SYY Shareholder/Stockholder Letter Transcript:

2024 ANNUAL REPORT

the Chair
Chair of
of
Annual Report Letter from the
the Board
Board and
and CEO
CEO
the
Kevin Hourican
Chair and Chief Executive O   cer
Fellow Stockholders,
As I re   ect upon the past year, we have much to be proud of as a company. Sysco is the leader in the food-away-from-home distribution industry, and
we understand the profound role food plays in connecting people. Our purpose-driven approach allows us to harness our unique capabilities and
provide compelling service to our customers. Sysco   s sales colleagues and delivery partners go the extra mile, daily, to help our customers succeed. Our
Global Support Center (GSC) colleagues wake up every day focused on how they can improve our front-line colleague experience, so those front-line
colleagues can better serve our customers.
It is these company values, coupled with our Recipe For Growth strategy, that have enabled Sysco to produce consistently strong results, year after
year. In    scal 2024, Sysco grew its business more than 1.75x the market and we delivered that growth at industry-leading pro   t margins. The result of
that success is that we delivered our third consecutive year of pro   table market share growth. Our focus on serving both national and independent
customers has fueled strong sales growth, domestically and internationally.
Our success is coming from the following growth vectors:
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Specialty: Over the past 20+ years, Sysco has built the strongest and most complete Specialty portfolio in the industry. Recently, we launched a
program that we call    Total Team Selling   . Through this program we have teamed up selling specialists in our Produce and Protein businesses with
our Broadline sales generalists. We have proven that when they    sell together    not only does the customer respond at a higher rate, but our close
rate also greatly improves. When our close rate improves, we increase sales and pro   t with these customers and provide them with better service
and value. A win-win!
In addition to the strength we have in Produce and Protein, we are expanding our presence in the Italian and Asian food sectors. Lastly, our recent
acquisition of Edward Don has enabled Sysco to expand its presence into the important and pro   table restaurant equipment and supplies space. All
told, these sectors have higher margin and higher growth than the traditional broadline foods sector. Bottom line: Sysco has a strong and compelling
competitive advantage in the specialty space.
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International: Over the past year, we introduced a new Global Operating model. We have accelerated best practice sharing across the globe and
the impact of this work has been compelling. Our International division   s adjusted operating income grew more than 7x times faster than our mature
U.S. business. I am con   dent that our success in International is just beginning, and we have strong room to run internationally.
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Domestic Expansion: In addition to our pro   table growth internationally, we continue to take market share, pro   tably, versus the overall industry in
our domestic U.S. business. One source of that growth has been our supply chain expansion e   orts. We recently opened our    rst    fold-out    distribution
center in more than ten years. The new broadline DC, located in Allentown, Pennsylvania, will enable Sysco to better serve our customers in the
highly dense Northeast corridor. Winning in metro locations, like NYC, is a priority for Sysco and the Allentown fold-out will help us increase storage
and throughput capacity to serve that trade area. This is just one of ten worldwide projects to help fuel Sysco   s pro   table sales growth.
Financial Strength in a Complex Economic Environment1
Building on a history of    nancial strength, in    scal year 2024 we have once again delivered exceptional results, growing market share more than 1.75x
the U.S. market. We delivered $78.8 billion in revenue for the year, a growth of 3.3%. Additionally, we delivered $3.2 billion of operating income for the
year, a growth of 5.4%, and adjusted diluted EPS of $4.31 for the year, a growth of 7.5%.
1
This paragraph contains non-GAAP financial measures, which are denoted as    adjusted.    See pages 29 through 34 in the attached Form 10-K and Annex A for a reconciliation
of these non-GAAP measures to the corresponding GAAP results and an explanation of the adjustments that we have made in order to calculate these adjusted measures.

Our robust cash generation, and strong balance sheet, enabled Sysco to return over $2.2 billion to our shareholders through both dividends and share
repurchases. We also ended the year at 2.7x net debt to adjusted EBITDA, within our target range.
Improving Today, Transforming for Tomorrow
The leadership team at Sysco is focused upon two major e   orts: improving our business    today    and transforming for a better    tomorrow   . We call the    rst
of these two e   orts    driving our core   , and our Recipe For Growth strategy enables Sysco to create innovative and cutting-edge solutions for tomorrow.
At our Investor Day in May 2024, we covered these two elements in detail, and I would like to provide a summary for you.
Driving Our Core:
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Local Sales: Sysco has a large and pro   table local business. We are the market share leader and have a very strong team. With that said, we are not
satis   ed with our recent growth performance and have put in motion speci   c actions to improve our outcomes. We have begun hiring incremental
sales professionals, have introduced a new compensation model, and are doubling down our focus on winning with Specialty. I am con   dent our
team is working on the right improvement topics and Sysco is con   dent we will increase our volume growth this year, pro   tably.
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Merchandising Leverage: Through strategic sourcing, Sysco Brand building, price optimization, and expanding our Italian and Asian product lines,
we are delivering superior value to our customers. This action is strength on strength, building upon our industry-leading capabilities.
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Supply Chain Efficiency: By increasing colleague retention, we are delivering improved productivity, colleague safety, and service levels to
our customers.
Our Recipe For Growth strategy is anchored by    ve interconnected pillars that work together to drive growth and improve our colleague and
customer experience:
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Digital: Sysco   s digital transformation has yielded signi   cant improvements in product recommendations and customer engagement personalization.
Our digital tools are easier to use and are inspiring additional purchasing.
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Products & Solutions: We are optimizing our product mix and providing the right products, at the right price points. We are improving our Sysco Brand
product o   ering, and our strategic sourcing e   orts. As I mentioned earlier, we are rapidly expanding our presence in the Italian and Asian foods sectors.
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Supply Chain: We are expanding our throughput capacity, improving the delivery experience, and investing in our future technologies to improve
productivity.
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Customer Teams: Sysco Your Way has expanded its reach to 500 global neighborhoods, acquiring new customers, and growing our business.
Additionally, our Sysco Perks! loyalty program has boosted customer satisfaction and generated incremental revenue.
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Future Horizons: By streamlining operations and reducing costs, we have generated funds to invest in future growth, guided by a strong return
on invested capital (ROIC) framework. Our M&A strategy remains focused on expanding our Specialty capabilities and    lling the white space in our
geographic coverage.
Sysco is Positioned to Deliver Results in a Growing Market
Our success this past year is a direct result of the exceptional dedication and talent of Sysco   s more than 76,000 colleagues. On a daily basis, I am inspired
by their values and commitment to excellence. I am honored to lead such an extraordinary team. My focus remains on empowering our colleagues
and providing them with the tools, resources, and support needed to exceed our customers    expectations.
As we turn the page and focus on 2025, I am excited by our future, and I have never been more con   dent in our ability to succeed in the marketplace.
Our unmatched set of assets, including Specialty and International, are a competitive di   erentiator. Our balance sheet a   ords us the ability to invest in
our business for the long term, while simultaneously returning value to our shareholders. Our industry-leading pro   tability metrics will be maintained
while we advance our growth initiatives. I am con   dent that we will improve our local sales performance while continuing the strong success we have
delivered in our national sales segment.
I look forward to engaging with you throughout the year.
Best regards,
Kevin Hourican
Chair and Chief Executive O   cer



 10/3/2024 Letter Continued (Full PDF)