Sysco Corporation (NYSE:SYY) Q2 2023 Earnings Call Transcript

Page 4 of 4

Alexander Slagle: All right. Thank you. Good morning. Just wondering how the opportunity for additional cost out actions gets reflected in the new outlook. If you could comment on the pace of these opportunities maybe beyond the or so realized to-date?

Neil Russell: Hey, Alex, good morning. It’s Neil. I’ll take that one. As you alluded to, we are well north of the original goal of $750 million of cost out, which we feel very good about and we continue to make progress in that area. Largely speaking, these cost-out initiatives are helping to fund our investments for future growth and we feel very good about the long-term capabilities through some of the digital tools that Kevin just referenced for us to be able to have a good long-term platform for sustainable growth. We’re well north of the $750 million. We’re working on what the next iteration of that will be, and we look forward to sharing what future cost out numbers can be on top of the $750 million that we’ve already exceeded. Go ahead, Kevin.

Kevin Hourican: Yes. So Neil, just did a good job talking about structural cost out and what I want to talk about is just operational cost. The biggest focus in the second half of the year has brought out through a couple of prior questions is the ability to continue to make progress in improving productivity. I haven’t spoken about the strategic initiative side of those efforts during Q&A. I just want to reinforce the importance of our driver academy. It’s now nationwide and all hired drivers now go through the Sysco Driver Academy. If they don’t have a CDL, they can become CDL certified. If they have a CDL, they get expert training and Sysco work practices and safety programs. So that training program is meaningfully working.

The retention and therefore lack of turnover for the people that are going through that program is meaningful. And as time goes on, the percentage of our associate population that has gone through that training program increases and then the retention value from that will grow over time. So we’re very, very pleased with the improvement in retention from our driver program and that will result in higher productivity into the future, because we’re really good at training our associates when they’re going through that program and also when they’re with us and the more tenured they are, the more productive they are, the more safe they work and that is a positive to our forward-facing outcomes. And we’re building new muscle in regards to staffing that I talked about earlier.

We’re doing a better job of forward-facing planning on peak window periods, lower volume window periods and having more staffing flexibility so that we can be more nimble for the business up and down trends so that our cost per piece can improve over time tied to that improved staffing level and we’re getting much better at that.

Alexander Slagle: Thanks.

Operator: Ladies and gentlemen, at this time, we have reached the allotted time for today’s conference. We would like to thank everybody for participating and ask that you kindly disconnect your lines.

Follow Sysco Corp (NYSE:SYY)

Page 4 of 4