Welcome to Sysco's first quarter fiscal year 2024 conference call. As a reminder, today's call is being recorded. We will begin with opening remarks and introductions. I would like to turn this over to Kevin Kim, Vice President of Investor Relations. Please go ahead. Good morning, everyone, and welcome to Sysco's first quarter fiscal year 2024 earnings call. On today's call, we have Kevin Hourican, our President and CEO, and Kenny Cheung, our CFO. Before we begin, please note that statements made during this presentation that state the company's or management's intentions, beliefs, expectations, or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act, and actual results could differ in a material manner. Additional information about factors that could cause results to differ from those in the forward-looking statements is contained in the company's SEC filings. This includes, but is not limited to, risk factors contained in our annual report on Form 10-K for the year ended July 1st, 2023, subsequent SEC filings, and the news release issued earlier this morning. A copy of these materials can be found in the Investor section at sysco.com. Non-GAAP financial measures are included in our comments today and our presentation slides. The reconciliation of these non-GAAP measures to the corresponding GAAP measures is included at the end of the presentation slides and can be found in the Investor section of our website. During the discussion today, unless otherwise stated, all results are compared to the same quarter in the prior year. To ensure we have sufficient time to answer all questions, we'd like to ask each participant to limit their time today to one question and one follow-up. At this time, I'd like to turn the call over to Kevin Hourican. Thank you, Kevin, and good morning, everyone. Thank you for joining our call today. Our prepared remarks will cover the following themes: confidence in reiterating fiscal year 2024 guidance, another record quarter of disciplined financial performance with a focus on profitable growth, disciplined ROIC, and balanced capital allocation priorities. These themes all confirm Sysco's strength as the market leader. During our call today, I plan to cover two topics. First, a summary of our Q1 results, and second, a spotlight on our Recipe for Growth strategy and how we continue to build capabilities for profitable growth at Sysco. So let's get started on slide number five. Our positive momentum from last year continued, with top and bottom line growth in Q1 to kick off the new fiscal year. Beginning with the top line, we delivered sales growth of 2.6%, driven by a combination of positive case volume growth and effective management of product cost deflation in the U.S. Turning to the bottom line, we posted double-digit growth in both adjusted operating income and adjusted EPS, with an adjusted earnings per share of $1.07. We delivered this double-digit bottom line growth in a slowing top line macro and deflationary COGS pressure within the U.S. Our ability to post strong results in Q1, considering those factors, is a proof point that Sysco is positioned to be successful in fiscal 2024. We believe the breadth and quality of our product assortment across both broadline and specialty, combined with the expertise of our commercial selling organization and the strength of our supply chain and balance sheet, position Sysco to produce compelling results in the near term and even stronger results over the longer term. Digging a bit deeper into the quarter, we grew volumes in our U.S. Foodservice segment, with Q1 total case volume growth of 1.6% and local case volume essentially flat year-over-year. We successfully grew share as the industry was roughly flat for the quarter. Our national sales team posted an outstanding quarter, winning substantial new business in the healthcare, restaurant, and hospitality sectors. As I have stated before, we are winning these multi-year contracts with strong profit profiles versus historical averages. Our success is a testament to the improvements we have made in how we serve large national customers. We have made it easier for national customers to do business with Sysco by improving our technology integration with our customers' systems and by providing large customers with more dedicated and accountable support. Additionally, our national and international fulfillment scale is very attractive to large concepts. We are able to provide them with supply chain that can scale with them wherever they operate. We expect our national sales segment to continue to outpace the industry due to these capabilities. Our local performance continues to outpace the overall industry, building on a positive multi-year trend. The local market has slowed quarter-over-quarter, and Sysco is not reacting by leading with price to win share. Instead, we are focused on profitable growth, properly serving our local customers, and improving our local sales execution. Local volume, as I said, was essentially flat, and that is something we intend to improve upon in our year to go periods. We are taking the following actions to drive increased growth in local volumes. First, we will invest in incremental sales headcount. As we have grown our local business faster than the overall industry for each of the past three years, our territory sizes for the sales teams have increased as well. We are actively hiring more sales resources, which will allow us to optimize territory sizes and enhance sales consultant effectiveness. The benefits from increasing our local sales force will accrue over time as new colleagues complete training and settle into their territories. We expect to see the majority of the positive impact from this action in fiscal year 2025. Second, we recently enhanced the compensation model for our sales consultants to incentivize our colleagues to focus on profitably growing their and Sysco's business. This change was implemented recently during our fiscal Q2, and the positive effects will be felt in future quarters of this fiscal year. The change to our compensation model better aligns the incentives of our sales team to the key priorities of Sysco. Third, we recently ramped up our focus on what we call visit frequency and visit quality expectations. Through our robust CRM, we are able to track the activity and outcomes from our sales team. Our sales leadership team is focused on colleague coaching to improve outcomes on both fronts. Lastly, Total Team Selling, which was recently expanded coast to coast, will improve cross-selling opportunities, combining the relationship strength of our sales consultants with the product expertise of our specialty businesses. All told, we are confident we can increase local sales volume growth while maintaining momentum with strong margin management. We will drive that improvement through healthy long-term decisions and by remaining disciplined in our pricing decisions. Next, I would like to provide a brief summary of select Recipe for Growth enhancements from our recent quarter. We recently implemented a global operating model for our leadership structure. It is important to note that our International segment posted another strong performance in Q1, solidly growing top line and bottom line faster than the U.S. business. The change to a global operating model will help further accelerate our progress internationally. We will move faster in adopting best practices, delivery of new capabilities, and leveraging new tools across Sysco's global footprint. An example would be taking the Sysco Your Way concept and bringing it to life globally. To head this new operating model, we named Greg Bertrand our Global Chief Operating Officer. In his expanded role, Greg will be accountable for managing Sysco's global operations, driving profitable growth in local sales and operations. I'm extremely confident in Greg as a leader, and I'm bullish on the impact that he will have on his expanded geographic territory. We continue to make progress in improving the performance of our supply chain. Chart 10 displays our year-over-year operating profit improvement, driven by positive operating leverage, with gross profits growing at a faster rate than operating expenses. Our supply chain operation remains fully staffed, and we continue to improve employee retention, and we are building on productivity gains. We recently implemented a new and improved labor scheduling tool that has increased our flexibility in matching our staffing to the variable work nature of our business. As a result, we are becoming more flexible in how we manage our cost structure to match business volume seasonality. The end result of that improvement is a lower cost structure. In addition to our focus on improving current day supply chain performance, we are expanding our supply chain capacity to increase our ability to serve rapidly growing markets. For example, we recently celebrated the groundbreaking for a net new Sysco fold-out site in Mesa, Arizona. Each new fulfillment center at Sysco undergoes a vigorous ROIC review and a project prioritization test. Each of the investments will increase our capacity and feed future Sysco growth in already successful, high-growth geographies. We are excited to have the first of these net new buildings in Allentown, Pennsylvania, opening later this fiscal year. The Allentown facility will enable us to better serve the highly dense Northeast corridor and support the eventual expansion of our specialty platforms in that geography. On October 11th, we announced an exciting addition to the Sysco family through our planned acquisition of Edward Don, a leading distributor of foodservice equipment and supplies based out of Chicago. Founded in 1921 and led by Steve Don, the business generates approximately $1.3 billion in annual revenue and services a broad range of customers across the U.S. We believe the acquisition will be a great addition to the Sysco family, further demonstrating our Recipe for Growth strategy, but focusing on building strategic specialty platforms that help us support restaurant and hospitality customers. Every Sysco customer needs restaurant equipment and supplies to manage their business. Don's compelling product offering and robust supply chain capabilities will improve how we serve those customers. After deal closing, Steve Don will continue to lead the business, and we will partner together to profitably grow the segment. Most compelling is the following: Sysco sells to hundreds of thousands of customers who are not currently buying restaurant equipment and supplies from either Don or from Sysco. Post-deal approval and closure, we have a great opportunity to introduce the Don assortment to Sysco's customers and have a one plus one equals three equation through this accretive acquisition. I look forward to working closely with Steve and his capable leadership team to bring that ambition to life for many years to come. As I wrap up my remarks this morning, I will summarize with the following: We grew our top and bottom line within the quarter and achieved positive operating leverage, with gross profit dollars outpacing operating expenses. The result was more than 10% growth in adjusted EPS. This double-digit growth is on top of a strong year in 2023. We are being very prudent in how we manage the business in fiscal 2024. We are closely monitoring the macro environment for signals on customer traffic and the rate of expected inflation this year. We are prepared to take actions to ensure we are successful in the operating conditions presented to our industry. For the full year, we believe Sysco is positioned to succeed, growing top line faster than the market and delivering robust bottom line growth. We have three more quarters to go, and we are focused on delivering our plan. I'll now turn it over to Kenny, who will provide a detailed review of Q1 performance and select fiscal year 2024 guidance commentary. Kenny, over to you. Thank you, Kevin, and good morning, everyone. I'm going to build upon Kevin's commentary with a few additional points. First, we are reiterating our annual guidance for fiscal year 2024. We have momentum, and we're off to a solid start for the year. Q1 was the highest operating income quarter in Sysco's history, marking the sixth consecutive period of record quarterly profits. We effectively managed deflation in the U.S. Q1 results included sales and volume growth, adjusted gross profit dollar and margin expansion, and disciplined operating leverage, all flowing down to adjusted EPS growth of over 10%. Second, our Recipe for Growth strategy is delivering accretive margin value across the U.S. and international segments. For example, we've continued to expand and enhance Sysco Your Way neighborhoods globally. In addition, we successfully closed on our BIX acquisition, a leading produce distributor, and our recently announced plans to acquire Edward Don, which will provide further penetration opportunities. Our strong balance sheet enables options to add acquisitions at opportunistic times while simultaneously returning cash back to shareholders. Lastly, we are the market leader in a growing industry with leading profit margins. We have diversity across geographies, a broad customer mix and brands, in particular, the depth of our Sysco product brand, which sets us apart from the competition and is a position of strength. For example, we were hedged from a deflation in the U.S. as international inflation rates remained positive. Another example of our strong positioning would be local case performance. While we were essentially flat in the U.S., Canada, local volumes were up over 6%, adding to our outside international growth. These ingredients and fundamental building blocks are unlocking long-term profitable growth and positioning Sysco to win market share in a growing, highly fragmented industry. Now, turning to a summary of our reported results for the quarter, starting on slide 14. For the first quarter, our enterprise sales grew 2.6%, with U.S. Food service growing 0.9%, International growing 12.2%, and SYGMA decreasing 1.4%, as we recently exited business that did not meet our disciplined profit threshold. This planned exit helped double our SYGMA profits this quarter, another prime example of ROIC in action. Enterprise inflation was 1.7% and positive throughout the quarter. U.S. Broadline inflation was negative 0.4%, and our International segment was up double digits, in line with our expectations for the first quarter. Total U.S. Foodservice volume increased 1.6%, and local volume was essentially flat. We produced $3.6 billion in gross profit, up 4.6% versus the prior year. Adjusted gross margin improved to 18.6%, an increase of 36 basis points compared to last year. As mentioned earlier, our gross profit dollar and margin percentage improvement during the first quarter reflected our ability to effectively manage product cost fluctuations. The improvement in gross profit was driven by incremental progress from our strategic sourcing efforts, disciplined pricing, as well as improved penetration rates from Sysco Brand products, which increased six basis points to 37.2% in U.S. Broadline and 53 basis points to 47.5% in U.S. local results. Overall, adjusted operating expense were $2.8 billion for the quarter, or 14.2% of sales. The strong management of expenses during the quarter was due to the positive impact of the variable labor planning tool Kevin mentioned, and benefits from our previously announced $100 million of cost out commitments, which commenced at the start of the year. For example, we are expanding the use of shared services in Canada, which are expected to drive improved operational efficiencies. These action items enabled Sysco to reduce Q1 adjusted SG&A at the Global Support Center by approximately 7% year-over-year. All four operating segments continue to show increases in quarterly profitability, including substantial growth in the International and SYGMA segments. As seen on slide 18, Q1 adjusted operating income of $854 million for the enterprise grew 10.6% year-over-year, delivering another record quarter. For the quarter, adjusted EBITDA was $1 billion, up 11.7%. We continue to be encouraged by the progress of our International segment, with adjusted operating income growing 8.7% for the first quarter. This is a continuation of the robust growth and positive momentum in this segment over the past three years. On an enterprise basis, Sysco's quarterly performance in the current macro environment provides another proof point of the company's ability to grow top line and bottom line under any environment, while continuing to achieve positive operating leverage. I am also particularly pleased with the health of our balance sheet. We ended the quarter at a 2.6 x net debt leverage ratio. This is within our target of 2.5x-2.75 x, a substantial improvement from 5.2 x just over two years ago. We ended the quarter with $10.3 billion in net debt and over $3.1 billion in total liquidity. Approximately 96% of our debt is fixed, with the floating component offset by our cash reserves. Our debt is well laddered without any maturities over $1 billion until FY 2027. Our strong investment-grade credit rating is a competitive advantage against the current macro backdrop. The strength of our balance sheet and history of delivering consistent cash flows provides us with robust options related to capital allocation. We will be excited to add another accretive acquisition upon the planned closing of Edward Don, which is in addition to our acquisition of BIX earlier in August, as we continue to invest in the business. Even with the substantial M&A actions, we remain committed to returning cash back to shareholders, planning $750 million in share repurchases and approximately $1 billion in dividend payoffs for FY 2024. Depending on the volume of M&A activity for the remainder of the year, we could increase share repurchases further while remaining within our stated leverage target of 2.5x-2.75 x. Turning now to free cash flow. We generated $87 million in operating cash flow and -$73 million in free cash flow for the quarter. Our first quarter is typically our lowest cash flow quarter of the year due to seasonality, and this year was impacted by timing of working capital, as well as our continued investment for growth related to capital expenditures. We remain confident that we will grow free cash flow year-over-year in FY 2024. This growth is expected to be driven by continued strong conversion rates from EBITDA to operating and free cash flow. Our strong financial position enable us to return $353 million to shareholders this quarter. This was done through $100 million of share repurchases and $253 million of dividends. Even with a softer overall marketplace growth, we believe we are positioned to grow both top line and bottom line results in FY 2024. Looking forward to fiscal year 2024 guidance, we are reiterating net sales growth of mid-single digits to approximately $80 billion and adjusted EPS growth of 5%-10% to $4.20-$4.40. We continue to expect slightly positive rates of industry volume growth and inflation. Regarding inflation in U.S. Broadline, we expect a step-up to slightly positive inflation beginning in Q2, ahead of our prior expectations, which had a positive inflection point in Q3. This slightly positive inflation rate is expected to continue into the second half of the fiscal year, consistent with prior expectations. For the year, we remain on target for enterprise inflation to be slightly positive. Our planned top line also includes benefits from M&A activity, consistent with previous disclosures, for an average annual contribution of 50-100 basis points of growth. Additionally, we expect positive operating leverage, with gross profit growing at a faster rate than OpEx, translating to bottom line growing faster than top line. Our Q1 operating margin improvement reflected this leverage as we applied our commercial and operational initiatives, which will also have the benefit of driving long-term profitable growth. We remain on target for an effective annual tax rate of approximately 24.5%. Interest expense is expected to step up by approximately $50 million year-over-year, up $20 million from prior guidance, driven by higher debt associated with our planned acquisition of Don. We plan to reward our shareholders with our industry-leading dividend yield and consistent share repurchase activity, all while remaining within our leverage target of 2.5x-2.75 x for the year. For the remainder of the year and over the long term, we expect to win market share profitably and continue to generate cash with strong conversion rates, ultimately beating our plans to grow and reward our shareholders. With that, I will turn the call back to Kevin for closing remarks. Thank you, Kenny. As we conclude, I'd like to provide a brief summary on slide number 23. We are the market leader in a growing industry. We are the largest in a space where scale matters. We're investing to create additional fulfillment capacity to support profitable growth to further leverage that scale advantage. We are investing in technology to support our customers and remove friction in the purchasing experience. We are expanding our product range to become even more of a one-stop solution for restaurants and strengthening our selling process with improved training, compensation, and digital tools to improve the close rate of product introductions to our customers. These efforts are combined with an increase in the size of our sales force in order to reduce territory size, enabling our sales team to provide more dedicated service to our customers. All combined, these capabilities are making it easier for foodservice operators to focus on what they do best, serving great food for their customers. Sysco has a strong record of generating consistent results. In fact, Sysco has consistently grown annual sales over our more than 50-year history. In addition to compelling top-line growth, Sysco is the industry leader from an adjusted operating profit margin perspective. We have the strongest balance sheet, and we are the only foodservice distributor with an investment-grade credit rating. Additionally, we remain the only distributor paying a strong dividend yield. We plan to build on that position of strength for years to come. As our recent proxy statement highlighted, we increased the weighting of financial metrics in our annual incentive program and added return on invested capital as a measurement in our long-term equity plan. These changes are well received by our management team, and we are very focused on delivering the guided results. We are confident in the long-term health and growth trends of the food service industry in total. Our $350 billion total addressable market will continue to grow over time, as food away from home has taken share from the grocery channel for 24 of the past 25 years. Scale matters in this industry, and Sysco is playing the long game to strengthen our scale advantages. These factors, coupled with our dividend and share buyback programs, will set investors up to be rewarded over time. I am both excited and proud to be a part of the journey. There is no other place that I'd rather be than at Sysco, right here, right now. As always, I want to thank our 72,000+ Sysco colleagues for their commitment to our customers and our shareholders. Operator, you can now open the line for questions. At this time, if you would like to ask a question, please press the star and one on your touchtone phone. You may remove yourself from the queue at any time by pressing star two. Once again, that is star and one if you would like to ask a question. We will take our first question from Edward Kelly with Wells Fargo. Your line is open. Hi. Good morning, guys. Thanks for all the good color. Kevin, I wanted to ask you, I mean, the biggest overhang, you know, for the space at this point, you know, is probably around case volumes and industry case volumes and expectations. Can you maybe just dig in a little bit more around what you're seeing from the customer segments? I mean, you did talk about some slowing in the local side today, and then you're obviously making adjustments. Given this backdrop and the adjustments that you're making, is it possible that you could see some improvement in an underlying case volume growth from Q1? Good morning, Ed. Appreciate the question. Just as it relates to the quarter that we disclosed, you know, overall, Sysco grew our volume greater than the market. We took share in total. We took share in national, for sure, and at the local level, we actually outperformed versus the market in aggregate, you know, at the local. I would say the quarter kind of played out the way we expected. You know, when we guided the year, we guided that volume would be more muted for fiscal 2024. We guided that there'd be deflation in Q1. That came to reality as well. So in aggregate, we're pleased with the performance of our sales organization and the outcomes, you know, that were delivered. You know, I'd say major point of strength would be our national success, as I covered in my prepared remarks. I wanna be very clear about one thing. The success we're having with national in no way, in any way, is impacting our ability to win or grow, in local. They're different sales teams. We don't have supply chain capacity constraints, that are getting in the way. We're winning in national because of the improvements that we've made on how we serve those large national customers with technology integration and dedicated and accountable sales teams. I did communicate on the call today that we believe there is room to improve, Ed, in local. I communicated today several actions that we're taking to drive improved progress. Most notably, the first thing I said, which is we will be adding headcount, this year. We've grown local for each of the last three years, faster than the overall industry, and the result of that is our territory sizes have gotten a bit larger than we would like. By adding headcount, that's skilled and trained properly, we can reduce the number of customers served by each SE, which will increase face time, increase presence in that kitchen, and increase the relationship strengths of our industry-leading, you know, sales reps. So that is a notable call-out, but I emphasize today that's more of a 2025 benefit because it takes time for those folks to get skilled up, trained up, and incorporated into the company. We recently modified our sales compensation that went live in this quarter, Q2, October, specifically. It'll take a little time for that opportunity to flow through in improved outcomes, but we are confident because we have piloted that change, that it will motivate our sales teams to grow their business and our business profitably. We're very focused on improving outcomes for the sales organization. We call it selling effectiveness, providing performance-based coaching and education and training to that team. And we're really pleased with Total Team Selling, which is the leverage of our specialty platforms. If I put all those things together, I wanna, again, emphasize one point: We're not gonna lead with price. We will be very rational in our pricing decisions, leading with capabilities, service, and outcomes. When I put it all together, I think, yes, we can see an uptick in volumes, specifically in local. And I would call out that in October, we're off to a good start. We're seeing some progress, and that progress is actually across all segments and across all restaurant types. Q2 is off to a strong start. I'll talk to Kenny. Kenny, over to you. Yeah, thanks, Kevin. Hey, Ed, one thing to add is that, in addition to the U.S. market, I think it's important to understand that we have a profitable growth engine in International as well, which makes up roughly 20% of our sales. During Q1, our Canadian business grew 6% in local, and our European business grew at a similar rate. You know, from my perspective, growing local is a big part of our long-term vision for Recipe for Growth. Under our global operating model that Kevin's referenced earlier, we are demonstrating sustainable value to our customers through programs like Sysco Your Way, which is yielding dividends, as well as the Sysco Brand penetration, which is also driving positive flow through our margins. So local and national growth is important, but under the Recipe for Growth umbrella, our focus is sustainable, profitable growth. A quick follow-up. Edward Don and, and BIX, looks like based upon the sales numbers, I don't know, could be 2%+, sort of like benefit to, to volumes. I'm not sure about price per case, so it's hard to say. Is that fair? And both of those are in the U.S. Foodservice business, is that right? Correct. They are, and they're also in the current guide right now. Okay. Thank you. Thank you. Thank you. We will take our next question from Lauren Silberman with Deutsche Bank. Your line is open. Thank you. I wanted to follow up on the local case volume side and the investments in incremental headcount. Can you talk about what you're seeing with new customer acquisition relative to wallet share gains and negative underlying restaurant traffic, just in terms of the composition of what local case growth you're seeing, and where do you see the most incremental opportunity? Is it really to improve on the new customer acquisition side, wallet share? Thank you. Lauren, thank you for the question. Good morning. I'm really pleased with the progress that we're making on what we call cases per operator, programs that Kenny mentioned in his comments a second ago, like Sysco Your Way, are doing extremely well in helping us advance cases per operator. The Sysco Perks program, which is a loyalty program, for our best customers, it's an invitation-only club, is having the desired effect of improved retention of our customers and increased penetration. And then our opportunity to improve specialty, which we call Total Team Selling, where we're penetrating further with both produce and with protein, is having a big impact. And last but not least, is personalization through our digital tools. We're getting better and smarter at understanding the cuisine focus of the customer and having our emails and our website and the topics that our customer, excuse me, sales reps bring to our customers, be very focused, you know, for them. Those things are working. Lauren, if you asked me the question, you know, where do I see the opportunity for improvement year ago? We can be stronger in acquiring net new customers. Our new compensation program that we just rolled out will motivate and incent our sales reps to win net new business that's profitable. I want to be really clear about that. We're not gonna go chase small, unprofitable customers. We need to chase the right customers, but it's boots on the ground, out on the street, prospecting new customers. We've had a lot of success over the last three years in winning net new, and we can be stronger in the year to go than we were in Q1 on winning net new. Great. Thanks. Just shifting on a similar topic, you talked about the local case and investing in incremental headcount. How does this impact your efforts on productivity this year? And then more broadly, if you could just provide any additional color on the progress around productivity. Thank you. Yeah, sure. Good question, Lauren. On the sales rep side, it's, it's really a math formula. We've grown our local business, we've grown our local cases over the last three years, and territory size is the key metric there. Territory size, because of the success we've had, has grown, and we wanna bring that territory size back down to what is an appropriate target ratio. We've not disclosed that number, and I'm not going to do that today. So that incremental headcount, again, those people have to go through training. They have to go through systems, you know, knowledge, you know, gaining inculcation into our culture and what have you. It'll take time for those folks to ramp up, and that process has begun. It'll be a consistent effort as we grow, the size of the sales force. Our sales retention, sales force retention has been strong. We're really pleased with the retention of our sales force. The productivity topic, Lauren, is more about our supply chain, and let me just talk about that for a minute. I've not spoken about that yet this morning. We grew our gross profit dollars more than we grew our expenses in Q1, and we're pleased by that. We posted positive net operating leverage. We're really pleased with the work that Kenny has led on CapEx. We saw a reduction in CapEx year-over-year, and Kenny can talk more about that in a moment. On the cost per piece side, we continue to make progress. Year-over-year, Q1 versus Q1 in our main U.S. business, retention is up, pieces per labor hour is up, pieces per transportation truck miles are up, and we're pleased with the progress that we're making. I also want to be clear, there's still more progress to be made. We're not yet back to 2019 productivity levels, and we will continue to be very focused on that, and there's upside into forward-facing periods and years as we continue to improve our productivity. And that is in our guide. We expect to make increased progress and continued progress, and those performance improvements are in our year-to-go guidance. Kenny, talk to you for any additional comments. ... Thanks, Kevin. So a few points from me. First is, in addition to the supply chain productivity Kevin just mentioned, the corporate initiatives we outlined last call, the $100 million, that is underway, and that is going to be realized ratably across the four quarters because we started on day one. That's number one. And if you look at the P&L from a corporate SG&A standpoint, we were down 7% year-on-year. That's point number one. Number two, in terms of the way to think about the pacing of the adds, I'll say one thing. We will be disciplined and deliberate on when and how and where we add. Meaning, we still expect to achieve positive operating leverage, even with the heads that we're adding. So GP growing faster than expenses and bottom line growing faster than top line. Thank you. Thanks, Lauren. Thank you. We'll take our next question from Joshua Long with Stephens Inc. Your line is now open. Great, thank you for taking my question. Kevin, you talked about the supply chain overall becoming healthier. That's a continuation of trends we've seen, a lot of the great work that you and your teams are doing. Wanted to see if you might be able to dig in a little bit more there in terms of, obviously, it's expanding capacity and the labor scheduling tools that you offered there are exciting, and imagine they're paying some dividends going forward. Can you talk about the underlying labor environment? We didn't spend much time talking about it in the prepared remarks, and I imagine that's because it's largely stabilized or largely improving as you start to think about just all of the, you know, culminating work that you've done over the last several quarters. But curious if you could provide kind of any additional thoughts there in terms of the overall labor environment, maybe at the, you know, the warehouse and kind of all the other scaling up that you've done over the last couple of quarters? Josh, thank you for the question. We feel good about our staffing levels across the enterprise globally and domestically. We're fully staffed as a network. That doesn't mean in every single site and every single job that we're, you know, fully staffed, but in the network, network-wide, we are feeling good about our staffing. We are fully staffed. And the labor market, I'd say, is mostly returned to kind of pre-COVID levels of, you know, inbound applicant flow for our jobs, and that's a good thing. Retention is improving year-over-year, and that's a good thing. Turnover is still elevated versus pre-COVID levels, and that's something we're very focused on, but year-over-year, retention is improved, and that's what's driving our improvements in pieces per labor hour productivity, and it's what's driving improvements in our transportation metrics as well. That progress will continue, as I mentioned. You know, Q2 through Q4 this year, we've got our team very focused. There are four key drivers of our ops expense: pieces per truck, our overall productivity pieces per labor hour, shrink, and safety. Those are the big four key metrics from an operations perspective. And if you interviewed any leader at Sysco, they would be able to tell you those four, and we have everyone meaningfully focused on making progress against each of them. And that's the good news, is that there's progress to be made in each of those critical four. We're making sequential improvement week-over-week, month-over-month, quarter-over-quarter, and there's still progress to be made. The staffing tool that I mentioned will pay dividends for the long term. It's muscle being built. This business is more flat-ish versus retail, which is very choppy with monthly promotions and certainly the Christmas holiday season. We don't have that degree of seasonality, but we do actually have meaningful seasonality. We have schools that are on and off. We have Northern Hemisphere that is much busier in the summer than it is in the winter. And then that flips, where places like Florida get really busy in the wintertime. We are going to be more effective in our future at managing our staffing levels to match those fluctuations in volume, leveraging technology, leveraging disciplined staffing tools, and that'll help reduce our cost to serve over time. Josh, back to you if you have a follow-up. Great. Thank you. It was also encouraged by the improving profit profile you've talked about versus historical periods. So imagine all of the initiatives and work that you just outlined there go into being able to service those new accounts that you bring on more profitably. But curious if you could talk a little bit more about that at a high level in terms of just other maybe systems, tools, procedures, you know, behind the scenes that are helping to drive that improving profit profile as you go forward. Yeah, I'll start on that question, then I'll toss to Kenny if he has, you know, any questions. Excuse me, anything to add, you know, to that question. Yeah, we're very pleased with the progress that we're making on GP dollars per case. I'll just, you know, go back to Lauren's question about, you know, the opportunity we have to win net new. We're better now at prospecting those customers to go after. It's not just go out and win a customer. You can win a small, you know, customer and add a lot of expense to your network by bringing on a small account and then having them never matriculate up to a minimum profit threshold. It's a waste of time, actually, to send our sales reps out to those types of accounts. So our CRM is quite robust, and we have a lot of market intelligence on the opportunity by door on what that account can do, and we're getting better and better at being able to target our sales reps to those high, you know, propensity accounts and really focusing on winning them. That's comment one. Comment two, the other things that are driving GP dollars per case are actually in the buying side of our business. Our strategic sourcing efforts are continuing to make progress as we bring down our COGS, and do so in a way that is stronger than the rest of the industry. It's a strength of ours. Topic three is Sysco Brand penetration, especially at the local level. We continue to advance penetration of Sysco Brand, and that's a huge strength point, for Sysco. Then if you add the pieces that I talked about from a supply chain perspective on increasing the pieces per truck for the routes that we send out, increasing the productivity of our team, net-net altogether, that's what drives a gross profit growth greater than expense growth, which allowed double-digit bottom line growth at Sysco. Kenny, over to you for any additional comments. Yeah, just one point to add. If you look at the gross profit line in the quarter, I know usually we talk about gross profit versus expenses, but I think it's worth pointing out that gross profit grew faster than sales, which is a proof point that what Kevin just mentioned, we are managing deflation in the quarter with discipline on the pricing tool side. Sysco Brand, as Kevin mentioned, grew 53 basis points on the local side for our business. Strategic sourcing initiatives and the continued growth of our specialty business, as well. On the corporate side, as I mentioned, $100 million is locked in for the year, and we're not stopping. We are looking for more as we speak. I know in the prepared remarks, we talked about Canada. As I'm looking at my own function, we're looking at finding better ways to drive outcomes, more with less. So overall, I would say we are on pace with our productivity target for the year, and again, looking for more. Thank you. Thanks, Josh. Thank you. We'll take our next question from Jeffrey Bernstein with Barclays. Your line is now open. Thank you very much. Two questions. One, just Kevin, from a top-line perspective, I know you mentioned maybe a slowing top-line macro and closely monitoring the market. I know three months ago there was more, I guess, enthusiasm. I think you had mentioned that exit velocity coming out of the June quarter gave you confidence in fiscal 2024. So it does seem like it's kind of rocky month-to-month. I'm just wondering where, maybe in the restaurant industry, which segments or perhaps chain versus local, where you're seeing this greater or less than average volatility. And then I think you mentioned most recently that now in October, there's an uptick. I'm just wondering if that's industry specific or more Sysco specific, and then I had one follow-up. Okay, Jeff, thank you for the question, and I appreciate it. You know, as we think about the quarter, you know, volume for the quarter was mostly in line with what we had actually predicted for the year. If you look at our kind of prepared remarks back in August, you know, lower overall volume growth year-over-year, deflation in the, you know, U.S. business, you know, for the quarter, and both of those things, you know, occurred. As I think about the full year for fiscal 2024, your volume will be softer than in 2023 from a growth perspective. But we have Sysco room for improvement in local, and I cited several things today on our prepared remarks that are gonna help us drive improvement in our local volume. The second is, you know, margin and from a rate perspective, and I'll toss to Kenny when I'm done here, if there's anything that he would like to add. You know, can we grow profit during a period of deflation in the U.S.? Was a question that we were being asked back in August. Answer: definitively, yes. We grew our bottom line double digits during a quarter where we had lower volume growth than is normal for our industry and deflation. And I think that's a powerful proof point to the financial fundamentals of this company. In a period of deflation with lower volume growth, we posted a double-digit increase in profit. As we look forward, we look further down the road, this industry will return to more normal levels of volume growth. It will return to more normal levels of inflation and the engine of productivity improvement, the engine of relentless focus on taking cost out of this business will enable really compelling long-term results. And one of the proof points that I said on the call, our sector, food away from home, has taken market share from the grocery channel in 24 of 25 years. The only year it didn't was 2020, and I think we all know the reasons why. So we've got confidence in the long term, and we have confidence in fiscal year 2024, which is why we reiterated the guide. October, as I said, is off to a good start. It is stronger than where we were, in Q1. It's too soon to tell if that's a Sysco specific thing and/or an industry thing, because we don't get the data on the overall market until after the months are over. But we're pleased with, you know, the start to the quarter, and it's coming across all restaurant types, national down to local, and it's also happening across our other sectors as well. So, hopefully, that's a strong harbinger of things to come for the remainder of this year. Time will tell. We're very focused on what we can control, which is continuing the success in national and improving our performance within local for the things that I described today. Kenny, over to you for additional comments. Yeah, regarding the guidance, as Kevin touched upon, you know, we are confident in our guidance. Here at Sysco, we do adopt what I call a checkbook mentality, where our business model allows us to pull levers to ensure we can manage against various market dynamics. As Kevin said, some are controllable and some are not, such as the muted market growth and inflation, which we were able to successfully navigate through in Q1. Just to put numbers on what Kevin mentioned, 36 basis points improvement on GP and then 33 basis points improvement on OI. Based on all the variables, risk and opportunities, we feel comfortable with the current guidance range. Got it. And then my follow-up is just on the inflation. You know, it seems like specific to the U.S., it was down 0.4%, but I think you mentioned you're now expecting that to reverse to modest inflation in the second quarter, which, like you said, a quarter ahead of schedule, and I know there was a lot of people pushing back, on that thesis. So I'm just wondering, your visibility or your confidence in that return to modest inflation in the U.S., any color on specific commodities that would be driving that? I'm assuming beef is a big component of that, but any color on that return to modest inflation would be great. Thank you. Yep. Yeah, so let me first just kind of reiterate our guide on inflation. So you are correct. We are seeing one quarter ahead of what we expected from the last guide in terms of inflation in the U.S. market. We were inflationary total from enterprise standpoint. The second half, right now, we are keeping what we said on the last call, which is consistently higher versus prior year, elevated on positive inflation. In terms of your question around the kind of the product categories or the commodities basket, here's how I would think about it. At Sysco, we have a diverse set of commodities or product categories in which we sell to a broad set of customers. The good news is, we do not over-index on any categories from a volume standpoint. No one category is more than 15%-20%. Each commodity, to your point, can act differently. Beef right now is up double digit, while other categories are in a different state. From a center plate standpoint, which makes up roughly 30% of our volume, we are seeing that trend up on the inflationary curve. If you think about and take a step back, Sysco is always managing deflation and inflation because our commodity basket acts differently across the board. That is the reason why we have a natural hedge in the basket itself. Yeah, this is Kevin. I think the only thing I'd add is Kenny hit the points very clearly, is that center plate is where, you know, the significant increase has occurred. Beef already started that process earlier in the summer. Poultry, while still deflationary, is nowhere near the level of deflationary pressure that it was impacting the business, you know, a couple of quarters ago. And Jeff, we've got really good data. We've got global data. We have connections with top suppliers. Ergo, why Kenny communicated that it's about a quarter ahead of schedule, the return to inflation, and that, you know, it's a net positive for the overall industry and company. Thank you. Thanks, Jeff. Thank you. We'll take our next question from Kelly Bania with BMO Capital. Your line is now open. Hi, good morning. It's Kelly Bania from BMO. Just wanted to dig in a little bit more, if we can, on the sales consultant investment. I believe you have about 7,500 today, but was curious if you can talk a little bit more in color about the magnitude that you're planning to invest there. The cost, is that already in the guidance and the ramp that you've assumed in terms of contribution from these new sales consultants? Yeah, Kelly, thank you for the question. You're correct on the total headcount for our sales force as of today. We did not, on today's call, communicate the quantity of headcount adds. It's a meaningful increase. It's in our budget for this year. It's in our guide for the year. It ramps up over time. They all don't start on one day. So think of it as, you know, a drumbeat that just gets louder each week. We're having success in filling the jobs, so it's not something we're struggling to do. And the reason I said sales professionals instead of just sales consultants is it's not just sales consultant generalists. We're adding more protein specialists, we're adding more produce specialists, we're adding more Italian specialists, and of course, we're adding sales consultants as well. Across the board, it will have an impact, a very positive impact. What I said in my prepared remarks is think about that more as a 2025 impact, because it takes time for associates to learn the industry, learn the company, learn our tools and systems, learn the selling process. We give them a small territory to start, and then they ramp up that territory size over time. The main benefit, though, is actually the other individual. We're able to free up more capacity and time for an existing strong performer to have fewer accounts to focus on, and then they can actually grow their business as well by spending more time with our best customers. So we're bullish on it for the long term. It's something we will do on an ongoing basis, going forward, but it will be a step change upward, in the forward-facing periods versus the past couple years. Okay, that's helpful. Can I also just ask about the improving profit profile for the national accounts and maybe just some color from your perspective on the driving force for that? I'm just curious how much of that is a Sysco dynamic versus an industry dynamic in terms of competition for the national accounts, if that's changing, or the way that the contracts are being structured in a way that allow you to pass on costs over time, or maybe just help us understand why that is happening and the magnitude of the profitability versus for these national contracts versus their historical profitability levels. Yeah, Kelly, excellent question. Thank you. I wanna be really clear that we're winning meaningfully in national. These are competitive bid RFPs, multi-year contracts. We're not seeing any reduction in the number of people participating in those competitive bids. We're winning at an increased rate, and we're not winning at an increased rate because we're buying that business. As you just said, the profit profile of that business is actually up versus historical norms. Why are we winning? We're winning for the following reasons: We've improved our technological integration skills for large national customers. We can more deeply embed our capabilities in tech with that large customer's tech to make it easier for them to do business with Sysco. What does that mean? New item set up, substitution management, new door openings, new customer onboarding. We have improved greatly our ability to make it easier for that customer to do what they do, which is focus on running their restaurants, take the worry of supply chain off their table. We've gotten much better at that. The second is we've increased the accountability, and capability of our national sales teams. They have the right to make decisions. They are empowered to do so. They are more dedicated to our large national customers, and we funded that internally by taking out cost elsewhere. So our largest customers have more dedicated account service, and they have account reps that are more accountable and can make decisions in order to serve them. That's topic two. Topic three, because we're a global company, we're a one-stop shop for a large national customer to be able to support their door expansion, both domestically and internationally, and that's now better understood by large customers that you would obviously know who they are. We're, we're attractive player and partner of theirs to make it easier for them to grow, both domestically and internationally. I wanna be really clear, though, that this is not just about restaurants. This is about healthcare, this is about hospitality, this is about education. We have dedicated specific SMEs, subject matter experts, now into each one of those categories. And while that might not be rocket science, that's reasonably new at Sysco. We've increased the skill set and capabilities within each of those dedicated lanes that I just mentioned. If you're gonna sell to a healthcare account, you need to be an expert in the nutritional guidance from the government to help that end customer receive the reimbursement from the government that they deserve. You need nurse practitioners that are dietary nutritionists, and we are increasing the quantity of people that have those skills, and we're having increased success on new customer acquisition as a result of that. And again, we funded those headcount through internal costs to take out elsewhere. In aggregate, it's working, it's winning, we're really pleased with the performance of our national sales team. Kenny, any additional comment? Yes. So in general, Kelly, when we think about, you know, capital allocation, you know, when growth opportunities avail themselves, which exceeds our hurdle rate, we deploy capital to enhance shareholder value through these opportunities. This is CapEx, this is M&A, and this is, you know, as Kevin mentioned, national sales. Each sales contract goes through a very rigorous process. We make sure that the margins is there and it passes the IRR and the hurdle rates. We will not grow for the sake of growing. This is all about profitable growth in our portfolio. ROIC cuts both ways. I just explained the first way. If you look at my prepared remarks, SYGMA was actually down on volume, and because of productivity, because of discipline, we were actually enabled us to double the profit for the portfolio in our business. So again, there is a lot of rigor in the approval process to answer your questions. Thank you. Thanks, Kelly. Thank you. We'll take our next question from John Heinbockel with Guggenheim Securities. Your line is now open. Hey, Kevin, I wanted to start with, how do you think the expansion in the sales consultants triangulates with, Sysco Your Way? And in particular, is there an opportunity to do maybe, maybe many Sysco Your Ways in less dense markets, you know, with this, with the expansion of the sales force? Yeah, it's a good question, John, and I would say it this way: We're being very strategic about where the headcount adds are happening. It's not peanut butter spread across the country. It's high dense trade areas, high growth trade areas, and where things like Sysco Your Way are happening, and that is where the headcount growth will happen. We're, you know, select geographies with high customer density, with high growth, are areas where we will overinvest in the new headcount additions, and we expect high yield from that. As it relates to Sysco Your Way, we have a real opportunity to continue to optimize our performance within those neighborhoods. We're now live in more than 450 neighborhoods, worldwide, and we have a big opportunity to increase the number of doors we serve within those neighborhoods. There's still tremendous growth potential in those neighborhoods where we don't serve every customer yet. And then for the customers that we are currently serving, we don't have produce and protein and Italian on every one of those customers' truck deliveries. And why wouldn't they order produce and protein from Sysco when we're coming literally every day and we have a sales rep? So, we are having so much success, and this perhaps is where you may have been going with your question, in select Sysco Your Way neighborhoods. We're actually having to split them apart and create two neighborhoods within a geography. In some, we've actually had to split into three neighborhoods. And yes, there's headcount dedication that will occur in that regard, and some of the new headcount that we're hiring this year will in fact be deployed to those neighborhoods. Great. And then one last thing. Can you remind us. You think about the national business, right? So your share of wallet is very high, correct? Maybe, you know, speak to, is there any opportunity there? And then secondly, I think your share of the national business, right, your overall share is, what, 17%? I think your national share is higher than that. When you think about the upside, right, to national share, where can that go? On the national side, I'll start with the answer to your question. I'll toss to Kenny, if he has anything else that he would like to say. Yeah, our share count with an existing national customer is very high. For many of them, it's 100%. The opportunity for profit improvement with those accounts are things like penetrate further with Sysco Brand. Sysco Brand under penetrates with national brand customers versus local customers, but we're making progress on that. Now, we're lining up our chief merchant with the chief purchasing officer for those top customers, and where can we win together? Where can we partner, move a product over to Sysco Brand, share in some of those savings with that national brand customer so that we win together? Other examples would be drop size incentives. How can we do things in a win-win nature with those customers, where if we can be more efficient through a decision that they make, we can share in some of the savings created from that efficiency improvement? Again, just back to why are we winning in national sales? If the contract's not win-win, it's short-lived. We need to have contracts that are win for us, win for them, structure the contract that way, and then these sustainable long-term partnerships. Reminder, these contracts are three to five years in nature, and our retention rate for our national sales customers is extremely high, in large part because we're doing an even better job of having that win-win contract provision, where, again, where we can be more efficient, we will share in some of those savings with that partner. It helps them be more profitable, it helps Sysco be more profitable as well, with that rigorous, disciplined ROIC lens that Kenny mentioned. He mentioned it. In SYGMA, we had a customer, not to be named, that wasn't willing to actually have a contract that was win-win. We walked away. We're more profitable because of it. We're not growing for the sake of growing. We're finding the right partners in national, across restaurants, healthcare, education, and hospitality. We're focusing on how we serve them better, and we're having a lot of success with that. Kenny, I'll toss to you for any additional comment you'd like to make. Yeah, you covered it well, Kevin. The only couple of things I'd say is that you're right, Jeff, the share of wallet can grow. The most profitable case is the extra case on the truck. That's one piece. And the other piece is, as I mentioned earlier, natural growth and watching very carefully, we're doing very well. But for us, it's all about sustainable, profitable growth. Okay. Thank you. Thank you, John. We will take our next question from Kendall Toscano with Bank of America. Your line is open. Hi, thanks for taking my question. So one thing I just wanted to clarify was whether margin expansion for Sysco in fiscal 2024 should be primarily driven by gross margin expansion or operating expense leverage. It looks like in the first quarter, you saw pretty impressive gross margin expansion, while operating expenses were flat as a percent of sales, which was kind of the opposite of how the street was modeling it. So just any help on how to think about that going forward for the year would be really helpful. Thanks. Yeah. So without going to actual numbers, the way that I would model and think about this, we should drive a bottom line accretion through both on the GP side and the operating expense side. And what does that mean? If you look at Q1, as I mentioned earlier, Q1's gross profit growth rate was actually higher than sales, meaning the work that we've done around, you know, call it the strategic sourcing, Sysco brand penetration, proper mix of our business, that will drive accretion between your sales and your GP line. In terms of operating expense below the GP, you have two things working in our favor. One is the continuation of supply chain productivity, as Kevin described earlier. This is tied to productivity, this is tied to better retention for our employees, which drives better productivity yield on the warehouse side and delivery side. This also dovetails nicely into the productivity work that we've done on the corporate side, which is the $100 million I referenced earlier. As I mentioned, we're not stopping there. So to answer your question directly, it is both the GP line and the operating expense line. Yeah, I just wanna add one thing. I 100% agree with what Kenny just said. I think the rate of inflation in sales a year ago is causing a little bit of perhaps year-over-year compare challenges, 'cause when I look at the actual core drivers, our transportation costs per piece, year-over-year, improved. Our warehouse costs per year, year-over-year, improved. Maintenance costs year-over-year, improved. Shrink, improved. Retention, improved. These are the drivers that actually impact cost per piece, and those metrics in our core U.S. business, all of them improved year-over-year, and we're not yet back to 2019. There's actual continued additional progress that can be made, that will be made. We've built that into our guide for the year, and we are very focused as a leadership team on continuing to make those improvements. Great. That's really helpful. Thank you. Kendall, thank you. Thank you. Thank you. We have reached our allotted time for questions. I will now turn the program back over to our presenters for any additional or closing remarks. Great. Thank you all for joining us. Please feel free to reach out to the investor relations group if you have any follow-up calls. Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time.