You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: A copy of these materials can be found in the Investors section at sysco.com.
I'll provide an update on our business transformation.
And finally, I'll provide some color on the current state of our business environment.
Let's get started with our financial results displayed on slide four.
Our top line results sequentially increased each month of the quarter despite the presence of the Delta variant and have continued to improve into October.
Our sequential improvement in sales and volume is a clear statement of our supply chain strength and our ability to win meaningful market share in this climate.
We are pleased with the top line results, and our flow-through to the bottom line exceeded our expectations for the quarter.
This strong start gives us confidence in reaffirming our guidance for the full year.
Key headlines for the quarter include a growing top line that improved sequentially throughout the quarter and continued growth through October, as seen on the right side of slide four.
Q1 represented another period of strong net new business wins for Sysco at both the national and local level.
These customer wins will fuel our success in quarters and years to come.
Customers are responding to Sysco's relative supply chain strength, our new purpose platform and our improving capabilities driven by our Recipe for Growth strategy.
All told, we delivered sales growth of 8.2% versus 2019.
We outperformed our fiscal 2022 growth goal of 1.2 times the market in the first quarter, delivering the strongest growth versus the market in the last 5-plus years.
We believe additional growth is still in front of us at Sysco as our volume is yet to fully recover in certain segments, such as hospitality, business and industry, foodservice management and international.
As these segments recover, additional momentum will be added to our business.
We are preparing now for select segments to further recover in early 2022 by strategically placing inventory and bolstering our staffing levels.
For example, we anticipate that our business and industry segment will see upward momentum in January as select customers plan to reopen their offices at that time.
International travel restrictions are beginning to ease, which should benefit our hospitality sector in specific regions of our business.
Our operational expenses for the quarter increased due to higher volumes, elevated overtime rates and in intentional expenditures that were targeted to improve our staffing health.
We invested in incremental marketing to advertise open positions.
We provided new associates with sign-on bonuses and provided referral and retention bonuses to existing staff.
We anticipate that these expenses will continue in our second quarter and that we can make progress in reducing the level of investment in the second half of our fiscal year.
Our profit flow-through from the top to the bottom line should improve as a result in the second half.
Gross margin for the quarter was impacted by a high rate of inflation, which increased to approximately 13%.
We expect inflation to continue at a similar rate through the second quarter before beginning to taper later in the fiscal year.
Given current trends in the industry, we expect the tapering will begin further into the fiscal year than we had initially modeled.
Our international business continues to show strong improvement.
We have improved from posting a loss in Q3 of 2021 to breaking even in Q4 to making more than $60 million of adjusted profit in our Q1 of fiscal 2022.
It is important to note that our international business is skewed to large contract customers that are still heavily impacted by COVID.
For example, we over-indexed in Europe in the business, industry and travel segments that remain constrained versus 2019 levels.
As such, the relative sales performance in the international sector still lags that of the U.S. segment.
However, it also conveys that we have additional recovery still in front of us internationally.
Our Recipe for Growth strategy will enable our international business segment to improve how we serve local customers over time.
And we anticipate a shift in our customer mix to the more profitable local sector as we progress on our three-year strategic plan.
In summary, we delivered very strong top line results, increased profit per case shipped and experienced elevated operating expenses that increased our cost to serve.
The combination of these results delivered a strong adjusted operating income for the quarter of $685 million and adjusted earnings per share of $0.83.
Both results exceeded our expectations for the quarter and position Sysco to deliver our full year guidance.
Aaron will provide more details on our financials shortly, but we are pleased to be off to a strong start in the new fiscal year.
Topic 2, let's turn to our business transformation, which is highlighted on slide five.
Our pricing project implementation is now substantially complete.
The centralized pricing tool enables Sysco to strategically manage the high levels of inflation we are currently experiencing with disciplined and strategic control.
We can determine, at the customer item level, exactly what level of inflation to pass through.
We can optimize the pass-through to balance profitability and sales growth.
There is no better time than the present to have this powerful capability.
Longer term, the pricing tool will enable us to accelerate sales growth profitably as we optimize pricing to increase share of wallet and increase pricing trust with our customers.
Our work on the personalization engine continues to advance.
This innovative industry-leading program will enable Sysco to further penetrate lines and cases with existing customers and will improve our sales consultants' ability to win new accounts.
We will supplement personalization with increased service levels for top customers through an innovative loyalty program that we will discuss more in future quarterly calls.
Our sales transformation is proving to be very successful as our sales teams continue to win new business at record levels.
As I mentioned in my financial narrative, our local and national sales teams delivered strong wins in the quarter that will help fuel our future growth profitably.
Lastly, we are continuing to improve the efficiency of our organization as we further reduce our structural expenses to fund our strategic initiatives.
Over the past few quarters, we regionalized the leadership structure of our specialty businesses, FreshPoint and SSMG, and we followed the playbook of our U.S. Broadline regionalization and have now implemented the more agile and efficient model for our two main specialty businesses.
As shown on slide six, during our first quarter, we successfully closed on the Greco and Sons transaction, which we expect to deliver over $1 billion in incremental sales to Sysco in fiscal 2022, ahead of our deal model expectations.
More importantly, we plan to leverage the Greco business model to build a nationwide Italian platform that is the best in the industry, which will further deliver incremental sales beyond the $1 billion just mentioned.
In addition to closing the Greco transaction, we acquired a produce distributor in October that will operate as a part of our FreshPoint business segment and will improve our ability to provide fresh produce and value-added fresh-cut capabilities to the Pennsylvania and Ohio markets.
You may not realize that Sysco is the largest specialty produce distributor in the United States vis-a-vis our FreshPoint platform.
Our produce business has a high-growth CAGR and attractive margins.
Growing in the specialty sector is a priority for Sysco, enabling us to gain more share of wallet from customers by combining our Broadline capabilities with the premium service levels, selling skills and product assortment availability of specialty.
Our Recipe for Growth is still in the very early innings, but we can see the benefits of our developing capabilities and the new customers we are winning and the progress that we are making in market share gains.
Importantly, our first quarter results exceeded our 1.2 times market share growth target for fiscal 2022.
More importantly, as the Recipe for Growth matures, the impact on our top line growth will accelerate.
As such, we remain committed to growing profitably 1.5 times the market as we exit our fiscal 2024.
Topic three for today is an update on the state of the business.
During our last earnings call, I highlighted the critical importance of staffing health due to the supply chain challenges that are well documented across all industries.
As covered on bullets on slide seven, we have made progress throughout this quarter in improving our staffing levels.
Our leadership team, top to bottom, has been extraordinarily focused on improving our staffing health.
A good example of our efforts is the execution of our first-ever nationwide hiring event in the second week of October.
We leveraged extensive digital marketing and a streamlined hiring process to net more than 1,000 new supply chain associates to bolster our troops.
When coupled with our year-to-date hiring success, we are making solid progress on increasing our throughput capacity.
Additionally, during the quarter, we opened our first Driver Academy, our first academy classes in session, as we say at Sysco, and we are training our next generation of Sysco drivers.
We are bullish on expanding this program across the country in the coming year, and we are confident it will make a meaningful difference in generating a solid driver pipeline.
From a product availability perspective, although our fill rates still lag our historical standards, we were able to deliver a higher fill rate to customers than the industry average.
We have strong relationships with our key suppliers and a merchant team that is extremely focused on finding and sourcing product substitutions.
I have personally engaged with top suppliers to ensure a solid partnership with Sysco, and I am cautiously optimistic that our suppliers' performance will improve through the remainder of the year and into our fiscal 2023.
Supplier improvement will be a key to improving customer fill rate and customer satisfaction.
Lastly, you may have seen the recent announcement regarding the Department of Labor's Occupational Safety and Health Administration's requirements for employers with 100 or more employees.
I am pleased to inform you that Sysco began a weekly COVID testing regimen in September, and as such, we are already compliant with the majority of the OSHA's stated guidelines.
The safety of our associates and our customers is our #1 priority, and we remain steadfast in protecting our team.
In summary, Sysco continues to lead the industry in how we are supporting our customers during this challenging supply chain environment.
Our Net Promoter Scores are outperforming the Broadline distribution industry, and our ability to serve customers remains best-in-class.
We remain the only national distributor without systemwide minimum orders, and we will endeavor to increase the flexibility and service that we provide our customers in the coming quarters and years.
The impact of our relative supply chain success can be seen in our results.
We sequentially increased sales throughout the quarter and expanded our market share capture.
We now have more than 10 consecutive months of gaining market share, and we are on track to deliver our stated goal for the year, growing 1.2 times the industry.
And our Recipe for Growth strategy will enable us to accelerate, over the next three years, and grow at 1.5 times the industry by the end of our fiscal year 2024.
We are winning in the marketplace, and that would not have been possible without the dedication of our sales, logistics and merchandising teams.
I'm honored to serve these associates and work by their side.
Aaron, over to you.
Our strong first quarter fiscal 2022 financial headlines are: growing demand with sales exceeding Q1 fiscal 2019 by 8.2%; a profitable quarter, exceeding our plans with EBITDA comparable to pre-COVID 2019 levels; aggressive investment by Sysco against hiring a snapback, allowing Sysco to lead the industry in otherwise turbulent times; purposeful investments in working capital to continue to lead in product availability; a strong return to profitability by our international business; and great progress against our balanced capital allocation strategy, including continued investments against the five pillars of our Recipe for Growth and upgrade to BBB of our investment-grade rating by S&P the elimination of all debt covenant restrictions on our ability to repurchase shares or increase our dividend in the future; and a decision that we are announcing today, namely that we have satisfied our internal criteria to commence share repurchase.
In the second quarter of fiscal 2022, we will begin our repurchase of up to $500 million of shares over the course of this fiscal year.
During today's call, I'm going to cover the income statement and cash flow for the quarter, and then I will close with some observations on our guidance for fiscal 2022.
First quarter sales were $16.5 billion, an increase of 39.7% from the same quarter in fiscal 2021 and an 8.2% increase from the same quarter in fiscal 2019.
In the United States, sales in our largest segment, U.S. Foodservice, were up 46.5% versus the first quarter of fiscal 2021 and up 11.6% versus the same quarter in fiscal 2019.
SYGMA was up 11.8% versus fiscal 2021 and up 5.1% versus the same quarter in fiscal 2019.
You will recall that in SYGMA, the increase in sales in the quarter is more modest because of the purposeful transition-out of an unprofitable customer, which we announced in our third quarter fiscal 2021 earnings call, and because during the quarter, some consumers are switching from their favorite QSR drive-up back to some of the excellent sit-down restaurants served by our more profitable U.S. Foodservice segment.
Local case volume, within a subset of USFS, our U.S. Broadline operations, increased 23.8%, while total case volume within U.S. Broadline operations increased 28.1%.
With respect to our international business, restrictions continue to ease across our international operations in the first quarter.
International sales were up 34% versus fiscal 2021 while also improving sequentially over prior quarters to down less than 1% versus fiscal 2019, indicating that we have more upside to come.
Foreign exchange rates had a positive impact of 1.1% on Sysco's sales results.
Inflation continued to be a factor during the quarter at approximately 13%.
The good news is that we continue to manage our profitability well in the inflationary environment.
Let me call out a couple of numbers, and then we'll discuss inflation further.
Gross profit for the enterprise was approximately $3 billion in the first quarter, increasing 33.9% versus the same quarter in fiscal 2021 and also exceeding gross profit in fiscal 2019 by 2%.
The increase in gross profit was driven by year-over-year improvements in volume versus fiscal 2021 and, compared to both fiscal 2021 and fiscal 2019, increases in gross profit dollars per case across all four of our reporting segments.
That's a real sign of health in our business.
While it is gross profit dollars that count, inflation did impact our gross margin rates for the enterprise during the quarter as it decreased 79 basis points versus the same period in fiscal 2021 and finished at a rate of 18.1%.
The rate was flat sequentially with Q4 of fiscal 2021.
The gross margin decline versus the prior year was driven by accelerating inflation and margin changes at our higher-margin U.S. businesses with the larger USFS businesses growing volume at lower margin rates.
We continue to manage the inflationary pressures with both our suppliers and our customers and, thus far, have not seen much pushback on our ability to pass along pricing.
In addition, the fact that we are now substantially complete in our rollout of our Periscope pricing system means that we have more tools than ever before to manage our profitability while being right on price.
Turning back to the enterprise.
Adjusted operating expense came in at $2.3 billion with expense increases from the prior year driven by three things: first, the variable costs associated with significantly increased volumes; second, more than $57 million of onetime and short-term transitory expenses associated with the snapback; and third, more than $24 million of operating expense investments for our Recipe for Growth.
Together, the snapback investments and the transformation costs totaled approximately $81 million of operating expense this quarter and negatively impacted our adjusted earnings per share by $0.12.
Even with those significant snapback and transformation operating expense investments, we leveraged our adjusted operating expense structure and delivered expense as a percentage of sales of 13.9%, an almost 200 basis point improvement from fiscal 2021 and a 64 basis [point] improvement from the same quarter in fiscal 2019.
Doing the simple math, if we removed the transitory snapback investments and the transformation investments I referenced earlier, total opex would have been at 13.4% of sales.
That is a real sign of the power of our earlier cost-out efforts.
To repeat what we said before, during fiscal 2022, our cost-out helps us to cover snapback and transformation costs.
Finally, for the first fiscal quarter, adjusted operating income increased $320 million from last year to $685 million, putting us basically on par with adjusted operating income for fiscal 2019, even with the snapback investments and the transformation investments.
This was primarily driven by a 58% improvement in U.S. Foodservice and strong profitability from international.
Adjusted earnings per share increased $0.49 to $0.83 for the first quarter.
Perhaps pointing out the obvious, if we extract the $51 million of incremental interest expense we are carrying in Q1 of fiscal 2022, resulting from the COVID-related precautionary bonds we issued in 2020, our adjusted earnings per share results for Q1 of fiscal 2022 would have been more in line with our pre-COVID adjusted earnings per share results for Q1 of fiscal 2019.
If you go a step further and exclude both the interest expense and the $81 million of snapback and transformation costs, you really begin to see why we believe that in the long term, Sysco has significant earnings potential.
Now let me share a couple of comments on cash flow and the balance sheet.
Cash flow from operations was $111 million during the first quarter as we responded to rising sales and purposely invested in inventory in support of managing product availability during the snapback better than the industry.
We also purposely invested in longer-lead inventory to support customers such as K-12 schools and healthcare facilities during the snapback, consistent with Sysco's purpose statement.
We also saw manageable changes in receivables levels that we expected to accompany rising sales and arising from the mix of business as Sysco executes its Recipe for Growth.
Our net capex spend was $79.4 million and is ramping up as teams submit business cases for investments against the Recipe for Growth.
We will manage those investments over the course of our three-year plan to ensure our growth.
Free cash flow for the first quarter was $31 million.
At the end of the first quarter, after our investments in the business, payments of the acquisition price for Greco and our dividend payments, we had $2.1 billion of cash and cash equivalents on hand.
In May, we committed to supporting a strong investment-grade credit rating with a targeted net debt to adjusted EBITDA leverage ratio of 2.5 times to 2.75 times, which we continue to expect to hit by the end of fiscal 2022.
Later this year, we plan to pay off the $450 million of notes due in June of 2022 and may, should the circumstances warrant it, take further action against our debt portfolio.
We also paid our increased dividend of $0.47 per share in July and again in October.
Given that we paid our increased dividend starting in July, consistent with our status as a dividend aristocrat, we expect to next address decisions around our dividend per share sometime during calendar year 2022.
As I mentioned earlier, we plan to commence share repurchase activity under the $5 billion share repurchase authority we announced in May at Investor Day beginning in the second quarter.
As I stated a moment ago, that will take the form of the repurchase of up to $500 million of shares by the end of the fiscal year.
Now before closing, I would like to provide you with some commentary on the outlook for fiscal 2022.
As Kevin highlighted, we expect to continue to grow at or above 1.2 times the market in fiscal 2022.
We are operating in a dynamic environment with significant inflation.
While we do expect inflation to moderate by the fourth quarter of fiscal 2022, it may take longer to taper than originally anticipated, though it is hard to predict.
We expect to pass through the vast majority of our COGS inflation.
We are assuming continued heavy snapback and transformation investments in Q2 at levels at least equal to the investments in Q1.
We are reaffirming our earnings per share guidance for the year.
Fiscal 2022 earnings per share will be in the range of $3.33 to $3.53, reflecting the $0.10 increase that we called out last quarter.
As always, our earnings per share guidance does not assume changes to the federal tax rate.
All in all, we have confidence for the rest of the year.
In summary, we've had a solid quarter, and the fundamentals of our business remain strong.
We are excited about the future as we continue to advance Sysco's Recipe for Growth.

user
sysco delivers strong first quarter results including meaningful market share gains reiterating fiscal year 2022 guidance.
q1 sales rose 39.7 percent to $16.5 billion.

assistant