Sales Growth Continues Strong Despite Inclement Weather in North America

HOUSTON, March 6, 2003--SYSCO Corporation (NYSE:SYY), North America's largest foodservice marketer and distributor, said today that top line sales growth through the first nine weeks of the third quarter is trending at approximately the same rate as the second quarter. Quarter to date sales are up more than 13 percent over the same period last year, despite an estimated one percent impact due to the effect of inclement weather in its distribution areas.

Thomas E. Lankford, SYSCO's president and chief operating officer, said, "The third quarter typically is our most challenging due to unpredictable winter weather, and this winter has been worse than those of the past few years. During times like these, we focus on providing the best service possible to our customers, even though we may experience some higher costs to deliver products. On the other hand, March usually is the strongest month of the third quarter and typically produces approximately 50 percent of the sales and profitability in the quarter. We are optimistic that our real growth (sales growth excluding acquisitions and inflation) will continue at least at a mid-single digit pace if there is milder weather through the rest of the quarter and a relatively stable political climate."
In addressing recent industry accounting concerns, Richard J. Schnieders, chairman and chief executive officer of SYSCO, stated, "Vendor allowance accounting is not an issue at SYSCO. Since the release of our fiscal 2003 second quarter 10-Q, we have evaluated the provisions of Emerging Issues Task Force (EITF) 02-16 "Accounting by Customers for Cash Considerations Received From a Vendor," and found that our policies, which have been in place for many years, are consistent with EITF 02-16," Mr. Schnieders said.

"SYSCO's accounting policies related to the timing of income recognition of vendor allowances are consistent with Generally Accepted Accounting Principles (GAAP). SYSCO records vendor allowances, net of any related expenses, as a reduction of cost of goods sold in the period when the activities are completed (e.g., food shows), thresholds are met, or when the products are sold for which the promotional allowances are given," he continued.

"Promotional allowances are fundamental to many industries throughout the country," he noted. "They are common not only in our industry, but also in pharmaceutical wholesaling, retail, automobile and other industries. SYSCO places significant focus on the oversight of proper accounting of these allowances, including ongoing external and internal auditor reviews. As a matter of fact, when we changed auditors in fiscal 2002, our new auditors examined not only 2002 financial statements, but also the prior two years, and no changes resulted from these audits. Finally, we have unique financial controls that provide us with many operational and financial metrics on a weekly basis, allowing us to closely monitor the activities of our operating companies. Our vendor allowance accounting policies and procedures are appropriate," he said.

In conclusion, Mr. Lankford said, "We are especially pleased with the continuing growth in our independent customer base. SYSCO, as the market leader, has the resources, systems and talent to outperform as it has done in previous challenging environments and we view this time as an opportunity to increase our market share."

SYSCO is the largest foodservice marketing and distribution organization in North America, generating sales of $24.7 billion for calendar year 2002. The company's 146 distribution locations in the United States and Canada provide food and related products and services to approximately 415,000 restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers.