Adjusted segment EBITDA margins reached a record above 25%, supported by portfolio actions, positive mix, and rigorous cost containment and productivity.
Dover's second quarter results were strong, driven by excellent production performance, positive margin mix from growth platforms, and carryforward cost actions from prior periods.
Margin improvements were noted across segments, including 80 basis points in Clean Energy & Fueling and 60 basis points in Climate Sustainability.
Order trends were positive, up 7% year-over-year, with the majority of third quarter revenue already in backlog and July orders tracking well.
Segment revenue performance varied: Engineered Products down on vehicle services volumes; Clean Energy & Fueling up 8%; Imaging & ID stable; Pumps & Process Solutions up 4% organically; Climate Sustainability down due to declines in food retail cases and engineering services.
Top line performance accelerated with broad-based shipment growth in short-cycle components and outperformance over secular growth exposed end markets.
Year-to-date free cash flow was $261 million or 7% of revenue, up $41 million over prior year, with expectations to accelerate in the second half of the year.
Adjusted EBITDA was $1.3 billion, up 1.8% year-over-year.
Adjusted operating expenses increased 28 basis points to 13.7% of sales due to investments in fleet, buildings, and sales headcount.
Adjusted operating income was $1.1 billion, up 1.1% year-over-year, with adjusted EPS growth of 6.5% to $1.48.
A noncash goodwill impairment charge of $92 million was recorded related to the guests worldwide business.
Gross profit grew 3.9% with 19 basis points of gross margin expansion, driven by strategic sourcing efforts.
International segment posted 3.6% top line growth reported and 8.3% excluding Mexico, with 4% local case growth and 20.1% adjusted operating income increase.
Local U.S. Foodservice case volume declined 1.5%, a 200 basis point improvement from Q3, with a 1% decline excluding an intentional business exit.
SYGMA segment sales grew 5.9% in Q4 and 8.3% for the year, with bottom line growth of 12.5%.
Sysco reported Q4 sales of $21.1 billion, up 2.8% on a reported basis and 3.7% excluding the divestiture of the Mexican business.
US Foodservice national sales volume grew 1.3%, with gross profit growing nearly 3x faster than volume due to customer optimization and contract provisions.
Dafinchi