Kenny Cheung
Executive Vice President and Chief Financial Officer at Sysco
Thank you, Kevin, and good morning, everyone. As Kevin highlighted, our results for the quarter were driven by improvements across the core financial drivers. Sales, gross profit and operating expense. Our success in Q2 was broad-based across business segments in our product portfolio. We generated positive operating leverage and sequential improvements to gross profit, while continued operating expense management rendered adjusted operating margin expansion.
Here at Cisco, we have levers across our P&L and our actions are driving structural improvements to the business. We believe the table is set for continued improvement in the second-half of our fiscal year. For example, this was on full display in our International segment this quarter. The positive momentum over the past few years continued into Q2 with sales growth of 4%, gross profit growth of 7% and adjusted operating income growth of 26.5%. The Cisco playbook is delivering across all geographies, driven primarily by our size and skill advantages in these markets, along with M&A contributions from the recent specialty additions to the portfolio, which are performing well.
We expect our positive momentum in international to step-up further in the second-half of the year. In addition to improved P&R results this quarter, I would be remiss if I did not highlight the compelling competitive advantage that our strong balance sheet and robust cash-flow generation provides. On that note, I am pleased to announce the upsizing of our share repurchase plan.
For this fiscal year, we now expect to buy-back $1.25 billion of shares, up from our prior plan of $1 billion. The full-year amount has the potential to flex up further depending on M&A activity for the remainder of the year. Further, we take both our role as a dividend aristocrat and our track-record of dividend growth seriously as we are one of only four consumer staples company that have grown dividends for the past 25 plus years.
This year, we expect to distribute to shareholders $1 billion in dividend payments. In total, we are now on-target to return over $2.25 billion to shareholders through share repurchase and dividends in FY '25. Our balance sheet affords us the financial tools and flexibility to make the right decisions both for the short-term and long-term as we seek to grow our business while driving industry-leading returns on invested capital and generating a double-digit TSR for our investors.
Now turning to a summary of our reported results for the quarter, starting on Slide 14. For the second-quarter, our enterprise sales grew 4.5%, in-line with our guidance in the financial algorithm we shared during Investor Day. Our sales results were driven by US foodservice growing 4.1%, international growing 3.6% and Sigma growing 10.6%. With respect to volume, total US foodservice volume increased 1.4% and local volume decreased 0.9%. Positively impacted US volumes by 1foodservice volumes by 1.6% and local volumes by 1%.
National volume growth in the quarter also included margin expansion. Local results were lapping the highest rates of growth in the prior year as well as headwinds from weather disruptions and unfavorable holiday timing impact on a year-over-year basis this year. We produced $3.7 billion in gross profit, up 3.9% and gross margin of 18.1%. On a dollar basis, we are encouraged by the expanding gross profit dollar per case trend and continued opportunities around our strategic sourcing efforts.
Looking to the second-half, we expect to execute on secured actions to expand the depth and breadth of our strategic sourcing to buy better to sell better. This includes working with existing suppliers, looking for incremental win-win opportunities, often adding items to existing contracts and scoping out work with new suppliers. Additionally, continual improvements in-sourcing will come, allowing us to lever the scale of our North-America presence, which includes our $6 billion Canadian business.
As I mentioned earlier, strategic sourcing is one example of structural improvements we expect to enhance gross profit in the second-half of our fiscal year. Our gross profit dollar growth reflected our ability to continue to effectively manage product inflation, which came in at 2.1% for the total enterprise, consistent with our expectations. This is the average across all of our major product categories with our teams regularly managing through pockets of fluctuations. We are doing an excellent job managing our corporate expenses with continued progress year-over-year. We have been extremely disciplined and reduced corporate expenses by 1.3% from the prior year-on an adjusted basis, driven by efficiency work that we deployed in FY '24 and incremental actions during the quarter.
We are making continued progress with our financial algorithm target of lowering corporate expenses to 1% of sales. Overall, adjusted operating expenses were $2.9 billion for the quarter or 14.2% of sales, a 13 basis-point improvement from the prior year, reflecting supply-chain and corporate expense efficiencies. Our supply-chain operations remain fully staffed. We continue to improve colleague retention year-over-year and we are building on productivity gains with peace per labor hour improvements compared to the prior year. Our outbound fill rates to our customers also improved during the quarter, which will help drive increased NPS and sales in the coming quarters.
Turning to field expenses, we remain disciplined around the pacing of our sales professional hires and we'll continue to focus on the quality and return on investments of our new hires as they continue to climb up the productivity curve. These deliberate investments are well-laddered with this year's hires expected to start driving financial contributions next year and thereafter.
Overall, adjusted operating income was $783 million for the quarter, positive momentum continued in our International segment with adjusted operating income growing 26.5% during the quarter. Our teams are successfully applying the Cisco playbook to drive continued growth and margin expansion. Adjusted operating income growth also benefited from Sigma contributing 11.8% profit growth as our focus on operational excellence resulted in improved profit from higher productivity alongside growth of new customers.
For the quarter, adjusted EBITDA increased to $969 million or up 4.4%. Our balance sheet remains robust and reflects the organization's healthy financial profile. We ended the quarter at a 2.76 times net-debt leverage ratio. We ended the quarter with $11.8 billion in net-debt and approximately $3.1 billion in total liquidity, which is substantially above our minimum threshold.
Turning to our cash-flow. We generated approximately $498 million in operating cash-flow and $331 million in free-cash flow for the first-half with a year-over-year variance driven by timing-related to working capital, which also includes the opportunistic purchase of inventory with solid economics. For the full-year, we continue to expect strong conversion rates from adjusted EBITDA to operating cash-flow at approximately 70% and free-cash flow at approximately 50%. Our strong financial position enabled us to return approximately $44 million to shareholders this quarter. We remain confident in growing both top-line and bottom-line results in FY '25, in-line with our financial algorithm. Importantly, we are reiterating our 2025 guidance metrics as seen on Slide 20.
During FY '25, we expect net sales growth of 4% to 5%. Net sales growth includes continued inflation of approximately 2%, positive volume growth of low-single digits and contributions from M&A during the year. All-in, we are guiding to adjusted EPS growth of 6% to 7%, in-line with our financial algorithm range. We continue to believe the second-half will improve from investments in the sales professionals and other growth initiatives. Additionally, we expect margin benefits as we leverage our unique scaled advantages to expand strategic sourcing efforts to include a wider basket of categories, more efficiently harness our global buying power and improve inbound freight logistics to minimize touch points across our networks.
Combined with recent actions around our organizational optimization at our GSC, we expect over $100 million of annualized savings to benefit gross profit dollars and operating expenses starting in the second-half. This figure highlights our ability to be disciplined with expenses and offset macro industry environment headwinds in the first-half and fund business investments this year. This is consistent with our focus on driving continual business improvement and we plan to explore additional actions going-forward.
In addition to these self-help initiatives, which we expect to drive the majority of our second-half lift, we continue to expect a stronger macro and modest industry traffic improvements. All-in, we expect a stronger rate of adjusted EPS growth in the second-half of the year, growing at a positive high single-digit growth rate with similar rates of growth across Q3 and Q4. Consistent with our ROIC focus, we divested our joint-venture in Mexico in mid-December. This is expected to impact international sales by approximately $500 million on an annualized basis and be immaterial from a profit standpoint.
From a modeling perspective, international top-line results will be negatively impacted from an as-reported perspective for the next year as Mexico will be out-of-the number starting next quarter, but accretive to international margins. We do not plan to recast prior year numbers. However, we do plan to provide additional context to aid in modeling this segment until we lap its sale at the end of this calendar year.
In the upcoming quarters, we will provide growth comparisons with in Mexico in an effort to add clarity around operating trends and enhance year-over-year comparability. Further, we plan to continue our practice rewarding our shareholders through the distribution of essentially all of our annual free-cash flow with over $1 billion in dividends. And as outlined earlier, $1.25 billion in share repurchases. This is another signal of continued confidence in our business. Specific to share repurchase, we note that this figure can flex up depending on M&A activity.
For the year, we expect to operate within our stated target of 2.5 to 2.75 times net leverage and maintain our investment-grade balance sheet. The adjusted tax-rate for FY '25 is now expected to range from 24.5% to 25%, slightly lower than our initial view. Adjusted depreciation and amortization remains unchanged at approximately $800 million for the year.
In closing, I'm confident in our FY '25 guidance and our ability to deliver on our long-term financial algorithm with levers across the business. We believe we are taking the right steps for long-term benefit of the business and unlocking value that will reward our shareholders. I look-forward to our progress ahead as Cisco is positioned to win.
With that, I will turn the call-back to Kevin for closing remarks.
