Key financial results for the first quarter of fiscal year 2026 include the following (comparisons are to the same period in fiscal year 2025):
Sales increased 3.2%; U.S. Foodservice volume increased 0.1%;
Gross profit increased 3.9% to $3.9 billion;
Operating income decreased 1.0% to $800 million, and adjusted operating income increased 2.9% to $898 million1;
Net earnings decreased 2.9% to $476 million, and adjusted net earnings increased 2.0% to $551 million1;
EBITDA decreased 3.1% to $1.0 billion2, and adjusted EBITDA increased 0.1% to $1.1 billion1,2; and
EPS3 remained flat at $0.99, and adjusted EPS1 increased 5.5% to $1.15.
"We are pleased with the start to our fiscal 2026, with solid improvement in our sales performance, margin management, and supply chain operations. Our Q1 adjusted EPS performance exceeded expectations, fueled by strong improvement in our local business. Our broadline local business was positive for the quarter, and improved sequentially each period of the quarter. Our USFS local business had a positive exit velocity for the quarter and improved 120 basis points sequentially. Our USFS local volume rate of improvement strongly outpaced the industry traffic environment. Momentum is building at Sysco, and the positive outcomes we are seeing re-enforce our confidence in our full year guide. I want to thank our entire team for their customer focus, the improvement in our business that they are delivering, and express how excited everyone at Sysco is for the year ahead," said Kevin Hourican, Sysco's Chair of the Board and Chief Executive Officer.
"First quarter results included volume improvements, another quarter of gross margin expansion, and solid expense controls. This reflects our focus on operational execution in the current macro environment. Based on a strong Q1 and trends observed in October, we are confident in our full year guidance of sales growth of 3%-5% and adjusted EPS growth of 1%-3%, which includes an approximate $100 million ($0.16 per diluted share) headwind from lapping lower incentive compensation in fiscal 2025. Excluding this impact, our reiterated outlook reflects EPS growth of approximately 5% to 7%, with the midpoint in-line with our long-term financial algorithm," said Kenny Cheung, Sysco's Chief Financial Officer.
1 Adjusted financial results, including adjusted operating expense, adjusted operating income (loss), adjusted net earnings, adjusted earnings per share (EPS) and adjusted EBITDA, among others, are non-GAAP financial measures that exclude certain items, which primarily include acquisition-related costs, restructuring and severance costs, and transformational project costs. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.2 Earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA are non-GAAP financial measures. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.3 Earnings per share (EPS) are shown on a diluted basis, unless otherwise specified.
First Quarter Fiscal Year 2026 Results (comparisons are to the same period in fiscal year 2025)
Total Sysco
Sales for the first quarter increased 3.2% to $21.1 billion.
Gross profit increased 3.9% to $3.9 billion, and gross margin increased 13 basis points to 18.5%. Product cost inflation was 3.4% at the total enterprise level, as measured by the estimated change in Sysco's product costs, primarily in the meat and seafood categories. The increase in gross profit for the first quarter was primarily driven by effective management of product cost inflation and strategic sourcing efficiencies.
Operating expenses increased 5.3%, driven by business capacity and sales headcount investments. Adjusted operating expenses increased 4.3%1.
Operating income decreased 1.0% to $800 million, and adjusted operating income increased 2.9% to $898 million1.
U.S. Foodservice Operations
The U.S. Foodservice Operations segment results were impacted by slight volume growth and continued investments across capacity and headcount.
Sales for the first quarter increased 2.9% to $14.8 billion. Total case volume within U.S. Foodservice increased 0.1% for the first quarter, while local case volume within U.S. Foodservice decreased 0.2%.
Gross profit increased 2.8% to $2.8 billion, and gross margin decreased 3 basis points to 19.1%.
Operating expenses increased 5.7%, and adjusted operating expenses increased 4.7%1.
Operating income decreased 3.1% to $880 million, and adjusted operating income decreased 1.0% to $916 million1.
International Foodservice Operations
The International Foodservice Operations segment continued to deliver effective margin management, local volume growth and double-digit profit growth.
Sales for the first quarter increased 4.5% to $4.0 billion. On a constant currency basis4, sales for the first quarter increased 2.1% to $3.9 billion. Foreign exchange rates increased both International Foodservice Operations sales by 2.4% and total Sysco sales by 0.4% during the quarter. Excluding the impact of the Mexico joint venture5, which was divested during the second quarter of fiscal 2025, sales grew 7.9% for International Foodservice Operations and 3.8% for total Sysco.
Gross profit increased 6.7% to $826 million, and gross margin increased 43 basis points to 20.8%. On a constant currency basis4, gross profit increased 3.6% to $802 million. Foreign exchange rates increased both International Foodservice Operations gross profit by 3.1% and total Sysco gross profit by 0.6% during the quarter.
Operating expenses increased 5.8%, and adjusted operating expenses increased 5.4%1. On a constant currency basis4, adjusted operating expenses increased 1.9%. Foreign exchange rates increased both International Foodservice Operations operating expenses by 3.5% and total Sysco operating expenses by 0.8% during the quarter.
4 Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. These adjusted measures are non-GAAP financial measures. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.5 Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.
Operating income increased 12.9% to $114 million, and adjusted operating income increased 13.1% to $147 million1. On a constant currency basis4, adjusted operating income increased 12.3% to $146 million. Foreign exchange rates increased both International Foodservice Operations operating income by 0.8% and total Sysco operating income by 0.2% during the quarter.
Balance Sheet, Cash Flow and Capital Spending
As of the end of the quarter, the company had a cash balance of $844 million and total liquidity of $3.5 billion.
Debt to net earnings was approximately 7.4 times, and Net Debt to adjusted EBITDA6 was approximately 2.9 times.
During the first 13 weeks of fiscal year 2026, Sysco returned $259 million to shareholders via dividends.
Cash flow from operations was $86 million and free cash flow7 was negative $50 million for the first 13 weeks of fiscal year 2026.
Capital expenditures, net of proceeds from sales of plant and equipment, for the first 13 weeks of fiscal year 2026 were $136 million.
6 Net debt to adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our net debt to adjusted EBITDA ratio is calculated using a numerator of our debt minus cash and cash equivalents, divided by the sum of the most recent four quarters of adjusted EBITDA. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.7 Free cash flow is a non-GAAP financial measure that represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release. Free cash flow is a non-GAAP financial measure that represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.
Conference Call & Webcast
Sysco will host a conference call to review the company's first quarter and full fiscal year 2026 financial results on Tuesday, October 28, 2025, at 10:00 a.m. Eastern Daylight Time. A live webcast of the call, accompanying slide presentation and a copy of this news release will be available online at investors.sysco.com.
Key Highlights:
13-Week Period Ended
Financial Comparison:
September 27, 2025
September 28, 2024
Change
GAAP:
Sales
$21.1 billion
$20.5 billion
3.2%
Gross Profit
$3.9 billion
$3.8 billion
3.9%
Gross Margin
18.5%
18.3%
13 bps
Operating Expenses
$3.1 billion
$2.9 billion
5.3%
Operating Income
$800 million
$808 million
-1.0%
Operating Margin
3.8%
3.9%
-16 bps
Net Earnings
$476 million
$490 million
-2.9%
Diluted Earnings Per Share
$0.99
$0.99
—%
Non-GAAP(1):
Adjusted Operating Expenses
$3.0 billion
$2.9 billion
4.3%
Adjusted Operating Income
$898 million
$873 million
2.9%
Adjusted Operating Margin
4.3%
4.3%
-1 bps
EBITDA
$1.0 billion
$1.0 billion
-3.1%
Adjusted EBITDA
$1.1 billion
$1.1 billion
0.1%
Adjusted Net Earnings
$551 million
$540 million
2.0%
Adjusted Diluted Earnings Per Share(2)
$1.15
$1.09
5.5%
Case Growth:
U.S. Foodservice
0.1%
2.7%
Local
-0.2%
0.2%
Sysco Brand Sales as a % of Cases(3):
U.S. Broadline
35.6%
36.6%
-93 bps
Local
46.1%
46.9%
-85 bps
Note:
(1) Reconciliations of all non-GAAP financial measures to the nearest respective GAAP financial measures are included at the end of this release.
(2) Individual components in the table above may not sum to the totals due to the rounding.
(3) Amounts reflect the impact of current customer classifications; prior period history has been reclassified to match the current period customer classification.
Forward-Looking Statements
Statements made in this press release or in our earnings call for the first quarter of fiscal year 2026 that look forward in time or that express management's beliefs, expectations or hopes are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements concern, among other things, our future financial performance and results, business strategy, plans, goals and objectives, including certain outlook, business trends, our dividend and share repurchase programs, our expectation of future macroeconomic conditions and other statements that are not historical facts, including our expectations regarding foot traffic and volume growth and benefits to gross margins; and our expectations regarding our future growth, including growth in sales and earnings per share.
Such forward-looking statements reflect the views of management at the time such statements are made and are subject to a number of risks, uncertainties, estimates, and assumptions, including those outside of Sysco's control. Risks and uncertainties include without limitation: the impact of geopolitical, economic and market conditions and developments, including changes in global trade policies and tariffs; risks related to our business initiatives; periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability generally; risks related to our efforts to implement our transformation initiatives and meet our other long-term strategic objectives; risk of interruption of supplies and increase in product costs; risks related to changes in consumer eating habits; and impact of natural disasters or adverse weather conditions, public health crises, adverse publicity or lack of confidence in our products, and product liability claims. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those indicated in our forward-looking statements. Therefore, you should not place undue reliance on any of the forward-looking statements contained herein. For more information on these risks and other concerning factors that could cause actual results to differ from those expressed or forecasted, see our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the SEC. We do not undertake to update our forward-looking statements, except as required by applicable law.
About Sysco
Sysco is the global leader in selling, marketing and distributing food and related products to customers who prepare meals away from home. This includes restaurants, healthcare and educational facilities, lodging establishments, entertainment venues, and more. Sysco operates 337 distribution centers, in 10 countries, with 75,000 colleagues serving approximately 730,000 customer locations. The company generated sales of more than $81 billion in fiscal year 2025 that ended June 28, 2025.
As the world's largest food-away-from-home distributor, Sysco offers customized supply chain solutions, bespoke specialty product offerings, and culinary support to drive customers to innovate and optimize their operations. We act as a trusted business partner to our customers, helping them grow through our industry-leading portfolio that includes fresh produce, premium proteins, specialty products, sustainably focused items, equipment and supplies, and innovative culinary solutions.
For more information, visit www.sysco.com. For important news and key information for Sysco investors, visit the Investor Relations section of the company's website at investors.sysco.com.
Kevin Kim
Cassandra Mauel
Investor Contact
Media Contact
T 281-584-1219
T 281-584-1390
SYY-INVESTORS
Sysco Corporation and its Consolidated SubsidiariesCONSOLIDATED RESULTS OF OPERATIONS (Unaudited)(In Millions, Except for Share and Per Share Data)
13-Week Period Ended
Sep. 27, 2025
Sep. 28, 2024
Sales
$
21,148
$
20,484
Cost of sales
17,247
16,731
Gross profit
3,901
3,753
Operating expenses
3,101
2,945
Operating income
800
808
Interest expense
172
160
Other expense (income), net
28
6
Earnings before income taxes
600
642
Income taxes
124
152
Net earnings
$
476
$
490
Net earnings:
Basic earnings per share
$
0.99
$
1.00
Diluted earnings per share
0.99
0.99
Average shares outstanding
478,761,180
492,023,827
Diluted shares outstanding
480,365,666
493,785,973
Sysco Corporation and its Consolidated SubsidiariesCONSOLIDATED BALANCE SHEETS(In Millions, Except for Share Data)
Sep. 27, 2025
Jun. 28, 2025
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
844
$
1,071
Accounts receivable, less allowances of $46 and $17
5,800
5,502
Inventories
5,377
5,053
Prepaid expenses and other current assets
387
338
Income tax receivable
4
4
Total current assets
12,412
11,968
Plant and equipment at cost, less accumulated depreciation
5,936
6,084
Other long-term assets
Goodwill
5,190
5,231
Intangibles, less amortization
1,043
1,080
Deferred income taxes
490
497
Operating lease right-of-use assets, net
1,172
1,131
Other assets
801
783
Total other long-term assets
8,696
8,722
Total assets
$
27,044
$
26,774
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable
$
6,492
$
6,512
Accrued expenses
2,166
2,268
Accrued income taxes
117
51
Current operating lease liabilities
141
136
Current maturities of long-term debt
1,894
949
Total current liabilities
10,810
9,916
Long-term liabilities
Long-term debt
11,459
12,360
Deferred income taxes
351
345
Long-term operating lease liabilities
1,087
1,049
Other long-term liabilities
1,226
1,247
Total long-term liabilities
14,123
15,001
Commitments and contingencies
Noncontrolling interest
44
27
Shareholders' equity
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none
—
—
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares
765
765
Paid-in capital
2,010
1,986
Retained earnings
13,262
13,061
Accumulated other comprehensive loss
(1,129
)
(1,098
)
Treasury stock at cost, 286,624,506 and 287,678,658 shares
(12,841
)
(12,884
)
Total shareholders' equity
2,067
1,830
Total liabilities and shareholders' equity
$
27,044
$
26,774
Sysco Corporation and its Consolidated SubsidiariesCONSOLIDATED CASH FLOWS (Unaudited)(In Millions)
13-Week Period Ended
Sep. 27, 2025
Sep. 28, 2024
Cash flows from operating activities:
Net earnings
$
476
$
490
Adjustments to reconcile net earnings to cash provided by operating activities:
Share-based compensation expense
31
30
Depreciation and amortization
233
235
Operating lease asset amortization
37
34
Amortization of debt issuance and other debt-related costs
4
4
Deferred income taxes
(5
)
(17
)
Provision for losses on receivables
30
21
Other non-cash items
8
(40
)
Additional changes in certain assets and liabilities, net of effect of businesses acquired:
Increase in receivables
(349
)
(427
)
Increase in inventories
(335
)
(287
)
Increase in prepaid expenses and other current assets
(42
)
(16
)
Increase in accounts payable
82
27
Decrease in accrued expenses
(83
)
(128
)
Decrease in operating lease liabilities
(49
)
(42
)
Increase in accrued income taxes
66
140
(Increase) decrease in other assets
(11
)
2
(Decrease) increase in other long-term liabilities
(7
)
27
Net cash provided by operating activities
86
53
Cash flows from investing activities:
Additions to plant and equipment
(160
)
(122
)
Proceeds from sales of plant and equipment
24
77
Purchase of marketable securities
—
(12
)
Proceeds from sales of marketable securities
7
10
Other investing activities
22
1
Net cash used for investing activities
(107
)
(46
)
Cash flows from financing activities:
Bank and commercial paper borrowings, net
76
240
Other debt borrowings including senior notes
