Sysco Reports First Quarter 2026 Results; Reiterates FY26 Guidance
HOUSTON, Oct. 28, 2025 (GLOBE NEWSWIRE) -- Sysco Corporation (NYSE:SYY) (“Sysco” or the “company”) today announced financial results for its 13-week first fiscal quarter ended September 27, 2025.
Key financial results for the first quarter of fiscal year 2026 include the following (comparisons are to the same period in fiscal year 2025):
“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 million 1.
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 million 1.
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 basis 4, 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 venture 5, 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 basis 4, 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 basis 4, 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 million 1. On a constant currency basis 4, 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 EBITDA 6 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 flow 7 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.
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.
SYY-INVESTORS
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Free Cash Flow
(In Millions)
Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Sysco considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases and sales of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of cash including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for discretionary expenditures, as it may be necessary that we use it to make mandatory debt service or other payments. Free cash flow should not be used as a substitute for the most comparable GAAP financial measure in assessing the company’s liquidity for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. In the table that follows, free cash flow for each period presented is reconciled to net cash provided by operating activities.
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(Dollars in Millions)
EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain Items that we do not consider representative of our underlying performance. As a result, in the non-GAAP reconciliations below for each period presented, adjusted EBITDA is computed as EBITDA plus the impact of Certain Items, excluding certain items related to interest expense, income taxes, depreciation and amortization. Sysco's management considers growth in this metric to be a measure of overall financial performance that provides useful information to management and investors about the profitability of the business, as it facilitates comparison of performance on a consistent basis from period to period by providing a measurement of recurring factors and trends affecting our business. Additionally, it is a commonly used component metric used to inform on capital structure decisions. Adjusted EBITDA should not be used as a substitute for the most comparable GAAP financial measure in assessing the company’s financial performance for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. In the tables that follow, adjusted EBITDA for each period presented is reconciled to net earnings.
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Net Debt to Adjusted EBITDA
(In Millions)
Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. It is an important measure used by management to evaluate our access to liquidity, and we believe it is a representation of our financial strength. 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. In the table that follows, we have provided the calculation of our debt and net debt as a ratio of Adjusted EBITDA.
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Trailing Twelve Months)
(In Millions)
Projected Adjusted EPS Guidance
Adjusted earnings per share is a non-GAAP financial measure; however, we cannot predict with certainty certain items that would be included in the most directly comparable GAAP measure for the relevant future periods. Due to these uncertainties, we cannot provide a quantitative reconciliation of projected adjusted EPS to the most directly comparable GAAP financial measure without unreasonable effort. However, we expect to calculate adjusted earnings per share for future periods in the same manner as the reconciliations provided for the historical periods herein.