Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This discussion should be read in conjunction with our consolidated financial statements as of June 28, 2025, and for
the fiscal year then ended, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, both
contained in our fiscal 2025 Form 10-K, as well as the consolidated financial statements (unaudited) and notes to the
consolidated financial statements (unaudited) contained in this report.
Highlights
Our third quarter of fiscal 2026 results included sales growth of 4.7% as compared to the third quarter of fiscal 2025,
primarily driven by volume improvements across our business. Sales increased in our U.S. Foodservice Operations,
International Foodservice Operations, and SYGMA segments. Our gross profit increased 6.5% compared to the third quarter of
fiscal 2025, due to our strategic sourcing efforts, favorable changes in customer mix, and the effective management of product
cost inflation. T1Operating income decreased 9.1% compared to the third quarter of fiscal 2025, due to higher incentive
compensation, increased restructuring and transformational project costs, and higher acquisition and due diligence costs. We
consider restructuring and transformational project costs and acquisition and due diligence costs to be “Certain Item” expenses
(as defined below). Excluding Certain Item expenses, adjusted operating income decreased 0.6% as compared to the third
quarter of fiscal 2025, primarily due to higher incentive compensation. Our net earnings for the third quarter of fiscal 2026
decreased 15.2% as compared to the third quarter of fiscal 2025. Excluding Certain Item expenses, adjusted net earnings
decreased by 3.6% as compared to the third quarter of fiscal 2025. See below for a comparison of our fiscal 2026 results to our
fiscal 2025 results, both including and excluding Certain Items.
Comparisons of results from the third quarter of fiscal 2026 to the third quarter of fiscal 2025 are presented below:
•Sales:
◦increased 4.7%, or $921 million, to $20.5 billion;
•Operating income:
◦decreased 9.1%, or $62 million, to $619 million;
◦adjusted operating income decreased 0.6%, or $5 million, to $768 million;
•Net earnings:
◦decreased 15.2%, or $61 million, to $340 million;
◦adjusted net earnings decreased 3.6%, or $17 million, to $452 million;
•Basic earnings per share:
◦decreased 13.4%, or $0.11, to $0.71 per share;
•Diluted earnings per share:
◦decreased 13.4% or $0.11, to $0.71 per share;
◦adjusted diluted earnings per share decreased 2.1%, or $0.02, to $0.94 per share;
•EBITDA:
◦decreased 5.1%, or $46 million, to $864 million; and
◦adjusted EBITDA increased 0.1%, or $1 million, to $970 million.
Comparisons of results from the first 39 weeks of fiscal 2026 to the first 39 weeks of fiscal 2025 are presented below:
•Sales:
◦increased 3.6%, or $2.2 billion, to $62.4 billion;
•Operating income:
◦decreased 4.0%, or $88 million, to $2.1 billion;
◦adjusted operating income increased 1.9%, or $46 million, to $2.5 billion;
•Net earnings:
◦decreased 7.0%, or $91 million, to $1.2 billion;
◦adjusted net earnings increased 1.0%, or $14 million, to $1.5 billion;
•Basic earnings per share:
◦decreased 4.9%, or $0.13, to $2.52 per share;
•Diluted earnings per share:
◦decreased 4.9% , or $0.13 to $2.51 per share;
◦adjusted diluted earnings per share increased 3.4%, or $0.10, to $3.08 per share;
•EBITDA:
◦decreased 3.0%, or $85 million, to $2.8 billion; and
◦adjusted EBITDA increased 1.2%, or $36 million, to $3.0 billion.
33
The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted
EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and
free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove: (1) restructuring charges;
(2) expenses associated with our various transformation initiatives; (3) severance charges; and (4) acquisition-related costs
consisting of (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions.
Adjustments provided herein for fiscal 2026 results of operations also remove the impact of a charge associated with a legal
matter. No similar charge was applicable in fiscal 2025.
The fiscal 2026 and fiscal 2025 items discussed above are collectively referred to as “Certain Items.” The results of
our operations can be impacted by changes in exchange rates applicable to converting from local currencies to U.S. dollars. We
measure our results on a constant currency basis.
Trends
Economic and Industry Trends
Foot traffic to restaurants experienced a decrease of 1.9% in the third quarter of fiscal 2026. Our U.S. Foodservice
Operations local case growth trends experienced a sequential improvement of 210 basis points compared to the second quarter
of fiscal 2026, despite the industry’s foot traffic performance. T2The macroeconomic environment was similar in the third quarter
of fiscal 2026 as compared to the previous quarter, which has continued to adversely impact consumer sentiment. Despite the
current macroeconomic landscape, we expect to grow our sales in fiscal 2026. We believe the food-away-from-home sector is a
healthy, long-term growth market, and Sysco is diversified and well positioned as a market leader in food service.
Sales and Gross Profit Trends
T3Sales increased 4.7% and 3.6% in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the
third quarter and first 39 weeks of fiscal 2025. Our sales and gross profit performance are influenced by multiple factors,
including price, volume, inflation, customer mix and product mix. We experienced a 2.3% and 1.0% increase in U.S.
Foodservice Operations case volume in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third
quarter and first 39 weeks of fiscal 2025. Our volume growth trends were attributable to local case volume increasing 3.3% and
1.4% in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of
fiscal 2025. Our local case volumes have improved due to improved sales colleague retention and incremental sales colleague
productivity improvements. National case volume increased 1.4% and 0.9% in the third quarter and first 39 weeks of fiscal
2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025. Our volume reflects our broadline and
specialty businesses. Beginning in fiscal 2026, we are now including volumes from our specialty meat business for all periods
presented. We expect continued local volume growth in the fourth quarter of fiscal 2026 of at least 2.5% due to continued sales
consultant productivity improvements. In addition, we expect national case volume growth in the fourth quarter due to the
strength of our non-restaurant business and the onboarding of new national restaurant customers.
We experienced inflation at a rate of 2.8% in the third quarter of fiscal 2026, at the total enterprise level, primarily
driven by inflation in the dairy, meat, and seafood categories. We continue to address inflation by successfully managing
through cost increases in a timely manner. T4Gross margin increased 31 and 20 basis points in the third quarter and first 39 weeks
of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025, primarily due to benefits from
our strategic sourcing initiatives, stronger volume performance from local customers and improving mix from Sysco Brand
penetration rates, and the effective management of product cost inflation.
Operating Expense Trends
Total operating expenses were $3.2 billion and $9.4 billion in the third quarter and first 39 weeks of fiscal 2026, a
10.1% and 6.9% increase compared to the third quarter and first 39 weeks of fiscal 2025, respectively. Total adjusted operating
expenses were $3.0 billion and $9.0 billion in the third quarter and first 39 weeks of fiscal 2026, an 8.4% and 5.6% increase
compared to the third quarter and first 39 weeks of fiscal 2025, respectively. Operating expenses increased primarily due to
higher incentive compensation, sales headcount investments, increased acquisition and due diligence costs, and increased costs
associated with expanded building capacity, partially offset by decreases in insurance costs. Adjusted operating expenses were
14.8% and 14.5% of sales during the third quarter and first 39 weeks of fiscal 2026, which represents a 51 and 27 basis point
increase as compared to the third quarter and first 39 weeks of fiscal 2025, respectively, as a result of higher incentive
compensation, sales headcount investments, and increased costs associated with expanded building capacity, partially offset by
decreases in insurance costs.
34
Amortization Expense Trends
Sysco’s operations within the United Kingdom, located within the International Foodservice Operations segment,
initiated a rebranding effort in the second quarter of fiscal 2026 to transition the Brakes® brand and other smaller brands to
“Sysco GB.” This rebranding initiative will take approximately two years to complete and will result in Sysco amortizing
previously indefinite-lived intangible assets on a straight-line basis over this two-year period. The rebranding is expected to
result in approximately $100 million of additional amortization expense over two years, including approximately $29 million in
fiscal 2026. This amortization expense will be treated as a Certain Item, which is consistent with our treatment of amortization
expense of other previously acquired intangible assets.
Mergers and Acquisitions
In October 2025, we acquired Fairfax Meadow, a leading specialty meat supplier based in the United Kingdom. This
acquisition follows our acquisition of Campbells Prime Meat last fiscal year and positions our team in the United Kingdom to
achieve additional growth by leveraging additional specialty meat capabilities geographically. This company’s results are
included within International Foodservice Operations and were not material to our results for the third quarter and first 39
weeks of fiscal 2026.
In December 2025, we acquired Ginsberg’s Foods, a broadline distributor servicing restaurants, schools, and
healthcare facilities across eastern New York and neighboring states. This acquisition opens opportunities to new customers
while creating procurement efficiencies through Sysco buying programs and expanded access to Sysco brand products. This
company’s results are included within U.S. Foodservice Operations and were not material to our results for the third quarter and
first 39 weeks of fiscal 2026.
T5In March 2026, we announced an agreement to acquire Jetro Restaurant Depot (JRD), a leading U.S. wholesale cash-
and-carry foodservice provider serving smaller, independent restaurants and businesses (the Proposed Transaction). JRD
operates 167 large-format warehouse stores across 35 states that serve more than 725,000 independent restaurants and
foodservice operators with a broad assortment of fresh and low-priced products. This transaction is expected to close by the
third quarter of Sysco’s fiscal 2027, subject to the satisfaction of customary closing conditions, including regulatory clearance
under the Hart-Scott-Rodino Act. See Note 15 "Subsequent Events" for more information on the terms of the Proposed
Transaction.
Interest Expense and Other Income and Expense Trends
The cash portion of the purchase price in the Proposed Transaction is expected to be financed with a combination of
new senior unsecured notes, hybrid debt, cash on hand and equity or equity-linked securities. Sysco has executed a commitment
letter for a $22 billion senior unsecured 364-day bridge loan facility that could be used to fund the cash portion of the purchase
price and pay related fees and expenses. Subsequent to the execution of the bridge loan facility, Sysco entered into a $3 billion
senior unsecured delayed draw term loan facility, comprising a $1.25 billion 364-day tranche and a $1.75 billion 2-year tranche,
reducing the bridge loan facility commitments from $22 billion to $19 billion. Fees paid upfront for this facility as of April 10,
2026 total $88 million and will be amortized to interest expense within our statement of consolidated results of operations over
the expected life of the bridge facility unless it is terminated at an earlier date. Additional fees will apply at later stages. This
bridge facility is expected to add approximately $30 million of interest expense in fiscal 2026. Additionally, Sysco has executed
cash-settled deal contingent rate lock transactions to mitigate interest rate risk on $6.3 billion of future permanent debt that
could potentially be issued to finance the Proposed Transaction. As these interest rate lock transactions are contingent upon
whether the Proposed Transaction is successfully consummated, we have not elected to apply hedge accounting at this time, and
any unrealized gains or losses will be recognized in Other income and expense within our statement of consolidated results of
operations. Our incremental interest expense from the bridge loan facility and any fair value gains or losses on these interest
rate locks will be treated as a Certain Item. See Note 15 "Subsequent Events" for more information on the terms of the Proposed
Transaction.
35
Strategy
Our purpose is “Connecting the World to Share Food and Care for One Another.” Purpose-driven companies are
believed to perform better. We believe our purpose will assist us to grow substantially faster than the foodservice distribution
industry and deliver profitable growth through our Recipe for Growth transformation. This growth transformation is supported
by strategic pillars that we believe will allow us to better serve our customers, including our digital, products and solutions,
supply chain, customer teams, and future horizons strategies.
Our business transformation initiatives are progressing, which include promoting our specialty programs for produce,
protein and Italian products, and our customer growth initiatives. From these actions, as a part of our Recipe for Growth, the
benefits of our developing capabilities are apparent in the new customers we are winning and in the progress we are making
toward increasing market share. We expect that, as our Recipe for Growth matures, the impact on our top-line growth will
deliver profitable and consistent growth. Our proposed acquisition of JRD is a part of our future horizons strategy enabling us
to enter the wholesale cash and carry foodservice segment, which is a resilient and growing channel.
Results of Operations
The following table sets forth the components of our consolidated results of operations expressed as a percentage of
sales for the periods indicated:
13-Week Period Ended
39-Week Period Ended
Mar. 28, 2026
Mar. 29, 2025
Mar. 28, 2026
Mar. 29, 2025
Sales
100.0%
100.0%
100.0%
100.0%
Cost of sales
81.4
81.7
81.6
81.8
Gross profit
18.6
18.3
18.4
18.2
Operating expenses
15.6
14.8
15.0
14.5
Operating income
3.0
3.5
3.4
3.7
Interest expense
0.8
0.8
0.8
0.8
Other expense (income), net
—
—
0.1
0.1
Earnings before income taxes
2.2
2.7
2.5
2.8
Income taxes
0.5
0.7
0.6
0.6
Net earnings
1.7%
2.0%
1.9%
2.2%
36
The following table sets forth the change in the components of our consolidated results of operations expressed as a
percentage increase or decrease over the comparable period in the prior year:
13-Week Period Ended
39-Week Period Ended
Mar. 28, 2026
Mar. 28, 2026
Sales
4.7%
3.6%
Cost of sales
4.3
3.4
Gross profit
6.5
4.8
Operating expenses
10.1
6.9
Operating income
(9.1)
(4.0)
Interest expense
12.8
9.2
Other expense (income), net (1) (2)
(33.3)
37.5
Earnings before income taxes
(14.9)
(8.4)
Income taxes
(13.9)
(12.9)
Net earnings
(15.2)%
(7.0)%
Basic earnings per share
(13.4)%
(4.9)%
Diluted earnings per share
(13.4)
(4.9)
Average shares outstanding
(1.7)
(2.2)
Diluted shares outstanding
(1.7)
(2.3)
(1)
Other expense (income), net was expense of $6 million and $9 million in the third quarter of fiscal 2026 and fiscal 2025, respectively.
(2)
Other expense (income), net was expense of $44 million and $32 million in the first 39 weeks of fiscal 2026 and fiscal 2025,
respectively.
The following tables represent our results by reportable segments:
13-Week Period Ended Mar. 28, 2026
U.S.
Foodservice
Operations
International
Foodservice
Operations
SYGMA
Other
Global
Support
Center
Consolidated
Totals
(In millions)
Sales
$14,234
$3,885
$2,137
$263
$—
$20,519
Sales increase
3.1%
12.4%
2.5%
2.3%
4.7%
Percentage of total
69.4%
18.9%
10.4%
1.3%
100.0%
Operating income (loss)
$772
$83
$18
$7
$(261)
$619
Operating income (loss) increase (decrease)
2.4%
(13.5)%
5.9%
NM
42.6%
(9.1)%
Percentage of total segments
87.8%
9.4%
2.0%
0.8%
100.0%
Operating income as a percentage of sales
5.4%
2.1%
0.8%
2.7%
3.0%
13-Week Period Ended Mar. 29, 2025
U.S.
Foodservice
Operations
International
Foodservice
Operations
SYGMA
Other
Global
Support
Center
Consolidated
Totals
(In millions)
Sales
$13,800
$3,457
$2,084
$257
$—
$19,598
Percentage of total
70.4%
17.6%
10.6%
1.4%
100.0%
Operating income (loss)
$754
$96
$17
$(3)
$(183)
$681
Percentage of total segments
87.2%
11.1%
2.0%
(0.3)%
100.0%
Operating income as a percentage of sales
5.5%
2.8%
0.8%
(1.2)%
3.5%
37
39-Week Period Ended Mar. 28, 2026
U.S.
Foodservice
Operations
International
Foodservice
Operations
SYGMA
Other
Global
Support
Center
Consolidated
Totals
(In millions)
Sales
$43,397
$11,851
$6,392
$789
$—
$62,429
Sales increase (decrease)
2.8%
8.0%
2.3%
(1.6)%
3.6%
Percentage of total
69.5%
19.0%
10.2%
1.3%
100.0%
Operating income (loss)
$2,472
$315
$64
$17
$(756)
$2,112
Operating income (loss) increase (decrease)
(1.0)%
7.9%
18.5%
88.9%
16.1%
(4.0)%
Percentage of total segments
86.2%
11.0%
2.2%
0.6%
100.0%
Operating income as a percentage of sales
5.7%
2.7%
1.0%
2.2%
3.4%
39-Week Period Ended Mar. 29, 2025
U.S.
Foodservice
Operations
International
Foodservice
Operations
SYGMA
Other
Global
Support
Center
Consolidated
Totals
(In millions)
Sales
$42,206
$10,978
$6,246
$802
$—
$60,232
Percentage of total
70.1%
18.2%
10.4%
1.3%
100.0%
Operating income (loss)
$2,496
$292
$54
$9
$(651)
$2,200
Percentage of total segments
87.6%
10.2%
1.9%
0.3%
100.0%
Operating income as a percentage of sales
5.9%
2.7%
0.9%
1.1%
3.7%
Based on information in Note 14, “Business Segment Information,” in the Notes to Consolidated Financial Statements
in Item 1 of Part I of this Form 10-Q, U.S. Foodservice Operations and International Foodservice Operations, collectively,
represented approximately 88.3% and 88.5% of Sysco’s overall sales in the third quarter and first 39 weeks of fiscal 2026,
respectively. U.S. Foodservice Operations and International Foodservice Operations, collectively, represented approximately
97.2% of total segment operating income in both the third quarter and first 39 weeks of fiscal 2026, respectively. This illustrates
that these segments represent a substantial majority of our total segment results when compared to other reportable segments.
Results of U.S. Foodservice Operations
The following table sets forth a summary of the components of operating income expressed as a percentage increase or
decrease over the comparable period in the prior year:
38
13-Week
Period Ended
Mar. 28, 2026
13-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
% Change
(Dollars in millions)
Sales
$14,234
$13,800
$434
3.1%
Gross profit
2,738
2,603
135
5.2
Operating expenses
1,966
1,849
117
6.3
Operating income
$772
$754
$18
2.4%
Gross profit
$2,738
$2,603
$135
5.2%
Adjusted operating expenses (Non-GAAP)
1,908
1,813
95
5.2
Adjusted operating income (Non-GAAP)
$830
$790
$40
5.1%
39-Week
Period Ended
Mar. 28, 2026
39-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
% Change
(Dollars in millions)
Sales
$43,397
$42,206
$1,191
2.8%
Gross profit
8,281
8,003
278
3.5
Operating expenses
5,809
5,507
302
5.5
Operating income
$2,472
$2,496
$(24)
(1.0)%
Gross profit
$8,281
$8,003
$278
3.5%
Adjusted operating expenses (Non-GAAP)
5,683
5,428
255
4.7
Adjusted operating income (Non-GAAP)
$2,598
$2,575
$23
0.9%
Sales
The following table sets forth the percentage and dollar value increase or decrease in the major factors impacting sales
as compared to the corresponding prior year period in order to demonstrate the cause and magnitude of change:
Increase (Decrease)
Increase (Decrease)
13-Week Period
39-Week Period
(Dollars in millions)
(Dollars in millions)
Cause of change
Percentage
Dollars
Percentage
Dollars
Case volume (1)
2.3%
$315
1.0%
$442
Inflation
0.6
84
1.6
673
Other
0.2
35
0.2
76
Total change in sales
3.1%
$434
2.8%
$1,191
(1)
Case volumes increased 2.3% and 1.0% compared to the third quarter and first 39 weeks of fiscal 2025, respectively. This volume
increase resulted in a 2.3% and 1.0% increase in the dollar value of sales compared to the third quarter and first 39 weeks of fiscal
2025, respectively.
The sales growth in our U.S. Foodservice Operations was primarily driven by case volume growth. Case volumes from
our U.S. Foodservice Operations increased 2.3% and 1.0% in the third quarter and first 39 weeks of fiscal 2026, respectively, as
compared to the third quarter and first 39 weeks of fiscal 2025. The growth in case volumes was attributable to local case
volumes increasing 3.3% and 1.4% in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third
quarter and first 39 weeks of fiscal 2025. National case volumes increased 1.4% and 0.9% in the third quarter and first 39
weeks of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025.
39
Operating Income
The increase in operating income for the third quarter of fiscal 2026, as compared to the third quarter fiscal 2025, was
driven by case volume growth and gross profit dollar growth, partially offset by an increase in operating expenses. The decrease
in operating income for the first 39 weeks of fiscal 2026, as compared to the first 39 weeks of fiscal 2025, was driven by an
increase in operating expenses, partially offset by case volume growth and gross profit dollar growth.
Gross profit dollars increased in the third quarter and first 39 weeks of fiscal 2026 as compared to the third quarter and
first 39 weeks of fiscal 2025, primarily as a result of improvements in our strategic sourcing initiatives, stronger volume
performance from local customers and improving mix from Sysco Brand penetration rates, and the effective management of
product cost fluctuations. Our local case volumes have improved due to improved sales colleague retention and incremental
sales colleague productivity improvements. The estimated change in product costs, an internal measure of inflation or deflation,
increased in the third quarter and first 39 weeks of fiscal 2026. Gross margin, which is gross profit as a percentage of sales, was
19.24% and 19.08% in the third quarter and first 39 weeks of fiscal 2026, respectively, for our U.S. Foodservice Operations,
which was an increase of 38 basis points compared to gross margin of 18.86% in the third quarter of fiscal 2025, and an
increase of 12 basis points compared to a gross margin of 18.96% in the first 39 weeks of fiscal 2025. The improvement in the
third quarter and first 39 weeks of fiscal 2026 is attributable to improvements in our strategic sourcing initiatives, favorable
changes in customer mix, and the effective management of product cost fluctuations.
The increase in operating expenses for the third quarter and first 39 weeks of fiscal 2026, as compared to the third
quarter and first 39 weeks of fiscal 2025, was primarily driven by increases in colleague-related costs, which is inclusive of
incentive compensation, and costs associated with investments in sales headcount and building expansions.
40
Results of International Foodservice Operations
The following table sets forth a summary of the components of operating income and adjusted operating income
expressed as a percentage increase or decrease over the comparable period in the prior year:
13-Week
Period Ended
Mar. 28, 2026
13-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
% Change
(Dollars in millions)
Sales
$3,885
$3,457
$428
12.4%
Gross profit
834
728
106
14.6
Operating expenses
751
632
119
18.8
Operating income
$83
$96
$(13)
(13.5)%
Gross profit
$834
$728
$106
14.6%
Adjusted operating expenses (Non-GAAP)
690
600
90
15.0
Adjusted operating income (Non-GAAP)
$144
$128
$16
12.5%
Sales on a constant currency basis (Non-GAAP)
$3,636
$3,457
$179
5.2%
Gross profit on a constant currency basis (Non-GAAP)
777
728
49
6.7
Adjusted operating expenses on a constant currency basis
(Non-GAAP)
640
600
40
6.7
Adjusted operating income on a constant currency basis
(Non-GAAP)
$137
$128
$9
7.0%
39-Week
Period Ended
Mar. 28, 2026
39-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
% Change
(Dollars in millions)
Sales
$11,851
$10,978
$873
8.0%
Gross profit
2,492
2,262
230
10.2
Operating expenses
2,177
1,970
207
10.5
Operating income
$315
$292
$23
7.9%
Gross profit
$2,492
$2,262
$230
10.2%
Adjusted operating expenses (Non-GAAP)
2,039
1,875
164
8.7
Adjusted operating income (Non-GAAP)
$453
$387
$66
17.1%
Sales on a constant currency basis (Non-GAAP)
$11,374
$10,978
$396
3.6%
Gross profit on a constant currency basis (Non-GAAP)
2,378
2,262
116
5.1
Adjusted operating expenses on a constant currency basis
(Non-GAAP)
1,937
1,875
62
3.3
Adjusted operating income on a constant currency basis
(Non-GAAP)
$441
$387
$54
14.0%
41
Sales
The following table sets forth the percentage and dollar value increase or decrease in the major components impacting
sales as compared to the corresponding prior year period in order to demonstrate the cause and magnitude of change.
Increase (Decrease)
Increase (Decrease)
13-Week Period
39-Week Period
(Dollars in millions)
(Dollars in millions)
Cause of change
Percentage
Dollars
Percentage
Dollars
Inflation
3.6%
$125
4.1%
$447
Foreign currency
7.2
249
4.3
477
Case volume
1.0
36
1.4
162
Impact of divestiture
—
—
(1.9)
(207)
Other
0.6
18
0.1
(6)
Total change in sales
12.4%
$428
8.0%
$873
Sales for the third quarter of fiscal 2026 increased 12.4% as compared to the third quarter of fiscal 2025. Sales for the
first 39 weeks of fiscal 2026 increased 8.0% as compared to the first 39 weeks of fiscal 2025. The sales increase in both periods
is primarily due to the impact of foreign currency translation, higher inflation, and local case growth. Excluding the impact of
the Mexico joint venture, which was divested in the second quarter of fiscal 2025, sales increased 10.0% in the first 39 weeks of
fiscal 2026 as compared to the first 39 weeks of fiscal 2025.
Operating Income
The decrease in operating income for the third quarter of fiscal 2026, as compared to the third quarter of fiscal 2025,
was primarily due to increases in operating expenses, partially offset by local case volume growth driven by expanded supply
chain capacity, increased availability of Sysco branded merchandise, and increased sales colleague headcount. The increase in
operating income for the first 39 weeks of fiscal 2026, as compared to the first 39 weeks of fiscal 2025, is primarily due to local
case volume growth driven by expanded supply chain capacity, increased availability of Sysco branded merchandise, and
increased sales colleague headcount, partially offset by increases in operating expenses.
The increase in gross profit dollars in the third quarter and first 39 weeks of fiscal 2026, as compared to the third
quarter and first 39 weeks of fiscal 2025, was primarily attributable to increases in local case volumes. Local case volumes
increased approximately 3.8% in the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025.
The increase in operating expenses in the third quarter and first 39 weeks of fiscal 2026 as compared to the third
quarter and first 39 weeks of fiscal 2025 was primarily due to increases in colleague-related costs and supply chain
transformation costs, as well as the impact of foreign currency translation.
Results of SYGMA and Other Segment
SYGMA segment sales were 2.5% and 2.3% higher in the third quarter and first 39 weeks of fiscal 2026, respectively,
as compared to the third quarter and first 39 weeks of fiscal 2025. Operating income increased $1 million and $10 million in the
third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025.
These results are reflective of recent increased strength in our supply chain operations.
For the operations that are grouped within Other, operating income increased $10 million and $8 million in the third
quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025. The
operations of this group primarily consist of our hospitality business, Guest Worldwide.
42
Global Support Center Expenses
Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service
operations. These expenses in the third quarter of fiscal 2026 increased $63 million, or 30.4%, as compared to the third quarter
of fiscal 2025, primarily due to increases in colleague-related costs, which is inclusive of incentive compensation, and
acquisition and due diligence costs, partially offset by decreases in insurance costs. These expenses in the first 39 weeks of
fiscal 2026 increased $110 million, or 16.2%, as compared to the first 39 weeks of fiscal 2025, primarily due to increases in
colleague-related costs, which is inclusive of incentive compensation, and acquisition and due diligence costs, partially offset
by decreases in insurance costs.
Included in Global Support Center expenses are Certain Items that totaled $30 million and $98 million in the third
quarter and first 39 weeks of fiscal 2026, as compared to $24 million and $54 million in the third quarter and first 39 weeks of
fiscal 2025, respectively. T6Certain Items impacting the third quarter and first 39 weeks of fiscal 2026 were primarily expenses
associated with our business technology transformation initiatives and acquisition and due diligence costs. Certain Items
impacting the third quarter and first 39 weeks of fiscal 2025 were primarily expenses associated with severances, our business
technology transformation initiatives and expenses associated with acquisitions.
Interest Expense
Interest expense increased $19 million and $43 million for the third quarter and first 39 weeks of fiscal 2026,
respectively, as compared to the third quarter and first 39 weeks of fiscal 2025. The increase was primarily due to interest
expense on recently issued senior notes.
Other Income and Expense
Other expense decreased $3 million and increased $12 million for the third quarter and first 39 weeks of fiscal 2026,
respectively, as compared to the third quarter and first 39 weeks of fiscal 2025. The changes are primarily due to foreign
exchange gains and losses incurred in those periods.
Net Earnings
Net earnings decreased 15.2% and 7.0% in the third quarter and first 39 weeks of fiscal 2026, respectively, as
compared to the third quarter and first 39 weeks of fiscal 2025, primarily due to the items noted above for operating income,
and interest expense, as well as items impacting our income taxes that are discussed in Note 12, “Income Taxes,” in the Notes
to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q. Adjusted net earnings, excluding Certain Items,
decreased 3.6% and increased 1.0% in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third
quarter and first 39 weeks of fiscal 2025. Adjusted net earnings were favorably impacted in the third quarter and first 39 weeks
of fiscal 2026 by increases in sales volumes, benefits from our strategic sourcing initiatives, and the effective management of
our product cost inflation. Adjusted net earnings were negatively impacted in the third quarter and first 39 weeks of fiscal 2026
by higher incentive compensation.
Earnings Per Share
Basic earnings per share in the third quarter of fiscal 2026 were $0.71, a 13.4% decrease from the comparable prior
year period amount of $0.82 per share. Diluted earnings per share in the third quarter of fiscal 2026 were $0.71, a 13.4%
decrease from the comparable prior year period amount of $0.82 per share. Adjusted diluted earnings per share, excluding
Certain Items, in the third quarter of fiscal 2026 were $0.94, a 2.1% decrease from the comparable prior year amount of $0.96
per share.
Basic earnings per share in the first 39 weeks of fiscal 2026 were $2.52, a 4.9% decrease from the comparable prior
year amount of $2.65 per share. Diluted earnings per share in the first 39 weeks of fiscal 2026 were $2.51, a 4.9% decrease
from the comparable prior year period amount of $2.64 per share. Adjusted diluted earnings per share, excluding Certain Items,
in the first 39 weeks of fiscal 2026 were $3.08, a 3.4% increase from the comparable prior year amount of $2.98 per share.
43
Non-GAAP Reconciliations
The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted
EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and
free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove: (1) restructuring charges;
(2) expenses associated with our various transformation initiatives; (3) severance charges; and (4) acquisition-related costs
consisting of (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions.
Adjustments provided herein for fiscal 2026 results of operations also remove the impact of a charge associated with a legal
matter. No similar charge was applicable in fiscal 2025.
The results of our operations can be impacted due to changes in exchange rates applicable in converting local
currencies to U.S. dollars. We measure our results on a constant currency basis. Constant currency operating results are
calculated by translating current-period local currency operating results with the currency exchange rates used to translate the
financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results
would have been if the currency exchange rate had not changed from the comparable prior-year period. We also measure our
sales growth excluding the impact of our joint venture in Mexico which was divested in the second quarter of fiscal year 2025.
Management believes that adjusting its operating expenses, operating income, operating margin, net earnings and
diluted earnings per share to remove these Certain Items, presenting its results on a constant currency basis, and adjusting its
sales results to exclude the impact of its joint venture in Mexico provides an important perspective with respect to our
underlying business trends and results. It provides meaningful supplemental information to both management and investors
that (1) is indicative of the performance of the company’s underlying operations and (2) facilitates comparisons on a year-
over-year basis.
Sysco has a history of growth through acquisitions and excludes from its non-GAAP financial measures the impact of
acquisition-related intangible amortization, acquisition costs and due diligence costs for those acquisitions. We believe this
approach significantly enhances the comparability of Sysco’s results for fiscal year 2026 and fiscal year 2025.
Set forth on the following page is a reconciliation of sales, operating expenses, operating income, net earnings and
diluted earnings per share to adjusted results for these measures for the periods presented. Individual components of diluted
earnings per share may not be equal to the total presented when added due to rounding. Adjusted diluted earnings per share is
calculated using adjusted net earnings divided by diluted shares outstanding.
13-Week
Period Ended
Mar. 28, 2026
13-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
%/bps
Change
Sales (GAAP)
$20,519
$19,598
$921
4.7%
Impact of currency fluctuations (1)
(252)
(252)
(1.3)
Comparable sales using a constant currency basis (Non-GAAP)
$20,267
$19,598
$669
3.4%
Cost of sales (GAAP)
$16,707
$16,017
$690
4.3%
Gross profit (GAAP)
$3,812
$3,581
$231
6.5%
Impact of currency fluctuations (1)
(58)
(58)
(1.7)
Comparable gross profit adjusted for Certain Items using a
constant currency basis (Non-GAAP)
$3,754
$3,581
$173
4.8%
Gross margin (GAAP)
18.58%
18.27%
31 bps
Impact of currency fluctuations (1)
(0.06)
-6 bps
Comparable gross margin adjusted for Certain Items using a
constant currency basis (Non-GAAP)
18.52%
18.27%
25 bps
Operating expenses (GAAP)
$3,193
$2,900
$293
10.1%
Impact of restructuring, transformational project, and other costs (2)
(94)
(50)
(44)
(88.0)
Impact of acquisition-related costs (3)
(55)
(42)
(13)
(31.0)
Operating expenses adjusted for Certain Items (Non-GAAP)
3,044
2,808
236
8.4
44
Impact of currency fluctuations (1)
(51)
(51)
(1.8)
Comparable operating expenses adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$2,993
$2,808
$185
6.6%
Operating expense as a percentage of sales (GAAP)
15.56%
14.80%
76 bps
Impact of certain item adjustments
(0.72)
(0.47)
-25 bps
Adjusted operating expense as a percentage of sales (Non-
GAAP)
14.84%
14.33%
51 bps
Operating income (GAAP)
$619
$681
$(62)
(9.1)%
Impact of restructuring, transformational project, and other costs (2)
94
50
44
88.0
Impact of acquisition-related costs (3)
55
42
13
31.0
Operating income adjusted for Certain Items (Non-GAAP)
768
773
(5)
(0.6)
Impact of currency fluctuations (1)
(7)
(7)
(1.0)
Comparable operating income adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$761
$773
$(12)
(1.6)%
Operating margin (GAAP)
3.02%
3.47%
-45 bps
Operating margin adjusted for Certain Items (Non-GAAP)
3.74%
3.94%
-20 bps
Operating margin adjusted for Certain Items using a constant
currency basis (Non-GAAP)
3.75%
3.94%
-19 bps
Net earnings (GAAP)
$340
$401
$(61)
(15.2)%
Impact of restructuring, transformational project, and other costs (2)
94
50
44
88.0
Impact of acquisition-related costs (3)
55
42
13
31.0
Tax impact of restructuring, transformational project, and other
costs (4)
(23)
(13)
(10)
(76.9)
Tax impact of acquisition-related costs (4)
(14)
(11)
(3)
(27.3)
Net earnings adjusted for Certain Items (Non-GAAP)
$452
$469
$(17)
(3.6)%
Diluted earnings per share (GAAP)
$0.71
$0.82
$(0.11)
(13.4)%
Impact of restructuring, transformational project, and other costs (2)
0.20
0.10
0.10
100.0
Impact of acquisition-related costs (3)
0.11
0.09
0.02
22.2
Tax impact of restructuring, transformational project, and other
costs (4)
(0.05)
(0.03)
(0.02)
(66.7)
Tax impact of acquisition-related costs (4)
(0.03)
(0.02)
(0.01)
(50.0)
Diluted earnings per share adjusted for Certain Items (Non-
GAAP) (5)
$0.94
$0.96
$(0.02)
(2.1)%
(1)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results.
(2)
Fiscal 2026 includes $43 million related to restructuring costs, severance charges, and costs associated with a legal matter and $51
million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our
business technology strategy. Fiscal 2025 includes $15 million related to restructuring and severance charges and $35 million related
to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business
technology strategy.
(3)
Fiscal 2026 includes $42 million of intangible amortization expense and $13 million in acquisition and due diligence costs. Fiscal 2025
includes $32 million of intangible amortization expense and $10 million in acquisition and due diligence costs.
(4)
The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory
rates in effect for each jurisdiction where the Certain Item was incurred.
(5)
Individual components of diluted earnings per share may not equal the total presented when added due to rounding. Total diluted
earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.
45
39-Week
Period Ended
Mar. 28, 2026
39-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
%/bps
Change
Sales (GAAP)
$62,429
$60,232
$2,197
3.6%
Impact of Mexico joint venture sales
—
(207)
207
0.4
Comparable sales excluding Mexico joint venture (Non-GAAP)
$62,429
$60,025
$2,404
4.0%
Sales (GAAP)
$62,429
$60,232
$2,197
3.6%
Impact of currency fluctuations (1)
(481)
(481)
(0.8)
Comparable sales using a constant currency basis (Non-GAAP)
$61,948
$60,232
$1,716
2.8%
Cost of sales (GAAP)
$50,924
$49,249
$1,675
3.4%
Gross profit (GAAP)
$11,505
$10,983
$522
4.8%
Impact of currency fluctuations (1)
(115)
(115)
(1.1)
Comparable gross profit adjusted for Certain Items using a
constant currency basis (Non-GAAP)
$11,390
$10,983
$407
3.7%
Gross margin (GAAP)
18.43%
18.23%
20 bps
Impact of currency fluctuations (1)
(0.04)
-4 bps
Comparable gross margin adjusted for Certain Items using a
constant currency basis (Non-GAAP)
18.39%
18.23%
16 bps
Operating expenses (GAAP)
$9,393
$8,783
$610
6.9%
Impact of restructuring, transformational project, and other costs (2)
(207)
(107)
(100)
(93.5)
Impact of acquisition-related costs (3)
(155)
(121)
(34)
(28.1)
Operating expenses adjusted for Certain Items (Non-GAAP)
9,031
8,555
476
5.6
Impact of currency fluctuations (1)
(102)
(102)
(1.2)
Comparable operating expenses adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$8,929
$8,555
$374
4.4%
Operating expense as a percentage of sales (GAAP)
15.05%
14.58%
47 bps
Impact of certain item adjustments
(0.58)
(0.38)
-20 bps
Adjusted operating expense as a percentage of sales (Non-
GAAP)
14.47%
14.20%
27 bps
Operating income (GAAP)
$2,112
$2,200
$(88)
(4.0)%
Impact of restructuring, transformational project, and other costs (2)
207
107
100
93.5
Impact of acquisition-related costs (3)
155
121
34
28.1
Operating income adjusted for Certain Items (Non-GAAP)
2,474
2,428
46
1.9
Impact of currency fluctuations (1)
(13)
(13)
(0.5)
Comparable operating income adjusted for Certain Items using
a constant currency basis (Non-GAAP)
$2,461
$2,428
$33
1.4%
Operating margin (GAAP)
3.38%
3.65%
-27 bps
Operating margin adjusted for Certain Items (Non-GAAP)
3.96%
4.03%
-7 bps
Operating margin adjusted for Certain Items using a constant
currency basis (Non-GAAP)
3.97%
4.03%
-6 bps
Net earnings (GAAP)
$1,206
$1,297
$(91)
(7.0)%
Impact of restructuring, transformational project, and other costs (2)
207
107
100
93.5
46
39-Week
Period Ended
Mar. 28, 2026
39-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
%/bps
Change
Impact of acquisition-related costs (3)
155
121
34
28.1
Tax impact of restructuring, transformational project, and other
costs (4)
(50)
(27)
(23)
(85.2)
Tax impact of acquisition-related costs (4)
(37)
(31)
(6)
(19.4)
Net earnings adjusted for Certain Items (Non-GAAP)
$1,481
$1,467
$14
1.0%
Diluted earnings per share (GAAP)
$2.51
$2.64
$(0.13)
(4.9)%
Impact of restructuring, transformational project, and other costs (2)
0.43
0.22
0.21
95.5
Impact of acquisition-related costs (3)
0.32
0.25
0.07
28.0
Tax impact of restructuring, transformational project, and other
costs (4)
(0.10)
(0.05)
(0.05)
(100.0)
Tax impact of acquisition-related costs (4)
(0.08)
(0.06)
(0.02)
(33.3)
Diluted earnings per share adjusted for Certain Items (Non-
GAAP) (5)
$3.08
$2.98
$0.10
3.4%
(1)
Represents a constant currency adjustment which eliminates the impact of foreign currency fluctuations on the current year results.
(2)
Fiscal 2026 includes $63 million related to restructuring costs, severance charges, and costs associated with a legal matter and $144
million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our
business technology strategy. Fiscal 2025 includes $31 million related to restructuring and severance charges and $76 million related
to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business
technology strategy.
(3)
Fiscal 2026 includes $108 million of intangible amortization expense and $47 million in acquisition and due diligence costs. Fiscal
2025 includes $97 million of intangible amortization expense and $24 million in acquisition and due diligence costs.
(4)
The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory
rates in effect for each jurisdiction where the Certain Item was incurred.
(5)
Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per
share is calculated using adjusted net earnings divided by diluted shares outstanding.
47
13-Week
Period Ended
Mar. 28, 2026
13-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
%/bps
Change
U.S. FOODSERVICE OPERATIONS
Operating expenses (GAAP)
$1,966
$1,849
$117
6.3%
Impact of restructuring, transformational project, and other costs (1)
(39)
(16)
(23)
NM
Impact of acquisition-related costs (2)
(19)
(20)
1
5.0
Operating expenses adjusted for Certain Items (Non-GAAP)
$1,908
$1,813
$95
5.2%
Operating income (GAAP)
$772
$754
$18
2.4%
Impact of restructuring, transformational project, and other costs (1)
39
16
23
NM
Impact of acquisition-related costs (2)
19
20
(1)
(5.0)
Operating income adjusted for Certain Items (Non-GAAP)
$830
$790
$40
5.1%
INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)
$3,885
$3,457
$428
12.4%
Impact of currency fluctuations (3)
(249)
(249)
(7.2)
Comparable sales using a constant currency basis (Non-GAAP)
$3,636
$3,457
$179
5.2%
Gross profit (GAAP)
$834
$728
$106
14.6%
Impact of currency fluctuations (3)
(57)
(57)
(7.9)
Comparable gross profit using a constant currency basis (Non-
GAAP)
$777
$728
$49
6.7%
Gross margin (GAAP)
21.47%
21.06%
41 bps
Impact of currency fluctuations (3)
(0.10)
-10 bps
Comparable gross margin using a constant currency basis
(Non-GAAP)
21.37%
21.06%
31 bps
Operating expenses (GAAP)
$751
$632
$119
18.8%
Impact of restructuring and transformational project costs (4)
(39)
(13)
(26)
NM
Impact of acquisition-related costs (2)
(22)
(19)
(3)
(15.8)
Operating expenses adjusted for Certain Items (Non-GAAP)
690
600
90
15.0
Impact of currency fluctuations (3)
(50)
(50)
(8.3)
Comparable operating expenses adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$640
$600
$40
6.7%
Operating income (GAAP)
$83
$96
$(13)
(13.5)%
Impact of restructuring and transformational project costs (4)
39
13
26
NM
Impact of acquisition-related costs (2)
22
19
3
15.8
Operating income adjusted for Certain Items (Non-GAAP)
144
128
16
12.5
Impact of currency fluctuations (3)
(7)
(7)
(5.5)
Comparable operating income adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$137
$128
$9
7.0%
SYGMA
Operating expenses (GAAP)
$145
$149
$(4)
(2.7)%
Operating income (GAAP)
18
17
1
5.9
OTHER
Operating expenses (GAAP)
$61
$63
$(2)
(3.2)%
Operating income (loss) (GAAP)
7
(3)
10
NM
GLOBAL SUPPORT CENTER
Gross profit (GAAP)
$9
$24
$(15)
(62.5)%
48
13-Week
Period Ended
Mar. 28, 2026
13-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
%/bps
Change
Operating expenses (GAAP)
$270
$207
$63
30.4%
Impact of restructuring and transformational project costs (5)
(16)
(21)
5
23.8
Impact of acquisition-related costs (6)
(14)
(3)
(11)
NM
Operating expenses adjusted for Certain Items (Non-GAAP)
$240
$183
$57
31.1%
Operating loss (GAAP)
$(261)
$(183)
$(78)
(42.6)%
Impact of restructuring and transformational project costs (5)
16
21
(5)
(23.8)
Impact of acquisition-related costs (6)
14
3
11
NM
Operating loss adjusted for Certain Items (Non-GAAP)
$(231)
$(159)
$(72)
(45.3)%
(1)
Primarily represents severance charges, transformation initiative costs, and costs associated with a legal matter.
(2)
Fiscal 2026 and fiscal 2025 include intangible amortization expense and acquisition costs.
(3)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(4)
Includes restructuring and transformation initiative costs primarily in Europe.
(5)
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(6)
Represents due diligence costs.
NM
Represents that the percentage change is not meaningful.
49
39-Week
Period Ended
Mar. 28, 2026
39-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
%/bps
Change
U.S. FOODSERVICE OPERATIONS
Operating expenses (GAAP)
$5,809
$5,507
$302
5.5%
Impact of restructuring, transformational project, and other costs (1)
(54)
(26)
(28)
NM
Impact of acquisition-related costs (2)
(72)
(53)
(19)
(35.8)
Operating expenses adjusted for Certain Items (Non-GAAP)
$5,683
$5,428
$255
4.7%
Operating income (GAAP)
$2,472
$2,496
$(24)
(1.0)%
Impact of restructuring, transformational project, and other costs (1)
54
26
28
NM
Impact of acquisition-related costs (2)
72
53
19
35.8
Operating income adjusted for Certain Items (Non-GAAP)
$2,598
$2,575
$23
0.9%
INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)
$11,851
$10,978
$873
8.0%
Impact of Mexico joint venture sales
—
(207)
207
2.0
Comparable sales excluding Mexico joint venture (Non-GAAP)
$11,851
$10,771
$1,080
10.0%
Sales (GAAP)
$11,851
$10,978
$873
8.0%
Impact of currency fluctuations (3)
(477)
(477)
(4.4)
Comparable sales using a constant currency basis (Non-GAAP)
$11,374
$10,978
$396
3.6%
Gross profit (GAAP)
$2,492
$2,262
$230
10.2%
Impact of currency fluctuations (3)
(114)
(114)
(5.1)
Comparable gross profit using a constant currency basis (Non-
GAAP)
$2,378
$2,262
$116
5.1%
Gross margin (GAAP)
21.03%
20.60%
43 bps
Impact of currency fluctuations (3)
(0.12)
-12 bps
Comparable gross margin using a constant currency basis (Non-
GAAP)
20.91%
20.60%
31 bps
Operating expenses (GAAP)
$2,177
$1,970
$207
10.5%
Impact of restructuring and transformational project costs (4)
(91)
(39)
(52)
NM
Impact of acquisition-related costs (2)
(47)
(56)
9
16.1
Operating expenses adjusted for Certain Items (Non-GAAP)
2,039
1,875
164
8.7
Impact of currency fluctuations (3)
(102)
(102)
(5.4)
Comparable operating expenses adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$1,937
$1,875
$62
3.3%
Operating income (GAAP)
$315
$292
$23
7.9%
Impact of restructuring and transformational project costs (4)
91
39
52
NM
Impact of acquisition-related costs (2)
47
56
(9)
(16.1)
Operating income adjusted for Certain Items (Non-GAAP)
453
387
66
17.1
Impact of currency fluctuations (3)
(12)
(12)
(3.1)
Comparable operating income adjusted for Certain Items using
a constant currency basis (Non-GAAP)
$441
$387
$54
14.0%
50
39-Week
Period Ended
Mar. 28, 2026
39-Week
Period Ended
Mar. 29, 2025
Change in
Dollars
%/bps
Change
SYGMA
Sales (GAAP)
$6,392
$6,246
$146
2.3%
Gross profit (GAAP)
496
492
4
0.8
Gross margin (GAAP)
7.76%
7.88%
-12 bps
Operating expenses (GAAP)
$432
$438
$(6)
(1.4)%
Operating income (GAAP)
64
54
10
18.5%
OTHER
Operating expenses (GAAP)
$185
$188
$(3)
(1.6)%
Operating income (GAAP)
17
9
8
88.9%
GLOBAL SUPPORT CENTER
Gross profit (GAAP)
$34
$29
$5
17.2%
Operating expenses (GAAP)
$790
$680
$110
16.2%
Impact of restructuring and transformational project costs (5)
(62)
(42)
(20)
(47.6)
Impact of acquisition-related costs (6)
(36)
(12)
(24)
NM
Operating expenses adjusted for Certain Items (Non-GAAP)
$692
$626
$66
10.5%
Operating loss (GAAP)
$(756)
$(651)
$(105)
(16.1)%
Impact of restructuring and transformational project costs (5)
62
42
20
47.6
Impact of acquisition-related costs (6)
36
12
24
NM
Operating loss adjusted for Certain Items (Non-GAAP)
$(658)
$(597)
$(61)
(10.2)%
(1)
Primarily represents severance charges, transformation initiative costs, and costs associated with a legal matter.
(2)
Fiscal 2026 and fiscal 2025 include intangible amortization expense and acquisition costs.
(3)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(4)
Includes restructuring and transformation initiative costs primarily in Europe.
(5)
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(6)
Represents due diligence costs.
NM
Represents that the percentage change is not meaningful.
EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA should not be used as a substitute for the most comparable GAAP measure in
assessing Sysco’s overall 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. See Item 7, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Key Performance Indicators” contained in our fiscal 2025 Form
10-K for discussions regarding this non-GAAP performance metric. Set forth below is a reconciliation of actual net earnings to
EBITDA and to adjusted EBITDA results for the periods presented (dollars in millions):
51
13-Week Period
Ended Mar. 28,
2026
13-Week Period
Ended Mar. 29,
2025
Change in
Dollars
% Change
Net earnings (GAAP)
$340
$401
$(61)
(15.2)%
Interest (GAAP)
168
149
19
12.8
Income taxes (GAAP)
105
122
(17)
(13.9)
Depreciation and amortization (GAAP)
251
238
13
5.5
EBITDA (Non-GAAP)
$864
$910
$(46)
(5.1)%
Certain Item adjustments:
Impact of restructuring, transformational project, and
other costs (1)
$93
$49
$44
89.8%
Impact of acquisition-related costs (2)
13
10
3
30.0
EBITDA adjusted for Certain Items (Non-GAAP) (3)
$970
$969
$1
0.1%
Other expense (income), net
6
9
(3)
(33.3)
Depreciation and amortization, as adjusted (Non-
GAAP) (4)
(208)
(205)
(3)
(1.5)
Operating income adjusted for Certain Items (Non-
GAAP)
$768
$773
$(5)
(0.6)%
(1)
Fiscal 2026 and fiscal 2025 include charges related to restructuring and severance, as well as various transformation initiative costs,
primarily consisting of supply chain transformation costs and changes to our business technology strategy, excluding charges related to
accelerated depreciation. In addition, fiscal 2026 includes charges associated with a legal matter.
(2)
Fiscal 2026 and fiscal 2025 include acquisition and due diligence costs.
(3)
In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $6 million and $7 million or non-cash stock
compensation expense of $31 million and $15 million in fiscal 2026 and fiscal 2025, respectively.
(4)
Fiscal 2026 includes $251 million in GAAP depreciation and amortization expense, less $43 million of Non-GAAP depreciation and
amortization expense primarily related to acquisitions. Fiscal 2025 includes $238 million in GAAP depreciation and amortization
expense, less $33 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions.
39-Week Period
Ended Mar. 28,
2026
39-Week Period
Ended Mar. 29,
2025
Change in
Dollars
% Change
Net earnings (GAAP)
$1,206
$1,297
$(91)
(7.0)%
Interest (GAAP)
512
469
43
9.2
Income taxes (GAAP)
350
402
(52)
(12.9)
Depreciation and amortization (GAAP)
724
709
15
2.1
EBITDA (Non-GAAP)
$2,792
$2,877
$(85)
(3.0)%
Certain Item adjustments:
Impact of restructuring, transformational project, and
other costs (1)
$203
$104
$99
95.2%
Impact of acquisition-related costs (2)
46
24
22
91.7
EBITDA adjusted for Certain Items (Non-GAAP) (3)
$3,041
$3,005
$36
1.2%
Other expense (income), net
44
32
12
37.5
Depreciation and amortization, as adjusted (Non-
GAAP) (4)
(611)
(609)
(2)
(0.3)
Operating income adjusted for Certain Items (Non-
GAAP)
$2,474
$2,428
$46
1.9%
52
(1)
Fiscal 2026 and 2025 include charges related to restructuring and severance, as well as various transformation initiative costs,
primarily consisting of supply chain transformation costs and changes to our business technology strategy, excluding charges related to
accelerated depreciation. In addition, fiscal 2026 includes charges associated with a legal matter.
(2)
Fiscal 2026 and fiscal 2025 include acquisition and due diligence costs.
(3)
In arriving at adjusted EBITDA, Sysco does not exclude interest income of $18 million and $22 million or non-cash stock
compensation expense of $95 million and $74 million for fiscal 2026 and fiscal 2025, respectively.
(4)
Fiscal 2026 includes $724 million in GAAP depreciation and amortization expense, less $113 million of Non-GAAP depreciation and
amortization expense primarily related to acquisitions. Fiscal 2025 includes $709 million in GAAP depreciation and amortization
expense, less $100 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions.
Liquidity and Capital Resources
Highlights
We produced free cash flow of $1.1 billion in the first 39 weeks of fiscal 2026, as compared to $954 million in the first
39 weeks of fiscal 2025. The increase in free cash flow is attributable to an increase in cash provided by operating activities and
a decrease in capital expenditures, partially offset by a decrease in proceeds from sales of plant and equipment. In the table that
follows, free cash flow for each period presented is reconciled to net cash provided by operating activities and comparisons of
the significant cash flows from the first 39 weeks of fiscal 2026 to the first 39 weeks of fiscal 2025 are provided.
39-Week
Period Ended
Mar. 28, 2026
39-Week
Period Ended
Mar. 29, 2025
Source of cash (use of cash)
(In millions)
Net cash provided by operating activities (GAAP)
$1,463
$1,317
Additions to plant and equipment
(461)
(532)
Proceeds from sales of plant and equipment
131
169
Free Cash Flow (Non-GAAP) (1)
$1,133
$954
Acquisition of businesses, net of cash acquired
$(189)
$(40)
Debt borrowings (repayments), net
637
1,078
Stock repurchases
(200)
(700)
Dividends paid
(778)
(752)
(1)
Free cash flow should not be used as a substitute for the most comparable GAAP 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. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key
Performance Indicators” contained in our fiscal 2025 Form 10-K for discussions regarding this non-GAAP performance metric.
Sources and Uses of Cash
Sysco generates cash in the U.S. and internationally. As of March 28, 2026, we had $1.9 billion in cash and cash
equivalents, approximately 30% of which was held by our international subsidiaries. Sysco’s strategic objectives are funded
primarily by cash from operations and external borrowings. Traditionally, our operations have produced significant cash flow.
Due to our strong financial position, we believe we will continue to be able to effectively access capital markets, as needed.
Cash is generally allocated to working capital requirements, investments compatible with our overall growth strategy (organic
and inorganic), debt management, and shareholder return. The remaining cash balances are invested in high-quality, short-term
instruments.
We believe our cash flow from operations, the availability of liquidity under our commercial paper programs and our
revolving credit facility, and our ability to access capital from financial markets will be sufficient to meet our anticipated cash
requirements for more than the next 12 months, while maintaining sufficient liquidity for normal operating purposes. See Note
15 "Subsequent Events" for more information about our financing plans to our Proposed Transaction.
53
Cash Flows
Operating Activities
We generated $1.5 billion in cash flows from operations in the first 39 weeks of fiscal 2026, compared to cash flows
from operations of $1.3 billion in the first 39 weeks of fiscal 2025. In the first 39 weeks of fiscal 2026, these amounts included
year-over-year favorable comparisons on working capital of $45 million due to a favorable comparison in accounts payable,
partially offset by unfavorable comparisons in accounts receivable and inventory. Accrued expenses also had a favorable
comparison, primarily related to lower payments of accrued incentive compensation in the first 39 weeks of fiscal 2026 in
comparison to the first 39 weeks of fiscal 2025. Income taxes positively impacted cash flows from operations, as estimated
payments made in the first 39 weeks of fiscal 2026 were lower compared to the first 39 weeks of fiscal 2025.
Investing Activities
Our capital expenditures in the first 39 weeks of fiscal 2026 consisted primarily of investments in buildings and
building improvements, technology equipment, warehouse equipment, and fleet. Our capital expenditures in the first 39 weeks
of fiscal 2026 were $71 million lower than in the first 39 weeks of fiscal 2025, primarily due to timing of capital spending.
During the first 39 weeks of fiscal 2026, we paid $189 million, net of cash acquired, primarily for the acquisitions of
Fairfax Meadow and Ginsberg’s Foods. During the first 39 weeks of fiscal 2025, we paid $40 million, net of cash acquired, for
the acquisition of Campbells Prime Meat.
During the first 39 weeks of fiscal 2026, we received $131 million in proceeds from sales of plant and equipment,
which was primarily attributable to proceeds received from sale leaseback transactions. During the first 39 weeks of fiscal 2025,
we received $169 million in proceeds from sales of plant and equipment, which was primarily attributable to proceeds received
from sale leaseback transactions.
Financing Activities
Equity Transactions
Proceeds from exercises of share-based compensation awards were $124 million in the first 39 weeks of fiscal 2026, as
compared to $96 million in the first 39 weeks of fiscal 2025. The level of option exercises, and thus proceeds, will vary from
period to period and is largely dependent on movements in our stock price and the time remaining before option grants expire.
In May 2021, our Board of Directors approved a share repurchase program to authorize the repurchase of up to
$5.0 billion of the company’s common stock, which will remain available until fully utilized. We repurchased 2,230,415 shares
for $200 million during the first 39 weeks of fiscal 2026. As of March 28, 2026, we had a remaining authorization of
approximately $1.3 billion. We repurchased no additional shares under our authorization from the end of our fiscal third quarter
through April 10, 2026. In connection with the Proposed Transaction, we have suspended the repurchase of additional shares
for the remainder of fiscal 2026.
Dividends paid in the first 39 weeks of fiscal 2026 were $778 million, or $1.62 per share, as compared to $752 million,
or $1.53 per share, in the first 39 weeks of fiscal 2025. In February 2026, we declared our regular quarterly dividend for the
third quarter of fiscal 2026 of $0.54 per share, which was paid in April 2026. In April 2026, we declared our regular quarterly
dividend for the fourth quarter of fiscal 2026 of $0.55 per share, representing an increase of $0.01 per share. This dividend will
be payable in July 2026.
54
Debt Activity and Borrowing Availability
Our debt activity, including issuances and repayments, if any, and our borrowing availability are described in Note 8,
“Debt,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q. Our outstanding borrowings as
of March 28, 2026 are also disclosed within that note.
On March 30, 2026, we executed a commitment letter for a $22 billion senior unsecured 364-day bridge loan facility in
connection with the Proposed Transaction. Subsequent to the execution of the bridge loan facility, Sysco entered into a
$3 billion senior unsecured delayed draw term loan facility, comprising a $1.25 billion 364-day tranche and a $1.75 billion 2-
year tranche, reducing the bridge loan facility commitments from $22 billion to $19 billion.
On April 16, 2026, Sysco entered into a new long-term revolving credit facility, which replaces Sysco’s existing
$3.0 billion senior revolving credit facility that was originally entered into on September 5, 2025. The aggregate commitments
of the lenders under the new revolving credit agreement are $3.0 billion, and such commitments will increase to $4.0 billion
after the completion of the Proposed Transaction. The new revolving credit agreement has an option to increase such
commitments to $5.0 billion. See Note 15 "Subsequent Events" for more information on the terms of the Proposed Transaction.
Guarantor Summarized Financial Information
On January 19, 2011, the wholly owned U.S. Broadline subsidiaries of Sysco Corporation, which distribute a full line
of food products and a wide variety of non-food products, entered into full and unconditional guarantees of all outstanding
senior notes and debentures of Sysco Corporation. All subsequent issuances of senior notes and debentures in the U.S. and
borrowings under the company’s $3.0 billion long-term revolving credit facility have also been guaranteed by these
subsidiaries. As of March 28, 2026, Sysco had a total of $12.2 billion in senior notes, debentures and borrowings under the
long-term revolving credit facility that were guaranteed by these subsidiary guarantors. Our remaining consolidated subsidiaries
(non-guarantor subsidiaries) are not obligated under the senior notes indenture, debentures indenture or our long-term revolving
credit facility. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations –
Liquidity and Capital Resources” contained in our fiscal 2025 Form 10-K for additional information regarding the terms of the
guarantees.
Basis of Preparation of the Summarized Financial Information
The summarized financial information of Sysco Corporation (issuer), and certain wholly owned U.S. Broadline
subsidiaries (guarantors) (together, the obligor group) is presented on a combined basis with intercompany balances and
transactions between entities in the obligor group eliminated. Investments in and equity in the earnings of our non-guarantor
subsidiaries, which are not members of the obligor group, have been excluded from the summarized financial information. The
obligor group’s amounts due to, amounts due from and transactions with non-guarantor subsidiaries have been presented in
separate line items, if they are material to the obligor financials. The following tables include summarized financial information
of the obligor group for the periods presented.
55
Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet
Mar. 28, 2026
Jun. 28, 2025
(In millions)
ASSETS
Receivables due from non-obligor subsidiaries
$157
$377
Current assets
7,296
6,015
Total current assets
$7,453
$6,392
Notes receivable from non-obligor subsidiaries
$1
$20
Other noncurrent assets
5,410
5,211
Total noncurrent assets
$5,411
$5,231
LIABILITIES
Payables due to non-obligor subsidiaries
$83
$61
Other current liabilities
3,512
3,214
Total current liabilities
$3,595
$3,275
Notes payable to non-obligor subsidiaries
$406
$334
Long-term debt
12,139
11,890
Other noncurrent liabilities
1,764
1,538
Total noncurrent liabilities
$14,309
$13,762
Combined Parent and Guarantor Subsidiaries Summarized Results of Operations
39-Week Period
Ended Mar. 28, 2026
(In millions)
Sales
$37,632
Gross profit
6,719
Operating income
1,599
Interest expense from non-obligor subsidiaries
111
Net earnings
956
Critical Accounting Estimates
Critical accounting estimates are those that are most important to the portrayal of our financial position and results of
operations. These require our most subjective or complex judgments, often employing the use of estimates about the effect of
matters that are inherently uncertain. We have reviewed with the Audit Committee of the Board of Directors the development
and selection of the critical accounting estimates and this related disclosure. Our most critical accounting estimates pertain to
goodwill and intangible assets, income taxes and company-sponsored pension plans, which are described in Item 7 of our fiscal
2025 Form 10-K.
As part of the rebranding initiative in the United Kingdom discussed above, we performed impairment testing on the
related indefinite-lived intangible assets during fiscal 2026. The assets were determined not to be impaired. The rebranding
initiative will result in Sysco amortizing previously indefinite-lived intangible assets on a straight-line basis over a two-year
period.
Forward-Looking Statements
Certain statements made herein that look forward in time or express management’s expectations or beliefs with respect
to the occurrence of future events are forward-looking statements under the Private Securities Litigation Reform Act of 1995.
Forward-looking statements provide current expectations of future events based on certain assumptions and include any
statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by
words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,”
“could,” “can,” “may,” “projected,” “continues,” “continuously,” variations of such terms, and similar terms and phrases
denoting anticipated or expected occurrences or results. This report contains various statements relating to future financial
performance and results, business strategy, plans, goals and objectives, including certain outlook, business trends, our dividend
56
and share repurchase programs, our expectation of future macroeconomic conditions and other statements that are not historical
facts about the expected timing and completion of the Proposed Transaction with JRD and the anticipated benefits of such
Proposed Transaction.
These statements are based on management’s current expectations and estimates; actual results may differ materially
due in part to the risk factors set forth below, those within Part II, Item 1A of this Form 10-Q and those discussed in Item 1A of
our fiscal 2025 Form 10-K:
•the risk that if sales from our locally managed customers do not grow at the same rate as sales from multi-unit
customers, our gross margins may decline;
•the risk that economic uncertainties can negatively impact consumer confidence and negatively impact foot traffic
to restaurants;
•periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability
generally, and our inability to predict inflation over the long term;
•the risk that our efforts to modify truck routing in order to reduce outbound transportation costs may be
unsuccessful;
•the risk that we may not realize anticipated benefits from our operating cost reduction efforts, including our ability
to accelerate and/or identify additional administrative cost savings;
•risks related to unfavorable conditions in the Americas and Europe and the impact on our results of operations and
financial condition;
•the risks related to our efforts to implement our transformation initiatives and meet our other long-term strategic
objectives, including the risk that these efforts may not provide the expected benefits in our anticipated time
frame, if at all, and may prove costlier than expected;
•the risk that competition in our industry and the impact of GPOs may adversely impact our margins and our ability
to retain customers and make it difficult for us to maintain our market share, growth rate and profitability;
•the risk that our relationships with long-term customers may be materially diminished or terminated;
•the risk that changes in consumer eating habits could materially and adversely affect our business, financial
condition, or results of operations;
•the impact and effects of public health crises, pandemics and epidemics, and the adverse impact thereof on our
business, financial condition and results of operations;
•the risk that we may not be able to fully compensate for increases in fuel costs, and forward purchase
commitments intended to contain fuel costs could result in above market fuel costs;
•the risk of interruption of supplies and increase in product costs as a result of conditions beyond our control;
•the potential impact on our reputation and earnings of adverse publicity or lack of confidence in our products;
•risks related to unfavorable changes to the mix of locally managed customers versus corporate-managed
customers;
•difficulties in successfully expanding into international markets and complimentary lines of business;
57
•the potential impact of product liability claims;
•the risk that we fail to comply with requirements imposed by applicable law or government regulations, including
but not limited to those related to environmental and tax and accounting laws, rules and regulations;
•risks related to our ability to effectively finance and integrate acquired businesses;
•risks related to our access to borrowed funds in order to grow and any default by us under our indebtedness that
could have a material adverse impact on cash flow and liquidity;
•our level of indebtedness and the terms of our indebtedness could adversely affect our business and liquidity
position;
•the risk that we may not be able to effectively execute our capital allocation framework;
•the risk that divestiture of one or more of our businesses may not provide the anticipated effects on our operations;
•risks related to our ability to return capital to stockholders, including those related to the timing and amounts
(including any plans or commitments in respect thereof) of any dividends and share repurchases;
•due to our reliance on technology, any technology disruption or delay in implementing new technology could have
a material negative impact on our business;
•the risk of negative impacts to our business and our relationships with customers from a cybersecurity incident
and/or other technology disruptions;
•risks related to our ability to attract, motivate and retain employees, including key personnel;
•risks related to labor issues, including the renegotiation of union contracts and shortage of qualified labor;
•the risk that the exclusive forum provisions in our amended and restated bylaws could limit our stockholders’
ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees;
•the risk that the Proposed Transaction with JRD is not consummated as expected, in a timely manner or at all; and
•the risk that any of the anticipated benefits of the Proposed Transaction will not be realized or will not be realized
within the expected time period.
In light of the significant risks and uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by us or any other person that such results will be
achieved, and readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the
date hereof. Except as required by law, we undertake no obligation to revise the forward-looking statements contained herein to
reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. You should read this
Form 10-Q, our fiscal 2025 Form 10-K and the documents we file with the SEC, with the understanding that our actual future
results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of
our forward-looking statements by the cautionary statements referenced above.
Mentions · how they’re counted
| Category | Underlined | Word counter | Model’s count |
|---|---|---|---|
| AI AI, artificial intelligence, generative AI, machine learning, large language model, LLM | 0 | 0 | 0 |
| Layoffs layoffs, RIF, headcount reduction, workforce optimization, restructuring | 38 | — | 0 |
| Recession recession, downturn, contraction, slowdown | 0 | 0 | 2 |
| Tariffs tariff, trade war, trade barriers, trade restrictions, trade policy | 0 | 0 | 0 |
| Buybacks share repurchase, buyback program | 3 | — | 1 |
Underlines use the same word lists the scores use. AI, recession and tariffs follow Palanor’s word counter, so those counts match it exactly on the same text. Layoffs and buybacks use the terms the model was given. The model’s count is an estimate by meaning, not by string, so it can differ from the underlines.
Source: SEC EDGAR · public domain · Highlights by Palanor