Sysco Corporation NYSE:SYY
Sysco : Quarterly Report for Quarter Ending December 27, 2025 (Form 10-Q)
Source: MarketScreener
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 second quarter of fiscal 2026 results included sales growth of 3.0% as compared to the second quarter of fiscal 2025, driven by increased sales in our U.S. Foodservice Operations, International Foodservice Operations, and SYGMA segments. Our gross profit increased 3.9% compared to the second quarter of fiscal 2025, due to our strategic sourcing efforts and effective management of product cost inflation. Operating income decreased 2.8% compared to the second quarter of fiscal 2025, due to increased restructuring and transformational project costs and acquisition-related costs. We consider these "Certain Item" expenses (as defined below). Excluding Certain Item expenses, adjusted operating income increased 3.1% as compared to the second quarter of fiscal 2025. Our net earnings for the second quarter of fiscal 2026 decreased 4.2% as compared to the second quarter of fiscal 2025. Excluding Certain Item expenses, adjusted net earnings increased by 3.9% as compared to the second 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 second quarter of fiscal 2026 to the second quarter of fiscal 2025 are presented below:
•Sales:
â—¦increased 3.0%, or $611 million, to $20.8 billion;
•Operating income:
â—¦decreased 2.8%, or $20 million, to $692 million;
â—¦adjusted operating income increased 3.1%, or $24 million, to $807 million;
•Net earnings:
â—¦decreased 4.2%, or $17 million, to $389 million;
â—¦adjusted net earnings increased 3.9%, or $18 million, to $476 million;
•Basic earnings per share:
â—¦decreased 2.4%, or $0.02, to $0.81 per share;
•Diluted earnings per share:
â—¦decreased 1.2% or $0.01, to $0.81 per share;
â—¦adjusted diluted earnings per share increased 6.5%, or $0.06, to $0.99 per share;
•EBITDA:
â—¦decreased 0.9%, or $8 million, to $923 million; and
â—¦adjusted EBITDA increased 3.3%, or $32 million, to $1.0 billion.
Comparisons of results from the first 26 weeks of fiscal 2026 to the first 26 weeks of fiscal 2025 are presented below:
•Sales:
â—¦increased 3.1%, or $1.3 billion, to $41.9 billion;
•Operating income:
â—¦decreased 1.7%, or $26 million, to $1.5 billion;
â—¦adjusted operating income increased 3.1%, or $51 million, to $1.7 billion;
•Net earnings:
â—¦decreased 3.3%, or $30 million, to $866 million;
â—¦adjusted net earnings increased 3.1%, or $31 million, to $1.0 billion;
•Basic earnings per share:
â—¦decreased 0.5%, or $0.01, to $1.81 per share;
•Diluted earnings per share:
â—¦decreased 1.1% , or $0.02 to $1.80 per share;
â—¦adjusted diluted earnings per share increased 5.9%, or $0.12, to $2.14 per share;
•EBITDA:
â—¦decreased 2.0%, or $39 million, to $1.9 billion; and
â—¦adjusted EBITDA increased 1.7%, or $34 million, to $2.1 billion.
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.
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 restaurant trends experienced a sequential decline of 230 basis points for the second quarter of fiscal 2026 as compared to foot traffic to restaurant trends experienced in the first quarter of fiscal 2026. Our U.S. Foodservice Operations local case growth trends experienced a sequential improvement of 140 basis points during the same time period, despite the industry's foot traffic trends. The macroeconomic environment was similar in the second quarter of fiscal 2026 as compared to the three prior fiscal quarters, 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
Sales increased 3.0% and 3.1% in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 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 0.8% and 0.4% increase in U.S. Foodservice Operations case volume in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025. Our volume growth trends were attributable to local case volume increasing 1.2% and 0.5% in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025. Our local case volumes have improved due to an increase in new customers, a reduction in lost customers, and improved productivity of our sales consultants. National case volume increased 0.4% and 0.6% in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 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 our volume growth trends to continue in the second half of fiscal 2026 due to improved productivity of our sales consultants.
We experienced inflation at a rate of 2.9% in the second quarter of fiscal 2026, at the total enterprise level, primarily driven by inflation in the meat and seafood categories. We continue to address inflation by successfully managing through cost increases in a timely manner. Gross margin increased 15 and 14 basis points in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025, primarily due to benefits from our strategic sourcing initiatives and the effective management of product cost inflation.
Operating Expense Trends
Total operating expenses were $3.1 billion and $6.2 billion in the second quarter and first 26 weeks of fiscal 2026, a 5.5% and 5.4% increase compared to the second quarter and first 26 weeks of fiscal 2025, respectively. Total adjusted operating expenses were $3.0 billion and $6.0 billion in the second quarter and first 26 weeks of fiscal 2026, a 4.1% and 4.2% increase compared to the second quarter and first 26 weeks of fiscal 2025, respectively. Operating expenses increased primarily due to sales headcount investments, a decrease in gains on sale leaseback transactions, higher incentive compensation, increased acquisition-related costs, and increased costs associated with expanded building capacity, partially offset by decreases in insurance costs. Adjusted operating expenses were 14.4% and 14.3% of sales during the second quarter and first 26 weeks of fiscal 2026, which represents a 15 and 14 basis point increase as compared to the second quarter and first 26 weeks of fiscal 2025, respectively, as a result of sales headcount investments, a decrease in gains on sale leaseback transactions, higher incentive compensation, and increased costs associated with expanded building capacity in higher growth areas of the business, partially offset by decreases in insurance costs.
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 for the remainder of fiscal 2026. This amortization expense will be treated as a Certain Item, similar to how we have treated amortization expense on 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 second quarter and first 26 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 second quarter and first 26 weeks of fiscal 2026.
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.
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 | 26-Week Period Ended | ||||||||||||||||||||||
| Dec. 27, 2025 | Dec. 28, 2024 | Dec. 27, 2025 | Dec. 28, 2024 | ||||||||||||||||||||
| Sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
| Cost of sales | 81.7 | 81.9 | 81.6 | 81.8 | |||||||||||||||||||
| Gross profit | 18.3 | 18.1 | 18.4 | 18.2 | |||||||||||||||||||
| Operating expenses | 15.0 | 14.6 | 14.8 | 14.5 | |||||||||||||||||||
| Operating income | 3.3 | 3.5 | 3.6 | 3.7 | |||||||||||||||||||
| Interest expense | 0.8 | 0.8 | 0.8 | 0.8 | |||||||||||||||||||
| Other expense (income), net | - | 0.1 | 0.1 | - | |||||||||||||||||||
| Earnings before income taxes | 2.5 | 2.6 | 2.7 | 2.9 | |||||||||||||||||||
| Income taxes | 0.6 | 0.6 | 0.6 | 0.7 | |||||||||||||||||||
| Net earnings | 1.9 | % | 2.0 | % | 2.1 | % | 2.2 | % | |||||||||||||||
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 | 26-Week Period Ended | ||||||||||
| Dec. 27, 2025 | Dec. 27, 2025 | ||||||||||
| Sales | 3.0 | % | 3.1 | % | |||||||
| Cost of sales | 2.8 | 3.0 | |||||||||
| Gross profit | 3.9 | 3.9 | |||||||||
| Operating expenses | 5.5 | 5.4 | |||||||||
| Operating income | (2.8) | (1.7) | |||||||||
| Interest expense | 8.1 | 7.8 | |||||||||
Other expense (income), net (1) (2) | (52.6) | 52.0 | |||||||||
| Earnings before income taxes | (4.3) | (5.4) | |||||||||
| Income taxes | (4.7) | (12.2) | |||||||||
| Net earnings | (4.2) | % | (3.3) | % | |||||||
| Basic earnings per share | (2.4) | % | (0.5) | % | |||||||
| Diluted earnings per share | (1.2) | (1.1) | |||||||||
| Average shares outstanding | (2.3) | (2.5) | |||||||||
| Diluted shares outstanding | (2.5) | (2.6) | |||||||||
(1) |
Other expense (income), net was expense of $9 million and $19 million in the second quarter of fiscal 2026 and fiscal 2025, respectively. | ||||
(2) |
Other expense (income), net was expense of $38 million and $25 million in the first 26 weeks of fiscal 2026 and fiscal 2025, respectively. | ||||
The following tables represent our results by reportable segments:
| 13-Week Period Ended Dec. 27, 2025 | |||||||||||||||||||||||||||||||||||
| U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center |
Consolidated Totals | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Sales | $ | 14,383 | $ | 3,999 | $ | 2,126 | $ | 254 | $ | - | $ | 20,762 | |||||||||||||||||||||||
| Sales increase (decrease) | 2.4 | % | 7.3 | % | 0.5 | % | (3.4) | % | 3.0 | % | |||||||||||||||||||||||||
| Percentage of total | 69.3 | % | 19.3 | % | 10.2 | % | 1.2 | % | 100.0 | % | |||||||||||||||||||||||||
| Operating income (loss) | $ | 820 | $ | 117 | $ | 21 | $ | 6 | $ | (272) | $ | 692 | |||||||||||||||||||||||
| Operating income (loss) increase (decrease) | (1.7) | % | 23.2 | % | 10.5 | % | 50.0 | % | 13.3 | % | (2.8) | % | |||||||||||||||||||||||
| Percentage of total segments | 85.1 | % | 12.1 | % | 2.2 | % | 0.6 | % | 100.0 | % | |||||||||||||||||||||||||
| Operating income as a percentage of sales | 5.7 | % | 2.9 | % | 1.0 | % | 2.4 | % | 3.3 | % | |||||||||||||||||||||||||
| 13-Week Period Ended Dec. 28, 2024 | |||||||||||||||||||||||||||||||||||
| U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center |
Consolidated Totals | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Sales | $ | 14,044 | $ | 3,728 | $ | 2,116 | $ | 263 | $ | - | $ | 20,151 | |||||||||||||||||||||||
| Percentage of total | 69.7 | % | 18.5 | % | 10.5 | % | 1.3 | % | 100.0 | % | |||||||||||||||||||||||||
| Operating income (loss) | $ | 834 | $ | 95 | $ | 19 | $ | 4 | $ | (240) | $ | 712 | |||||||||||||||||||||||
| Percentage of total segments | 87.6 | % | 10.0 | % | 2.0 | % | 0.4 | % | 100.0 | % | |||||||||||||||||||||||||
| Operating income as a percentage of sales | 5.9 | % | 2.5 | % | 0.9 | % | 1.5 | % | 3.5 | % | |||||||||||||||||||||||||
| 26-Week Period Ended Dec. 27, 2025 | |||||||||||||||||||||||||||||||||||
| U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center |
Consolidated Totals | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Sales | $ | 29,163 | $ | 7,965 | $ | 4,255 | $ | 527 | $ | - | $ | 41,910 | |||||||||||||||||||||||
| Sales increase (decrease) | 2.7 | % | 5.9 | % | 2.2 | % | (3.3) | % | 3.1 | % | |||||||||||||||||||||||||
| Percentage of total | 69.6 | % | 19.0 | % | 10.2 | % | 1.2 | % | 100.0 | % | |||||||||||||||||||||||||
| Operating income (loss) | $ | 1,700 | $ | 232 | $ | 46 | $ | 10 | $ | (495) | $ | 1,493 | |||||||||||||||||||||||
| Operating income (loss) increase (decrease) | (2.4) | % | 18.4 | % | 24.3 | % | (16.7) | % | 5.8 | % | (1.7) | % | |||||||||||||||||||||||
| Percentage of total segments | 85.6 | % | 11.7 | % | 2.3 | % | 0.5 | % | 100.0 | % | |||||||||||||||||||||||||
| Operating income as a percentage of sales | 5.8 | % | 2.9 | % | 1.1 | % | 1.9 | % | 3.6 | % | |||||||||||||||||||||||||
| 26-Week Period Ended Dec. 28, 2024 | |||||||||||||||||||||||||||||||||||
| U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center |
Consolidated Totals | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Sales | $ | 28,406 | $ | 7,521 | $ | 4,162 | $ | 545 | $ | - | $ | 40,634 | |||||||||||||||||||||||
| Percentage of total | 69.9 | % | 18.5 | % | 10.2 | % | 1.4 | % | 100.0 | % | |||||||||||||||||||||||||
| Operating income (loss) | $ | 1,742 | $ | 196 | $ | 37 | $ | 12 | $ | (468) | $ | 1,519 | |||||||||||||||||||||||
| Percentage of total segments | 87.6 | % | 9.9 | % | 1.9 | % | 0.6 | % | 100.0 | % | |||||||||||||||||||||||||
| Operating income as a percentage of sales | 6.1 | % | 2.6 | % | 0.9 | % | 2.2 | % | 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 88.6% of Sysco's overall sales in both the second quarter and first 26 weeks of fiscal 2026, respectively. U.S. Foodservice Operations and International Foodservice Operations, collectively, represented approximately 97.2% and 97.3% of total segment operating income, in the second quarter and first 26 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:
| 13-Week Period Ended Dec. 27, 2025 | 13-Week Period Ended Dec. 28, 2024 | Change in Dollars | % Change | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Sales | $ | 14,383 | $ | 14,044 | $ | 339 | 2.4 | % | |||||||||||||||
| Gross profit | 2,720 | 2,654 | 66 | 2.5 | |||||||||||||||||||
| Operating expenses | 1,900 | 1,820 | 80 | 4.4 | |||||||||||||||||||
| Operating income | $ | 820 | $ | 834 | $ | (14) | (1.7) | % | |||||||||||||||
| Gross profit | $ | 2,720 | $ | 2,654 | $ | 66 | 2.5 | % | |||||||||||||||
| Adjusted operating expenses (Non-GAAP) | 1,868 | 1,795 | 73 | 4.1 | |||||||||||||||||||
| Adjusted operating income (Non-GAAP) | $ | 852 | $ | 859 | $ | (7) | (0.8) | % | |||||||||||||||
| 26-Week Period Ended Dec. 27, 2025 | 26-Week Period Ended Dec. 28, 2024 | Change in Dollars | % Change | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Sales | $ | 29,163 | $ | 28,406 | $ | 757 | 2.7 | % | |||||||||||||||
| Gross profit | 5,543 | 5,401 | 142 | 2.6 | |||||||||||||||||||
| Operating expenses | 3,843 | 3,659 | 184 | 5.0 | |||||||||||||||||||
| Operating income | $ | 1,700 | $ | 1,742 | $ | (42) | (2.4) | % | |||||||||||||||
| Gross profit | $ | 5,543 | $ | 5,401 | $ | 142 | 2.6 | % | |||||||||||||||
| Adjusted operating expenses (Non-GAAP) | 3,775 | 3,616 | 159 | 4.4 | |||||||||||||||||||
| Adjusted operating income (Non-GAAP) | $ | 1,768 | $ | 1,785 | $ | (17) | (1.0) | % | |||||||||||||||
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 | 26-Week Period | ||||||||||||||||||||||
| (Dollars in millions) | (Dollars in millions) | ||||||||||||||||||||||
| Cause of change | Percentage | Dollars | Percentage | Dollars | |||||||||||||||||||
Case volume (1) | 0.8 | % | $ | 110 | 0.4 | % | $ | 123 | |||||||||||||||
| Inflation | 1.5 | 215 | 2.1 | 589 | |||||||||||||||||||
| Other | 0.1 | 14 | 0.2 | 45 | |||||||||||||||||||
| Total change in sales | 2.4 | % | $ | 339 | 2.7 | % | $ | 757 | |||||||||||||||
| (1) | Case volumes increased 0.8% and 0.4% compared to the second quarter and first 26 weeks of fiscal 2025, respectively. This volume increase resulted in a 0.8% and 0.4% increase in the dollar value of sales compared to the second quarter and first 26 weeks of fiscal 2025, respectively. | ||||
The sales growth in our U.S. Foodservice Operations was primarily driven by higher inflation. Case volumes from our U.S. Foodservice Operations increased 0.8% and 0.4% in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025. The growth in case volumes was attributable to local case volumes increasing 1.2% and 0.5% in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025. National case volumes increased 0.4% and 0.6% in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025.
Operating Income
The decrease in operating income for the second quarter and first 26 weeks of fiscal 2026 as compared to the second quarter and first 26 weeks of fiscal 2025 was driven by an increase in operating expenses, partially offset by gross profit dollar growth and case volume growth.
Gross profit dollars increased in the second quarter and first 26 weeks of fiscal 2026 as compared to the second quarter and first 26 weeks of fiscal 2025, primarily as a result of improvements in our strategic sourcing initiatives and the effective management of product cost fluctuations. The estimated change in product costs, an internal measure of inflation or deflation, increased in the second quarter and first 26 weeks of fiscal 2026. Gross margin, which is gross profit as a percentage of sales, was 18.91% and 19.01% in the second quarter and first 26 weeks of fiscal 2026, respectively, for our U.S. Foodservice Operations, which was an increase of 1 basis point compared to gross margin of 18.90% in the second quarter of fiscal 2025, and unchanged compared to a gross margin of 19.01% in the first 26 weeks of fiscal 2025. The improvement in the second quarter of fiscal 2026 is attributable to customer mix, as local case volume growth outpaced national case volume growth.
The increase in operating expenses for the second quarter and first 26 weeks of fiscal 2026, as compared to the second quarter and first 26 weeks of fiscal 2025, was primarily driven by increases in colleague-related costs, which is inclusive of incentive compensation, costs associated with investments in sales headcount and building expansions, and a decrease in gains on sale leaseback transactions.
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 Dec. 27, 2025 | 13-Week Period Ended Dec. 28, 2024 | Change in Dollars | % Change | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Sales | $ | 3,999 | $ | 3,728 | $ | 271 | 7.3 | % | |||||||||||||||
| Gross profit | 832 | 760 | 72 | 9.5 | |||||||||||||||||||
| Operating expenses | 715 | 665 | 50 | 7.5 | |||||||||||||||||||
| Operating income | $ | 117 | $ | 95 | $ | 22 | 23.2 | % | |||||||||||||||
| Gross profit | $ | 832 | $ | 760 | $ | 72 | 9.5 | % | |||||||||||||||
| Adjusted operating expenses (Non-GAAP) | 670 | 631 | 39 | 6.2 | |||||||||||||||||||
| Adjusted operating income (Non-GAAP) | $ | 162 | $ | 129 | $ | 33 | 25.6 | % | |||||||||||||||
| Sales on a constant currency basis (Non-GAAP) | $ | 3,862 | $ | 3,728 | $ | 134 | 3.6 | % | |||||||||||||||
| Gross profit on a constant currency basis (Non-GAAP) | 798 | 760 | 38 | 5.0 | |||||||||||||||||||
| Adjusted operating expenses on a constant currency basis (Non-GAAP) | 641 | 631 | 10 | 1.6 | |||||||||||||||||||
| Adjusted operating income on a constant currency basis (Non-GAAP) | $ | 157 | $ | 129 | $ | 28 | 21.7 | % | |||||||||||||||
| 26-Week Period Ended Dec. 27, 2025 | 26-Week Period Ended Dec. 28, 2024 | Change in Dollars | % Change | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Sales | $ | 7,965 | $ | 7,521 | $ | 444 | 5.9 | % | |||||||||||||||
| Gross profit | 1,658 | 1,534 | 124 | 8.1 | |||||||||||||||||||
| Operating expenses | 1,426 | 1,338 | 88 | 6.6 | |||||||||||||||||||
| Operating income | $ | 232 | $ | 196 | $ | 36 | 18.4 | % | |||||||||||||||
| Gross profit | $ | 1,658 | $ | 1,534 | $ | 124 | 8.1 | % | |||||||||||||||
| Adjusted operating expenses (Non-GAAP) | 1,349 | 1,275 | 74 | 5.8 | |||||||||||||||||||
| Adjusted operating income (Non-GAAP) | $ | 309 | $ | 259 | $ | 50 | 19.3 | % | |||||||||||||||
| Sales on a constant currency basis (Non-GAAP) | $ | 7,736 | $ | 7,521 | $ | 215 | 2.9 | % | |||||||||||||||
| Gross profit on a constant currency basis (Non-GAAP) | 1,601 | 1,534 | 67 | 4.4 | |||||||||||||||||||
| Adjusted operating expenses on a constant currency basis (Non-GAAP) | 1,297 | 1,275 | 22 | 1.7 | |||||||||||||||||||
| Adjusted operating income on a constant currency basis (Non-GAAP) | $ | 304 | $ | 259 | $ | 45 | 17.4 | % | |||||||||||||||
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 | 26-Week Period | ||||||||||||||||||||||
| (Dollars in millions) | (Dollars in millions) | ||||||||||||||||||||||
| Cause of change | Percentage | Dollars | Percentage | Dollars | |||||||||||||||||||
| Inflation | 4.0 | % | $ | 150 | 4.3 | % | $ | 323 | |||||||||||||||
| Foreign currency | 3.7 | 137 | 3.0 | 229 | |||||||||||||||||||
| Case volume | 1.0 | 39 | 0.7 | 51 | |||||||||||||||||||
| Impact of divestiture | (2.4) | (90) | (2.8) | (207) | |||||||||||||||||||
| Other | 1.0 | 35 | 0.7 | 48 | |||||||||||||||||||
| Total change in sales | 7.3 | % | $ | 271 | 5.9 | % | $ | 444 | |||||||||||||||
Sales for the second quarter of fiscal 2026 increased 7.3% as compared to the second quarter of fiscal 2025. Sales for the first 26 weeks of fiscal 2026 increased 5.9% as compared to the first 26 weeks of fiscal 2025. The sales increase in both periods is primarily due to higher inflation, the impact of foreign currency translation, and local case growth. Excluding the impact of the Mexico joint venture, which was divested in the second quarter of fiscal 2025, sales increased 9.9% in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025 and 8.9% in the first 26 weeks of fiscal 2026 as compared to the first 26 weeks of fiscal 2025.
Operating Income
The increase in operating income for the second quarter and first 26 weeks of fiscal 2026, as compared to the second quarter and first 26 weeks of fiscal 2025, was primarily due to growth in local case volumes and expanded supply chain capacity, partially offset by increases in operating expenses.
The increase in gross profit dollars in the second quarter and first 26 weeks of fiscal 2026, as compared to the second quarter and first 26 weeks of fiscal 2025, was primarily attributable to increases in local case volumes and expanded supply chain capacity. Local case volumes increased approximately 4.5% in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025.
The increase in operating expenses in the second quarter and first 26 weeks of fiscal 2026 as compared to the second quarter and first 26 weeks of fiscal 2025 was primarily due to increases in colleague-related costs and the impact of foreign currency translation.
Results of SYGMA and Other Segment
SYGMA segment sales were 0.5% and 2.2% higher in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025. Operating income increased $2 million and $9 million in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025. These results are reflective of recent supply chain operating efficiencies achieved, which we expect to moderate for the remainder of the fiscal year.
For the operations that are grouped within Other, operating income increased $2 million and decreased $2 million in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025. The operations of this group primarily consist of our hospitality business, Guest Worldwide.
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 second quarter of fiscal 2026 increased $35 million, or 14.1%, as compared to the second quarter of fiscal 2025, primarily due to increases in colleague-related costs, which is inclusive of incentive compensation, and acquisition-related costs, partially offset by decreases in insurance costs. These expenses in the first 26 weeks of fiscal 2026 increased $47 million, or 9.9%, as compared to the first 26 weeks of fiscal 2025, primarily due to increases in colleague-related costs, which is inclusive of incentive compensation, and acquisition-related costs, partially offset by decreases in insurance costs.
Included in Global Support Center expenses are Certain Items that totaled $38 million and $68 million in the second quarter and first 26 weeks of fiscal 2026, as compared to $12 million and $30 million in the second quarter and first 26 weeks of fiscal 2025, respectively. Certain Items impacting the second quarter and first 26 weeks of fiscal 2026 were primarily expenses associated with our business technology transformation initiatives and expenses associated with acquisitions. Certain Items impacting the second quarter and first 26 weeks of fiscal 2025 were primarily expenses associated with our business technology transformation initiatives and expenses associated with acquisitions.
Interest Expense
Interest expense increased $13 million and $25 million for the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025. The increase was primarily due to interest on new senior notes that were issued in the third quarter of fiscal 2025 and interest expense on recent commercial paper issuances.
Other Income and Expense
Other expense decreased $10 million and increased $13 million for the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 weeks of fiscal 2025, primarily due to foreign exchange gains and losses incurred in those periods.
Net Earnings
Net earnings decreased 4.2% and 3.3% in the second quarter and first 26 weeks of fiscal 2026, respectively, as compared to the second quarter and first 26 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, increased 3.9% and 3.1% in the second quarter and first 26 weeks of fiscal 2026 respectively, as compared to the second quarter and first 26 weeks of fiscal 2025, primarily due to increases in sales volumes and the effective management of our product cost inflation and strategic sourcing efforts.
Earnings Per Share
Basic earnings per share in the second quarter of fiscal 2026 were $0.81, a 2.4% decrease from the comparable prior year period amount of $0.83 per share. Diluted earnings per share in the second quarter of fiscal 2026 were $0.81, a 1.2% decrease from the comparable prior year period amount of $0.82 per share. Adjusted diluted earnings per share, excluding Certain Items, in the second quarter of fiscal 2026 were $0.99, a 6.5% increase from the comparable prior year amount of $0.93 per share.
Basic earnings per share in the first 26 weeks of fiscal 2026 were $1.81, a 0.5% decrease from the comparable prior year amount of $1.82 per share. Diluted earnings per share in the first 26 weeks of fiscal 2026 were $1.80, a 1.1% decrease from the comparable prior year period amount of $1.82 per share. Adjusted diluted earnings per share, excluding Certain Items, in the first 26 weeks of fiscal 2026 were $2.14, a 5.9% increase from the comparable prior year amount of $2.02 per share.
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. | ||
| 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 Dec. 27, 2025 | 13-Week Period Ended Dec. 28, 2024 | Change in Dollars | %/bps Change | ||||||||||||||||||||
| Sales (GAAP) | $ | 20,762 | $ | 20,151 | $ | 611 | 3.0 | % | |||||||||||||||
| Impact of Mexico joint venture sales | - | (90) | 90 | 0.5 | |||||||||||||||||||
| Comparable sales excluding Mexico joint venture (Non-GAAP) | $ | 20,762 | $ | 20,061 | $ | 701 | 3.5 | % | |||||||||||||||
| Sales (GAAP) | $ | 20,762 | $ | 20,151 | $ | 611 | 3.0 | % | |||||||||||||||
Impact of currency fluctuations (1) | (138) | (138) | (0.7) | ||||||||||||||||||||
| Comparable sales using a constant currency basis (Non-GAAP) | $ | 20,624 | $ | 20,151 | $ | 473 | 2.3 | % | |||||||||||||||
| Cost of sales (GAAP) | $ | 16,970 | $ | 16,501 | $ | 469 | 2.8 | % | |||||||||||||||
| Gross profit (GAAP) | $ | 3,792 | $ | 3,650 | $ | 142 | 3.9 | % | |||||||||||||||
Impact of currency fluctuations (1) | (34) | (34) | (0.9) | ||||||||||||||||||||
| Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 3,758 | $ | 3,650 | $ | 108 | 3.0 | % | |||||||||||||||
| Gross margin (GAAP) | 18.26 | % | 18.11 | % | 15 bps | ||||||||||||||||||
Impact of currency fluctuations (1) | (0.04) | -4 bps | |||||||||||||||||||||
| Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 18.22 | % | 18.11 | % | 11 bps | ||||||||||||||||||
| 13-Week Period Ended Dec. 27, 2025 | 13-Week Period Ended Dec. 28, 2024 | Change in Dollars | %/bps Change | ||||||||||||||||||||
| Operating expenses (GAAP) | $ | 3,100 | $ | 2,938 | $ | 162 | 5.5 | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) | (57) | (31) | (26) | (83.9) | |||||||||||||||||||
Impact of acquisition-related costs (3) | (58) | (40) | (18) | (45.0) | |||||||||||||||||||
| Operating expenses adjusted for Certain Items (Non-GAAP) | 2,985 | 2,867 | 118 | 4.1 | |||||||||||||||||||
Impact of currency fluctuations (1) | (29) | (29) | (1.0) | ||||||||||||||||||||
| Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 2,956 | $ | 2,867 | $ | 89 | 3.1 | % | |||||||||||||||
| Operating expense as a percentage of sales (GAAP) | 14.93 | % | 14.58 | % | 35 bps | ||||||||||||||||||
| Impact of certain item adjustments | (0.55) | (0.35) | -20 bps | ||||||||||||||||||||
| Adjusted operating expense as a percentage of sales (Non-GAAP) | 14.38 | % | 14.23 | % | 15 bps | ||||||||||||||||||
| Operating income (GAAP) | $ | 692 | $ | 712 | $ | (20) | (2.8) | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) | 57 | 31 | 26 | 83.9 | |||||||||||||||||||
Impact of acquisition-related costs (3) | 58 | 40 | 18 | 45.0 | |||||||||||||||||||
| Operating income adjusted for Certain Items (Non-GAAP) | 807 | 783 | 24 | 3.1 | |||||||||||||||||||
Impact of currency fluctuations (1) | (5) | (5) | (0.7) | ||||||||||||||||||||
| Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 802 | $ | 783 | $ | 19 | 2.4 | % | |||||||||||||||
| Operating margin (GAAP) | 3.33 | % | 3.53 | % | -20 bps | ||||||||||||||||||
| Operating margin adjusted for Certain Items (Non-GAAP) | 3.89 | % | 3.89 | % | 0 bps | ||||||||||||||||||
| Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 3.89 | % | 3.89 | % | 0 bps | ||||||||||||||||||
| Net earnings (GAAP) | $ | 389 | $ | 406 | $ | (17) | (4.2) | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) | 57 | 31 | 26 | 83.9 | |||||||||||||||||||
Impact of acquisition-related costs (3) | 58 | 40 | 18 | 45.0 | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (4) | (14) | (8) | (6) | (75.0) | |||||||||||||||||||
Tax impact of acquisition-related costs (4) | (14) | (11) | (3) | (27.3) | |||||||||||||||||||
| Net earnings adjusted for Certain Items (Non-GAAP) | $ | 476 | $ | 458 | $ | 18 | 3.9 | % | |||||||||||||||
| Diluted earnings per share (GAAP) | $ | 0.81 | $ | 0.82 | $ | (0.01) | (1.2) | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) | 0.12 | 0.06 | 0.06 | 100.0 | |||||||||||||||||||
Impact of acquisition-related costs (3) | 0.12 | 0.08 | 0.04 | 50.0 | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (4) | (0.03) | (0.02) | (0.01) | (50.0) | |||||||||||||||||||
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) | $ | 0.99 | $ | 0.93 | $ | 0.06 | 6.5 | % | |||||||||||||||
(1) |
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results. | ||||
(2) |
Fiscal 2026 includes $10 million related to restructuring and severance charges and $47 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. Fiscal 2025 includes $12 million related to restructuring and severance charges and $19 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 $35 million of intangible amortization expense and $23 million in acquisition-related costs. Fiscal 2025 includes $32 million of intangible amortization expense and $8 million in acquisition-related 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. | ||||
| 26-Week Period Ended Dec. 27, 2025 | 26-Week Period Ended Dec. 28, 2024 | Change in Dollars | %/bps Change | ||||||||||||||||||||
| Sales (GAAP) | $ | 41,910 | $ | 40,634 | $ | 1,276 | 3.1 | % | |||||||||||||||
| Impact of Mexico joint venture sales | - | (207) | 207 | 0.6 | |||||||||||||||||||
| Comparable sales excluding Mexico joint venture (Non-GAAP) | $ | 41,910 | $ | 40,427 | $ | 1,483 | 3.7 | % | |||||||||||||||
| Sales (GAAP) | $ | 41,910 | $ | 40,634 | $ | 1,276 | 3.1 | % | |||||||||||||||
Impact of currency fluctuations (1) | (229) | (229) | (0.5) | ||||||||||||||||||||
| Comparable sales using a constant currency basis (Non-GAAP) | $ | 41,681 | $ | 40,634 | $ | 1,047 | 2.6 | % | |||||||||||||||
| Cost of sales (GAAP) | $ | 34,217 | $ | 33,231 | $ | 986 | 3.0 | % | |||||||||||||||
| Gross profit (GAAP) | $ | 7,693 | $ | 7,403 | $ | 290 | 3.9 | % | |||||||||||||||
Impact of currency fluctuations (1) | (57) | (57) | (0.8) | ||||||||||||||||||||
| Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 7,636 | $ | 7,403 | $ | 233 | 3.1 | % | |||||||||||||||
| Gross margin (GAAP) | 18.36 | % | 18.22 | % | 14 bps | ||||||||||||||||||
Impact of currency fluctuations (1) | (0.04) | -4 bps | |||||||||||||||||||||
| Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 18.32 | % | 18.22 | % | 10 bps | ||||||||||||||||||
| Operating expenses (GAAP) | $ | 6,200 | $ | 5,884 | $ | 316 | 5.4 | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) | (114) | (57) | (57) | (100.0) | |||||||||||||||||||
Impact of acquisition-related costs (3) | (99) | (79) | (20) | (25.3) | |||||||||||||||||||
| Operating expenses adjusted for Certain Items (Non-GAAP) | 5,987 | 5,748 | 239 | 4.2 | |||||||||||||||||||
Impact of currency fluctuations (1) | (52) | (52) | (0.9) | ||||||||||||||||||||
| Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 5,935 | $ | 5,748 | $ | 187 | 3.3 | % | |||||||||||||||
| Operating expense as a percentage of sales (GAAP) | 14.79 | % | 14.48 | % | 31 bps | ||||||||||||||||||
| Impact of certain item adjustments | (0.50) | (0.33) | -17 bps | ||||||||||||||||||||
| Adjusted operating expense as a percentage of sales (Non-GAAP) | 14.29 | % | 14.15 | % | 14 bps | ||||||||||||||||||
| Operating income (GAAP) | $ | 1,493 | $ | 1,519 | $ | (26) | (1.7) | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) | 114 | 57 | 57 | 100.0 | |||||||||||||||||||
Impact of acquisition-related costs (3) | 99 | 79 | 20 | 25.3 | |||||||||||||||||||
| Operating income adjusted for Certain Items (Non-GAAP) | 1,706 | 1,655 | 51 | 3.1 | |||||||||||||||||||
Impact of currency fluctuations (1) | (6) | (6) | (0.4) | ||||||||||||||||||||
| Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 1,700 | $ | 1,655 | $ | 45 | 2.7 | % | |||||||||||||||
| Operating margin (GAAP) | 3.56 | % | 3.74 | % | -18 bps | ||||||||||||||||||
| Operating margin adjusted for Certain Items (Non-GAAP) | 4.07 | % | 4.07 | % | 0 bps | ||||||||||||||||||
| Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 4.08 | % | 4.07 | % | 1 bp | ||||||||||||||||||
| Net earnings (GAAP) | $ | 866 | $ | 896 | $ | (30) | (3.3) | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) | 114 | 57 | 57 | 100.0 | |||||||||||||||||||
| 26-Week Period Ended Dec. 27, 2025 | 26-Week Period Ended Dec. 28, 2024 | Change in Dollars | %/bps Change | ||||||||||||||||||||
Impact of acquisition-related costs (3) | 99 | 79 | 20 | 25.3 | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (4) | (27) | (15) | (12) | (80.0) | |||||||||||||||||||
Tax impact of acquisition-related costs (4) | (24) | (20) | (4) | (20.0) | |||||||||||||||||||
| Net earnings adjusted for Certain Items (Non-GAAP) | $ | 1,028 | $ | 997 | $ | 31 | 3.1 | % | |||||||||||||||
| Diluted earnings per share (GAAP) | $ | 1.80 | $ | 1.82 | $ | (0.02) | (1.1) | % | |||||||||||||||
Impact of restructuring and transformational project costs (2) | 0.24 | 0.12 | 0.12 | 100.0 | |||||||||||||||||||
Impact of acquisition-related costs (3) | 0.21 | 0.16 | 0.05 | 31.3 | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (4) | (0.06) | (0.03) | (0.03) | (100.0) | |||||||||||||||||||
Tax impact of acquisition-related costs (4) | (0.05) | (0.04) | (0.01) | (25.0) | |||||||||||||||||||
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (5) | $ | 2.14 | $ | 2.02 | $ | 0.12 | 5.9 | % | |||||||||||||||
(1) |
Represents a constant currency adjustment which eliminates the impact of foreign currency fluctuations on the current year results. | ||||
(2) | Fiscal 2026 includes $21 million related to restructuring and severance charges and $93 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. Fiscal 2025 includes $16 million related to restructuring and severance charges and $41 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 $66 million of intangible amortization expense and $33 million in acquisition-related costs. Fiscal 2025 includes $65 million of intangible amortization expense and $14 million in acquisition-related 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. | ||||
| 13-Week Period Ended Dec. 27, 2025 | 13-Week Period Ended Dec. 28, 2024 | Change in Dollars | %/bps Change | ||||||||||||||||||||
| U.S. FOODSERVICE OPERATIONS | |||||||||||||||||||||||
| Operating expenses (GAAP) | $ | 1,900 | $ | 1,820 | $ | 80 | 4.4 | % | |||||||||||||||
Impact of restructuring and transformational project costs(1) | (8) | (5) | (3) | (60.0) | |||||||||||||||||||
Impact of acquisition-related costs (2) | (24) | (20) | (4) | (20.0) | |||||||||||||||||||
| Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 1,868 | $ | 1,795 | $ | 73 | 4.1 | % | |||||||||||||||
| Operating income (GAAP) | $ | 820 | $ | 834 | $ | (14) | (1.7) | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) | 8 | 5 | 3 | 60.0 | |||||||||||||||||||
Impact of acquisition-related costs (2) | 24 | 20 | 4 | 20.0 | |||||||||||||||||||
| Operating income adjusted for Certain Items (Non-GAAP) | $ | 852 | $ | 859 | $ | (7) | (0.8) | % | |||||||||||||||
| INTERNATIONAL FOODSERVICE OPERATIONS | |||||||||||||||||||||||
| Sales (GAAP) | $ | 3,999 | $ | 3,728 | $ | 271 | 7.3 | % | |||||||||||||||
| Impact of Mexico joint venture sales | - | (90) | 90 | 2.6 | |||||||||||||||||||
| Comparable sales excluding Mexico joint venture (Non-GAAP) | $ | 3,999 | $ | 3,638 | $ | 361 | 9.9 | % | |||||||||||||||
| Sales (GAAP) | $ | 3,999 | $ | 3,728 | $ | 271 | 7.3 | % | |||||||||||||||
Impact of currency fluctuations (3) | (137) | (137) | (3.7) | ||||||||||||||||||||
| Comparable sales using a constant currency basis (Non-GAAP) | $ | 3,862 | $ | 3,728 | $ | 134 | 3.6 | % | |||||||||||||||
| Gross profit (GAAP) | $ | 832 | $ | 760 | $ | 72 | 9.5 | % | |||||||||||||||
Impact of currency fluctuations (3) | (34) | (34) | (4.5) | ||||||||||||||||||||
| Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 798 | $ | 760 | $ | 38 | 5.0 | % | |||||||||||||||
| Gross margin (GAAP) | 20.81 | % | 20.39 | % | 42 bps | ||||||||||||||||||
Impact of currency fluctuations (3) | (0.15) | -15 bps | |||||||||||||||||||||
| Comparable gross margin using a constant currency basis (Non-GAAP) | 20.66 | % | 20.39 | % | 27 bps | ||||||||||||||||||
| Operating expenses (GAAP) | $ | 715 | $ | 665 | $ | 50 | 7.5 | % | |||||||||||||||
Impact of restructuring and transformational project costs (4) | (30) | (15) | (15) | (100.0) | |||||||||||||||||||
Impact of acquisition-related costs (2) | (15) | (19) | 4 | 21.1 | |||||||||||||||||||
| Operating expenses adjusted for Certain Items (Non-GAAP) | 670 | 631 | 39 | 6.2 | |||||||||||||||||||
Impact of currency fluctuations (3) | (29) | (29) | (4.6) | ||||||||||||||||||||
| Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 641 | $ | 631 | $ | 10 | 1.6 | % | |||||||||||||||
| Operating income (GAAP) | $ | 117 | $ | 95 | $ | 22 | 23.2 | % | |||||||||||||||
Impact of restructuring and transformational project costs (4) | 30 | 15 | 15 | 100.0 | |||||||||||||||||||
Impact of acquisition-related costs (2) | 15 | 19 | (4) | (21.1) | |||||||||||||||||||
| Operating income adjusted for Certain Items (Non-GAAP) | 162 | 129 | 33 | 25.6 | |||||||||||||||||||
Impact of currency fluctuations (3) | (5) | (5) | (3.9) | ||||||||||||||||||||
| Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 157 | $ | 129 | $ | 28 | 21.7 | % | |||||||||||||||
| SYGMA | |||||||||||||||||||||||
| Operating expenses (GAAP) | $ | 142 | $ | 144 | $ | (2) | (1.4) | % | |||||||||||||||
| Operating income (GAAP) | 21 | 19 | 2 | 10.5 | |||||||||||||||||||
| OTHER | |||||||||||||||||||||||
| Operating expenses (GAAP) | $ | 60 | $ | 61 | $ | (1) | (1.6) | % | |||||||||||||||
| Operating income (GAAP) | 6 | 4 | 2 | 50.0 | |||||||||||||||||||
| 13-Week Period Ended Dec. 27, 2025 | 13-Week Period Ended Dec. 28, 2024 | Change in Dollars | %/bps Change | ||||||||||||||||||||
| GLOBAL SUPPORT CENTER | |||||||||||||||||||||||
| Gross profit (GAAP) | $ | 11 | $ | 8 | $ | 3 | 37.5 | % | |||||||||||||||
| Operating expenses (GAAP) | $ | 283 | $ | 248 | $ | 35 | 14.1 | % | |||||||||||||||
Impact of restructuring and transformational project costs (5) | (19) | (11) | (8) | (72.7) | |||||||||||||||||||
| Impact of acquisition-related costs | (19) | (1) | (18) | NM | |||||||||||||||||||
| Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 245 | $ | 236 | $ | 9 | 3.8 | % | |||||||||||||||
| Operating loss (GAAP) | $ | (272) | $ | (240) | $ | (32) | (13.3) | % | |||||||||||||||
Impact of restructuring and transformational project costs (5) | 19 | 11 | 8 | 72.7 | |||||||||||||||||||
| Impact of acquisition-related costs | 19 | 1 | 18 | NM | |||||||||||||||||||
| Operating loss adjusted for Certain Items (Non-GAAP) | $ | (234) | $ | (228) | $ | (6) | (2.6) | % | |||||||||||||||
(1) | Primarily represents severance and transformation initiative costs. | ||||
(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. | ||||
| NM | Represents that the percentage change is not meaningful. | ||||
| 26-Week Period Ended Dec. 27, 2025 | 26-Week Period Ended Dec. 28, 2024 | Change in Dollars | %/bps Change | ||||||||||||||||||||
| U.S. FOODSERVICE OPERATIONS | |||||||||||||||||||||||
| Operating expenses (GAAP) | $ | 3,843 | $ | 3,659 | $ | 184 | 5.0 | % | |||||||||||||||
Impact of restructuring and transformational project costs(1) | (15) | (11) | (4) | (36.4) | |||||||||||||||||||
Impact of acquisition-related costs (2) | (53) | (32) | (21) | (65.6) | |||||||||||||||||||
| Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 3,775 | $ | 3,616 | $ | 159 | 4.4 | % | |||||||||||||||
| Operating income (GAAP) | $ | 1,700 | $ | 1,742 | $ | (42) | (2.4) | % | |||||||||||||||
Impact of restructuring and transformational project costs (1) | 15 | 11 | 4 | 36.4 | |||||||||||||||||||
Impact of acquisition-related costs (2) | 53 | 32 | 21 | 65.6 | |||||||||||||||||||
| Operating income adjusted for Certain Items (Non-GAAP) | $ | 1,768 | $ | 1,785 | $ | (17) | (1.0) | % | |||||||||||||||
| INTERNATIONAL FOODSERVICE OPERATIONS | |||||||||||||||||||||||
| Sales (GAAP) | $ | 7,965 | $ | 7,521 | $ | 444 | 5.9 | % | |||||||||||||||
| Impact of Mexico joint venture sales | - | (207) | 207 | 3.0 | |||||||||||||||||||
| Comparable sales excluding Mexico joint venture (Non-GAAP) | $ | 7,965 | $ | 7,314 | $ | 651 | 8.9 | % | |||||||||||||||
| Sales (GAAP) | $ | 7,965 | $ | 7,521 | $ | 444 | 5.9 | % | |||||||||||||||
Impact of currency fluctuations (3) | (229) | (229) | (3.0) | ||||||||||||||||||||
| Comparable sales using a constant currency basis (Non-GAAP) | $ | 7,736 | $ | 7,521 | $ | 215 | 2.9 | % | |||||||||||||||
| Gross profit (GAAP) | $ | 1,658 | $ | 1,534 | $ | 124 | 8.1 | % | |||||||||||||||
Impact of currency fluctuations (3) | (57) | (57) | (3.7) | ||||||||||||||||||||
| Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 1,601 | $ | 1,534 | $ | 67 | 4.4 | % | |||||||||||||||
| Gross margin (GAAP) | 20.82 | % | 20.40 | % | 42 bps | ||||||||||||||||||
Impact of currency fluctuations (3) | (0.12) | -12 bps | |||||||||||||||||||||
| Comparable gross margin using a constant currency basis (Non-GAAP) | 20.70 | % | 20.40 | % | 30 bps | ||||||||||||||||||
| Operating expenses (GAAP) | $ | 1,426 | $ | 1,338 | $ | 88 | 6.6 | % | |||||||||||||||
Impact of restructuring and transformational project costs (4) | (53) | (26) | (27) | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) | (24) | (37) | 13 | 35.1 | |||||||||||||||||||
| Operating expenses adjusted for Certain Items (Non-GAAP) | 1,349 | 1,275 | 74 | 5.8 | |||||||||||||||||||
Impact of currency fluctuations (3) | (52) | (52) | (4.1) | ||||||||||||||||||||
| Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 1,297 | $ | 1,275 | $ | 22 | 1.7 | % | |||||||||||||||
| Operating income (GAAP) | $ | 232 | $ | 196 | $ | 36 | 18.4 | % | |||||||||||||||
Impact of restructuring and transformational project costs (4) | 53 | 26 | 27 | NM | |||||||||||||||||||
Impact of acquisition-related costs (2) | 24 | 37 | (13) | (35.1) | |||||||||||||||||||
| Operating income adjusted for Certain Items (Non-GAAP) | 309 | 259 | 50 | 19.3 | |||||||||||||||||||
Impact of currency fluctuations (3) | (5) | (5) | (1.9) | ||||||||||||||||||||
| Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 304 | $ | 259 | $ | 45 | 17.4 | % | |||||||||||||||
| 26-Week Period Ended Dec. 27, 2025 | 26-Week Period Ended Dec. 28, 2024 | Change in Dollars | %/bps Change | ||||||||||||||||||||
| SYGMA | |||||||||||||||||||||||
| Sales (GAAP) | $ | 4,255 | $ | 4,162 | $ | 93 | 2.2 | % | |||||||||||||||
| Gross profit (GAAP) | 333 | 326 | 7 | 2.1 | |||||||||||||||||||
| Gross margin (GAAP) | 7.83 | % | 7.83 | % | 0 bps | ||||||||||||||||||
| Operating expenses (GAAP) | $ | 287 | $ | 289 | $ | (2) | (0.7) | % | |||||||||||||||
| Operating income (GAAP) | 46 | 37 | 9 | 24.3 | % | ||||||||||||||||||
| OTHER | |||||||||||||||||||||||
| Operating expenses (GAAP) | $ | 124 | $ | 125 | $ | (1) | (0.8) | % | |||||||||||||||
| Operating income (GAAP) | 10 | 12 | (2) | (16.7) | % | ||||||||||||||||||
| GLOBAL SUPPORT CENTER | |||||||||||||||||||||||
| Gross profit (GAAP) | $ | 25 | $ | 5 | $ | 20 | NM | ||||||||||||||||
| Operating expenses (GAAP) | $ | 520 | $ | 473 | $ | 47 | 9.9 | % | |||||||||||||||
Impact of restructuring and transformational project costs (5) | (46) | (20) | (26) | NM | |||||||||||||||||||
| Impact of acquisition-related costs | (22) | (10) | (12) | NM | |||||||||||||||||||
| Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 452 | $ | 443 | $ | 9 | 2.0 | % | |||||||||||||||
| Operating loss (GAAP) | $ | (495) | $ | (468) | $ | (27) | (5.8) | % | |||||||||||||||
Impact of restructuring and transformational project costs (5) | 46 | 20 | 26 | NM | |||||||||||||||||||
| Impact of acquisition-related costs | 22 | 10 | 12 | NM | |||||||||||||||||||
| Operating loss adjusted for Certain Items (Non-GAAP) | $ | (427) | $ | (438) | $ | 11 | 2.5 | % | |||||||||||||||
(1) | Primarily represents severance and transformation initiative costs. | ||||
(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. | ||||
| 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):
| 13-Week Period Ended Dec. 27, 2025 | 13-Week Period Ended Dec. 28, 2024 | Change in Dollars | % Change | ||||||||||||||||||||
| Net earnings (GAAP) | $ | 389 | $ | 406 | $ | (17) | (4.2) | % | |||||||||||||||
| Interest (GAAP) | 173 | 160 | 13 | 8.1 | |||||||||||||||||||
| Income taxes (GAAP) | 121 | 127 | (6) | (4.7) | |||||||||||||||||||
| Depreciation and amortization (GAAP) | 240 | 238 | 2 | 0.8 | |||||||||||||||||||
| EBITDA (Non-GAAP) | $ | 923 | $ | 931 | $ | (8) | (0.9) | % | |||||||||||||||
| Certain Item adjustments: | |||||||||||||||||||||||
Impact of restructuring and transformational project costs (1) | $ | 55 | $ | 30 | $ | 25 | 83.3 | % | |||||||||||||||
| Impact of acquisition-related costs | 23 | 8 | 15 | NM | |||||||||||||||||||
EBITDA adjusted for Certain Items (Non-GAAP) (2) | $ | 1,001 | $ | 969 | $ | 32 | 3.3 | % | |||||||||||||||
| Other expense (income), net | 9 | 19 | (10) | (52.6) | |||||||||||||||||||
Depreciation and amortization, as adjusted (Non-GAAP) (3) | (203) | (205) | 2 | 1.0 | |||||||||||||||||||
| Operating income adjusted for Certain Items (Non-GAAP) | $ | 807 | $ | 783 | $ | 24 | 3.1 | % | |||||||||||||||
(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. | ||||
(2) |
In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $5 million and $7 million or non-cash stock compensation expense of $33 million and $30 million in fiscal 2026 and fiscal 2025, respectively. | ||||
(3) |
Fiscal 2026 includes $240 million in GAAP depreciation and amortization expense, less $37 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. | ||||
| NM | Represents that the percentage change is not meaningful. | ||||
| 26-Week Period Ended Dec. 27, 2025 | 26-Week Period Ended Dec. 28, 2024 | Change in Dollars | % Change | ||||||||||||||||||||
| Net earnings (GAAP) | $ | 866 | $ | 896 | $ | (30) | (3.3) | % | |||||||||||||||
| Interest (GAAP) | 344 | 319 | 25 | 7.8 | |||||||||||||||||||
| Income taxes (GAAP) | 245 | 279 | (34) | (12.2) | |||||||||||||||||||
| Depreciation and amortization (GAAP) | 473 | 473 | - | - | |||||||||||||||||||
| EBITDA (Non-GAAP) | $ | 1,928 | $ | 1,967 | $ | (39) | (2.0) | % | |||||||||||||||
| Certain Item adjustments: | |||||||||||||||||||||||
Impact of restructuring and transformational project costs (1) | 109 | 56 | 53 | 94.6 | |||||||||||||||||||
| Impact of acquisition-related costs | 34 | 14 | 20 | NM | |||||||||||||||||||
EBITDA adjusted for Certain Items (Non-GAAP) (2) | $ | 2,071 | $ | 2,037 | $ | 34 | 1.7 | % | |||||||||||||||
| Other expense (income), net | 38 | 25 | 13 | 52.0 | |||||||||||||||||||
Depreciation and amortization, as adjusted (Non-GAAP)(3) | (403) | (407) | 4 | 1.0 | |||||||||||||||||||
| Operating income adjusted for Certain Items (Non-GAAP) | $ | 1,706 | $ | 1,655 | $ | 51 | 3.1 | % | |||||||||||||||
(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. | ||||
(2) |
In arriving at adjusted EBITDA, Sysco does not exclude interest income of $12 million and $14 million or non-cash stock compensation expense of $64 million and $60 million for fiscal 2026 and fiscal 2025, respectively. | ||||
(3) |
Fiscal 2026 includes $473 million in GAAP depreciation and amortization expense, less $70 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2025 includes $473 million in GAAP depreciation and amortization expense, less $66 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. | ||||
| NM | Represents that the percentage change is not meaningful. | ||||
Liquidity and Capital Resources
Highlights
We produced free cash flow of $413 million in the first 26 weeks of fiscal 2026, as compared to $331 million in the first 26 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 26 weeks of fiscal 2026 to the first 26 weeks of fiscal 2025 are provided.
| 26-Week Period Ended Dec. 27, 2025 | 26-Week Period Ended Dec. 28, 2024 | ||||||||||
| Source of cash (use of cash) | (In millions) | ||||||||||
| Net cash provided by operating activities (GAAP) | $ | 611 | $ | 498 | |||||||
| Additions to plant and equipment | (300) | (333) | |||||||||
| Proceeds from sales of plant and equipment | 102 | 166 | |||||||||
Free Cash Flow (Non-GAAP) (1) | $ | 413 | $ | 331 | |||||||
| Acquisition of businesses, net of cash acquired | $ | (133) | $ | (40) | |||||||
| Debt borrowings (repayments), net | 223 | 371 | |||||||||
| Stock repurchases | - | (300) | |||||||||
| Dividends paid | (518) | (503) | |||||||||
(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 December 27, 2025, we had $1.2 billion in cash and cash equivalents, approximately 56% 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.
Cash Flows
Operating Activities
We generated $611 million in cash flows from operations in the first 26 weeks of fiscal 2026, compared to cash flows from operations of $498 million in the first 26 weeks of fiscal 2025. In the first 26 weeks of fiscal 2026, these amounts included year-over-year favorable comparisons on working capital of $144 million due to a favorable comparison in inventory, partially offset by unfavorable comparisons on accounts payable and accounts receivable. Accrued expenses also had a favorable comparison, primarily related to lower payments of accrued incentive compensation in the first 26 weeks of fiscal 2026 in comparison to the first 26 weeks of fiscal 2025. Partially offsetting these favorable comparisons, a decrease in accrued income taxes negatively impacted cash flows from operations due to lower net earnings in the first 26 weeks of fiscal 2026 compared to the first 26 weeks of fiscal 2025.
Investing Activities
Our capital expenditures in the first 26 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 26 weeks of fiscal 2026 were $33 million lower than in the first 26 weeks of fiscal 2025, primarily due to timing of capital spending.
During the first 26 weeks of fiscal 2026, we paid $133 million, net of cash acquired, for the acquisitions of Fairfax Meadow and Ginsberg's Foods. During the first 26 weeks of fiscal 2025, we paid $40 million, net of cash acquired, for the acquisition of Campbells Prime Meat.
During the first 26 weeks of fiscal 2026, we received $102 million in proceeds from sales of plant and equipment, which was primarily attributable to proceeds received from sale leaseback transactions. During the first 26 weeks of fiscal 2025, we received $166 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 $60 million in the first 26 weeks of fiscal 2026, as compared to $67 million in the first 26 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 no shares during the first 26 weeks of fiscal 2026. As of December 27, 2025, we had a remaining authorization of approximately $1.5 billion. We repurchased no additional shares under our authorization from the end of our fiscal second quarter through January 9, 2026. We intend to resume share repurchases in the second half of fiscal 2026, which could result in approximately $1.0 billion in total spend; however, this amount could be reduced due to factors such as economic conditions and acquisition activity.
Dividends paid in the first 26 weeks of fiscal 2026 were $518 million, or $1.08 per share, as compared to $503 million, or $1.02 per share, in the first 26 weeks of fiscal 2025. In November 2025, we declared our regular quarterly dividend for the second quarter of fiscal 2026 of $0.54 per share, which was paid in January 2026.
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 December 27, 2025 are also disclosed within that note.
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 December 27, 2025, Sysco had a total of $11.0 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.
| Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet | Dec. 27, 2025 | Jun. 28, 2025 | ||||||||||||
| (In millions) | ||||||||||||||
| ASSETS | ||||||||||||||
| Receivables due from non-obligor subsidiaries | $ | 205 | $ | 377 | ||||||||||
| Current assets | 6,141 | 6,015 | ||||||||||||
| Total current assets | $ | 6,346 | $ | 6,392 | ||||||||||
| Notes receivable from non-obligor subsidiaries | $ | 44 | $ | 20 | ||||||||||
| Other noncurrent assets | 5,325 | 5,211 | ||||||||||||
| Total noncurrent assets | $ | 5,369 | $ | 5,231 | ||||||||||
| LIABILITIES | ||||||||||||||
| Payables due to non-obligor subsidiaries | $ | 58 | $ | 61 | ||||||||||
| Other current liabilities | 3,303 | 3,214 | ||||||||||||
| Total current liabilities | $ | 3,361 | $ | 3,275 | ||||||||||
| Notes payable to non-obligor subsidiaries | $ | 405 | $ | 334 | ||||||||||
| Long-term debt | 11,704 | 11,890 | ||||||||||||
| Other noncurrent liabilities | 1,741 | 1,538 | ||||||||||||
| Total noncurrent liabilities | $ | 13,850 | $ | 13,762 | ||||||||||
| Combined Parent and Guarantor Subsidiaries Summarized Results of Operations | 26-Week Period Ended Dec. 27, 2025 | |||||||
| (In millions) | ||||||||
| Sales | $ | 25,336 | ||||||
| Gross profit | 4,506 | |||||||
| Operating income | 1,108 | |||||||
| Interest expense from non-obligor subsidiaries | 72 | |||||||
| Net earnings | 674 | |||||||
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 the second quarter of 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 and share repurchase programs, our expectation of future macroeconomic conditions and other statements that are not historical facts.
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;
•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; and
•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.
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.