SYSCO CORP
For the period ended Mar 28, 2026. Filed Apr 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 28, 2026 · Filed Apr 29, 2026
SYY$76.86+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-27; filed 2026-01-28.
0000096021-26-000009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-28; filed 2026-04-29.
0000096021-26-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 161 previous paragraphs and 458 current paragraphs.
62 unchanged; 74 reworded; 166 added; 24 removed; 1 previous and 156 current paragraphs rearranged.
Tables are not compared: 32 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (166)
Current report
Ourthird quarter of fiscal 2026 results included sales growth of 4.7% as compared to thethird quarter of fiscal 2025,
Current report
primarily driven by volume improvements across our business. Sales increased in our U.S. Foodservice Operations,
Current report
cost inflation. Operating income decreased 9.1% compared to thethird quarter of fiscal 2025, due to higher incentive
Current report
quarter of fiscal 2025, primarily due to higher incentive compensation. Our net earnings for thethird quarter of fiscal 2026
Current report
◦increased 4.7%, or$921 million, to$20.5 billion;
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◦decreased 9.1%, or$62 million, to$619 million;
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◦adjusted operating income decreased 0.6%, or$5 million, to$768 million;
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◦decreased 15.2%, or$61 million, to$340 million;
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◦adjusted net earnings decreased 3.6%, or$17 million, to$452 million;
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◦decreased 13.4%, or$0.11, to$0.71 per share;
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◦decreased 13.4% or$0.11, to$0.71 per share;
Current report
◦adjusted diluted earnings per share decreased 2.1%, or$0.02, to$0.94 per share;
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◦decreased 5.1%, or$46 million, to$864 million; and
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◦adjusted EBITDA increased 0.1%, or$1 million, to$970 million.
Current report
◦increased 3.6%, or$2.2 billion, to$62.4 billion;
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◦decreased 4.0%, or$88 million, to$2.1 billion;
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◦adjusted operating income increased 1.9%, or$46 million, to$2.5 billion;
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◦decreased 7.0%, or$91 million, to$1.2 billion;
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◦adjusted net earnings increased 1.0%, or$14 million, to$1.5 billion;
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◦decreased 4.9%, or$0.13, to$2.52 per share;
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◦decreased 4.9% , or$0.13 to$2.51 per share;
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◦adjusted diluted earnings per share increased 3.4%, or$0.10, to$3.08 per share;
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◦decreased 3.0%, or$85 million, to$2.8 billion; and
Current report
◦adjusted EBITDA increased 1.2%, or$36 million, to$3.0 billion.
Current report
Adjustments provided herein for fiscal 2026 results of operations also remove the impact of a charge associated with a legal
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matter. No similar charge was applicable in fiscal 2025.
Current report
Foot traffic to restaurants experienced a decrease of 1.9% in thethird quarter of fiscal 2026. Our U.S. Foodservice
Current report
Sales increased 4.7% and 3.6% in thethird quarter and first 39 weeks of fiscal 2026, respectively, as compared to the
Current report
Foodservice Operations case volume in thethird quarter and first 39 weeks of fiscal 2026, respectively, as compared to thethird
Current report
1.4% in thethird quarter and first 39 weeks of fiscal 2026, respectively, as compared to thethird quarter and first 39 weeks of
Current report
productivity improvements. National case volume increased 1.4% and 0.9% in thethird quarter and first 39 weeks of fiscal
Current report
presented. We expect continued local volume growth in the fourth quarter of fiscal 2026 of at least 2.5% due to continued sales
Current report
consultant productivity improvements. In addition, we expect national case volume growth in the fourth quarter due to the
Current report
strength of our non-restaurant business and the onboarding of new national restaurant customers.
Current report
of fiscal 2026, respectively, as compared to thethird quarter and first 39 weeks of fiscal 2025, primarily due to benefits from
Current report
our strategic sourcing initiatives, stronger volume performance from local customers and improving mix from Sysco Brand
Current report
penetration rates, and the effective management of product cost inflation.
Current report
Total operating expenses were$3.2 billion and$9.4 billion in thethird quarter and first 39 weeks of fiscal 2026, a
Current report
10.1% and 6.9% increase compared to thethird quarter and first 39 weeks of fiscal 2025, respectively. Total adjusted operating
Current report
expenses were$3.0 billion and$9.0 billion in thethird quarter and first 39 weeks of fiscal 2026, an 8.4% and 5.6% increase
Showing the first 40 of 166 passages. Open the source sections for the rest.
Removed paragraphs (24)
Previous report
◦increased 3.0%, or $611 million, to $20.8 billion;
Previous report
◦decreased 2.8%, or $20 million, to $692 million;
Previous report
◦adjusted operating income increased 3.1%, or $24 million, to $807 million;
Previous report
◦decreased 4.2%, or $17 million, to $389 million;
Previous report
◦adjusted net earnings increased 3.9%, or $18 million, to $476 million;
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◦decreased 2.4%, or $0.02, to $0.81 per share;
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◦decreased 1.2% or $0.01, to $0.81 per share;
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◦adjusted diluted earnings per share increased 6.5%, or $0.06, to $0.99 per share;
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◦decreased 0.9%, or $8 million, to $923 million; and
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◦adjusted EBITDA increased 3.3%, or $32 million, to $1.0 billion.
Previous report
◦increased 3.1%, or $1.3 billion, to $41.9 billion;
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◦decreased 1.7%, or $26 million, to $1.5 billion;
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◦adjusted operating income increased 3.1%, or $51 million, to $1.7 billion;
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◦decreased 3.3%, or $30 million, to $866 million;
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◦adjusted net earnings increased 3.1%, or $31 million, to $1.0 billion;
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◦decreased 0.5%, or $0.01, to $1.81 per share;
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◦decreased 1.1% , or $0.02 to $1.80 per share;
Previous report
◦adjusted diluted earnings per share increased 5.9%, or $0.12, to $2.14 per share;
Previous report
◦decreased 2.0%, or $39 million, to $1.9 billion; and
Previous report
◦adjusted EBITDA increased 1.7%, or $34 million, to $2.1 billion.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Reworded paragraphs (74)
Previous wording
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.
Current wording
This discussion should be read in conjunction with our consolidated financial statements as of June 28, 2025, and for
Previous wording
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.
Current wording
International Foodservice Operations, and SYGMA segments. Our gross profit increased 6.5% compared to thethird quarter of
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Comparisons of results from the second quarter of fiscal 2026 to the second quarter of fiscal 2025 are presented below:
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Comparisons of results from thethird quarter of fiscal 2026 to thethird quarter of fiscal 2025 are presented below:
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Comparisons of results from the first 26 weeks of fiscal 2026 to the first 26 weeks of fiscal 2025 are presented below:
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Comparisons of results from the first 39 weeks of fiscal 2026 to the first 39 weeks of fiscal 2025 are presented below:
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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.
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our operations can be impacted by changes in exchange rates applicable to converting from local currencies to U.S. dollars. We
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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.
Current wording
Operations local case growth trends experienced a sequential improvement of 210 basis points compared to the second quarter
Previous wording
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.
Current wording
third quarter and first 39 weeks of fiscal 2025. Our sales and gross profit performance are influenced by multiple factors,
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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.
Current wording
We experienced inflation at a rate of 2.8% in thethird quarter of fiscal 2026, at the total enterprise level, primarily
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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.
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compared to thethird quarter and first 39 weeks of fiscal 2025, respectively. Operating expenses increased primarily due to
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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.
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Sysco’s operations within the United Kingdom, located within the International Foodservice Operations segment,
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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.
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In October 2025, we acquired Fairfax Meadow, a leading specialty meat supplier based in the United Kingdom. This
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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.
Current wording
In December 2025, we acquired Ginsberg’s Foods, a broadline distributor servicing restaurants, schools, and
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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.
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Our purpose is “Connecting the World to Share Food and Care for One Another.” Purpose-driven companies are
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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.
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Our business transformation initiatives are progressing, which include promoting our specialty programs for produce,
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The following table sets forth the components of our consolidated results of operations expressed as a percentage of sales for the periods indicated:
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The following table sets forth the components of our consolidated results of operations expressed as a percentage of
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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:
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The following table sets forth the change in the components of our consolidated results of operations expressed as a
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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.
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Based on information in Note 14,“Business Segment Information,” in the Notes to Consolidated Financial Statements
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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:
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The following table sets forth a summary of the components of operating income expressed as a percentage increase or
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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:
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The following table sets forth the percentage and dollar value increase or decrease in the major factors impacting sales
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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.
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The sales growth in our U.S. Foodservice Operations was primarily driven by case volume growth. Case volumes from
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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.
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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
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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.
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first 39 weeks of fiscal 2025, primarily as a result of improvements in our strategic sourcing initiatives, stronger volume
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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.
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incentive compensation, and costs associated with investments in sales headcount and building expansions.
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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:
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The following table sets forth a summary of the components of operating income and adjusted operating income
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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.
Current wording
sales as compared to the corresponding prior year period in order to demonstrate the cause and magnitude of change.
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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.
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is primarily due to the impact of foreign currency translation, higher inflation, and local case growth. Excluding the impact of
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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.
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increased sales colleague headcount, partially offset by increases in operating expenses.
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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.
Current wording
For the operations that are grouped within Other, operating income increased$10 million and$8 million in thethird
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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.
Current wording
Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service
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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.
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Included in Global Support Center expenses are Certain Items that totaled$30 million and$98 million in thethird
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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.
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respectively, as compared to thethird quarter and first 39 weeks of fiscal 2025. The increase was primarily due to interest
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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.
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exchange gains and losses incurred in those periods.
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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.
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compared to thethird quarter and first 39 weeks of fiscal 2025, primarily due to the items noted above for operating income,
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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.
Current wording
decrease from the comparable prior year period amount of$0.82 per share. Adjusted diluted earnings per share, excluding
Previous wording
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.
Current wording
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.
Previous wording
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):
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EBITDA and adjusted EBITDA should not be used as a substitute for the most comparable GAAP measure in
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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.
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39 weeks of fiscal 2025. Theincrease in free cash flow is attributable to anincrease in cash provided by operating activities and
Previous wording
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.
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Sysco generates cash in the U.S. and internationally. As of March 28, 2026, we had$1.9 billion in cash and cash
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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.
Current wording
We believe our cash flow from operations, the availability of liquidity under our commercial paper programs and our
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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.
Current wording
We generated$1.5 billion in cash flows from operations in the first 39 weeks of fiscal 2026, compared to cash flows
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the fiscal year then ended, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, both
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contained in our fiscal 2025 Form 10-K, as well as the consolidated financial statements (unaudited) and notes to the
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consolidated financial statements (unaudited) contained in this report.
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fiscal 2025, due to our strategic sourcing efforts, favorable changes in customer mix, and the effective management of product
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compensation, increased restructuring and transformational project costs, and higher acquisition and due diligence costs. We
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consider restructuring and transformational project costs and acquisition and due diligence costs to be “Certain Item” expenses
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(as defined below). Excluding Certain Item expenses, adjusted operating income decreased 0.6% as compared to thethird
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decreased 15.2% as compared to thethird quarter of fiscal 2025. Excluding Certain Item expenses, adjusted net earnings
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decreased by 3.6% as compared to thethird quarter of fiscal 2025. See below for a comparison of our fiscal 2026 results to our
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fiscal 2025 results, both including and excluding Certain Items.
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The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted
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EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and
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free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove: (1) restructuring charges;
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(2) expenses associated with our various transformation initiatives; (3) severance charges; and (4) acquisition-related costs
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consisting of (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions.
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The fiscal 2026 and fiscal 2025 items discussed above are collectively referred to as “Certain Items.” The results of
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measure our results on a constant currency basis.
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of fiscal 2026, despite the industry’s foot traffic performance. The macroeconomic environment was similar in thethird quarter
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of fiscal 2026 as compared to the previous quarter, which has continued to adversely impact consumer sentiment. Despite the
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current macroeconomic landscape, we expect to grow our sales in fiscal 2026. We believe the food-away-from-home sector is a
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healthy, long-term growth market, and Sysco is diversified and well positioned as a market leader in food service.
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including price, volume, inflation, customer mix and product mix. We experienced a 2.3% and 1.0% increase in U.S.
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quarter and first 39 weeks of fiscal 2025. Our volume growth trends were attributable to local case volume increasing 3.3% and
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fiscal 2025. Our local case volumes have improved due to improved sales colleague retention and incremental sales colleague
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2026, respectively, as compared to thethird quarter and first 39 weeks of fiscal 2025. Our volume reflects our broadline and
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specialty businesses. Beginning in fiscal 2026, we are now including volumes from our specialty meat business for all periods
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driven by inflation in thedairy, meat, and seafood categories. We continue to address inflation by successfully managing
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through cost increases in a timely manner. Gross margin increased 31 and 20 basis points in thethird quarter and first 39 weeks
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associated with expanded building capacity, partially offset by decreases in insurance costs. Adjusted operating expenses were
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compensation, sales headcount investments, and increased costs associated with expanded building capacity, partially offset by
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initiated a rebranding effort in thesecond quarter of fiscal 2026 to transition the Brakes® brand and other smaller brands to
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“Sysco GB.” This rebranding initiative will take approximately two years to complete and will result in Sysco amortizing
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previously indefinite-lived intangible assets on a straight-line basis over this two-year period. The rebranding is expected to
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result in approximately$100 million of additional amortization expense over two years, including approximately$29 million in
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fiscal 2026. This amortization expense will be treated as a Certain Item, which is consistent with our treatment of amortization
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expense of other previously acquired intangible assets.
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acquisition follows our acquisition of Campbells Prime Meat last fiscal year and positions our team in the United Kingdom to
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achieve additional growth by leveraging additional specialty meat capabilities geographically. This company’s results are
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included within International Foodservice Operations and were not material to our results for thethird quarter and first 39
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healthcare facilities across eastern New York and neighboring states. This acquisition opens opportunities to new customers
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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.