SYSCO CORP
For the period ended Jun 27, 2026. Filed Aug 21, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 21, 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-K
Period ended 2025-06-28; filed 2025-08-22.
0000096021-25-000099
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-27; filed 2026-08-21.
0000096021-26-000033
Item 7. 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 262 previous paragraphs and 272 current paragraphs.
153 unchanged; 90 reworded; 28 added; 16 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 24 previous and 24 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 (28)
Current report
Our fiscal 2026 results reflected sales growth of 3.9% as compared to fiscal 2025, driven by inflation and volume growth, including contributions from recent acquisitions. Sales increased across our U.S. Foodservice Operations, International Foodservice Operations, and SYGMA segments. Gross profit increased 4.5% as compared to fiscal 2025, primarily due to our strategic sourcing efforts and higher volumes from local customers. Operating income increased 0.2% as compared to fiscal 2025, primarily due to gross profit gains, partially offset by increased sales headcount investments, increased restructuring and transformational project costs, higher incentive compensation, and higher acquisition and due diligence costs. We consider restructuring and transformational project costs and acquisition and due diligence costs to be “Certain Item” expenses (as defined below). Excluding Certain Item expenses, adjusted operating income increased 2.6% as compared to fiscal 2025. See below for a comparison of our fiscal 2026 results to our fiscal 2025 results, both including and excluding Certain Items (as defined below).
Current report
◦increased 3.9%, or $3.2 billion, to $84.6 billion;
Current report
◦adjusted operating income increased 2.6%, or $91 million, to $3.6 billion;
Current report
◦decreased 1.9%, or $0.07, to $3.67 from the comparable prior year amount of $3.74 per share;
Current report
◦decreased 1.9%, or $0.07, to $3.66 from the comparable prior year amount of $3.73 per share;
Current report
◦adjusted EBITDA increased 2.2%, or $94 million, to $4.4 billion.
Current report
Unless otherwise stated, future trend expectations discussed below exclude the impact of the pending acquisition of JRD. See the “Mergers and Acquisitions” section below and Note 4, “Acquisitions,” in the Notes to the Consolidated Financial Statements in Item 8 for more information.
Current report
Total operating expenses increased 5.6% during fiscal 2026, as compared to fiscal 2025, driven by sales headcount investments, increased restructuring and transformational project costs, higher incentive compensation, and higher acquisition and due diligence costs. Adjusted operating expenses increased 5.1% during fiscal 2026, as compared to fiscal 2025, as a result of higher sales headcount investments and incentive compensation.
Current report
In fiscal 2027, we expect to achieve cost savings benefits through the continued use of technology, including artificial intelligence, and business efficiency initiatives across sales, merchandising, supply chain, and back office functions. Collectively, these efforts are expected to generate approximately $100 million of cost savings during fiscal 2027. In addition, we believe the advancements that have been made in our operational capabilities and ongoing investments in employee training will continue to drive supply chain productivity gains and reduce the cost to serve our customers.
Current report
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 in fiscal 2026.
Current report
In March 2026, we announced that we had entered into the Merger Agreement, pursuant to which we would acquire Jetro Restaurant Depot, a leading U.S. wholesale cash-and-carry foodservice provider serving smaller, independent restaurants and businesses. JRD operates 167 large-format warehouse stores across 35 states that serve more than 725,000 independent restaurants and foodservice operators with a broad assortment of fresh and low-priced products. The Transactions are expected to close by the third quarter of Sysco’s fiscal 2027, subject to the satisfaction of customary closing conditions, including regulatory clearance under the Hart-Scott-Rodino Act. We expect to incur increased operating expenses for acquisition-related costs in fiscal 2027. See Note 4, “Acquisitions,” in the Notes to the Consolidated Financial Statements in Item 8 for more information.
Current report
Amortization Expense Trends
Current report
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 nineteen months to complete and will result in Sysco amortizing previously indefinite-lived intangible assets on a straight-line basis over nineteen month period. The rebranding is expected to result in approximately $100 million of additional amortization expense over nineteen months. $29 million of amortization expense was recorded in fiscal 2026 and approximately $76 million of amortization expense is expected to be recorded in fiscal 2027. This amortization expense is treated as a Certain Item, which is consistent with our treatment of amortization expense of other previously acquired intangible assets.
Current report
Interest Expense and Other Income and Expense Trends
Current report
The cash portion of the purchase price of the Transactions is expected to be financed with a combination of new senior unsecured notes, hybrid debt, cash on hand and equity or equity-linked securities. Sysco has executed a commitment letter for a $22 billion senior unsecured 364-day bridge loan facility that could be used to fund the cash portion of the purchase price and pay related fees and expenses. Subsequent to the execution of the bridge loan facility, Sysco entered into a $3 billion senior unsecured delayed draw term loan facility, comprised of a $1.25 billion 364-day tranche and a $1.75 billion 2-year tranche, reducing the bridge loan facility commitments from $22 billion to $19 billion. Fees paid upfront for this facility as of August 4, 2026 total $126 million and will be amortized to interest expense within our statement of consolidated results of operations over the expected life of the bridge facility unless it is terminated at an earlier date. This bridge facility added approximately $30 million of interest expense in fiscal 2026 and is expected to add approximately $96 million of interest expense in fiscal 2027.
Current report
Additionally, Sysco has executed cash-settled deal contingent rate lock transactions to mitigate interest rate risk on $6.3 billion of future permanent debt that could potentially be issued to finance the Transactions. As these interest rate lock transactions are contingent upon whether the Transactions are successfully consummated, we have not elected to apply hedge accounting at this time, and any unrealized gains or losses will be recognized in Other expense (income), net within our statement of consolidated results of operations. Sysco incurred approximately $54 million in losses on these rate lock transactions in the fourth quarter of fiscal 2026, which was recorded to Other expense (income), net. Our incremental interest expense from the bridge loan facility and any fair value gains or losses on these interest rate locks are treated as Certain Items. The exact timing, aggregate principal amount, and specific terms of any future debt or equity issuances related to the Transactions have not been finalized and remain subject to prevailing market conditions, investor demand, and macroeconomic factors. See Note 12, “Debt and Other Financing Arrangements,” and Note 10, “Derivative Financial Instruments” in the Notes to the Consolidated Financial Statements in Item 8 for more information.
Current report
The $26 million increase in operating income for fiscal 2026, as compared to fiscal 2025, was primarily due to growth in local case volumes as a result of expanded supply chain capacity, increased availability of Sysco branded merchandise, and increased sales headcount. This was partially offset by increases in operating expenses.
Current report
Our SYGMA segment sales increased 2.5% in fiscal 2026, as compared to fiscal 2025. Operating income increased by $13 million in fiscal 2026, as compared to fiscal 2025. These increases were driven by continued improvements in the efficiency and performance of SYGMA’s supply chain operations.
Current report
Other expense (income), net
Current report
Other expense (income), net increased $64 million for fiscal 2026, as compared to fiscal 2025, primarily due to a $54 million loss on deal contingent rate lock transactions in fiscal 2026. During fiscal 2026 we have executed cash-settled deal contingent rate lock transactions to mitigate interest rate risk on future permanent debt that could potentially be issued to finance the purchase of JRD.
Current report
•Federal Clean Energy Tax Credits – See Note 19 “Income Taxes,” in the Notes to Consolidated Financial Statements in Item 8 for further detail of our tax credits and expected timing of purchases.
Current report
As part of the planned acquisition of Jetro Restaurant Depot, Sysco executed a commitment letter on March 30, 2026 for a $22 billion senior unsecured 364-day bridge loan facility that will be used to fund the cash portion of the purchase price and pay related fees and expenses. Subsequent to the execution of the commitment letter for the bridge loan facility, Sysco entered into a $3 billion senior unsecured delayed draw term loan facility, comprised of a $1.25 billion 364-day tranche and a $1.75 billion 2-year tranche, reducing the bridge loan facility commitments from $22 billion to $19 billion. Fees paid upfront for the bridge facility as of August 4, 2026 total $126 million and will be amortized to interest expense within our statement of consolidated results of operations over the expected life of the bridge facility unless it is terminated at an earlier date.
Current report
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 nineteen month period through June 2027.
Current report
•business uncertainties and contractual restrictions affecting us and Jetro Restaurant Depot while the Transactions are pending, including effects on employees, customers, suppliers, and other business relationships;
Current report
•the risk that the Transactions are not consummated as expected, in a timely manner or at all;
Current report
•the risk that any of the anticipated benefits of the Transactions will not be realized or will not be realized within the expected time period;
Current report
•risks relating to the integration of Jetro Restaurant Depot; and
Current report
•the outcome and costs of any litigation relating to the Transactions.
Removed paragraphs (16)
Previous report
Our fiscal 2025 results were driven by sales growth of 3.2% as compared to fiscal 2024. This growth was driven by inflation and volume growth, partially from recent acquisitions. Gross profit increased 2.5% as compared to fiscal 2024, primarily attributable to effective management of product cost inflation. Operating income decreased 3.6% as compared to fiscal 2024, primarily due to a noncash goodwill impairment charge in our Guest Worldwide business. Adjusted operating income increased 1.2% as compared to fiscal 2024. See below for a comparison of our fiscal 2025 results to our fiscal 2024 results, both including and excluding Certain Items (as defined below).
Previous report
◦increased 3.2%, or $2.5 billion, to $81.4 billion;
Previous report
◦adjusted operating income increased 1.2%, or $42 million, to $3.5 billion;
Previous report
◦decreased 4.1%, or $0.16, to $3.74 from the comparable prior year amount of $3.90 per share;
Previous report
◦decreased 4.1%, or $0.16, to $3.73 from the comparable prior year amount of $3.89 per share;
Previous report
◦adjusted EBITDA increased 2.4%, or $101 million, to $4.3 billion.
Previous report
Total operating expenses increased 4.2% during fiscal 2025, as compared to fiscal 2024, driven by business and sales headcount investments, cost inflation, as well as a noncash impairment charge on our Guest Worldwide business. These increases were partially offset by lower incentive compensation as our operating results were lower than our target payout criteria. Our Global Support Center expenses experienced a decrease of 5.7% in fiscal 2025 as compared to fiscal 2024, primarily as a result of progress on our existing cost savings program.
Previous report
In fiscal 2026, we expect to achieve target operating results thereby increasing our incentive compensation by approximately $100 million compared to fiscal 2025. In fiscal 2026, we expect to achieve cost savings benefits as we leverage our unique scale advantages to expand strategic sourcing efforts to include a broader range of categories, more efficiently harness our global buying power, improve inbound freight logistics to minimize points across our network, and take actions to improve organizational optimization at our Global Support Center. We believe the advancements that have been made in our physical capabilities, and the investments made to improve training, will result in continued supply chain productivity improvements and in lowered costs to serve our customers.
Previous report
Goodwill Impairment
Previous report
In our annual fiscal 2025 goodwill impairment assessment, we concluded that one reporting unit, Guest Worldwide, had a fair value that was less than book value due to its recent financial performance and downward revisions in its long-range financial outlook. During the fourth quarter of fiscal 2025 we recorded a noncash goodwill impairment charge of $92 million for a portion of the goodwill attributable to our Guest Worldwide reporting unit. This charge is included within operating expenses in the consolidated results of operations. All other reporting units were concluded to have a fair value that exceeded book value. We do not anticipate to incur additional goodwill impairment charges in fiscal 2026.
Previous report
Divestitures
Previous report
In the second quarter of fiscal 2025, we sold our interest in our joint venture partnership in Mexico, which was a part of our International Foodservice Operations. This operation was not significant to Sysco’s business, and the divestiture will facilitate our efforts to improve our return on invested capital position.
Previous report
The $62 million increase in operating income for fiscal 2025, as compared to fiscal 2024, was primarily due to growth in local case volumes, success in our strategic sourcing program, and positive contributions from our recent mergers and acquisitions efforts.
Previous report
Our SYGMA segment sales were 8.3% higher in fiscal 2025, as compared to fiscal 2024, primarily driven by the growth of new customers. Operating income increased by $9 million in fiscal 2025, as compared to fiscal 2024, primarily due to the growth of new customers and productivity improvements. We expect SYGMA’s sales growth rates to moderate in fiscal 2026 as we reach the one-year anniversary mark of fiscal 2025’s substantial customer additions.
Previous report
In our annual fiscal 2025 assessment, we concluded that one reporting unit, Guest Worldwide, had a fair value that was less than book value due to its recent financial performance and downward revisions in its long-range financial outlook. During the fourth quarter of fiscal 2025 we recorded a noncash goodwill impairment charge of $92 million for a portion of the goodwill attributable to our Guest Worldwide reporting unit. This charge is included within operating expenses in the consolidated results of operations. All other reporting units were concluded to have a fair value that exceeded book value.
Previous report
•risks related to unfavorable changes to the mix of locally managed customers versus corporate-managed customers;
Reworded paragraphs (90)
Previous wording
We estimate that we serve about 17% of an approximately $370 billion annual foodservice market in the U.S. based on industry data obtained from Technomic, Inc. (Technomic) as of the end of calendar year 2024. Technomic projects the market size to increase to approximately $382 billion by the end of calendar year 2025. From time to time, Technomic may revise the methodology used to calculate the size of the foodservice market and, as a result, our percentage can change not only from our sales results, but also from such revisions. We also serve certain international geographies that vary in size and amount of market share.
Current wording
We estimate that we serve about 18% of an approximately $377 billion annual foodservice market in the U.S. based on industry data obtained from Technomic, Inc. (Technomic) as of the end of calendar year 2025. Technomic projects the market size to increase to approximately $390 billion by the end of calendar year 2026. From time to time, Technomic may revise the methodology used to calculate the size of the foodservice market and, as a result, our percentage can change not only from our sales results, but also from such revisions. We also serve certain international geographies that vary in size and amount of market share.
Previous wording
◦decreased 3.6%, or $114 million, to $3.1 billion;
Current wording
◦increased 0.2%, or $7 million, to $3.1 billion;
Previous wording
◦decreased 6.5%, or $127 million, to $1.8 billion;
Current wording
◦decreased 3.9%, or $71 million, to $1.8 billion;
Previous wording
◦adjusted net earnings increased 0.8%, or $17 million, to $2.2 billion;
Current wording
◦adjusted net earnings increased 1.4%, or $31 million, to $2.2 billion;
Previous wording
◦adjusted diluted earnings per share were $4.46 in fiscal 2025, a $0.15 increase from the comparable prior year amount of $4.31 per share;
Current wording
◦adjusted diluted earnings per share were $4.61 in fiscal 2026, a $0.15 increase from the comparable prior year amount of $4.46 per share;
Previous wording
◦decreased 1.2%, or $50 million, to $4.0 billion; and
Current wording
◦decreased 0.7%, or $26 million, to $4.0 billion; and
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. Fiscal year 2026 results of operations also remove the impact of a charge associated with a legal matter, amortization expense associated with debt issuance costs on a bridge loan facility, and a loss on deal contingent rate lock transactions entered into to mitigate interest rate risk on future permanent debt that could potentially be issued to finance the purchase of Jetro Restaurant Depot. No similar charges were applicable in fiscal year 2025. Fiscal year 2025 results of operations were also negatively impacted by a noncash goodwill impairment charge. No similar charge was applicable in fiscal year 2026.
Previous wording
Management believes that adjusting its operating expenses, operating income, other (income) expense, net earnings and diluted earnings per share to remove these Certain Items, provides an important perspective with respect to our underlying business trends and results. Additionally, it provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company’s underlying operations, (2) facilitates comparisons on a year-over-year basis and (3) removes those items that are difficult to predict and are often unanticipated and that, as a result, are difficult to include in analysts’ financial models and our investors’ expectations with any degree of specificity.
Current wording
Management believes that adjusting its operating expenses, operating income, interest expense, other (income) expense, net earnings and diluted earnings per share to remove these Certain Items, provides an important perspective with respect to our underlying business trends and results. Additionally, it provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company’s underlying operations, (2) facilitates comparisons on a year-over-year basis and (3) removes those items that are difficult to predict and are often unanticipated and that, as a result, are difficult to include in analysts’ financial models and our investors’ expectations with any degree of specificity.
Previous wording
Free cash flow represents net cash provided from operating activities, subtracted by purchases of plant and equipment, added to proceeds from sales of plant and equipment. Sysco management considers free cash flow to be a non-GAAP liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases and sales of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of cash, including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for discretionary expenditures as it may be necessary that we use it to make mandatory debt service or other payments. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See “Liquidity and
Current wording
Free cash flow represents net cash provided from operating activities, subtracted by purchases of plant and equipment, added to proceeds from sales of plant and equipment. Sysco management considers free cash flow to be a non-GAAP liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases and sales of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of cash, including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for discretionary expenditures as it may be necessary that we use it to make mandatory debt service or other payments. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See “Liquidity and Capital Resources” for discussions of GAAP metrics, including net cash provided by operating activities and our reconciliation of this non-GAAP financial measure.
Previous wording
During fiscal 2025, Sysco was impacted by negative year-over-year foot traffic to restaurants. Foot traffic trends improved in the fourth quarter of fiscal 2025. We expect foot traffic in fiscal 2026 to be similar to foot traffic trends in the fourth quarter of fiscal 2025. 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
During fiscal 2026, Sysco experienced the effects of negative year-over-year restaurant foot traffic trends. We expect restaurant foot traffic and the broader macroeconomic environment in fiscal 2027 to remain generally consistent with fiscal 2026 conditions. Despite these near-term trends, we continue to 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.
Previous wording
Our sales and gross profit performance are influenced by multiple factors including price, volume, inflation, customer mix and product mix. The most significant factor affecting our sales and gross profit performance in fiscal 2025 was product cost inflation, as we experienced 2.5% inflation at the total enterprise level. U.S. Foodservice experienced a 0.5% improvement in total case volume and a 1.4% decrease in local case volume as compared to fiscal 2024. This volume reflects our broadline and specialty businesses, except for our specialty meats business, which measures its volume in pounds. We experienced growth in local case volume in our International Foodservice segment of approximately 4.0% in fiscal 2025, as compared to fiscal 2024.
Current wording
Our sales and gross profit performance are influenced by multiple factors including price, volume, inflation, customer mix and product mix. The most significant factor affecting our sales and gross profit performance in fiscal 2026 was product cost inflation, as we experienced 3.0% inflation at the total enterprise level. U.S. Foodservice experienced a 1.4% improvement in total case volume and a 1.7% increase in local case volume as compared to fiscal 2025. This volume reflects our broadline and specialty businesses. We experienced growth in local case volume in our International Foodservice segment of approximately 4.3% in fiscal 2026, as compared to fiscal 2025.
Previous wording
We experienced inflation at a rate of 3.5% and 2.5% in the fourth quarter and for fiscal 2025, respectively, at the total enterprise level, primarily driven by inflation in the dairy, poultry, and meat categories. We have been successful in managing inflation, resulting in an increase in gross profit dollars. Gross margin decreased 13 basis points in fiscal 2025 as compared to fiscal 2024, primarily as a result of a shift in our customer mix driven by national sales volumes outpacing local sales volumes and a decrease in Sysco brand penetration rates. Gross margin increased 19 basis points in the fourth quarter of fiscal 2025 as compared to the fourth quarter of fiscal 2024, primarily as a result of disciplined strategic sourcing efforts.
Current wording
We experienced inflation at a rate of 2.8% and 3.0% in the fourth quarter and for fiscal 2026, respectively, at the total enterprise level, primarily driven by inflation in the meat, seafood, and fresh produce categories. We have been successful in managing inflation, resulting in an increase in gross profit dollars. Gross margin increased 10 basis points in fiscal 2026 as compared to fiscal 2025, primarily as a result of our strategic sourcing efforts and a shift in our customer mix driven by local case growth outpacing national case growth. Gross margin decreased 17 basis points in the fourth quarter of fiscal 2026 as compared to the fourth quarter of fiscal 2025, primarily due to the lapping of favorable benefits from strategic sourcing initiatives in the fourth quarter of fiscal 2025 and the increased cost of fuel across the business.
Previous wording
We expect to grow our revenue and earnings in fiscal 2026. We expect the rate of inflation for fiscal 2026 to be approximately 2%, which is consistent with recent trends experienced in fiscal 2025. We also expect volume growth in fiscal 2026 as a result of improved sales consultant retention, increased sales consultant tenure, and from contributions from potential mergers and acquisitions. In total, we expect these factors to result in net sales growth across the enterprise of 3% to 5% in fiscal 2026.
Current wording
We expect to grow our revenue in fiscal 2027. We expect the rate of inflation for fiscal 2027 to be approximately 1.5% to 2.0%. We also expect volume growth in fiscal 2027, including local case volume growth, as a result of continued productivity gains with sales professionals based on improving tenure. In total, we expect these factors to result in net sales growth across the enterprise of 6% to 7% in fiscal 2027.
Previous wording
In the second quarter of fiscal 2025, we acquired Campbells Prime Meat, a leading specialty meat business based in Scotland. By combining the Campbells Prime Meat product offering with our broadline business, this acquisition provides a strategic opportunity to enable total team selling in this region. This company’s results are included within International Foodservice Operations and were not material to our results in fiscal 2025.
Current wording
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 in fiscal 2026.
Previous wording
Our provision for income taxes primarily reflects a combination of income earned and taxed in the various U.S. federal and state as well as foreign jurisdictions. Tax law changes, increases or decreases in book versus tax basis differences, accruals or adjustments of accruals for unrecognized tax benefits or valuation allowances, and our change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate. Our effective tax rate for fiscal 2025 was 24.3% and is expected to be approximately 23.5% to 24.0% in fiscal 2026.
Current wording
Our provision for income taxes primarily reflects a combination of income earned and taxed in the various U.S. federal and state as well as foreign jurisdictions. Tax law changes, increases or decreases in book versus tax basis differences, accruals or adjustments of accruals for unrecognized tax benefits or valuation allowances, and our change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate. Our effective tax rate for fiscal 2026 was 22.8% and is expected to be approximately 23.7% to 24.2% in fiscal 2027.
Previous wording
On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (OBBBA). The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. Certain provisions will be effective for Sysco beginning in our fiscal 2026 tax year. We are currently evaluating the future impact of these tax law changes on our financial statements.
Current wording
On July 4, 2025, President Trump signed into law the legislation of OBBBA, that includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. These provisions decreased cash taxes paid in fiscal 2026 and may change the timing of cash tax payments in future periods.
Previous wording
Our U.S. Foodservice Operations and our International Foodservice Operations segments represent a substantial majority of our total segment results when compared to other reportable segments. In fiscal 2025, U.S. Foodservice Operations and International Foodservice Operations represented approximately 70.0% and 18.3%, respectively, of Sysco’s overall sales, compared to 70.2% and 18.5%, respectively, in fiscal 2024. In fiscal 2025 and fiscal 2024, U.S. Foodservice Operations represented approximately 88.8% and 88.3%, respectively, of the total segment operating income. See Note 21, “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 8 for more information.
Current wording
Our U.S. Foodservice Operations and our International Foodservice Operations segments represent a substantial majority of our total segment results when compared to other reportable segments. In fiscal 2026, U.S. Foodservice Operations and International Foodservice Operations represented approximately 69.5% and 19.0%, respectively, of Sysco’s overall sales, compared to 70.0% and 18.3%, respectively, in fiscal 2025. In fiscal 2026 and fiscal 2025, U.S. Foodservice Operations represented approximately 85.7% and 88.8%, respectively, of the total segment operating income. See Note 21, “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 8 for more information.
Previous wording
In fiscal 2025, the U.S. Foodservice Operations operating results represented approximately 70.0% of Sysco’s overall sales and 88.8% of the aggregated operating income of Sysco’s reporting segments. Several factors contributed to these higher operating results as compared to the other operating segments. We have invested substantial amounts in assets, operating methods, technology and management expertise in this segment. The breadth of its sales force, geographic reach of its distribution area and its purchasing power enable this segment to generate its relatively stronger results of operations.
Current wording
In fiscal 2026, the U.S. Foodservice Operations operating results represented approximately 69.5% of Sysco’s overall sales and 85.7% of the aggregated operating income of Sysco’s reporting segments. Several factors contributed to these higher operating results as compared to the other operating segments. We have invested substantial amounts in assets, operating methods, technology and management expertise in this segment. The breadth of its sales force, geographic reach of its distribution area and its purchasing power enable this segment to generate its relatively stronger results of operations.
Previous wording
The sales growth in our U.S. Foodservice Operations was driven by higher inflation in fiscal 2025. Case volumes from our U.S. Foodservice Operations increased 0.5%, as compared to fiscal 2024. This included a 1.4% decrease in local customer case volume as compared to fiscal 2024.
Current wording
The sales growth in our U.S. Foodservice Operations in fiscal 2026 was driven by higher inflation and case volume growth. Case volumes from our U.S. Foodservice Operations increased 1.4%, as compared to fiscal 2025. This included a 1.7% increase in local customer case volume as compared to fiscal 2025 and a 1.3% increase in national customer case volume as compared to fiscal 2025.
Previous wording
The decrease in operating income for fiscal 2025, as compared to fiscal 2024, was driven by increases in operating expenses, partially offset by gross profit dollar growth and case volume growth.
Current wording
The increase in operating income for fiscal 2026, as compared to fiscal 2025, was driven by increases in gross profit dollar growth and case volume growth, partially offset by increases in operating expenses.
Previous wording
Gross profit dollar growth in fiscal 2025 was driven primarily by disciplined strategic sourcing efforts and case volume growth from recent acquisitions. The estimated change in product costs, an internal measure of inflation or deflation, increased in fiscal 2025. For fiscal 2025, this change in product costs was primarily driven by inflation in the dairy and poultry categories. Sysco brand penetration for U.S. Broadline decreased by 81 basis points to 35.8% for fiscal 2025, as compared to fiscal 2024. Specific to local customers, Sysco brand penetration for U.S. Broadline decreased by 81 basis points to 46.2% for fiscal 2025, as compared to fiscal 2024.
Current wording
Gross profit dollar growth in fiscal 2026 was driven primarily by benefits from strategic sourcing efforts and case volume growth, including contributions from recent acquisitions and stronger performance from local customers. The estimated change in product costs, an internal measure of inflation or deflation, increased in fiscal 2026. For fiscal 2026, this change in product costs was primarily driven by inflation in the meat, seafood, and fresh produce categories. Sysco brand penetration for U.S. Broadline decreased by 59 basis points to 35.4% for fiscal 2026, as compared to fiscal 2025. Specific to local customers, Sysco brand penetration for U.S. Broadline decreased by 45 basis points to 45.8% for fiscal 2026, as compared to fiscal 2025.
Previous wording
Gross margin, which is gross profit as a percentage of sales, was 19.1% in fiscal 2025. This was a decrease of 26 basis points compared to gross margin of 19.4% in fiscal 2024, primarily due to a shift in our customer mix driven by national sales volumes outpacing local sales volume and a decrease in Sysco brand penetration rates.
Current wording
Gross margin, which is gross profit as a percentage of sales, was 19.11% in fiscal 2026, compared to 19.09% in fiscal 2025. The 2 basis point increase was primarily due to a favorable shift in customer mix, driven by local sales volume growth outpacing national sales volume growth.
Previous wording
The increase in operating expenses for fiscal 2025, as compared to fiscal 2024, was primarily driven by cost inflation and increases in colleague-related costs, depreciation expense, and bad debt, partially offset by lower incentive compensation and gains from sale leaseback transactions.
Current wording
The increase in operating expenses for fiscal 2026, as compared to fiscal 2025, was primarily driven by increases in colleague-related costs, which is inclusive of investments in sales headcount and incentive compensation.
Previous wording
In fiscal 2025, the International Foodservice Operations operating results represented approximately 18.3% of Sysco’s overall sales.
Current wording
In fiscal 2026, the International Foodservice Operations operating results represented approximately 19.0% of Sysco’s overall sales.
Previous wording
Sales increased 2.4% in fiscal 2025 as compared to fiscal 2024, primarily due to higher inflation and local case growth. Excluding the impact of the Mexico joint venture, which was divested during the second quarter of fiscal 2025, sales increased 4.8% in fiscal 2025 as compared to fiscal 2024.
Current wording
Sales increased 7.6% in fiscal 2026 as compared to fiscal 2025, 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 during the second quarter of fiscal 2025, sales increased 9.1% in fiscal 2026 as compared to fiscal 2025.
Previous wording
The increase in gross profit dollars in fiscal 2025, as compared to fiscal 2024, was primarily attributable to increases in local case volumes. Local case volumes increased approximately 4.0% in fiscal 2025, as compared to fiscal 2024.
Current wording
The increase in gross profit dollars in fiscal 2026, as compared to fiscal 2025, was primarily attributable to increases in local case volumes, including contributions from recent acquisitions. Local case volumes increased approximately 4.3% in fiscal 2026, as compared to fiscal 2025.
Previous wording
The increase in operating expenses for fiscal 2025, as compared to fiscal 2024, was primarily due to increases in colleague-related costs and depreciation expense.
Current wording
The increase in operating expenses for fiscal 2026, as compared to fiscal 2025, was primarily due to increases in colleague-related costs, supply chain transformation costs, and sales headcount investments.
Previous wording
For the operations that are grouped within our Other segment, sales were 7.3% lower in fiscal 2025, as compared to fiscal 2024. Operating income decreased $113 million in fiscal 2025, as compared to fiscal 2024. The operations of this group mainly consist of our hospitality business, Guest Worldwide. In fiscal 2025, a noncash goodwill impairment charge of $92 million was recorded within operating expenses for a portion of the goodwill attributable to our Guest Worldwide reporting unit. This impairment charge is considered a Certain Item (defined above). We do not expect a similar impairment charge in fiscal 2026 and as a result, are expecting improved operating results within our Other segment in fiscal 2026.
Current wording
For the operations that are grouped within our Other segment, sales were 0.5% lower in fiscal 2026, as compared to fiscal 2025. Operating income increased $103 million in fiscal 2026, as compared to fiscal 2025. The operations of this group mainly consist of our hospitality business, Guest Worldwide. The improvement in operating income is due to a noncash goodwill impairment charge of $92 million that was recorded in fiscal 2025 within operating expenses for a portion of the goodwill attributable to our Guest Worldwide reporting unit. We did not have a similar charge in fiscal 2026.
Previous wording
Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service operations. These expenses decreased $56 million in fiscal 2025, or 5.7% as compared to fiscal 2024, primarily due to decreases in colleague-related costs, including lower incentive compensation.
Current wording
Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service operations. These expenses increased $127 million in fiscal 2026, or 13.7% as compared to fiscal 2025, primarily due to increases in colleague-related costs, which is inclusive of incentive compensation, and acquisition and due diligence costs, partially offset by decreases in insurance costs.
Previous wording
Included in Global Support Center expenses are Certain Items that totaled $79 million in fiscal 2025, as compared to $81 million in fiscal 2024. Certain Items impacting fiscal 2025 were primarily expenses associated with severances, our business technology transformation initiatives, and expenses associated with acquisitions. In fiscal 2024, Certain Items that impacted the year were primarily expenses associated with severances, our business technology transformation initiatives, and expenses associated with acquisitions.
Current wording
Included in Global Support Center expenses are Certain Items that totaled $162 million in fiscal 2026, as compared to $79 million in fiscal 2025. Certain Items impacting fiscal 2026 were primarily expenses associated with our business technology transformation initiatives and acquisition and due diligence costs. In fiscal 2025, Certain Items that impacted the year were primarily expenses associated with severances, our business technology transformation initiatives, and expenses associated with acquisitions.
Previous wording
Interest expense increased $28 million for fiscal 2025, as compared to fiscal 2024, primarily due to interest on new senior notes issued. We expect to incur $700 million in interest expense in fiscal 2026.
Current wording
Interest expense increased $82 million for fiscal 2026, as compared to fiscal 2025, primarily due to interest on new senior notes issued, as well as amortization expense associated with debt issuance costs on a bridge loan facility, which is treated as a Certain Item. We expect to incur approximately $770 million in interest expense in fiscal 2027, which includes the amortization of debt issuance costs associated with the bridge loan facility related to the planned acquisition of JRD. Interest expense on an adjusted basis is expected to be approximately $675 million in fiscal 2027.
Previous wording
Net earnings decreased 6.5% in fiscal 2025, as compared to fiscal 2024, due primarily to the items noted previously for operating income and interest expense, as well as items impacting our income taxes that are discussed in Note 19, “Income Taxes,” in the Notes to Consolidated Financial Statements in Item 8. Adjusted net earnings, excluding Certain Items, increased 0.8% in fiscal 2025, primarily due to an increase in sales volume as a result of recent acquisitions and disciplined strategic sourcing efforts.
Current wording
Net earnings decreased 3.9% in fiscal 2026, as compared to fiscal 2025, due primarily to the items noted previously for operating income, interest expense, and other expense (income), net as well as items impacting our income taxes that are discussed in Note 19, “Income Taxes,” in the Notes to Consolidated Financial Statements in Item 8. Adjusted net earnings, excluding Certain Items, increased 1.4% in fiscal 2026, primarily due to an increase in sales volume driven by local case growth and benefits from strategic sourcing efforts.
Previous wording
Basic earnings per share in fiscal 2025 were $3.74, a 4.1% decrease from the fiscal 2024 amount of $3.90 per share. Diluted earnings per share in fiscal 2025 were $3.73, a 4.1% decrease from the fiscal 2024 amount of $3.89 per share. Adjusted diluted earnings per share, excluding Certain Items (which is a non-GAAP financial measure for which a reconciliation is provided in “Non-GAAP Reconciliations” on the subsequent page), in fiscal 2025 were $4.46, a 3.5% increase from the fiscal 2024 amount of $4.31 per share. These results were primarily attributable to the factors discussed previously related to net earnings in fiscal 2025.
Current wording
Basic earnings per share in fiscal 2026 were $3.67, a 1.9% decrease from the fiscal 2025 amount of $3.74 per share. Diluted earnings per share in fiscal 2026 were $3.66, a 1.9% decrease from the fiscal 2025 amount of $3.73 per share. Adjusted diluted earnings per share, excluding Certain Items (which is a non-GAAP financial measure for which a reconciliation is provided in “Non-GAAP Reconciliations” on the subsequent page), in fiscal 2026 were $4.61, a 3.4% increase from the fiscal 2025 amount of $4.46 per share. These results were primarily attributable to the factors discussed previously related to net earnings in fiscal 2026.
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. Adjustments provided herein for fiscal 2025 results of operations also remove the impact of a goodwill impairment charge. No similar charge was applicable in fiscal 2024.
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 year 2026 results of operations also remove the impact of a charge associated with a legal matter, amortization expense associated with debt issuance costs on a bridge loan facility, and a loss on deal contingent rate lock transactions entered into to mitigate interest rate risk on future permanent debt that could potentially be issued to finance the purchase of Jetro Restaurant Depot. No similar charges were applicable in fiscal year 2025. Adjustments provided herein for fiscal year 2025 results of operations also remove the impact of a goodwill impairment charge. No similar charge was applicable in fiscal year 2026.
Previous wording
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 2025.
Current wording
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 for our International Foodservice Operations excluding the impact of our joint venture in Mexico which was divested in the second quarter of fiscal year 2025.
Previous wording
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.
Current wording
Management believes that adjusting its operating expenses, operating income, operating margin, interest expense, other (income) expense, 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.
Previous wording
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.
Current wording
Set forth on the following page is a reconciliation of sales, operating expenses, operating income, interest expense, other (income) expense, 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. The non-GAAP financial measures shown in the following tables should not be used as a substitute for the most comparable GAAP financial measures in assessing the company’s financial performance for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
Previous wording
•Cash flows from operations were $2.5 billion in fiscal 2025, compared to $3.0 billion in fiscal 2024;
Current wording
•Cash flows from operations were $2.6 billion in fiscal 2026, compared to $2.5 billion in fiscal 2025;
Previous wording
•Net capital expenditures totaled $692 million in fiscal 2025, compared to $753 million in fiscal 2024;
Current wording
•Net capital expenditures totaled $524 million in fiscal 2026, compared to $692 million in fiscal 2025;
Previous wording
•Free cash flow was $1.8 billion in fiscal 2025, compared to $2.2 billion in fiscal 2024 (see “Cash Flows – Free Cash Flow – Non-GAAP Reconciliation” below for an explanation of this non-GAAP financial measure);
Current wording
•Free cash flow was $2.1 billion in fiscal 2026, compared to $1.8 billion in fiscal 2025 (see “Cash Flows – Free Cash Flow – Non-GAAP Reconciliation” below for an explanation of this non-GAAP financial measure);
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Current report — wording carried from elsewhere
None of these plans have a significant sensitivity to changes in discount rates specific to our results of operations, but such changes could impact our balance sheet due to a change in our funded status. Due to the low level of active employees in our retirement plans, our assumption for the rate of increase in future compensation is not a critical assumption.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Fiscal 2025 results of operations were also negatively impacted by a noncash goodwill impairment charge. No similar charge was applicable in fiscal 2024.
Previous report — wording carried elsewhere
Capital Resources” for discussions of GAAP metrics, including net cash provided by operating activities and our reconciliation of this non-GAAP financial measure.
Previous report — wording carried elsewhere
Additionally, Sysco Corporation has provided intercompany loans to certain of its international subsidiaries. When interest and principal payments are made, some of this cash will move to the U.S.