Sysco (NYSE: SYY) Q3 2026 results and $29.1B Jetro Restaurant Depot acquisition
Filing Impact
Filing Sentiment
Form Type
10-Q
Sysco Corporation delivered modest top-line growth but lower profit in its fiscal Q3 2026 while announcing a transformative acquisition. Quarterly sales rose to $20.5 billion, up 4.7% from a year earlier, driven by higher case volumes across U.S. and international foodservice operations. Gross profit grew 6.5%, but operating income fell 9.1% to $619 million as incentive compensation, restructuring, transformation projects, and acquisition-related costs increased. Net earnings declined 15.2% to $340 million, with diluted EPS down to $0.71. For the first 39 weeks, sales reached $62.4 billion, up 3.6%, while operating income slipped to $2.1 billion and net earnings to $1.2 billion.
Cash generation remained solid: Sysco produced $1.46 billion in operating cash flow over 39 weeks, boosting cash, cash equivalents and restricted cash to $2.06 billion and total assets to $28.0 billion. Total debt rose to $14.0 billion, and interest expense for the period increased 9.2% to $512 million. The company continued returning capital via dividends of $0.54 per share in the quarter and share repurchases of $200 million year-to-date, while basic shares outstanding declined to about 479 million.
Sysco also detailed a planned acquisition of Jetro Restaurant Depot for approximately $29.1 billion, including $21.6 billion in cash and 91.5 million Sysco shares, after which JRD holders are expected to own about 16% of Sysco. The cash portion is backed by a $19 billion bridge loan commitment and a new $3 billion delayed draw term loan facility, alongside future permanent financing. A new revolving credit facility will expand to $4.0–5.0 billion post-closing. The deal is targeted to close by Q3 fiscal 2027, subject to regulatory approval; failure to obtain clearance would trigger a $1.164 billion termination fee.
Positive
- None.
Negative
- None.
Insights
Sysco posts modest growth but takes on major JRD deal and financing.
Sysco grew Q3 2026 sales 4.7% to $20.5 billion, with gross profit up 6.5%. However, operating income fell 9.1% to $619 million and net earnings dropped 15.2% to $340 million, mainly from higher incentive pay, restructuring, and acquisition-related costs.
For the first 39 weeks, sales reached $62.4 billion and EBITDA was $2.8 billion, slightly below last year, while adjusted EBITDA edged up 1.2% to $3.0 billion. Cash from operations improved to $1.46 billion, supporting dividends and $200 million of buybacks despite total debt rising to about $14.0 billion.
The planned $29.1 billion acquisition of Jetro Restaurant Depot is the key strategic swing, adding a large U.S. cash-and-carry footprint. Financing relies on a $19 billion bridge loan facility, a $3 billion delayed draw term loan, and future permanent debt and equity. A $1.164 billion break fee if regulators block the deal underscores execution and regulatory risk. Subsequent filings and closing progress will clarify leverage, interest cost, and integration impact.
Key Figures
Quarterly sales: $20.5 billion
Quarterly net earnings: $340 million
Diluted EPS: $0.71 per share
+5 more
8 metrics
Quarterly sales
$20.5 billion
Sales for 13-week period ended March 28, 2026
Quarterly net earnings
$340 million
Net earnings for 13-week period ended March 28, 2026
Diluted EPS
$0.71 per share
13-week period ended March 28, 2026
Year-to-date cash from operations
$1.463 billion
39-week period ended March 28, 2026
Total debt
$14.0 billion
Carrying value as of March 28, 2026
JRD purchase price
$29.1 billion
Agreed consideration for Jetro Restaurant Depot
JRD cash component
$21.6 billion
Cash portion of JRD acquisition price
Bridge loan commitment
$19 billion
Senior unsecured 364-day bridge facility for JRD deal
Key Terms
bridge loan facility, cash flow hedges, net investment hedges, adjusted EBITDA, +2 more
6 terms
bridge loan facility financial
"Sysco has executed a commitment letter for a $22 billion senior unsecured 364-day bridge loan facility"
A bridge loan facility is short-term financing that helps a company cover an immediate cash need while it arranges longer-term funding, like a temporary bridge spanning a river until a permanent road is built. For investors, it matters because it signals short-term liquidity pressure or planned transactions, can carry higher interest or fees, and may affect future equity or debt terms if the company must refinance, dilute shares, or accept tighter covenants.
cash flow hedges financial
"Change in cash flow hedges | Operating expenses | 81 | 20 | 61"
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
net investment hedges financial
"Derivatives in net investment hedging relationships Cross currency contracts | $ 43 | N/A"
adjusted EBITDA financial
"adjusted EBITDA increased 0.1%, or $1 million, to $970 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Certain Items financial
"The fiscal 2026 and fiscal 2025 items discussed above are collectively referred to as “Certain Items.”"
delayed draw term loan facility financial
"Sysco entered into a $3 billion senior unsecured delayed draw term loan facility, comprising a $1.25 billion 364-day tranche and a $1.75 billion 2-year tranche"
A delayed draw term loan facility is a committed loan that a borrower can tap in one or more installments at specified future times after meeting agreed conditions, rather than receiving the full amount upfront. For investors it matters because it provides a ready source of cash that can change a company’s financial strength, leverage and interest costs when drawn—similar to having a reserved credit line you can use later, which affects liquidity and the risk profile of the business.
1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 10-Q
(Mark One) | |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 28, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 1-6544
________________
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:
(281 ) 584-1390
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes þ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
☑ | Accelerated Filer | ☐ | |
Non-accelerated Filer | ☐ | Smaller Reporting Company | |
(Do not check if a smaller reporting company) | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION | Page No. | |
Item 1. | Financial Statements | 1 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 57 |
Item 4. | Controls and Procedures | 58 |
PART II – OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 59 |
Item 1A. | Risk Factors | 59 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 60 |
Item 3. | Defaults Upon Senior Securities | 61 |
Item 4. | Mine Safety Disclosures | 61 |
Item 5. | Other Information | 61 |
Item 6. | Exhibits | 61 |
Signatures | 64 |
1
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In millions, except for share data)
Mar. 28, 2026 | Jun. 28, 2025 | ||
(unaudited) | |||
ASSETS | |||
Current assets | |||
Cash and cash equivalents | $ | $ | |
Accounts receivable, less allowances of $ | |||
Inventories | |||
Prepaid expenses and other current assets | |||
Income tax receivable | |||
Total current assets | |||
Plant and equipment at cost, less accumulated depreciation | |||
Other long-term assets | |||
Goodwill | |||
Intangibles, less amortization | |||
Deferred income taxes | |||
Operating lease right-of-use assets, net | |||
Other assets | |||
Total other long-term assets | |||
Total assets | $ | $ | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
Current liabilities | |||
Accounts payable | $ | $ | |
Accrued expenses | |||
Accrued income taxes | |||
Current operating lease liabilities | |||
Current maturities of long-term debt | |||
Total current liabilities | |||
Long-term liabilities | |||
Long-term debt | |||
Deferred income taxes | |||
Long-term operating lease liabilities | |||
Other long-term liabilities | |||
Total long-term liabilities | |||
Noncontrolling interest | |||
Shareholders’ equity | |||
Preferred stock, par value $ | |||
Common stock, par value $ | |||
Paid-in capital | |||
Retained earnings | |||
Accumulated other comprehensive loss | ( | ( | |
Treasury stock at cost, | ( | ( | |
Total shareholders’ equity | |||
Total liabilities and shareholders’ equity | $ | $ | |
Note: The June 28, 2025 balance sheet has been derived from the audited financial statements at that date.
See Notes to Consolidated Financial Statements
2
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In millions, except for share and per share data)
13-Week Period Ended | 39-Week Period Ended | ||||||
Mar. 28, 2026 | Mar. 29, 2025 | Mar. 28, 2026 | Mar. 29, 2025 | ||||
Sales | $ | $ | $ | $ | |||
Cost of sales | |||||||
Gross profit | |||||||
Operating expenses | |||||||
Operating income | |||||||
Interest expense | |||||||
Other expense (income), net | |||||||
Earnings before income taxes | |||||||
Income taxes | |||||||
Net earnings | $ | $ | $ | $ | |||
Net earnings: | |||||||
Basic earnings per share | $ | $ | $ | $ | |||
Diluted earnings per share | |||||||
Average shares outstanding | |||||||
Diluted shares outstanding | |||||||
See Notes to Consolidated Financial Statements
3
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In millions)
13-Week Period Ended | 39-Week Period Ended | ||||||
Mar. 28, 2026 | Mar. 29, 2025 | Mar. 28, 2026 | Mar. 29, 2025 | ||||
Net earnings | $ | $ | $ | $ | |||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustment | ( | ( | |||||
Items presented net of tax: | |||||||
Amortization of cash flow hedges | |||||||
Change in net investment hedges | ( | ( | |||||
Change in cash flow hedges | ( | ||||||
Change in excluded components of fair value hedge | ( | ||||||
Amortization of actuarial loss | |||||||
Net actuarial gain and other adjustments arising in current year | |||||||
Change in marketable securities | ( | ||||||
Total other comprehensive income (loss) | |||||||
Comprehensive income | $ | $ | $ | $ | |||
See Notes to Consolidated Financial Statements
4
Sysco Corporation and its Consolidated Subsidiaries
CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (Unaudited)
(In millions, except for share data)
Quarter to Date
Accumulated Other Comprehensive Loss | |||||||||||||||
Common Stock | Paid-in Capital | Retained Earnings | Treasury Stock | ||||||||||||
Shares | Amount | Shares | Amounts | Totals | |||||||||||
Balance as of December 27, 2025 | $ | $ | $ | $( | $( | $ | |||||||||
Net earnings | |||||||||||||||
Other comprehensive income (loss) | |||||||||||||||
Dividends declared ($ | ( | ( | |||||||||||||
Treasury stock purchases | ( | ( | |||||||||||||
Share-based compensation awards | ( | ||||||||||||||
Adjustments to redeemable non-controlling interest | ( | ( | |||||||||||||
Balance as of March 28, 2026 | $ | $ | $ | $( | $( | $ | |||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||
Common Stock | Paid-in Capital | Retained Earnings | Treasury Stock | ||||||||||||
Shares | Amount | Shares | Amounts | Totals | |||||||||||
Balance as of December 28, 2024 | $ | $ | $ | $( | $( | $ | |||||||||
Net earnings | |||||||||||||||
Other comprehensive income (loss) | |||||||||||||||
Dividends declared ($ | ( | ( | |||||||||||||
Treasury stock purchases | ( | ( | |||||||||||||
Share-based compensation awards | ( | ( | |||||||||||||
Adjustments to redeemable non-controlling interest | ( | ( | |||||||||||||
Balance as of March 29, 2025 | $ | $ | $ | $( | $( | $ | |||||||||
See Notes to Consolidated Financial Statements
Year to Date
Accumulated Other Comprehensive Loss | |||||||||||||||
Common Stock | Paid-in Capital | Retained Earnings | Treasury Stock | ||||||||||||
Shares | Amount | Shares | Amounts | Totals | |||||||||||
Balance as of June 28, 2025 | $ | $ | $ | $( | $( | $ | |||||||||
Net earnings | |||||||||||||||
Other comprehensive income (loss) | |||||||||||||||
Dividends declared ($ | ( | ( | |||||||||||||
Treasury stock purchases | ( | ( | |||||||||||||
Share-based compensation awards | ( | ||||||||||||||
Adjustments to redeemable non-controlling interest | ( | ( | |||||||||||||
Balance as of March 28, 2026 | $ | $ | $ | $( | $( | $ | |||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||
Common Stock | Paid-in Capital | Retained Earnings | Treasury Stock | ||||||||||||
Shares | Amount | Shares | Amounts | Totals | |||||||||||
Balance as of June 29, 2024 | $ | $ | $ | $( | $( | $ | |||||||||
Net earnings | |||||||||||||||
Other comprehensive loss | |||||||||||||||
Dividends declared ($ | ( | ( | |||||||||||||
Treasury stock purchases | ( | ( | |||||||||||||
Share-based compensation awards | ( | ||||||||||||||
Adjustments to redeemable non-controlling interest | ( | ( | |||||||||||||
Balance as of March 29, 2025 | $ | $ | $ | $( | $( | $ | |||||||||
See Notes to Consolidated Financial Statements
5
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS (Unaudited)
(In millions)
39-Week Period Ended | |||
Mar. 28, 2026 | Mar. 29, 2025 | ||
Cash flows from operating activities: | |||
Net earnings | $ | $ | |
Adjustments to reconcile net earnings to cash provided by operating activities: | |||
Share-based compensation expense | |||
Depreciation and amortization | |||
Operating lease asset amortization | |||
Amortization of debt issuance and other debt-related costs | |||
Deferred income taxes | ( | ( | |
Provision for losses on receivables | |||
Other non-cash items | ( | ( | |
Additional changes in certain assets and liabilities, net of effect of businesses acquired: | |||
Increase in receivables | ( | ( | |
Increase in inventories | ( | ( | |
Increase in prepaid expenses and other current assets | ( | ( | |
Increase (decrease) in accounts payable | ( | ||
Increase (decrease) in accrued expenses | ( | ||
Decrease in operating lease liabilities | ( | ( | |
Decrease in accrued income taxes | ( | ( | |
(Increase) decrease in other assets | ( | ||
(Decrease) increase in other long-term liabilities | ( | ||
Net cash provided by operating activities | |||
Cash flows from investing activities: | |||
Additions to plant and equipment | ( | ( | |
Proceeds from sales of plant and equipment | |||
Acquisition of businesses, net of cash acquired | ( | ( | |
Purchase of marketable securities | ( | ( | |
Proceeds from sales of marketable securities | |||
Other investing activities | |||
Net cash used for investing activities | ( | ( | |
Cash flows from financing activities: | |||
Bank and commercial paper borrowings (repayments), net | ( | ||
Other debt borrowings including senior notes | |||
Other debt repayments including senior notes | ( | ( | |
Proceeds from stock option exercises | |||
Stock repurchases | ( | ( | |
Dividends paid | ( | ( | |
Other financing activities | ( | ( | |
Net cash used for financing activities | ( | ( | |
Effect of exchange rates on cash, cash equivalents and restricted cash | ( | ( | |
Net increase in cash, cash equivalents and restricted cash | |||
Cash, cash equivalents and restricted cash at beginning of period | |||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |
Supplemental disclosures of cash flow information: | |||
Cash paid during the period for: | |||
Interest | $ | $ | |
Income taxes, net of refunds (1) | |||
(1) | Cash paid for income taxes, net for the 39 weeks ended March 28, 2026 and March 29, 2025 includes $ of cash paid for the purchase of federal tax credits. | |||
See Notes to Consolidated Financial Statements
6
Sysco Corporation and its Consolidated Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Sysco,” or
the “company” as used in this Form 10-Q refer to Sysco Corporation together with its consolidated subsidiaries and divisions.
1. BASIS OF PRESENTATION
The consolidated financial statements have been prepared by the company, without an audit. The financial statements
include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income,
changes in consolidated shareholders’ equity and consolidated cash flows. In the opinion of management, all adjustments,
which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position,
results of operations, comprehensive income, cash flows and changes in shareholders’ equity for all periods presented have
been made.
These financial statements should be read in conjunction with the audited financial statements and notes thereto
included in our Annual Report on Form 10-K for the fiscal year ended June 28, 2025 (our “fiscal 2025 Form 10-K”). Certain
footnote disclosures included in annual financial statements prepared in accordance with generally accepted accounting
principles (GAAP) have been condensed or omitted pursuant to applicable rules and regulations for interim financial
statements.
Supplemental Balance Sheet Information
We have agreements with third parties to provide supplier finance programs which facilitate participating suppliers’
ability to finance payment obligations from the company with designated third-party financial institutions. Participating
suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the company prior to their
scheduled due dates at a discounted price to participating financial institutions. Obligations of the company that have been
confirmed as valid require payment by Sysco upon the due date of the obligation.
in accounts payable on the consolidated balance sheets, are as follows:
Mar. 28, 2026 | Jun. 28, 2025 | ||
(In millions) | |||
Financed payment obligations | $ | $ | |
We utilize arrangements to sell portions of our trade accounts receivable to third-party financial institutions on a non-
recourse basis in exchange for cash. The arrangements meet the requirements for the receivables transferred to be accounted for
as sales and are accounted for as a reduction in trade receivables. Proceeds from the sales are reported net of negotiated
discount and are recorded as a reduction to accounts receivable outstanding in the company’s consolidated balance sheets and
these arrangements were $1.4 billion and $1.9 billion for the third quarter of fiscal 2026 and 2025, respectively, and $4.4 billion
and $6.0 billion for the first 39 weeks of fiscal 2026 and 2025, respectively.
In certain instances, Sysco has continuing involvement subsequent to the transfer, limited to providing certain
servicing and collection actions on behalf of the purchasers of the designated trade receivables. The outstanding aggregate
principal amount of receivables that has been derecognized and remain outstanding was $198 million and $189 million at
March 28, 2026 and June 28, 2025, respectively. We continue to service the receivables post-transfer on a non-recourse basis
with no participating interest.
Supplemental Cash Flow Information
consolidated balance sheets that sum to the total of the amounts shown in the consolidated statement of cash flows:
7
Mar. 28, 2026 | Mar. 29, 2025 | ||
(In millions) | |||
Cash and cash equivalents | $ | $ | |
Restricted cash (1) | |||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ | $ | |
(1) | Restricted cash primarily represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. Restricted cash is located within other assets in each consolidated balance sheet. |
Mar. 28, 2026 | Mar. 29, 2025 | ||
(In millions) | |||
Non-cash investing and financing activities: | |||
Plant and equipment acquired through financing programs | $ | $ | |
Assets obtained in exchange for finance lease obligations | |||
2. NEW ACCOUNTING STANDARDS
Segment Reporting
In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures to improve reportable segment
disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public
entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief
operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its
composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is
effective for fiscal years beginning after December 15, 2023, (our fiscal 2025), and interim periods for our fiscal years
beginning after December 15, 2024, (our first quarter of fiscal 2026), and should be applied on a retrospective basis to all
periods presented. Sysco adopted ASU 2023-07 related to annual disclosure requirements effective with our fiscal 2025 Form
10-K. The newly required annual disclosures were included in Note 21 - Business Segment Information of the fiscal 2025 Form
10-K. We adopted ASU 2023-07 related to interim disclosure requirements effective with our first quarter fiscal 2026 10-Q
filing. See Note 14 included in this Form 10-Q for the additional segment disclosures required as a result of the adoption.
Adoption of ASU 2023-07 only impacted our financial statement disclosures, with no impacts to our financial position or
results of operations.
Recent Accounting Guidance Not Yet Adopted
Income Taxes
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax
Disclosures to enhance income tax information primarily through changes in the rate reconciliation and income taxes paid
information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, (our fiscal 2026), and may be
applied prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the effect of adopting ASU
2023-09 on our disclosures.
8
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense
Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard update requires
more detailed disclosures related to the types of expenses included within commonly presented income statement captions. The
amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, (our fiscal 2028),
and interim reporting periods for our fiscal years beginning after December 15, 2027, (our first quarter of fiscal 2029). Early
adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. We are
currently evaluating the effect of adopting ASU 2024-03 on our disclosures.
Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software
(Subtopic 350-40), which amends certain aspects of the accounting and disclosure of software costs under ASU 350-40. This
ASU updates the cost capitalization threshold for internal-use software development costs by removing all references to
software project development stages and providing new guidance on how to evaluate whether the probable-to-complete
recognition threshold has been met. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027,
(our fiscal 2029), and interim reporting periods within those annual reporting periods, (our first quarter of fiscal 2029). Early
adoption is permitted. The standard updates may be applied prospectively, retrospectively, or via a modified prospective
transition method. We are currently evaluating the effect of adopting ASU 2025-06 on our consolidated financial statements
and disclosures.
3. REVENUE
We recognize revenues when our performance obligations are satisfied in an amount that reflects the consideration
Sysco expects to be entitled to receive in exchange for those goods and services. Customer receivables, which are included in
accounts receivable, less allowances in the consolidated balance sheet, were $5.4 billion and $5.1 billion as of March 28, 2026
and June 28, 2025, respectively.
product categories for the periods presented:
13-Week Period Ended Mar. 28, 2026 | ||||||||||
US Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||
(In millions) | ||||||||||
Principal Product Categories | ||||||||||
Fresh and frozen meats | $ | $ | $ | $ | $ | |||||
Canned and dry products | ||||||||||
Frozen fruits, vegetables, bakery and other | ||||||||||
Dairy products | ||||||||||
Poultry | ||||||||||
Fresh produce | ||||||||||
Paper and disposables | ||||||||||
Beverage products | ||||||||||
Seafood | ||||||||||
Equipment and smallwares | ||||||||||
Other (1) | ||||||||||
Total Sales | $ | $ | $ | $ | $ | |||||
(1) | Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies. |
9
13-Week Period Ended Mar. 29, 2025 | ||||||||||
US Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||
(In millions) | ||||||||||
Principal Product Categories | ||||||||||
Fresh and frozen meats | $ | $ | $ | $ | $ | |||||
Canned and dry products | ||||||||||
Frozen fruits, vegetables, bakery and other | ||||||||||
Dairy products | ||||||||||
Poultry | ||||||||||
Fresh produce | ||||||||||
Paper and disposables | ||||||||||
Beverage products | ||||||||||
Seafood | ||||||||||
Equipment and smallwares | ||||||||||
Other (1) | ||||||||||
Total Sales | $ | $ | $ | $ | $ | |||||
(1) | Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies. |
39-Week Period Ended Mar. 28, 2026 | ||||||||||
US Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||
(In millions) | ||||||||||
Principal Product Categories | ||||||||||
Fresh and frozen meats | $ | $ | $ | $ | $ | |||||
Canned and dry products | ||||||||||
Frozen fruits, vegetables, bakery and other | ||||||||||
Dairy products | ||||||||||
Poultry | ||||||||||
Fresh produce | ||||||||||
Paper and disposables | ||||||||||
Beverage products | ||||||||||
Seafood | ||||||||||
Equipment and smallwares | ||||||||||
Other (1) | ||||||||||
Total Sales | $ | $ | $ | $ | $ | |||||
(1) | Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies. |
10
39-Week Period Ended Mar. 29, 2025 | ||||||||||
US Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||
(In millions) | ||||||||||
Principal Product Categories | ||||||||||
Fresh and frozen meats | $ | $ | $ | $ | $ | |||||
Canned and dry products | ||||||||||
Frozen fruits, vegetables, bakery and other | ||||||||||
Dairy products | ||||||||||
Poultry | ||||||||||
Fresh produce | ||||||||||
Paper and disposables | ||||||||||
Beverage products | ||||||||||
Seafood | ||||||||||
Equipment and smallwares | ||||||||||
Other (1) | ||||||||||
Total Sales | $ | $ | $ | $ | $ | |||||
(1) | Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies. |
11
4. ACQUISITIONS
During the first 39 weeks of fiscal 2026, the company paid $189 million primarily for the acquisitions of Fairfax
Meadow and Ginsberg’s Foods.
In certain circumstances, purchase price allocations may be based upon preliminary estimates and assumptions.
Accordingly, allocations are subject to revision until Sysco receives final information and completes its analysis during the
measurement period. This includes finalizing the valuation of acquired tangible and intangible assets and related tax attributes.
Sysco’s operations within the United Kingdom will undergo a rebranding initiative, rebranding the Brakes® brand and
other smaller brands, as “Sysco GB.” This rebranding initiative will take approximately two years and will result in Sysco
amortizing previously indefinite-lived intangible assets on a straight-line basis over this two-year period. Amortization expense
related to these intangible assets is expected to be $29 million in fiscal 2026, $49 million in fiscal 2027 and $25 million in fiscal
2028.
5. FAIR VALUE MEASUREMENTS
funds included in cash equivalents are valued using inputs that are considered a Level 1 measurement. Other cash equivalents,
such as time deposits and highly liquid instruments with original maturities of three months or less, are valued using inputs that
are considered a Level 2 measurement. The fair value of our marketable securities is measured using inputs that are considered
a Level 2 measurement, as they rely on quoted prices in markets that are not actively traded or observable inputs over the full
term of the asset. The location and the fair value of the company’s marketable securities in the consolidated balance sheet are
disclosed in Note 6, “Marketable Securities.” The fair value of our derivative instruments is measured using inputs that are
considered a Level 2 measurement, as they are not actively traded and are valued using pricing models that use observable
market quotations. The location and the fair values of derivative assets and liabilities designated as hedges in the consolidated
balance sheet are disclosed in Note 7, “Derivative Financial Instruments.”
2025:
Assets Measured at Fair Value as of Mar. 28, 2026 | |||||||
Level 1 | Level 2 | Level 3 | Total | ||||
(In millions) | |||||||
Assets: | |||||||
Cash and cash equivalents | $ | $ | $ | $ | |||
Restricted cash | |||||||
Total assets at fair value | $ | $ | $ | $ | |||
Assets Measured at Fair Value as of Jun. 28, 2025 | |||||||
Level 1 | Level 2 | Level 3 | Total | ||||
(In millions) | |||||||
Assets: | |||||||
Cash and cash equivalents | $ | $ | $ | $ | |||
Restricted cash | |||||||
Total assets at fair value | $ | $ | $ | $ | |||
The carrying values of accounts receivable and accounts payable approximated their respective fair values due to their
short-term maturities. The fair value of our total debt is estimated based on the quoted market prices for the same or similar
issues or on the current rates offered to the company for new debt with the same maturities as existing debt and is considered a
Level 2 measurement. The fair value of total debt was approximately $13.4 billion as of March 28, 2026 and $12.8 billion as of
12
6. MARKETABLE SECURITIES
Sysco invests a portion of the assets held by its wholly owned captive insurance subsidiary in a restricted investment
portfolio of marketable fixed income securities, which have been classified and accounted for as available-for-sale. We include
fixed income securities maturing in less than 12 months within prepaid expenses and other current assets. Fixed income
securities maturing in more than 12 months are included within other assets in the accompanying consolidated balance sheets.
We record the amounts at fair market value, which is determined using quoted market prices at the end of the reporting period.
Unrealized gains and any portion of a security’s unrealized loss attributable to non-credit losses are recorded in
accumulated other comprehensive loss. There were no significant credit losses recognized in the first 39 weeks of fiscal 2026.
Mar. 28, 2026 | |||||||||||
Amortized Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Short-Term Marketable Securities | Long-Term Marketable Securities | ||||||
(In millions) | |||||||||||
Fixed income securities: | |||||||||||
Corporate bonds | $ | $ | $( | $ | $ | $ | |||||
Government bonds | ( | ||||||||||
Total marketable securities | $ | $ | $( | $ | $ | $ | |||||
Jun. 28, 2025 | |||||||||||
Amortized Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Short-Term Marketable Securities | Long-Term Marketable Securities | ||||||
(In millions) | |||||||||||
Fixed income securities: | |||||||||||
Corporate bonds | $ | $ | $( | $ | $ | $ | |||||
Government bonds | ( | ||||||||||
Total marketable securities | $ | $ | $( | $ | $ | $ | |||||
table. Within the table, maturities of fixed income securities have been allocated based upon timing of estimated cash flows.
Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay
obligations without prepayment penalties.
Mar. 28, 2026 | |
(In millions) | |
Due in one year or less | $ |
Due after one year through five years | |
Due after five years | |
Total | $ |
There were no significant realized gains or losses in marketable securities in the first 39 weeks of fiscal 2026.
7. DERIVATIVE FINANCIAL INSTRUMENTS
Sysco uses derivative financial instruments to enact hedging strategies for risk mitigation purposes; however, we do
not use derivative financial instruments for trading or speculative purposes. Hedging strategies are used to manage interest rate
risk, foreign currency risk and fuel price risk.
13
Hedging of interest rate risk
Sysco manages its debt portfolio with interest rate swaps from time to time to achieve an overall desired position of
fixed and floating rates. In the third quarter of fiscal 2026, we entered into receive-fixed, pay-floating swap agreements to trade
the fixed interest rate on $600 million of 4.40 % senior notes and $650 million of 4.95 % senior notes with variable rates,
respectively. The interest rate swaps are designated as fair value hedges and gains or losses on the hedges impact interest
expense within the consolidated statements of income.
Hedging of foreign currency risk
Sysco has cross-currency swaps that hedge the foreign currency exposure of our net investment in certain foreign
operations. These cross-currency swaps are designated as net investment hedges with gains and losses recognized within
accumulated other comprehensive income (loss), including changes in fair value attributed to the spot-forward rate differential
which are excluded from the assessment of hedge effectiveness. The initial value of the excluded component is recognized in
earnings over the life of the hedging instrument. In the third quarter of fiscal 2026, we entered into $814 million Canadian
dollar cross-currency swaps which will mature on June 25, 2031 to hedge the foreign currency exposure of the net investment
in our Canadian operations.
Sysco routinely manages foreign currency risk with spot and forward-rate cross-currency swaps on foreign-
denominated balances. The swaps are designated as fair value hedges and for swaps hedging the change in foreign currency
spot rates, we have elected to exclude the changes in fair value of the forward points from the assessments of hedge
effectiveness. Gains or losses from fair value hedges impact the same category on the consolidated statements of income as the
item being hedged, including the value of the excluded components which is recognized in earnings over the life of the hedging
instrument. Subsequent to March 28, 2026, Sysco entered an intercompany loan with an affiliate that is denominated in euro
that will mature July 10, 2026. To hedge our foreign currency risk, we entered into a cross currency swap for €450 million and
designated it as a fair value hedge.
Sysco’s operations in Europe have inventory purchases denominated in currencies other than their functional currency,
such as the Euro, U.S. dollar, Polish zloty and Danish krone. Accounts payable associated with these inventory purchases give
rise to foreign currency exposure between the functional currency of each entity and these currencies. We periodically enter into
foreign currency forward swap contracts to sell the applicable entity’s functional currency and buy currencies matching the
inventory purchase, which operate as cash flow hedges of the company’s foreign currency-denominated inventory purchases.
Hedging of fuel price risk
Sysco uses fuel commodity swap contracts to hedge against the risk of the change in the price of diesel fuel on
anticipated future purchases. These swaps are designated as cash flow hedges.
14
None of our hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging
instruments as of March 28, 2026 are presented below:
Maturity Date of the Hedging Instrument | Currency / Unit of Measure | Notional Value | ||
(In millions) | ||||
Hedging of interest rate risk | ||||
January 2034 | U.S. Dollar | |||
March 2035 | U.S. Dollar | |||
June 2031 | U.S. Dollar | |||
March 2036 | U.S. Dollar | |||
Hedging of foreign currency risk | ||||
January 2029 | Euro | |||
September 2030 | Canadian Dollar | |||
June 2031 | Canadian Dollar | |||
Hedging of fuel risk | ||||
Various (March 2026 to March 2028) | Gallons |
March 28, 2026 and June 28, 2025 are as follows:
Derivative Fair Value | |||||
Balance Sheet location | Mar. 28, 2026 | Jun. 28, 2025 | |||
(In millions) | |||||
Fair Value Hedges: | |||||
Interest rate swaps | Prepaid expenses and other current assets | $ | $ | ||
Interest rate swaps | Other assets | ||||
Interest rate swaps | Accrued expenses | ||||
Interest rate swaps | Other long-term liabilities | ||||
Cash Flow Hedges: | |||||
Fuel swaps | Prepaid expenses and other current assets | $ | $ | ||
Fuel swaps | Other assets | ||||
Fuel swaps | Accrued expenses | ||||
Fuel swaps | Other long-term liabilities | ||||
Net Investment Hedges: | |||||
Cross currency swaps | Prepaid expenses and other current assets | $ | $ | ||
Cross currency swaps | Other assets | ||||
Cross currency swaps | Accrued expenses | ||||
Cross currency swaps | Other long-term liabilities | ||||
Gains or losses recognized in the consolidated results of operations for cash flow hedging relationships are not
significant for each of the periods presented. The location and amount of gains or losses recognized in the consolidated results
of operations for fair value hedging relationships for each of the periods, presented on a pretax basis, are as follows:
15
13-Week Period Ended | 39-Week Period Ended | |||||||
Mar. 28, 2026 | Mar. 29, 2025 | Mar. 28, 2026 | Mar. 29, 2025 | |||||
(In millions) | ||||||||
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value hedges are recorded | $ | $ | $ | $ | ||||
Gain or (loss) on fair value hedging relationships: | ||||||||
Interest rate swaps: | ||||||||
Hedged items | $ | $( | $( | $( | ||||
Derivatives designated as hedging instruments | ( | ( | ||||||
Cross currency swaps and foreign currency forwards: | ||||||||
Hedged items | $ | $( | $ | $ | ||||
Derivatives designated as hedging instruments | ( | |||||||
The gains and losses on the fair value hedging relationships associated with the hedged items as disclosed in the table
above consist of the following components for each of the periods presented:
13-Week Period Ended | 39-Week Period Ended | |||||||
Mar. 28, 2026 | Mar. 29, 2025 | Mar. 28, 2026 | Mar. 29, 2025 | |||||
(In millions) | ||||||||
Interest expense | $( | $( | $( | $( | ||||
(Increase) decrease in fair value of debt | ( | ( | ||||||
Foreign currency gain (loss) | ( | |||||||
Hedged items | $ | $( | $( | $( | ||||
The location and effect of cash flow, net investment, and excluded components of fair value hedges on the
consolidated statements of comprehensive income for the 13-week periods ended March 28, 2026 and March 29, 2025,
presented on a pretax basis, are as follows:
16
13-Week Period Ended Mar. 28, 2026 | |||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | |||
(In millions) | (In millions) | ||||
Derivatives in cash flow hedging relationships: | |||||
Fuel swaps | $ | Operating expense | $ | ||
Derivatives in net investment hedging relationships: | |||||
Cross currency contracts | $ | N/A | $ | ||
13-Week Period Ended Mar. 29, 2025 | |||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | |||
(In millions) | (In millions) | ||||
Derivatives in cash flow hedging relationships: | |||||
Fuel swaps | $ | Operating expense | $ | ||
Derivatives in net investment hedging relationships: | |||||
Cross currency contracts | $( | N/A | $ | ||
17
consolidated statements of comprehensive income for the 39-week periods ended March 28, 2026 and March 29, 2025,
presented on a pretax basis, are as follows:
39-Week Period Ended Mar. 28, 2026 | |||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | |||
(In millions) | (In millions) | ||||
Derivatives in cash flow hedging relationships: | |||||
Fuel swaps | $ | Operating expense | $( | ||
Derivatives in net investment hedging relationships: | |||||
Cross currency contracts | $ | N/A | $ | ||
39-Week Period Ended Mar. 29, 2025 | |||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | |||
(In millions) | (In millions) | ||||
Derivatives in cash flow hedging relationships: | |||||
Fuel swaps | $( | Operating expense | $ | ||
Foreign currency contracts | ( | Cost of sales / Other expense (income) | |||
Total | $( | $ | |||
Derivatives in net investment hedging relationships: | |||||
Cross currency contracts | $( | N/A | $ | ||
Derivatives in fair value hedging relationships: | |||||
Change in excluded component of fair value hedge | $( | Other expense (income) | $ | ||
follows:
Mar. 28, 2026 | |||
Carrying Amount of Hedged Assets (Liabilities) | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | ||
(In millions) | |||
Balance sheet location: | |||
Long-term debt | $( | $ | |
The carrying amount of hedged liabilities in the consolidated balance sheet as of June 28, 2025 is $1.1 billion.
18
8. DEBT
On September 5, 2025, Sysco entered into a new long-term revolving credit facility, which replaces the $3.0 billion
senior revolving credit facility that was originally entered into on April 29, 2022. The aggregate commitments of the lenders
under the new long-term credit agreement are $3.0 billion, with an option to increase such commitments to $4.0 billion. The
new facility includes a covenant requiring Sysco to maintain a ratio of consolidated EBITDA to consolidated interest expense
of 3.0 to 1.0 over four consecutive fiscal quarters, which is consistent with our previous revolving credit facility. The new
revolving credit facility expires on September 5, 2030. As of March 28, 2026, there were no borrowings outstanding under this
facility. In April 2026, Sysco replaced the 2025 credit facility described above. See more information in Note 15, Subsequent
Events.
We have a commercial paper program allowing the company to issue short-term unsecured notes in an aggregate
amount not to exceed $3.0 billion. Any outstanding amounts are classified within long-term debt, as the program is supported
by the long-term revolving credit facility noted above. As of March 28, 2026, there were no U.S. commercial paper issuances
outstanding under this program. We have commercial paper issuances outstanding under this program in Europe. In December
2025, Sysco entered into an agreement to increase the maximum allowable principal amount of the commercial paper issuances
in Europe, with borrowings not to exceed €750 million. As of March 28, 2026, there were €410 million (the equivalent of
$473 million) in commercial paper issuances outstanding in Europe.
On February 13, 2026, Sysco issued senior notes (the Notes) totaling $1.25 billion. Details of the Notes are as follows:
Maturity Date | Par Value (In millions) | Coupon Rate | Pricing (percentage of par) | ||
July 25, 2031 (the 2031 Notes) | $ | ||||
March 25, 2036 (the 2036 Notes) |
The Notes initially are fully and unconditionally guaranteed by Sysco’s direct and indirect wholly owned subsidiaries
that guarantee Sysco’s other senior notes issued under the indenture governing the Notes or any of Sysco’s other indebtedness.
Subsidiaries acquired or created in the future may or may not become guarantors, but any domestic subsidiary that guarantees
our other senior notes or our other indebtedness must also guarantee the Notes. Interest on the 2031 Notes will be paid semi-
annually in arrears on January 25 and July 25, beginning on July 25, 2026. Interest on the 2036 Notes will be paid semi-
annually in arrears on March 25 and September 25, beginning on September 25, 2026. The 2031 Notes will mature on July 25,
2031, and the 2036 Notes will mature on March 25, 2036. At Sysco’s option, any or all of the Notes may be redeemed, in whole
or in part, at any time prior to maturity. If we elect to redeem (i) the 2031 Notes before the date that is one month prior to the
maturity date, or (ii) the 2036 Notes before the date that is three months prior to the maturity date, Sysco will pay a redemption
price equal to the greater of (1) 100 % of the principal amount of the Notes of the applicable series to be redeemed plus, in either
case, accrued and unpaid interest thereon to, but excluding, the date of redemption and (2) a “make-whole” amount calculated
by reference to the sum of the present values of the remaining scheduled payments of principal and interest on the Notes of the
applicable series to be redeemed discounted to the date of redemption . If we elect to redeem a series of Notes on or after the
applicable date described in the preceding sentence, Sysco will pay a redemption price equal to 100 % of the principal amount of
the Notes being redeemed plus accrued and unpaid interest thereon to the date of redemption.
The total carrying value of our debt was $14.0 billion as of March 28, 2026 and $13.3 billion as of June 28, 2025. The
increase in the carrying value of our debt during the 39-week period ended March 28, 2026 was due to the issuance of the Notes
and borrowings under our European commercial paper program, partially offset by a senior note that matured in October 2025.
Information regarding the guarantors of our registered debt securities is contained in the section captioned Guarantor
Summarized Financial Information in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in Item 2 of Part I of this Form 10-Q.
19
9. EARNINGS PER SHARE
13-Week Period Ended | 39-Week Period Ended | ||||||
Mar. 28, 2026 | Mar. 29, 2025 | Mar. 28, 2026 | Mar. 29, 2025 | ||||
(In millions, except for share and per share data) | (In millions, except for share and per share data) | ||||||
Numerator: | |||||||
Net earnings | $ | $ | $ | $ | |||
Denominator: | |||||||
Weighted-average basic shares outstanding | |||||||
Dilutive effect of share-based awards | |||||||
Weighted-average diluted shares outstanding | |||||||
Basic earnings per share | $ | $ | $ | $ | |||
Diluted earnings per share | $ | $ | $ | $ | |||
The number of securities that were not included in the diluted earnings per share calculation because the effect would
have been anti-dilutive was approximately 1,600,000 and 4,667,000 for the third quarter of fiscal 2026 and 2025, respectively,
10. OTHER COMPREHENSIVE INCOME
Comprehensive income is net earnings plus certain other items that are recorded directly to shareholders’ equity, such
as foreign currency translation adjustment, amounts related to certain hedging arrangements, amounts related to pension and
other postretirement plans and changes in marketable securities. Comprehensive income was $373 million and $542 million for
the third quarter of fiscal 2026 and fiscal 2025, respectively. Comprehensive income was $1.2 billion and $1.4 billion for the
first 39 weeks of fiscal 2026 and 2025, respectively.
presented is as follows:
20
13-Week Period Ended Mar. 28, 2026 | |||||||
Location of Expense (Income) Recognized in Net Earnings | Before Tax Amount | Tax | Net of Tax Amount | ||||
(In millions) | |||||||
Foreign currency translation: | |||||||
Foreign currency translation adjustment | N/A | $( | $ | $( | |||
Hedging instruments: | |||||||
Other comprehensive income (loss) before reclassification adjustments: | |||||||
Change in cash flow hedges | Operating expenses | ||||||
Change in net investment hedges | N/A | ||||||
Total other comprehensive income before reclassification adjustments | |||||||
Reclassification adjustments: | |||||||
Amortization of cash flow hedges | Interest expense | ||||||
Reclassification adjustments: | |||||||
Amortization of actuarial loss, net | Other expense (income), net | ||||||
Total reclassification adjustments | |||||||
Marketable securities: | |||||||
Change in marketable securities | Other expense (income), net | ( | ( | ||||
Total other comprehensive income (loss) | $ | $ | $ | ||||
13-Week Period Ended Mar. 29, 2025 | |||||||
Location of Expense (Income) Recognized in Net Earnings | Before Tax Amount | Tax | Net of Tax Amount | ||||
(In millions) | |||||||
Foreign currency translation: | |||||||
Foreign currency translation adjustment | N/A | $ | $ | $ | |||
Hedging instruments: | |||||||
Other comprehensive income (loss) before reclassification adjustments: | |||||||
Change in cash flow hedges | Operating expenses | ||||||
Change in net investment hedges | N/A | ( | ( | ( | |||
Total other comprehensive income before reclassification adjustments | ( | ( | ( | ||||
Reclassification adjustments: | |||||||
Amortization of cash flow hedges | Interest expense | ||||||
Pension and other postretirement benefit plans: | |||||||
Reclassification adjustments: | |||||||
Amortization of actuarial loss, net | Other expense (income), net | ||||||
Total reclassification adjustments | |||||||
Marketable securities: | |||||||
Change in marketable securities | N/A | ||||||
Total other comprehensive income (loss) | $ | $ | $ | ||||
21
39-Week Period Ended Mar. 28, 2026 | |||||||
Location of Expense (Income) Recognized in Net Earnings | Before Tax Amount | Tax | Net of Tax Amount | ||||
(In millions) | |||||||
Foreign currency translation: | |||||||
Foreign currency translation adjustment | N/A | $( | $ | $( | |||
Hedging instruments: | |||||||
Other comprehensive income (loss) before reclassification adjustments: | |||||||
Change in cash flow hedges | Operating expenses | ||||||
Change in net investment hedges | N/A | ||||||
Total other comprehensive (loss) before reclassification adjustments | |||||||
Reclassification adjustments: | |||||||
Amortization of cash flow hedges | Interest expense | ||||||
Pension and other postretirement benefit plans: | |||||||
Other comprehensive income before reclassification adjustments: | |||||||
Net actuarial gain arising in the current year | |||||||
Reclassification adjustments: | |||||||
Amortization of actuarial loss, net | Other expense (income), net | ||||||
Total reclassification adjustments | |||||||
Total other comprehensive income (loss) | $ | $ | $ | ||||
22
39-Week Period Ended Mar. 29, 2025 | |||||||
Location of Expense (Income) Recognized in Net Earnings | Before Tax Amount | Tax | Net of Tax Amount | ||||
(In millions) | |||||||
Foreign currency translation: | |||||||
Foreign currency translation adjustment | N/A | $ | $ | $ | |||
Hedging instruments: | |||||||
Other comprehensive income (loss) before reclassification adjustments: | |||||||
Change in excluded component of fair value hedge | Other expense (income), net | ( | ( | ||||
Change in cash flow hedges | Operating expense | ( | ( | ( | |||
Change in net investment hedges | N/A | ( | ( | ( | |||
Total other comprehensive (loss) before reclassification adjustments | ( | ( | ( | ||||
Reclassification adjustments: | |||||||
Amortization of cash flow hedges | Interest expense | ||||||
Pension and other postretirement benefit plans: | |||||||
Other comprehensive income before reclassification adjustments: | |||||||
Net actuarial gain arising in the current year | |||||||
Reclassification adjustments: | |||||||
Amortization of actuarial loss, net | Other expense (income), net | ||||||
Total reclassification adjustments | |||||||
Marketable securities: | |||||||
Change in marketable securities | N/A | ||||||
Total other comprehensive income (loss) | $ | $ | $ | ||||
23
periods presented:
13-Week Period Ended Mar. 28, 2026 | |||||||||
Foreign Currency Translation | Hedging, net of tax | Pension and Other Postretirement Benefit Plans, net of tax | Marketable Securities, net of tax | Total | |||||
(In millions) | |||||||||
Balance as of Dec. 27, 2025 | $( | $( | $( | $ | $( | ||||
Equity adjustment from foreign currency translation | ( | — | — | — | ( | ||||
Amortization of cash flow hedges | — | — | — | ||||||
Change in net investment hedges | — | — | — | ||||||
Change in cash flow hedges | — | — | — | ||||||
Amortization of unrecognized net actuarial losses | — | — | — | ||||||
Change in marketable securities | — | — | — | ( | ( | ||||
Balance as of Mar. 28, 2026 | $( | $ | $( | $( | $( | ||||
13-Week Period Ended Mar. 29, 2025 | |||||||||
Foreign Currency Translation | Hedging, net of tax | Pension and Other Postretirement Benefit Plans, net of tax | Marketable Securities, net of tax | Total | |||||
(In millions) | |||||||||
Balance as of Dec. 28, 2024 | $( | $( | $( | $( | $( | ||||
Equity adjustment from foreign currency translation | — | — | — | ||||||
Amortization of cash flow hedges | — | — | — | ||||||
Change in net investment hedges | — | ( | — | — | ( | ||||
Change in cash flow hedges | — | — | — | ||||||
Amortization of unrecognized net actuarial losses | — | — | — | ||||||
Change in marketable securities | — | — | — | ||||||
Balance as of Mar. 29, 2025 | $( | $( | $( | $( | $( | ||||
24
39-Week Period Ended Mar. 28, 2026 | |||||||||
Foreign Currency Translation | Hedging, net of tax | Pension and Other Postretirement Benefit Plans, net of tax | Marketable Securities, net of tax | Total | |||||
(In millions) | |||||||||
Balance as of Jun. 28, 2025 | $( | $( | $( | $( | $( | ||||
Equity adjustment from foreign currency translation | ( | — | — | — | ( | ||||
Amortization of cash flow hedges | — | — | — | ||||||
Change in net investment hedges | — | — | — | ||||||
Change in cash flow hedges | — | — | — | ||||||
Amortization of unrecognized net actuarial losses | — | — | — | ||||||
Net actuarial loss arising in the current year | — | — | — | ||||||
Balance as of Mar. 28, 2026 | $( | $ | $( | $( | $( | ||||
39-Week Period Ended Mar. 29, 2025 | |||||||||
Foreign Currency Translation | Hedging, net of tax | Pension and Other Postretirement Benefit Plans, net of tax | Marketable Securities, net of tax | Total | |||||
(In millions) | |||||||||
Balance as of Jun. 29, 2024 | $( | $( | $( | $( | $( | ||||
Equity adjustment from foreign currency translation | — | — | — | ||||||
Amortization of cash flow hedges | — | — | — | ||||||
Change in net investment hedges | — | ( | — | — | ( | ||||
Change in cash flow hedges | — | ( | — | — | ( | ||||
Change in excluded component of fair value hedge | — | ( | — | — | ( | ||||
Amortization of unrecognized net actuarial losses | — | — | — | ||||||
Net actuarial gain arising in the current year | — | — | — | ||||||
Change in marketable securities | — | — | — | ||||||
Balance as of Mar. 29, 2025 | $( | $( | $( | $( | $( | ||||
11. SHARE-BASED COMPENSATION
Sysco provides compensation benefits to employees under several share-based payment arrangements, including
various long-term employee stock incentive plans and the 2015 Employee Stock Purchase Plan (ESPP).
Stock Incentive Plans
In the first 39 weeks of fiscal 2026, options to purchase 726,016 shares were granted to employees. The fair value of
each option award is estimated as of the date of grant using a Black-Scholes option pricing model. The weighted average grant-
date fair value per option granted during the first 39 weeks of fiscal 2026 was $19.52 .
In the first 39 weeks of fiscal 2026, employees were granted 460,258 performance share units (PSUs). Based on the
jurisdiction in which the employee resides, some of these PSUs were granted with forfeitable dividend equivalents. The fair
value of each PSU award granted with a dividend equivalent is based on the company’s stock price as of the date of grant. For
PSUs granted without dividend equivalents, the fair value is reduced by the present value of expected dividends during the
25
vesting period. The weighted average grant-date fair value per PSU granted during the first 39 weeks of fiscal 2026 was $86.22 .
The PSUs will convert into shares of Sysco’s common stock at the end of the three-year performance period based on actual
performance targets achieved, as well as the market-based return of Sysco’s common stock relative to that of each company
within the S&P 500 index.
In the first 39 weeks of fiscal 2026, employees were granted 1,353,984 restricted stock units. The weighted average
grant-date fair value per restricted stock unit granted during the first 39 weeks of fiscal 2026 was $77.46 .
Employee Stock Purchase Plan
Plan participants purchased 838,005 shares of common stock under the ESPP during the first 39 weeks of fiscal 2026.
The weighted average fair value per employee stock purchase right issued pursuant to the ESPP was $11.37 during the first 39
weeks of fiscal 2026. The fair value of each stock purchase right is estimated as the difference between the stock price at the
date of issuance and the employee purchase price.
All Share-Based Payment Arrangements
The total share-based compensation cost that has been recognized in results of operations was $95 million and $74
million for the first 39 weeks of fiscal 2026 and fiscal 2025, respectively.
As of March 28, 2026, there was a total of $162 million of unrecognized compensation cost related to share-based
compensation arrangements. This cost is expected to be recognized over a weighted-average period of 1.88 years.
12. INCOME TAXES
Effective Tax Rate
The effective tax rates for the third quarter and first 39 weeks of fiscal 2026 were 23.6 % and 22.5 %, respectively.
These rates were higher than the company’s 21.0% statutory tax rate primarily due to the impact of state income taxes, partially
offset by a foreign income tax benefit and equity-based compensation excess tax benefits.
The effective tax rates for the third quarter and first 39 weeks of fiscal 2025 were 23.3 % and 23.6 %, respectively.
These rates were higher than the company’s 21.0% statutory tax rate primarily as a result of state income taxes, partially offset
by a foreign income tax benefit and equity-based compensation excess tax benefits.
Uncertain Tax Positions
As of March 28, 2026, the gross amount of unrecognized tax benefit and related accrued interest was $68 million and
$20 million, respectively. It is reasonably possible the amount of the unrecognized tax benefit with respect to certain
unrecognized tax positions of the company will increase or decrease in the next 12 months. At this time, an estimate of the
range of the reasonably possible change cannot be made.
During the third quarter of fiscal 2023, Sysco received a Statutory Notice of Deficiency from the Internal Revenue
Service, mainly related to foreign tax credits generated in fiscal 2018 from repatriated earnings primarily from our Canadian
operations. In the fourth quarter of fiscal 2023, the company filed suit in the U.S. Tax Court challenging the validity of certain
tax regulations related to the one-time transition tax on unrepatriated foreign earnings, which were enacted as part of the Tax
Cuts and Jobs Act of 2017 (TCJA). The lawsuit seeks to have the court invalidate these regulations, which would affirm the
company’s position regarding its foreign tax credits. Sysco has previously recorded a benefit of $131 million attributable to its
interpretation of the TCJA and the Internal Revenue Code. If we are ultimately unsuccessful in defending our position, we may
be required to reverse all, or some portion, of the benefit previously recorded.
Other
The Inflation Reduction Act includes provisions that allow for the transfer of certain federal clean energy tax credits
(Transferable Tax Credits). In September 2025, we entered into a contract to purchase Transferable Tax Credits which will be
applied against our fiscal 2026 federal income tax liability. Through March 28, 2026, we have purchased $241 million of
Transferable Tax Credits.
26
The determination of our provision for income taxes requires judgment, the use of estimates and the interpretation and
application of complex tax laws. Our provision for income taxes reflects income earned and taxed in the various U.S. federal
and state, as well as foreign jurisdictions. Tax law changes, increases or decreases in permanent 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.
13. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
Sysco is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of
loss for these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to
reasonably possible to probable. When probable and reasonably estimable, the losses have been accrued. Although the final
results of legal proceedings cannot be predicted with certainty, based on estimates of the range of potential losses associated
with these matters, management does not believe the ultimate resolution of these proceedings, either individually or in the
aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the company.
14. BUSINESS SEGMENT INFORMATION
Sysco distributes food and related products to restaurants, healthcare and educational facilities, lodging establishments
and other foodservice customers. Our primary operations are located in North America and Europe. Under the accounting
provisions related to disclosures about segments of an enterprise, we have aggregated certain operating segments into three
reportable segments. “Other” financial information is attributable to our other operating segments that do not meet the
quantitative disclosure thresholds.
•U.S. Foodservice Operations – primarily includes (a) our U.S. Broadline operations, which distribute a full line
of food products, including custom-cut meat, seafood, produce, specialty Italian, specialty imports and a wide
variety of non-food products and (b) our U.S. Specialty operations, which include our FreshPoint fresh produce
distribution business, our Buckhead | Newport Meat & Seafood specialty protein operations, our growing Italian
Specialty platform anchored by Greco & Sons, Inc., our Edward Don restaurant equipment and supplies
distribution business, our Asian specialty distribution company and a number of other small specialty businesses
that are not material to the operations of Sysco;
•International Foodservice Operations – includes operations outside of the United States (U.S.), which distribute
a full line of food products and a wide variety of non-food products. The Americas primarily consists of
operations in Canada, Bahamas, Costa Rica and Panama, as well as our export operations that distribute to
international customers. Our European operations primarily consist of operations in the United Kingdom (U.K.),
France, Ireland and Sweden;
•SYGMA – our U.S. customized distribution operations serving quick-service chain restaurant customer locations;
and
•Other – primarily our hotel supply operations, Guest Worldwide.
27
The accounting policies for the segments are the same as those disclosed by Sysco for its consolidated financial
statements. Our Global Support Center expenses generally include all expenses of the corporate office and Sysco’s shared
service operations. Collectively, our Global Support Center provides numerous centralized services to our operating sites and
performs support activities for employees, suppliers and customers. These services include customer and vendor contract
administration, finance, legal, information technology, risk management and insurance, sales and marketing, merchandising,
inbound logistics, human resources, and strategy. Expenses for the Global Support Center primarily consist of payroll costs for
employees assigned to these operations, including severance, if any, all U.S. share-based compensation costs, and certain
information technology, self-insurance, and depreciation expenses.
Our chief operating decision maker (CODM) is our chief executive officer, who is responsible for setting the
company's strategic direction, managing overall operations, and is the main point of communication between the board of
directors and key operational personnel within the organization. The CODM regularly reviews financial results, operating
performance, and capital expenditures of our reportable segments. Our CODM uses operating income as a primary measure of
segment performance and as a comparison between each of our segments. Operating income is defined as income before
interest expense, other expense (income), net, and income taxes. The significant expense categories and amounts presented
below align with the segment-level information that is regularly provided to the CODM. The following tables set forth certain
financial information for Sysco’s business segments.
13-Week Period Ended March 28, 2026 | ||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||
(In millions) | ||||||||||
Sales | $ | $ | $ | $ | $ | |||||
Less: | ||||||||||
Cost of sales | ||||||||||
Operations expense | ||||||||||
Selling, general & administrative expense | ||||||||||
Total segment operating income | ||||||||||
Global Support Center | ( | |||||||||
Total operating income | ||||||||||
Interest expense | ||||||||||
Other expense (income), net | ||||||||||
Earnings before income taxes | $ | |||||||||
13-Week Period Ended March 29, 2025 | ||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||
(In millions) | ||||||||||
Sales | $ | $ | $ | $ | $ | |||||
Less: | ||||||||||
Cost of sales | ||||||||||
Operations expense | ||||||||||
Selling, general & administrative expense | ||||||||||
Total segment operating income (loss) | ( | |||||||||
Global Support Center | ( | |||||||||
Total operating income | ||||||||||
Interest expense | ||||||||||
Other expense (income), net | ||||||||||
Earnings before income taxes | $ | |||||||||
28
39-Week Period Ended March 28, 2026 | ||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||
(In millions) | ||||||||||
Sales | $ | $ | $ | $ | $ | |||||
Less: | ||||||||||
Cost of sales | ||||||||||
Operations expense | ||||||||||
Selling, general & administrative expense | ||||||||||
Total segment operating income | ||||||||||
Global Support Center | ( | |||||||||
Total operating income | ||||||||||
Interest expense | ||||||||||
Other expense (income), net | ||||||||||
Earnings before income taxes | $ | |||||||||
39-Week Period Ended March 29, 2025 | ||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||
(In millions) | ||||||||||
Sales | $ | $ | $ | $ | $ | |||||
Less: | ||||||||||
Cost of sales | ||||||||||
Operations expense | ||||||||||
Selling, general & administrative expense | ||||||||||
Total segment operating income | ||||||||||
Global Support Center | ( | |||||||||
Total operating income | ||||||||||
Interest expense | ||||||||||
Other expense (income), net | ||||||||||
Earnings before income taxes | $ | |||||||||
29
13-Week Period Ended | 13-Week Period Ended | |||
Mar. 28, 2026 | Mar. 29, 2025 | |||
Depreciation and amortization: | (In millions) | |||
U.S. Foodservice Operations | $ | $ | ||
International Foodservice Operations | ||||
SYGMA | ||||
Other | ||||
Total segments | ||||
Global Support Center | ||||
Total | $ | $ | ||
39-Week Period Ended | 39-Week Period Ended | |||
Mar. 28, 2026 | Mar. 29, 2025 | |||
Depreciation and amortization: | (In millions) | |||
U.S. Foodservice Operations | $ | $ | ||
International Foodservice Operations | ||||
SYGMA | ||||
Other | ||||
Total segments | ||||
Global Support Center | ||||
Total | $ | $ | ||
13-Week Period Ended | 13-Week Period Ended | |||
Mar. 28, 2026 | Mar. 29, 2025 | |||
Capital Expenditures: | (In millions) | |||
U.S. Foodservice Operations | $ | $ | ||
International Foodservice Operations | ||||
SYGMA | ||||
Other | ||||
Total segments | ||||
Global Support Center | ||||
Total | $ | $ | ||
39-Week Period Ended | 39-Week Period Ended | |||
Mar. 28, 2026 | Mar. 29, 2025 | |||
Capital Expenditures: | (In millions) | |||
U.S. Foodservice Operations | $ | $ | ||
International Foodservice Operations | ||||
SYGMA | ||||
Other | ||||
Total segments | ||||
Global Support Center | ||||
Total | $ | $ | ||
30
Mar. 28, 2026 | Jun. 28, 2025 | |||
Assets: | (In millions) | |||
U.S. Foodservice Operations | $ | $ | ||
International Foodservice Operations | ||||
SYGMA | ||||
Other | ||||
Total segments | ||||
Global Support Center | ||||
Total | $ | $ | ||
31
15. SUBSEQUENT EVENTS
On March 30, 2026, Sysco Corporation entered into an agreement (the Merger Agreement) to acquire Jetro Restaurant
Depot (JRD), 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.
Sysco has agreed to pay approximately $29.1 billion to JRD shareholders, comprising of approximately $21.6 billion
in cash, subject to customary adjustments, and 91.5 million shares of Sysco common stock. Following the transaction, JRD’s
equity holders are expected to hold approximately 16 % of the outstanding common stock of Sysco in the aggregate.
The cash portion of the purchase price 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 commitment letter for the bridge loan facility, Sysco entered into a
$3 billion senior unsecured delayed draw term loan facility, comprising a $1.25 billion 364-day tranche and a $1.75 billion 2-
of April 10, 2026 total $88 million and will be amortized to interest expense within our statement of consolidated results of
operations over the expected life of the bridge facility unless it is terminated at an earlier date. Additional fees will apply at later
stages.
We have 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 purchase of JRD. As these interest rate lock transactions
are contingent upon whether the transaction is successfully consummated, we have not elected to apply hedge accounting at this
time and any unrealized gains or losses will be recognized in Other income and expense within our statement of consolidated
results of operations.
On April 16, 2026, Sysco entered into a new long-term revolving credit facility, which replaces Sysco’s existing
$3.0 billion senior revolving credit facility that was originally entered into on September 5, 2025. The aggregate commitments
of the lenders under the new revolving credit agreement are $3.0 billion, and such commitments will increase to $4.0 billion
after the acquisition of JRD is complete. The new revolving credit agreement has an option to increase such commitments to
$5.0 billion. The new facility includes a covenant requiring Sysco to maintain a ratio of consolidated EBITDA to consolidated
interest expense of 3.0 to 1.0 over four consecutive fiscal quarters, which is consistent with our previous revolving credit
facility. The new revolving credit facility expires on April 16, 2031.
This transaction is expected to close by the third quarter of Sysco’s fiscal 2027, subject to the satisfaction of customary
closing conditions, including regulatory clearance under the Hart-Scott-Rodino Act. If the Merger Agreement is terminated due
to a failure to obtain required regulatory clearances, Sysco has agreed to pay JRD a termination fee of $1.164 billion.
32
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This discussion should be read in conjunction with our consolidated financial statements as of June 28, 2025, and for
the fiscal year then ended, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, both
contained in our fiscal 2025 Form 10-K, as well as the consolidated financial statements (unaudited) and notes to the
consolidated financial statements (unaudited) contained in this report.
Highlights
Our third quarter of fiscal 2026 results included sales growth of 4.7% as compared to the third quarter of fiscal 2025,
primarily driven by volume improvements across our business. Sales increased in our U.S. Foodservice Operations,
International Foodservice Operations, and SYGMA segments. Our gross profit increased 6.5% compared to the third quarter of
fiscal 2025, due to our strategic sourcing efforts, favorable changes in customer mix, and the effective management of product
cost inflation. Operating income decreased 9.1% compared to the third quarter of fiscal 2025, due to higher incentive
compensation, increased restructuring and transformational project costs, and higher acquisition and due diligence costs. We
consider restructuring and transformational project costs and acquisition and due diligence costs to be “Certain Item” expenses
(as defined below). Excluding Certain Item expenses, adjusted operating income decreased 0.6% as compared to the third
quarter of fiscal 2025, primarily due to higher incentive compensation. Our net earnings for the third quarter of fiscal 2026
decreased 15.2% as compared to the third quarter of fiscal 2025. Excluding Certain Item expenses, adjusted net earnings
decreased by 3.6% as compared to the third quarter of fiscal 2025. See below for a comparison of our fiscal 2026 results to our
fiscal 2025 results, both including and excluding Certain Items.
Comparisons of results from the third quarter of fiscal 2026 to the third quarter of fiscal 2025 are presented below:
•Sales:
◦increased 4.7%, or $921 million, to $20.5 billion;
•Operating income:
◦decreased 9.1%, or $62 million, to $619 million;
◦adjusted operating income decreased 0.6%, or $5 million, to $768 million;
•Net earnings:
◦decreased 15.2%, or $61 million, to $340 million;
◦adjusted net earnings decreased 3.6%, or $17 million, to $452 million;
•Basic earnings per share:
◦decreased 13.4%, or $0.11, to $0.71 per share;
•Diluted earnings per share:
◦decreased 13.4% or $0.11, to $0.71 per share;
◦adjusted diluted earnings per share decreased 2.1%, or $0.02, to $0.94 per share;
•EBITDA:
◦decreased 5.1%, or $46 million, to $864 million; and
◦adjusted EBITDA increased 0.1%, or $1 million, to $970 million.
Comparisons of results from the first 39 weeks of fiscal 2026 to the first 39 weeks of fiscal 2025 are presented below:
•Sales:
◦increased 3.6%, or $2.2 billion, to $62.4 billion;
•Operating income:
◦decreased 4.0%, or $88 million, to $2.1 billion;
◦adjusted operating income increased 1.9%, or $46 million, to $2.5 billion;
•Net earnings:
◦decreased 7.0%, or $91 million, to $1.2 billion;
◦adjusted net earnings increased 1.0%, or $14 million, to $1.5 billion;
•Basic earnings per share:
◦decreased 4.9%, or $0.13, to $2.52 per share;
•Diluted earnings per share:
◦decreased 4.9% , or $0.13 to $2.51 per share;
◦adjusted diluted earnings per share increased 3.4%, or $0.10, to $3.08 per share;
•EBITDA:
◦decreased 3.0%, or $85 million, to $2.8 billion; and
◦adjusted EBITDA increased 1.2%, or $36 million, to $3.0 billion.
33
The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted
EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and
free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove: (1) restructuring charges;
(2) expenses associated with our various transformation initiatives; (3) severance charges; and (4) acquisition-related costs
consisting of (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions.
Adjustments provided herein for fiscal 2026 results of operations also remove the impact of a charge associated with a legal
matter. No similar charge was applicable in fiscal 2025.
The fiscal 2026 and fiscal 2025 items discussed above are collectively referred to as “Certain Items.” The results of
our operations can be impacted by changes in exchange rates applicable to converting from local currencies to U.S. dollars. We
measure our results on a constant currency basis.
Trends
Economic and Industry Trends
Foot traffic to restaurants experienced a decrease of 1.9% in the third quarter of fiscal 2026. Our U.S. Foodservice
Operations local case growth trends experienced a sequential improvement of 210 basis points compared to the second quarter
of fiscal 2026, despite the industry’s foot traffic performance. The macroeconomic environment was similar in the third quarter
of fiscal 2026 as compared to the previous quarter, which has continued to adversely impact consumer sentiment. Despite the
current macroeconomic landscape, we expect to grow our sales in fiscal 2026. We believe the food-away-from-home sector is a
healthy, long-term growth market, and Sysco is diversified and well positioned as a market leader in food service.
Sales and Gross Profit Trends
Sales increased 4.7% and 3.6% in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the
third quarter and first 39 weeks of fiscal 2025. Our sales and gross profit performance are influenced by multiple factors,
including price, volume, inflation, customer mix and product mix. We experienced a 2.3% and 1.0% increase in U.S.
Foodservice Operations case volume in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third
quarter and first 39 weeks of fiscal 2025. Our volume growth trends were attributable to local case volume increasing 3.3% and
1.4% in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of
fiscal 2025. Our local case volumes have improved due to improved sales colleague retention and incremental sales colleague
productivity improvements. National case volume increased 1.4% and 0.9% in the third quarter and first 39 weeks of fiscal
2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025. Our volume reflects our broadline and
specialty businesses. Beginning in fiscal 2026, we are now including volumes from our specialty meat business for all periods
presented. We expect continued local volume growth in the fourth quarter of fiscal 2026 of at least 2.5% due to continued sales
consultant productivity improvements. In addition, we expect national case volume growth in the fourth quarter due to the
strength of our non-restaurant business and the onboarding of new national restaurant customers.
We experienced inflation at a rate of 2.8% in the third quarter of fiscal 2026, at the total enterprise level, primarily
driven by inflation in the dairy, meat, and seafood categories. We continue to address inflation by successfully managing
through cost increases in a timely manner. Gross margin increased 31 and 20 basis points in the third quarter and first 39 weeks
of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025, primarily due to benefits from
our strategic sourcing initiatives, stronger volume performance from local customers and improving mix from Sysco Brand
penetration rates, and the effective management of product cost inflation.
Operating Expense Trends
Total operating expenses were $3.2 billion and $9.4 billion in the third quarter and first 39 weeks of fiscal 2026, a
10.1% and 6.9% increase compared to the third quarter and first 39 weeks of fiscal 2025, respectively. Total adjusted operating
expenses were $3.0 billion and $9.0 billion in the third quarter and first 39 weeks of fiscal 2026, an 8.4% and 5.6% increase
compared to the third quarter and first 39 weeks of fiscal 2025, respectively. Operating expenses increased primarily due to
higher incentive compensation, sales headcount investments, increased acquisition and due diligence costs, and increased costs
associated with expanded building capacity, partially offset by decreases in insurance costs. Adjusted operating expenses were
14.8% and 14.5% of sales during the third quarter and first 39 weeks of fiscal 2026, which represents a 51 and 27 basis point
increase as compared to the third quarter and first 39 weeks of fiscal 2025, respectively, as a result of higher incentive
compensation, sales headcount investments, and increased costs associated with expanded building capacity, partially offset by
decreases in insurance costs.
34
Amortization Expense Trends
Sysco’s operations within the United Kingdom, located within the International Foodservice Operations segment,
initiated a rebranding effort in the second quarter of fiscal 2026 to transition the Brakes® brand and other smaller brands to
“Sysco GB.” This rebranding initiative will take approximately two years to complete and will result in Sysco amortizing
previously indefinite-lived intangible assets on a straight-line basis over this two-year period. The rebranding is expected to
result in approximately $100 million of additional amortization expense over two years, including approximately $29 million in
fiscal 2026. This amortization expense will be treated as a Certain Item, which is consistent with our treatment of amortization
expense of other previously acquired intangible assets.
Mergers and Acquisitions
In October 2025, we acquired Fairfax Meadow, a leading specialty meat supplier based in the United Kingdom. This
acquisition follows our acquisition of Campbells Prime Meat last fiscal year and positions our team in the United Kingdom to
achieve additional growth by leveraging additional specialty meat capabilities geographically. This company’s results are
included within International Foodservice Operations and were not material to our results for the third quarter and first 39
weeks of fiscal 2026.
In December 2025, we acquired Ginsberg’s Foods, a broadline distributor servicing restaurants, schools, and
healthcare facilities across eastern New York and neighboring states. This acquisition opens opportunities to new customers
while creating procurement efficiencies through Sysco buying programs and expanded access to Sysco brand products. This
company’s results are included within U.S. Foodservice Operations and were not material to our results for the third quarter and
first 39 weeks of fiscal 2026.
In March 2026, we announced an agreement to acquire Jetro Restaurant Depot (JRD), a leading U.S. wholesale cash-
and-carry foodservice provider serving smaller, independent restaurants and businesses (the Proposed Transaction). JRD
operates 167 large-format warehouse stores across 35 states that serve more than 725,000 independent restaurants and
foodservice operators with a broad assortment of fresh and low-priced products. This transaction is expected to close by the
third quarter of Sysco’s fiscal 2027, subject to the satisfaction of customary closing conditions, including regulatory clearance
under the Hart-Scott-Rodino Act. See Note 15 "Subsequent Events" for more information on the terms of the Proposed
Transaction.
Interest Expense and Other Income and Expense Trends
The cash portion of the purchase price in the Proposed Transaction is expected to be financed with a combination of
new senior unsecured notes, hybrid debt, cash on hand and equity or equity-linked securities. Sysco has executed a commitment
letter for a $22 billion senior unsecured 364-day bridge loan facility that could be used to fund the cash portion of the purchase
price and pay related fees and expenses. Subsequent to the execution of the bridge loan facility, Sysco entered into a $3 billion
senior unsecured delayed draw term loan facility, comprising a $1.25 billion 364-day tranche and a $1.75 billion 2-year tranche,
reducing the bridge loan facility commitments from $22 billion to $19 billion. Fees paid upfront for this facility as of April 10,
2026 total $88 million and will be amortized to interest expense within our statement of consolidated results of operations over
the expected life of the bridge facility unless it is terminated at an earlier date. Additional fees will apply at later stages. This
bridge facility is expected to add approximately $30 million of interest expense in fiscal 2026. Additionally, Sysco has executed
cash-settled deal contingent rate lock transactions to mitigate interest rate risk on $6.3 billion of future permanent debt that
could potentially be issued to finance the Proposed Transaction. As these interest rate lock transactions are contingent upon
whether the Proposed Transaction is successfully consummated, we have not elected to apply hedge accounting at this time, and
any unrealized gains or losses will be recognized in Other income and expense within our statement of consolidated results of
operations. Our incremental interest expense from the bridge loan facility and any fair value gains or losses on these interest
rate locks will be treated as a Certain Item. See Note 15 "Subsequent Events" for more information on the terms of the Proposed
Transaction.
35
Strategy
Our purpose is “Connecting the World to Share Food and Care for One Another.” Purpose-driven companies are
believed to perform better. We believe our purpose will assist us to grow substantially faster than the foodservice distribution
industry and deliver profitable growth through our Recipe for Growth transformation. This growth transformation is supported
by strategic pillars that we believe will allow us to better serve our customers, including our digital, products and solutions,
supply chain, customer teams, and future horizons strategies.
Our business transformation initiatives are progressing, which include promoting our specialty programs for produce,
protein and Italian products, and our customer growth initiatives. From these actions, as a part of our Recipe for Growth, the
benefits of our developing capabilities are apparent in the new customers we are winning and in the progress we are making
toward increasing market share. We expect that, as our Recipe for Growth matures, the impact on our top-line growth will
deliver profitable and consistent growth. Our proposed acquisition of JRD is a part of our future horizons strategy enabling us
to enter the wholesale cash and carry foodservice segment, which is a resilient and growing channel.
Results of Operations
The following table sets forth the components of our consolidated results of operations expressed as a percentage of
sales for the periods indicated:
13-Week Period Ended | 39-Week Period Ended | ||||||
Mar. 28, 2026 | Mar. 29, 2025 | Mar. 28, 2026 | Mar. 29, 2025 | ||||
Sales | 100.0% | 100.0% | 100.0% | 100.0% | |||
Cost of sales | 81.4 | 81.7 | 81.6 | 81.8 | |||
Gross profit | 18.6 | 18.3 | 18.4 | 18.2 | |||
Operating expenses | 15.6 | 14.8 | 15.0 | 14.5 | |||
Operating income | 3.0 | 3.5 | 3.4 | 3.7 | |||
Interest expense | 0.8 | 0.8 | 0.8 | 0.8 | |||
Other expense (income), net | — | — | 0.1 | 0.1 | |||
Earnings before income taxes | 2.2 | 2.7 | 2.5 | 2.8 | |||
Income taxes | 0.5 | 0.7 | 0.6 | 0.6 | |||
Net earnings | 1.7% | 2.0% | 1.9% | 2.2% | |||
36
The following table sets forth the change in the components of our consolidated results of operations expressed as a
percentage increase or decrease over the comparable period in the prior year:
13-Week Period Ended | 39-Week Period Ended | ||
Mar. 28, 2026 | Mar. 28, 2026 | ||
Sales | 4.7% | 3.6% | |
Cost of sales | 4.3 | 3.4 | |
Gross profit | 6.5 | 4.8 | |
Operating expenses | 10.1 | 6.9 | |
Operating income | (9.1) | (4.0) | |
Interest expense | 12.8 | 9.2 | |
Other expense (income), net (1) (2) | (33.3) | 37.5 | |
Earnings before income taxes | (14.9) | (8.4) | |
Income taxes | (13.9) | (12.9) | |
Net earnings | (15.2)% | (7.0)% | |
Basic earnings per share | (13.4)% | (4.9)% | |
Diluted earnings per share | (13.4) | (4.9) | |
Average shares outstanding | (1.7) | (2.2) | |
Diluted shares outstanding | (1.7) | (2.3) |
(1) | Other expense (income), net was expense of $6 million and $9 million in the third quarter of fiscal 2026 and fiscal 2025, respectively. |
(2) | Other expense (income), net was expense of $44 million and $32 million in the first 39 weeks of fiscal 2026 and fiscal 2025, respectively. |
The following tables represent our results by reportable segments:
13-Week Period Ended Mar. 28, 2026 | |||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center | Consolidated Totals | ||||||
(In millions) | |||||||||||
Sales | $14,234 | $3,885 | $2,137 | $263 | $— | $20,519 | |||||
Sales increase | 3.1% | 12.4% | 2.5% | 2.3% | 4.7% | ||||||
Percentage of total | 69.4% | 18.9% | 10.4% | 1.3% | 100.0% | ||||||
Operating income (loss) | $772 | $83 | $18 | $7 | $(261) | $619 | |||||
Operating income (loss) increase (decrease) | 2.4% | (13.5)% | 5.9% | NM | 42.6% | (9.1)% | |||||
Percentage of total segments | 87.8% | 9.4% | 2.0% | 0.8% | 100.0% | ||||||
Operating income as a percentage of sales | 5.4% | 2.1% | 0.8% | 2.7% | 3.0% | ||||||
13-Week Period Ended Mar. 29, 2025 | |||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center | Consolidated Totals | ||||||
(In millions) | |||||||||||
Sales | $13,800 | $3,457 | $2,084 | $257 | $— | $19,598 | |||||
Percentage of total | 70.4% | 17.6% | 10.6% | 1.4% | 100.0% | ||||||
Operating income (loss) | $754 | $96 | $17 | $(3) | $(183) | $681 | |||||
Percentage of total segments | 87.2% | 11.1% | 2.0% | (0.3)% | 100.0% | ||||||
Operating income as a percentage of sales | 5.5% | 2.8% | 0.8% | (1.2)% | 3.5% | ||||||
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39-Week Period Ended Mar. 28, 2026 | |||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center | Consolidated Totals | ||||||
(In millions) | |||||||||||
Sales | $43,397 | $11,851 | $6,392 | $789 | $— | $62,429 | |||||
Sales increase (decrease) | 2.8% | 8.0% | 2.3% | (1.6)% | 3.6% | ||||||
Percentage of total | 69.5% | 19.0% | 10.2% | 1.3% | 100.0% | ||||||
Operating income (loss) | $2,472 | $315 | $64 | $17 | $(756) | $2,112 | |||||
Operating income (loss) increase (decrease) | (1.0)% | 7.9% | 18.5% | 88.9% | 16.1% | (4.0)% | |||||
Percentage of total segments | 86.2% | 11.0% | 2.2% | 0.6% | 100.0% | ||||||
Operating income as a percentage of sales | 5.7% | 2.7% | 1.0% | 2.2% | 3.4% | ||||||
39-Week Period Ended Mar. 29, 2025 | |||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center | Consolidated Totals | ||||||
(In millions) | |||||||||||
Sales | $42,206 | $10,978 | $6,246 | $802 | $— | $60,232 | |||||
Percentage of total | 70.1% | 18.2% | 10.4% | 1.3% | 100.0% | ||||||
Operating income (loss) | $2,496 | $292 | $54 | $9 | $(651) | $2,200 | |||||
Percentage of total segments | 87.6% | 10.2% | 1.9% | 0.3% | 100.0% | ||||||
Operating income as a percentage of sales | 5.9% | 2.7% | 0.9% | 1.1% | 3.7% | ||||||
Based on information in Note 14, “Business Segment Information,” in the Notes to Consolidated Financial Statements
in Item 1 of Part I of this Form 10-Q, U.S. Foodservice Operations and International Foodservice Operations, collectively,
represented approximately 88.3% and 88.5% of Sysco’s overall sales in the third quarter and first 39 weeks of fiscal 2026,
respectively. U.S. Foodservice Operations and International Foodservice Operations, collectively, represented approximately
97.2% of total segment operating income in both the third quarter and first 39 weeks of fiscal 2026, respectively. This illustrates
that these segments represent a substantial majority of our total segment results when compared to other reportable segments.
Results of U.S. Foodservice Operations
The following table sets forth a summary of the components of operating income expressed as a percentage increase or
decrease over the comparable period in the prior year:
38
13-Week Period Ended Mar. 28, 2026 | 13-Week Period Ended Mar. 29, 2025 | Change in Dollars | % Change | ||||
(Dollars in millions) | |||||||
Sales | $14,234 | $13,800 | $434 | 3.1% | |||
Gross profit | 2,738 | 2,603 | 135 | 5.2 | |||
Operating expenses | 1,966 | 1,849 | 117 | 6.3 | |||
Operating income | $772 | $754 | $18 | 2.4% | |||
Gross profit | $2,738 | $2,603 | $135 | 5.2% | |||
Adjusted operating expenses (Non-GAAP) | 1,908 | 1,813 | 95 | 5.2 | |||
Adjusted operating income (Non-GAAP) | $830 | $790 | $40 | 5.1% | |||
39-Week Period Ended Mar. 28, 2026 | 39-Week Period Ended Mar. 29, 2025 | Change in Dollars | % Change | ||||
(Dollars in millions) | |||||||
Sales | $43,397 | $42,206 | $1,191 | 2.8% | |||
Gross profit | 8,281 | 8,003 | 278 | 3.5 | |||
Operating expenses | 5,809 | 5,507 | 302 | 5.5 | |||
Operating income | $2,472 | $2,496 | $(24) | (1.0)% | |||
Gross profit | $8,281 | $8,003 | $278 | 3.5% | |||
Adjusted operating expenses (Non-GAAP) | 5,683 | 5,428 | 255 | 4.7 | |||
Adjusted operating income (Non-GAAP) | $2,598 | $2,575 | $23 | 0.9% | |||
Sales
The following table sets forth the percentage and dollar value increase or decrease in the major factors impacting sales
as compared to the corresponding prior year period in order to demonstrate the cause and magnitude of change:
Increase (Decrease) | Increase (Decrease) | ||||||
13-Week Period | 39-Week Period | ||||||
(Dollars in millions) | (Dollars in millions) | ||||||
Cause of change | Percentage | Dollars | Percentage | Dollars | |||
Case volume (1) | 2.3% | $315 | 1.0% | $442 | |||
Inflation | 0.6 | 84 | 1.6 | 673 | |||
Other | 0.2 | 35 | 0.2 | 76 | |||
Total change in sales | 3.1% | $434 | 2.8% | $1,191 | |||
(1) | Case volumes increased 2.3% and 1.0% compared to the third quarter and first 39 weeks of fiscal 2025, respectively. This volume increase resulted in a 2.3% and 1.0% increase in the dollar value of sales compared to the third quarter and first 39 weeks of fiscal 2025, respectively. |
The sales growth in our U.S. Foodservice Operations was primarily driven by case volume growth. Case volumes from
our U.S. Foodservice Operations increased 2.3% and 1.0% in the third quarter and first 39 weeks of fiscal 2026, respectively, as
compared to the third quarter and first 39 weeks of fiscal 2025. The growth in case volumes was attributable to local case
volumes increasing 3.3% and 1.4% in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third
quarter and first 39 weeks of fiscal 2025. National case volumes increased 1.4% and 0.9% in the third quarter and first 39
weeks of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025.
39
Operating Income
The increase in operating income for the third quarter of fiscal 2026, as compared to the third quarter fiscal 2025, was
driven by case volume growth and gross profit dollar growth, partially offset by an increase in operating expenses. The decrease
in operating income for the first 39 weeks of fiscal 2026, as compared to the first 39 weeks of fiscal 2025, was driven by an
increase in operating expenses, partially offset by case volume growth and gross profit dollar growth.
Gross profit dollars increased in the third quarter and first 39 weeks of fiscal 2026 as compared to the third quarter and
first 39 weeks of fiscal 2025, primarily as a result of improvements in our strategic sourcing initiatives, stronger volume
performance from local customers and improving mix from Sysco Brand penetration rates, and the effective management of
product cost fluctuations. Our local case volumes have improved due to improved sales colleague retention and incremental
sales colleague productivity improvements. The estimated change in product costs, an internal measure of inflation or deflation,
increased in the third quarter and first 39 weeks of fiscal 2026. Gross margin, which is gross profit as a percentage of sales, was
19.24% and 19.08% in the third quarter and first 39 weeks of fiscal 2026, respectively, for our U.S. Foodservice Operations,
which was an increase of 38 basis points compared to gross margin of 18.86% in the third quarter of fiscal 2025, and an
increase of 12 basis points compared to a gross margin of 18.96% in the first 39 weeks of fiscal 2025. The improvement in the
third quarter and first 39 weeks of fiscal 2026 is attributable to improvements in our strategic sourcing initiatives, favorable
changes in customer mix, and the effective management of product cost fluctuations.
The increase in operating expenses for the third quarter and first 39 weeks of fiscal 2026, as compared to the third
quarter and first 39 weeks of fiscal 2025, was primarily driven by increases in colleague-related costs, which is inclusive of
incentive compensation, and costs associated with investments in sales headcount and building expansions.
40
Results of International Foodservice Operations
The following table sets forth a summary of the components of operating income and adjusted operating income
expressed as a percentage increase or decrease over the comparable period in the prior year:
13-Week Period Ended Mar. 28, 2026 | 13-Week Period Ended Mar. 29, 2025 | Change in Dollars | % Change | ||||
(Dollars in millions) | |||||||
Sales | $3,885 | $3,457 | $428 | 12.4% | |||
Gross profit | 834 | 728 | 106 | 14.6 | |||
Operating expenses | 751 | 632 | 119 | 18.8 | |||
Operating income | $83 | $96 | $(13) | (13.5)% | |||
Gross profit | $834 | $728 | $106 | 14.6% | |||
Adjusted operating expenses (Non-GAAP) | 690 | 600 | 90 | 15.0 | |||
Adjusted operating income (Non-GAAP) | $144 | $128 | $16 | 12.5% | |||
Sales on a constant currency basis (Non-GAAP) | $3,636 | $3,457 | $179 | 5.2% | |||
Gross profit on a constant currency basis (Non-GAAP) | 777 | 728 | 49 | 6.7 | |||
Adjusted operating expenses on a constant currency basis (Non-GAAP) | 640 | 600 | 40 | 6.7 | |||
Adjusted operating income on a constant currency basis (Non-GAAP) | $137 | $128 | $9 | 7.0% | |||
39-Week Period Ended Mar. 28, 2026 | 39-Week Period Ended Mar. 29, 2025 | Change in Dollars | % Change | ||||
(Dollars in millions) | |||||||
Sales | $11,851 | $10,978 | $873 | 8.0% | |||
Gross profit | 2,492 | 2,262 | 230 | 10.2 | |||
Operating expenses | 2,177 | 1,970 | 207 | 10.5 | |||
Operating income | $315 | $292 | $23 | 7.9% | |||
Gross profit | $2,492 | $2,262 | $230 | 10.2% | |||
Adjusted operating expenses (Non-GAAP) | 2,039 | 1,875 | 164 | 8.7 | |||
Adjusted operating income (Non-GAAP) | $453 | $387 | $66 | 17.1% | |||
Sales on a constant currency basis (Non-GAAP) | $11,374 | $10,978 | $396 | 3.6% | |||
Gross profit on a constant currency basis (Non-GAAP) | 2,378 | 2,262 | 116 | 5.1 | |||
Adjusted operating expenses on a constant currency basis (Non-GAAP) | 1,937 | 1,875 | 62 | 3.3 | |||
Adjusted operating income on a constant currency basis (Non-GAAP) | $441 | $387 | $54 | 14.0% | |||
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Sales
The following table sets forth the percentage and dollar value increase or decrease in the major components impacting
sales as compared to the corresponding prior year period in order to demonstrate the cause and magnitude of change.
Increase (Decrease) | Increase (Decrease) | ||||||
13-Week Period | 39-Week Period | ||||||
(Dollars in millions) | (Dollars in millions) | ||||||
Cause of change | Percentage | Dollars | Percentage | Dollars | |||
Inflation | 3.6% | $125 | 4.1% | $447 | |||
Foreign currency | 7.2 | 249 | 4.3 | 477 | |||
Case volume | 1.0 | 36 | 1.4 | 162 | |||
Impact of divestiture | — | — | (1.9) | (207) | |||
Other | 0.6 | 18 | 0.1 | (6) | |||
Total change in sales | 12.4% | $428 | 8.0% | $873 | |||
Sales for the third quarter of fiscal 2026 increased 12.4% as compared to the third quarter of fiscal 2025. Sales for the
first 39 weeks of fiscal 2026 increased 8.0% as compared to the first 39 weeks of fiscal 2025. The sales increase in both periods
is primarily due to the impact of foreign currency translation, higher inflation, and local case growth. Excluding the impact of
the Mexico joint venture, which was divested in the second quarter of fiscal 2025, sales increased 10.0% in the first 39 weeks of
fiscal 2026 as compared to the first 39 weeks of fiscal 2025.
Operating Income
The decrease in operating income for the third quarter of fiscal 2026, as compared to the third quarter of fiscal 2025,
was primarily due to increases in operating expenses, partially offset by local case volume growth driven by expanded supply
chain capacity, increased availability of Sysco branded merchandise, and increased sales colleague headcount. The increase in
operating income for the first 39 weeks of fiscal 2026, as compared to the first 39 weeks of fiscal 2025, is primarily due to local
case volume growth driven by expanded supply chain capacity, increased availability of Sysco branded merchandise, and
increased sales colleague headcount, partially offset by increases in operating expenses.
The increase in gross profit dollars in the third quarter and first 39 weeks of fiscal 2026, as compared to the third
quarter and first 39 weeks of fiscal 2025, was primarily attributable to increases in local case volumes. Local case volumes
increased approximately 3.8% in the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025.
The increase in operating expenses in the third quarter and first 39 weeks of fiscal 2026 as compared to the third
quarter and first 39 weeks of fiscal 2025 was primarily due to increases in colleague-related costs and supply chain
transformation costs, as well as the impact of foreign currency translation.
Results of SYGMA and Other Segment
SYGMA segment sales were 2.5% and 2.3% higher in the third quarter and first 39 weeks of fiscal 2026, respectively,
as compared to the third quarter and first 39 weeks of fiscal 2025. Operating income increased $1 million and $10 million in the
third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025.
These results are reflective of recent increased strength in our supply chain operations.
For the operations that are grouped within Other, operating income increased $10 million and $8 million in the third
quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third quarter and first 39 weeks of fiscal 2025. The
operations of this group primarily consist of our hospitality business, Guest Worldwide.
42
Global Support Center Expenses
Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service
operations. These expenses in the third quarter of fiscal 2026 increased $63 million, or 30.4%, as compared to the third quarter
of fiscal 2025, primarily due to increases in colleague-related costs, which is inclusive of incentive compensation, and
acquisition and due diligence costs, partially offset by decreases in insurance costs. These expenses in the first 39 weeks of
fiscal 2026 increased $110 million, or 16.2%, as compared to the first 39 weeks of fiscal 2025, primarily due to increases in
colleague-related costs, which is inclusive of incentive compensation, and acquisition and due diligence costs, partially offset
by decreases in insurance costs.
Included in Global Support Center expenses are Certain Items that totaled $30 million and $98 million in the third
quarter and first 39 weeks of fiscal 2026, as compared to $24 million and $54 million in the third quarter and first 39 weeks of
fiscal 2025, respectively. Certain Items impacting the third quarter and first 39 weeks of fiscal 2026 were primarily expenses
associated with our business technology transformation initiatives and acquisition and due diligence costs. Certain Items
impacting the third quarter and first 39 weeks of fiscal 2025 were primarily expenses associated with severances, our business
technology transformation initiatives and expenses associated with acquisitions.
Interest Expense
Interest expense increased $19 million and $43 million for the third quarter and first 39 weeks of fiscal 2026,
respectively, as compared to the third quarter and first 39 weeks of fiscal 2025. The increase was primarily due to interest
expense on recently issued senior notes.
Other Income and Expense
Other expense decreased $3 million and increased $12 million for the third quarter and first 39 weeks of fiscal 2026,
respectively, as compared to the third quarter and first 39 weeks of fiscal 2025. The changes are primarily due to foreign
exchange gains and losses incurred in those periods.
Net Earnings
Net earnings decreased 15.2% and 7.0% in the third quarter and first 39 weeks of fiscal 2026, respectively, as
compared to the third quarter and first 39 weeks of fiscal 2025, primarily due to the items noted above for operating income,
and interest expense, as well as items impacting our income taxes that are discussed in Note 12, “Income Taxes,” in the Notes
to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q. Adjusted net earnings, excluding Certain Items,
decreased 3.6% and increased 1.0% in the third quarter and first 39 weeks of fiscal 2026, respectively, as compared to the third
quarter and first 39 weeks of fiscal 2025. Adjusted net earnings were favorably impacted in the third quarter and first 39 weeks
of fiscal 2026 by increases in sales volumes, benefits from our strategic sourcing initiatives, and the effective management of
our product cost inflation. Adjusted net earnings were negatively impacted in the third quarter and first 39 weeks of fiscal 2026
by higher incentive compensation.
Earnings Per Share
Basic earnings per share in the third quarter of fiscal 2026 were $0.71, a 13.4% decrease from the comparable prior
year period amount of $0.82 per share. Diluted earnings per share in the third quarter of fiscal 2026 were $0.71, a 13.4%
decrease from the comparable prior year period amount of $0.82 per share. Adjusted diluted earnings per share, excluding
Certain Items, in the third quarter of fiscal 2026 were $0.94, a 2.1% decrease from the comparable prior year amount of $0.96
per share.
Basic earnings per share in the first 39 weeks of fiscal 2026 were $2.52, a 4.9% decrease from the comparable prior
year amount of $2.65 per share. Diluted earnings per share in the first 39 weeks of fiscal 2026 were $2.51, a 4.9% decrease
from the comparable prior year period amount of $2.64 per share. Adjusted diluted earnings per share, excluding Certain Items,
in the first 39 weeks of fiscal 2026 were $3.08, a 3.4% increase from the comparable prior year amount of $2.98 per share.
43
Non-GAAP Reconciliations
The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove: (1) restructuring charges; (2) expenses associated with our various transformation initiatives; (3) severance charges; and (4) acquisition-related costs consisting of (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions. Adjustments provided herein for fiscal 2026 results of operations also remove the impact of a charge associated with a legal matter. No similar charge was applicable in fiscal 2025. |
The results of our operations can be impacted due to changes in exchange rates applicable in converting local currencies to U.S. dollars. We measure our results on a constant currency basis. Constant currency operating results are calculated by translating current-period local currency operating results with the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period. We also measure our sales growth excluding the impact of our joint venture in Mexico which was divested in the second quarter of fiscal year 2025. |
Management believes that adjusting its operating expenses, operating income, operating margin, net earnings and diluted earnings per share to remove these Certain Items, presenting its results on a constant currency basis, and adjusting its sales results to exclude the impact of its joint venture in Mexico provides an important perspective with respect to our underlying business trends and results. It provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company’s underlying operations and (2) facilitates comparisons on a year- over-year basis. |
Sysco has a history of growth through acquisitions and excludes from its non-GAAP financial measures the impact of acquisition-related intangible amortization, acquisition costs and due diligence costs for those acquisitions. We believe this approach significantly enhances the comparability of Sysco’s results for fiscal year 2026 and fiscal year 2025. |
Set forth on the following page is a reconciliation of sales, operating expenses, operating income, net earnings and diluted earnings per share to adjusted results for these measures for the periods presented. Individual components of diluted earnings per share may not be equal to the total presented when added due to rounding. Adjusted diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. |
13-Week Period Ended Mar. 28, 2026 | 13-Week Period Ended Mar. 29, 2025 | Change in Dollars | %/bps Change | ||||
Sales (GAAP) | $20,519 | $19,598 | $921 | 4.7% | |||
Impact of currency fluctuations (1) | (252) | (252) | (1.3) | ||||
Comparable sales using a constant currency basis (Non-GAAP) | $20,267 | $19,598 | $669 | 3.4% | |||
Cost of sales (GAAP) | $16,707 | $16,017 | $690 | 4.3% | |||
Gross profit (GAAP) | $3,812 | $3,581 | $231 | 6.5% | |||
Impact of currency fluctuations (1) | (58) | (58) | (1.7) | ||||
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) | $3,754 | $3,581 | $173 | 4.8% | |||
Gross margin (GAAP) | 18.58% | 18.27% | 31 bps | ||||
Impact of currency fluctuations (1) | (0.06) | -6 bps | |||||
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 18.52% | 18.27% | 25 bps | ||||
Operating expenses (GAAP) | $3,193 | $2,900 | $293 | 10.1% | |||
Impact of restructuring, transformational project, and other costs (2) | (94) | (50) | (44) | (88.0) | |||
Impact of acquisition-related costs (3) | (55) | (42) | (13) | (31.0) | |||
Operating expenses adjusted for Certain Items (Non-GAAP) | 3,044 | 2,808 | 236 | 8.4 |
44
Impact of currency fluctuations (1) | (51) | (51) | (1.8) | ||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $2,993 | $2,808 | $185 | 6.6% | |||
Operating expense as a percentage of sales (GAAP) | 15.56% | 14.80% | 76 bps | ||||
Impact of certain item adjustments | (0.72) | (0.47) | -25 bps | ||||
Adjusted operating expense as a percentage of sales (Non- GAAP) | 14.84% | 14.33% | 51 bps | ||||
Operating income (GAAP) | $619 | $681 | $(62) | (9.1)% | |||
Impact of restructuring, transformational project, and other costs (2) | 94 | 50 | 44 | 88.0 | |||
Impact of acquisition-related costs (3) | 55 | 42 | 13 | 31.0 | |||
Operating income adjusted for Certain Items (Non-GAAP) | 768 | 773 | (5) | (0.6) | |||
Impact of currency fluctuations (1) | (7) | (7) | (1.0) | ||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $761 | $773 | $(12) | (1.6)% | |||
Operating margin (GAAP) | 3.02% | 3.47% | -45 bps | ||||
Operating margin adjusted for Certain Items (Non-GAAP) | 3.74% | 3.94% | -20 bps | ||||
Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 3.75% | 3.94% | -19 bps | ||||
Net earnings (GAAP) | $340 | $401 | $(61) | (15.2)% | |||
Impact of restructuring, transformational project, and other costs (2) | 94 | 50 | 44 | 88.0 | |||
Impact of acquisition-related costs (3) | 55 | 42 | 13 | 31.0 | |||
Tax impact of restructuring, transformational project, and other costs (4) | (23) | (13) | (10) | (76.9) | |||
Tax impact of acquisition-related costs (4) | (14) | (11) | (3) | (27.3) | |||
Net earnings adjusted for Certain Items (Non-GAAP) | $452 | $469 | $(17) | (3.6)% | |||
Diluted earnings per share (GAAP) | $0.71 | $0.82 | $(0.11) | (13.4)% | |||
Impact of restructuring, transformational project, and other costs (2) | 0.20 | 0.10 | 0.10 | 100.0 | |||
Impact of acquisition-related costs (3) | 0.11 | 0.09 | 0.02 | 22.2 | |||
Tax impact of restructuring, transformational project, and other costs (4) | (0.05) | (0.03) | (0.02) | (66.7) | |||
Tax impact of acquisition-related costs (4) | (0.03) | (0.02) | (0.01) | (50.0) | |||
Diluted earnings per share adjusted for Certain Items (Non- GAAP) (5) | $0.94 | $0.96 | $(0.02) | (2.1)% |
(1) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results. |
(2) | Fiscal 2026 includes $43 million related to restructuring costs, severance charges, and costs associated with a legal matter and $51 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. Fiscal 2025 includes $15 million related to restructuring and severance charges and $35 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. |
(3) | Fiscal 2026 includes $42 million of intangible amortization expense and $13 million in acquisition and due diligence costs. Fiscal 2025 includes $32 million of intangible amortization expense and $10 million in acquisition and due diligence costs. |
(4) | The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. |
(5) | Individual components of diluted earnings per share may not equal the total presented when added due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. |
45
39-Week Period Ended Mar. 28, 2026 | 39-Week Period Ended Mar. 29, 2025 | Change in Dollars | %/bps Change | ||||
Sales (GAAP) | $62,429 | $60,232 | $2,197 | 3.6% | |||
Impact of Mexico joint venture sales | — | (207) | 207 | 0.4 | |||
Comparable sales excluding Mexico joint venture (Non-GAAP) | $62,429 | $60,025 | $2,404 | 4.0% | |||
Sales (GAAP) | $62,429 | $60,232 | $2,197 | 3.6% | |||
Impact of currency fluctuations (1) | (481) | (481) | (0.8) | ||||
Comparable sales using a constant currency basis (Non-GAAP) | $61,948 | $60,232 | $1,716 | 2.8% | |||
Cost of sales (GAAP) | $50,924 | $49,249 | $1,675 | 3.4% | |||
Gross profit (GAAP) | $11,505 | $10,983 | $522 | 4.8% | |||
Impact of currency fluctuations (1) | (115) | (115) | (1.1) | ||||
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) | $11,390 | $10,983 | $407 | 3.7% | |||
Gross margin (GAAP) | 18.43% | 18.23% | 20 bps | ||||
Impact of currency fluctuations (1) | (0.04) | -4 bps | |||||
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 18.39% | 18.23% | 16 bps | ||||
Operating expenses (GAAP) | $9,393 | $8,783 | $610 | 6.9% | |||
Impact of restructuring, transformational project, and other costs (2) | (207) | (107) | (100) | (93.5) | |||
Impact of acquisition-related costs (3) | (155) | (121) | (34) | (28.1) | |||
Operating expenses adjusted for Certain Items (Non-GAAP) | 9,031 | 8,555 | 476 | 5.6 | |||
Impact of currency fluctuations (1) | (102) | (102) | (1.2) | ||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $8,929 | $8,555 | $374 | 4.4% | |||
Operating expense as a percentage of sales (GAAP) | 15.05% | 14.58% | 47 bps | ||||
Impact of certain item adjustments | (0.58) | (0.38) | -20 bps | ||||
Adjusted operating expense as a percentage of sales (Non- GAAP) | 14.47% | 14.20% | 27 bps | ||||
Operating income (GAAP) | $2,112 | $2,200 | $(88) | (4.0)% | |||
Impact of restructuring, transformational project, and other costs (2) | 207 | 107 | 100 | 93.5 | |||
Impact of acquisition-related costs (3) | 155 | 121 | 34 | 28.1 | |||
Operating income adjusted for Certain Items (Non-GAAP) | 2,474 | 2,428 | 46 | 1.9 | |||
Impact of currency fluctuations (1) | (13) | (13) | (0.5) | ||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $2,461 | $2,428 | $33 | 1.4% | |||
Operating margin (GAAP) | 3.38% | 3.65% | -27 bps | ||||
Operating margin adjusted for Certain Items (Non-GAAP) | 3.96% | 4.03% | -7 bps | ||||
Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 3.97% | 4.03% | -6 bps | ||||
Net earnings (GAAP) | $1,206 | $1,297 | $(91) | (7.0)% | |||
Impact of restructuring, transformational project, and other costs (2) | 207 | 107 | 100 | 93.5 |
46
39-Week Period Ended Mar. 28, 2026 | 39-Week Period Ended Mar. 29, 2025 | Change in Dollars | %/bps Change | ||||
Impact of acquisition-related costs (3) | 155 | 121 | 34 | 28.1 | |||
Tax impact of restructuring, transformational project, and other costs (4) | (50) | (27) | (23) | (85.2) | |||
Tax impact of acquisition-related costs (4) | (37) | (31) | (6) | (19.4) | |||
Net earnings adjusted for Certain Items (Non-GAAP) | $1,481 | $1,467 | $14 | 1.0% | |||
Diluted earnings per share (GAAP) | $2.51 | $2.64 | $(0.13) | (4.9)% | |||
Impact of restructuring, transformational project, and other costs (2) | 0.43 | 0.22 | 0.21 | 95.5 | |||
Impact of acquisition-related costs (3) | 0.32 | 0.25 | 0.07 | 28.0 | |||
Tax impact of restructuring, transformational project, and other costs (4) | (0.10) | (0.05) | (0.05) | (100.0) | |||
Tax impact of acquisition-related costs (4) | (0.08) | (0.06) | (0.02) | (33.3) | |||
Diluted earnings per share adjusted for Certain Items (Non- GAAP) (5) | $3.08 | $2.98 | $0.10 | 3.4% |
(1) | Represents a constant currency adjustment which eliminates the impact of foreign currency fluctuations on the current year results. |
(2) | Fiscal 2026 includes $63 million related to restructuring costs, severance charges, and costs associated with a legal matter and $144 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. Fiscal 2025 includes $31 million related to restructuring and severance charges and $76 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. |
(3) | Fiscal 2026 includes $108 million of intangible amortization expense and $47 million in acquisition and due diligence costs. Fiscal 2025 includes $97 million of intangible amortization expense and $24 million in acquisition and due diligence costs. |
(4) | The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. |
(5) | Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. |
47
13-Week Period Ended Mar. 28, 2026 | 13-Week Period Ended Mar. 29, 2025 | Change in Dollars | %/bps Change | ||||
U.S. FOODSERVICE OPERATIONS | |||||||
Operating expenses (GAAP) | $1,966 | $1,849 | $117 | 6.3% | |||
Impact of restructuring, transformational project, and other costs (1) | (39) | (16) | (23) | NM | |||
Impact of acquisition-related costs (2) | (19) | (20) | 1 | 5.0 | |||
Operating expenses adjusted for Certain Items (Non-GAAP) | $1,908 | $1,813 | $95 | 5.2% | |||
Operating income (GAAP) | $772 | $754 | $18 | 2.4% | |||
Impact of restructuring, transformational project, and other costs (1) | 39 | 16 | 23 | NM | |||
Impact of acquisition-related costs (2) | 19 | 20 | (1) | (5.0) | |||
Operating income adjusted for Certain Items (Non-GAAP) | $830 | $790 | $40 | 5.1% | |||
INTERNATIONAL FOODSERVICE OPERATIONS | |||||||
Sales (GAAP) | $3,885 | $3,457 | $428 | 12.4% | |||
Impact of currency fluctuations (3) | (249) | (249) | (7.2) | ||||
Comparable sales using a constant currency basis (Non-GAAP) | $3,636 | $3,457 | $179 | 5.2% | |||
Gross profit (GAAP) | $834 | $728 | $106 | 14.6% | |||
Impact of currency fluctuations (3) | (57) | (57) | (7.9) | ||||
Comparable gross profit using a constant currency basis (Non- GAAP) | $777 | $728 | $49 | 6.7% | |||
Gross margin (GAAP) | 21.47% | 21.06% | 41 bps | ||||
Impact of currency fluctuations (3) | (0.10) | -10 bps | |||||
Comparable gross margin using a constant currency basis (Non-GAAP) | 21.37% | 21.06% | 31 bps | ||||
Operating expenses (GAAP) | $751 | $632 | $119 | 18.8% | |||
Impact of restructuring and transformational project costs (4) | (39) | (13) | (26) | NM | |||
Impact of acquisition-related costs (2) | (22) | (19) | (3) | (15.8) | |||
Operating expenses adjusted for Certain Items (Non-GAAP) | 690 | 600 | 90 | 15.0 | |||
Impact of currency fluctuations (3) | (50) | (50) | (8.3) | ||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $640 | $600 | $40 | 6.7% | |||
Operating income (GAAP) | $83 | $96 | $(13) | (13.5)% | |||
Impact of restructuring and transformational project costs (4) | 39 | 13 | 26 | NM | |||
Impact of acquisition-related costs (2) | 22 | 19 | 3 | 15.8 | |||
Operating income adjusted for Certain Items (Non-GAAP) | 144 | 128 | 16 | 12.5 | |||
Impact of currency fluctuations (3) | (7) | (7) | (5.5) | ||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $137 | $128 | $9 | 7.0% | |||
SYGMA | |||||||
Operating expenses (GAAP) | $145 | $149 | $(4) | (2.7)% | |||
Operating income (GAAP) | 18 | 17 | 1 | 5.9 | |||
OTHER | |||||||
Operating expenses (GAAP) | $61 | $63 | $(2) | (3.2)% | |||
Operating income (loss) (GAAP) | 7 | (3) | 10 | NM | |||
GLOBAL SUPPORT CENTER | |||||||
Gross profit (GAAP) | $9 | $24 | $(15) | (62.5)% | |||
48
13-Week Period Ended Mar. 28, 2026 | 13-Week Period Ended Mar. 29, 2025 | Change in Dollars | %/bps Change | ||||
Operating expenses (GAAP) | $270 | $207 | $63 | 30.4% | |||
Impact of restructuring and transformational project costs (5) | (16) | (21) | 5 | 23.8 | |||
Impact of acquisition-related costs (6) | (14) | (3) | (11) | NM | |||
Operating expenses adjusted for Certain Items (Non-GAAP) | $240 | $183 | $57 | 31.1% | |||
Operating loss (GAAP) | $(261) | $(183) | $(78) | (42.6)% | |||
Impact of restructuring and transformational project costs (5) | 16 | 21 | (5) | (23.8) | |||
Impact of acquisition-related costs (6) | 14 | 3 | 11 | NM | |||
Operating loss adjusted for Certain Items (Non-GAAP) | $(231) | $(159) | $(72) | (45.3)% |
(1) | Primarily represents severance charges, transformation initiative costs, and costs associated with a legal matter. |
(2) | Fiscal 2026 and fiscal 2025 include intangible amortization expense and acquisition costs. |
(3) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. |
(4) | Includes restructuring and transformation initiative costs primarily in Europe. |
(5) | Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy. |
(6) | Represents due diligence costs. |
NM | Represents that the percentage change is not meaningful. |
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39-Week Period Ended Mar. 28, 2026 | 39-Week Period Ended Mar. 29, 2025 | Change in Dollars | %/bps Change | ||||
U.S. FOODSERVICE OPERATIONS | |||||||
Operating expenses (GAAP) | $5,809 | $5,507 | $302 | 5.5% | |||
Impact of restructuring, transformational project, and other costs (1) | (54) | (26) | (28) | NM | |||
Impact of acquisition-related costs (2) | (72) | (53) | (19) | (35.8) | |||
Operating expenses adjusted for Certain Items (Non-GAAP) | $5,683 | $5,428 | $255 | 4.7% | |||
Operating income (GAAP) | $2,472 | $2,496 | $(24) | (1.0)% | |||
Impact of restructuring, transformational project, and other costs (1) | 54 | 26 | 28 | NM | |||
Impact of acquisition-related costs (2) | 72 | 53 | 19 | 35.8 | |||
Operating income adjusted for Certain Items (Non-GAAP) | $2,598 | $2,575 | $23 | 0.9% | |||
INTERNATIONAL FOODSERVICE OPERATIONS | |||||||
Sales (GAAP) | $11,851 | $10,978 | $873 | 8.0% | |||
Impact of Mexico joint venture sales | — | (207) | 207 | 2.0 | |||
Comparable sales excluding Mexico joint venture (Non-GAAP) | $11,851 | $10,771 | $1,080 | 10.0% | |||
Sales (GAAP) | $11,851 | $10,978 | $873 | 8.0% | |||
Impact of currency fluctuations (3) | (477) | (477) | (4.4) | ||||
Comparable sales using a constant currency basis (Non-GAAP) | $11,374 | $10,978 | $396 | 3.6% | |||
Gross profit (GAAP) | $2,492 | $2,262 | $230 | 10.2% | |||
Impact of currency fluctuations (3) | (114) | (114) | (5.1) | ||||
Comparable gross profit using a constant currency basis (Non- GAAP) | $2,378 | $2,262 | $116 | 5.1% | |||
Gross margin (GAAP) | 21.03% | 20.60% | 43 bps | ||||
Impact of currency fluctuations (3) | (0.12) | -12 bps | |||||
Comparable gross margin using a constant currency basis (Non- GAAP) | 20.91% | 20.60% | 31 bps | ||||
Operating expenses (GAAP) | $2,177 | $1,970 | $207 | 10.5% | |||
Impact of restructuring and transformational project costs (4) | (91) | (39) | (52) | NM | |||
Impact of acquisition-related costs (2) | (47) | (56) | 9 | 16.1 | |||
Operating expenses adjusted for Certain Items (Non-GAAP) | 2,039 | 1,875 | 164 | 8.7 | |||
Impact of currency fluctuations (3) | (102) | (102) | (5.4) | ||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $1,937 | $1,875 | $62 | 3.3% | |||
Operating income (GAAP) | $315 | $292 | $23 | 7.9% | |||
Impact of restructuring and transformational project costs (4) | 91 | 39 | 52 | NM | |||
Impact of acquisition-related costs (2) | 47 | 56 | (9) | (16.1) | |||
Operating income adjusted for Certain Items (Non-GAAP) | 453 | 387 | 66 | 17.1 | |||
Impact of currency fluctuations (3) | (12) | (12) | (3.1) | ||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $441 | $387 | $54 | 14.0% | |||
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39-Week Period Ended Mar. 28, 2026 | 39-Week Period Ended Mar. 29, 2025 | Change in Dollars | %/bps Change | ||||
SYGMA | |||||||
Sales (GAAP) | $6,392 | $6,246 | $146 | 2.3% | |||
Gross profit (GAAP) | 496 | 492 | 4 | 0.8 | |||
Gross margin (GAAP) | 7.76% | 7.88% | -12 bps | ||||
Operating expenses (GAAP) | $432 | $438 | $(6) | (1.4)% | |||
Operating income (GAAP) | 64 | 54 | 10 | 18.5% | |||
OTHER | |||||||
Operating expenses (GAAP) | $185 | $188 | $(3) | (1.6)% | |||
Operating income (GAAP) | 17 | 9 | 8 | 88.9% | |||
GLOBAL SUPPORT CENTER | |||||||
Gross profit (GAAP) | $34 | $29 | $5 | 17.2% | |||
Operating expenses (GAAP) | $790 | $680 | $110 | 16.2% | |||
Impact of restructuring and transformational project costs (5) | (62) | (42) | (20) | (47.6) | |||
Impact of acquisition-related costs (6) | (36) | (12) | (24) | NM | |||
Operating expenses adjusted for Certain Items (Non-GAAP) | $692 | $626 | $66 | 10.5% | |||
Operating loss (GAAP) | $(756) | $(651) | $(105) | (16.1)% | |||
Impact of restructuring and transformational project costs (5) | 62 | 42 | 20 | 47.6 | |||
Impact of acquisition-related costs (6) | 36 | 12 | 24 | NM | |||
Operating loss adjusted for Certain Items (Non-GAAP) | $(658) | $(597) | $(61) | (10.2)% |
(1) | Primarily represents severance charges, transformation initiative costs, and costs associated with a legal matter. |
(2) | Fiscal 2026 and fiscal 2025 include intangible amortization expense and acquisition costs. |
(3) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. |
(4) | Includes restructuring and transformation initiative costs primarily in Europe. |
(5) | Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy. |
(6) | Represents due diligence costs. |
NM | Represents that the percentage change is not meaningful. |
EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA should not be used as a substitute for the most comparable GAAP measure in
assessing Sysco’s overall financial performance for the periods presented. An analysis of any non-GAAP financial measure
should be used in conjunction with results presented in accordance with GAAP. See Item 7, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Key Performance Indicators” contained in our fiscal 2025 Form
10-K for discussions regarding this non-GAAP performance metric. Set forth below is a reconciliation of actual net earnings to
EBITDA and to adjusted EBITDA results for the periods presented (dollars in millions):
51
13-Week Period Ended Mar. 28, 2026 | 13-Week Period Ended Mar. 29, 2025 | Change in Dollars | % Change | ||||
Net earnings (GAAP) | $340 | $401 | $(61) | (15.2)% | |||
Interest (GAAP) | 168 | 149 | 19 | 12.8 | |||
Income taxes (GAAP) | 105 | 122 | (17) | (13.9) | |||
Depreciation and amortization (GAAP) | 251 | 238 | 13 | 5.5 | |||
EBITDA (Non-GAAP) | $864 | $910 | $(46) | (5.1)% | |||
Certain Item adjustments: | |||||||
Impact of restructuring, transformational project, and other costs (1) | $93 | $49 | $44 | 89.8% | |||
Impact of acquisition-related costs (2) | 13 | 10 | 3 | 30.0 | |||
EBITDA adjusted for Certain Items (Non-GAAP) (3) | $970 | $969 | $1 | 0.1% | |||
Other expense (income), net | 6 | 9 | (3) | (33.3) | |||
Depreciation and amortization, as adjusted (Non- GAAP) (4) | (208) | (205) | (3) | (1.5) | |||
Operating income adjusted for Certain Items (Non- GAAP) | $768 | $773 | $(5) | (0.6)% |
(1) | Fiscal 2026 and fiscal 2025 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy, excluding charges related to accelerated depreciation. In addition, fiscal 2026 includes charges associated with a legal matter. |
(2) | Fiscal 2026 and fiscal 2025 include acquisition and due diligence costs. |
(3) | In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $6 million and $7 million or non-cash stock compensation expense of $31 million and $15 million in fiscal 2026 and fiscal 2025, respectively. |
(4) | Fiscal 2026 includes $251 million in GAAP depreciation and amortization expense, less $43 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2025 includes $238 million in GAAP depreciation and amortization expense, less $33 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. |
39-Week Period Ended Mar. 28, 2026 | 39-Week Period Ended Mar. 29, 2025 | Change in Dollars | % Change | ||||
Net earnings (GAAP) | $1,206 | $1,297 | $(91) | (7.0)% | |||
Interest (GAAP) | 512 | 469 | 43 | 9.2 | |||
Income taxes (GAAP) | 350 | 402 | (52) | (12.9) | |||
Depreciation and amortization (GAAP) | 724 | 709 | 15 | 2.1 | |||
EBITDA (Non-GAAP) | $2,792 | $2,877 | $(85) | (3.0)% | |||
Certain Item adjustments: | |||||||
Impact of restructuring, transformational project, and other costs (1) | $203 | $104 | $99 | 95.2% | |||
Impact of acquisition-related costs (2) | 46 | 24 | 22 | 91.7 | |||
EBITDA adjusted for Certain Items (Non-GAAP) (3) | $3,041 | $3,005 | $36 | 1.2% | |||
Other expense (income), net | 44 | 32 | 12 | 37.5 | |||
Depreciation and amortization, as adjusted (Non- GAAP) (4) | (611) | (609) | (2) | (0.3) | |||
Operating income adjusted for Certain Items (Non- GAAP) | $2,474 | $2,428 | $46 | 1.9% |
52
(1) | Fiscal 2026 and 2025 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy, excluding charges related to accelerated depreciation. In addition, fiscal 2026 includes charges associated with a legal matter. |
(2) | Fiscal 2026 and fiscal 2025 include acquisition and due diligence costs. |
(3) | In arriving at adjusted EBITDA, Sysco does not exclude interest income of $18 million and $22 million or non-cash stock compensation expense of $95 million and $74 million for fiscal 2026 and fiscal 2025, respectively. |
(4) | Fiscal 2026 includes $724 million in GAAP depreciation and amortization expense, less $113 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2025 includes $709 million in GAAP depreciation and amortization expense, less $100 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. |
Liquidity and Capital Resources
Highlights
We produced free cash flow of $1.1 billion in the first 39 weeks of fiscal 2026, as compared to $954 million in the first
39 weeks of fiscal 2025. The increase in free cash flow is attributable to an increase in cash provided by operating activities and
a decrease in capital expenditures, partially offset by a decrease in proceeds from sales of plant and equipment. In the table that
follows, free cash flow for each period presented is reconciled to net cash provided by operating activities and comparisons of
the significant cash flows from the first 39 weeks of fiscal 2026 to the first 39 weeks of fiscal 2025 are provided.
39-Week Period Ended Mar. 28, 2026 | 39-Week Period Ended Mar. 29, 2025 | ||
Source of cash (use of cash) | (In millions) | ||
Net cash provided by operating activities (GAAP) | $1,463 | $1,317 | |
Additions to plant and equipment | (461) | (532) | |
Proceeds from sales of plant and equipment | 131 | 169 | |
Free Cash Flow (Non-GAAP) (1) | $1,133 | $954 | |
Acquisition of businesses, net of cash acquired | $(189) | $(40) | |
Debt borrowings (repayments), net | 637 | 1,078 | |
Stock repurchases | (200) | (700) | |
Dividends paid | (778) | (752) | |
(1) | Free cash flow should not be used as a substitute for the most comparable GAAP measure in assessing the company’s liquidity for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” contained in our fiscal 2025 Form 10-K for discussions regarding this non-GAAP performance metric. |
Sources and Uses of Cash
Sysco generates cash in the U.S. and internationally. As of March 28, 2026, we had $1.9 billion in cash and cash
equivalents, approximately 30% of which was held by our international subsidiaries. Sysco’s strategic objectives are funded
primarily by cash from operations and external borrowings. Traditionally, our operations have produced significant cash flow.
Due to our strong financial position, we believe we will continue to be able to effectively access capital markets, as needed.
Cash is generally allocated to working capital requirements, investments compatible with our overall growth strategy (organic
and inorganic), debt management, and shareholder return. The remaining cash balances are invested in high-quality, short-term
instruments.
We believe our cash flow from operations, the availability of liquidity under our commercial paper programs and our
revolving credit facility, and our ability to access capital from financial markets will be sufficient to meet our anticipated cash
requirements for more than the next 12 months, while maintaining sufficient liquidity for normal operating purposes. See Note
15 "Subsequent Events" for more information about our financing plans to our Proposed Transaction.
53
Cash Flows
Operating Activities
We generated $1.5 billion in cash flows from operations in the first 39 weeks of fiscal 2026, compared to cash flows
from operations of $1.3 billion in the first 39 weeks of fiscal 2025. In the first 39 weeks of fiscal 2026, these amounts included
year-over-year favorable comparisons on working capital of $45 million due to a favorable comparison in accounts payable,
partially offset by unfavorable comparisons in accounts receivable and inventory. Accrued expenses also had a favorable
comparison, primarily related to lower payments of accrued incentive compensation in the first 39 weeks of fiscal 2026 in
comparison to the first 39 weeks of fiscal 2025. Income taxes positively impacted cash flows from operations, as estimated
payments made in the first 39 weeks of fiscal 2026 were lower compared to the first 39 weeks of fiscal 2025.
Investing Activities
Our capital expenditures in the first 39 weeks of fiscal 2026 consisted primarily of investments in buildings and
building improvements, technology equipment, warehouse equipment, and fleet. Our capital expenditures in the first 39 weeks
of fiscal 2026 were $71 million lower than in the first 39 weeks of fiscal 2025, primarily due to timing of capital spending.
During the first 39 weeks of fiscal 2026, we paid $189 million, net of cash acquired, primarily for the acquisitions of
Fairfax Meadow and Ginsberg’s Foods. During the first 39 weeks of fiscal 2025, we paid $40 million, net of cash acquired, for
the acquisition of Campbells Prime Meat.
During the first 39 weeks of fiscal 2026, we received $131 million in proceeds from sales of plant and equipment,
which was primarily attributable to proceeds received from sale leaseback transactions. During the first 39 weeks of fiscal 2025,
we received $169 million in proceeds from sales of plant and equipment, which was primarily attributable to proceeds received
from sale leaseback transactions.
Financing Activities
Equity Transactions
Proceeds from exercises of share-based compensation awards were $124 million in the first 39 weeks of fiscal 2026, as
compared to $96 million in the first 39 weeks of fiscal 2025. The level of option exercises, and thus proceeds, will vary from
period to period and is largely dependent on movements in our stock price and the time remaining before option grants expire.
In May 2021, our Board of Directors approved a share repurchase program to authorize the repurchase of up to
$5.0 billion of the company’s common stock, which will remain available until fully utilized. We repurchased 2,230,415 shares
for $200 million during the first 39 weeks of fiscal 2026. As of March 28, 2026, we had a remaining authorization of
approximately $1.3 billion. We repurchased no additional shares under our authorization from the end of our fiscal third quarter
through April 10, 2026. In connection with the Proposed Transaction, we have suspended the repurchase of additional shares
for the remainder of fiscal 2026.
Dividends paid in the first 39 weeks of fiscal 2026 were $778 million, or $1.62 per share, as compared to $752 million,
or $1.53 per share, in the first 39 weeks of fiscal 2025. In February 2026, we declared our regular quarterly dividend for the
third quarter of fiscal 2026 of $0.54 per share, which was paid in April 2026. In April 2026, we declared our regular quarterly
dividend for the fourth quarter of fiscal 2026 of $0.55 per share, representing an increase of $0.01 per share. This dividend will
be payable in July 2026.
54
Debt Activity and Borrowing Availability
Our debt activity, including issuances and repayments, if any, and our borrowing availability are described in Note 8,
“Debt,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q. Our outstanding borrowings as
of March 28, 2026 are also disclosed within that note.
On March 30, 2026, we executed a commitment letter for a $22 billion senior unsecured 364-day bridge loan facility in
connection with the Proposed Transaction. Subsequent to the execution of the bridge loan facility, Sysco entered into a
$3 billion senior unsecured delayed draw term loan facility, comprising a $1.25 billion 364-day tranche and a $1.75 billion 2-
year tranche, reducing the bridge loan facility commitments from $22 billion to $19 billion.
On April 16, 2026, Sysco entered into a new long-term revolving credit facility, which replaces Sysco’s existing
$3.0 billion senior revolving credit facility that was originally entered into on September 5, 2025. The aggregate commitments
of the lenders under the new revolving credit agreement are $3.0 billion, and such commitments will increase to $4.0 billion
after the completion of the Proposed Transaction. The new revolving credit agreement has an option to increase such
commitments to $5.0 billion. See Note 15 "Subsequent Events" for more information on the terms of the Proposed Transaction.
Guarantor Summarized Financial Information
On January 19, 2011, the wholly owned U.S. Broadline subsidiaries of Sysco Corporation, which distribute a full line
of food products and a wide variety of non-food products, entered into full and unconditional guarantees of all outstanding
senior notes and debentures of Sysco Corporation. All subsequent issuances of senior notes and debentures in the U.S. and
borrowings under the company’s $3.0 billion long-term revolving credit facility have also been guaranteed by these
subsidiaries. As of March 28, 2026, Sysco had a total of $12.2 billion in senior notes, debentures and borrowings under the
long-term revolving credit facility that were guaranteed by these subsidiary guarantors. Our remaining consolidated subsidiaries
(non-guarantor subsidiaries) are not obligated under the senior notes indenture, debentures indenture or our long-term revolving
credit facility. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations –
Liquidity and Capital Resources” contained in our fiscal 2025 Form 10-K for additional information regarding the terms of the
guarantees.
Basis of Preparation of the Summarized Financial Information
The summarized financial information of Sysco Corporation (issuer), and certain wholly owned U.S. Broadline
subsidiaries (guarantors) (together, the obligor group) is presented on a combined basis with intercompany balances and
transactions between entities in the obligor group eliminated. Investments in and equity in the earnings of our non-guarantor
subsidiaries, which are not members of the obligor group, have been excluded from the summarized financial information. The
obligor group’s amounts due to, amounts due from and transactions with non-guarantor subsidiaries have been presented in
separate line items, if they are material to the obligor financials. The following tables include summarized financial information
of the obligor group for the periods presented.
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Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet | Mar. 28, 2026 | Jun. 28, 2025 | ||
(In millions) | ||||
ASSETS | ||||
Receivables due from non-obligor subsidiaries | $157 | $377 | ||
Current assets | 7,296 | 6,015 | ||
Total current assets | $7,453 | $6,392 | ||
Notes receivable from non-obligor subsidiaries | $1 | $20 | ||
Other noncurrent assets | 5,410 | 5,211 | ||
Total noncurrent assets | $5,411 | $5,231 | ||
LIABILITIES | ||||
Payables due to non-obligor subsidiaries | $83 | $61 | ||
Other current liabilities | 3,512 | 3,214 | ||
Total current liabilities | $3,595 | $3,275 | ||
Notes payable to non-obligor subsidiaries | $406 | $334 | ||
Long-term debt | 12,139 | 11,890 | ||
Other noncurrent liabilities | 1,764 | 1,538 | ||
Total noncurrent liabilities | $14,309 | $13,762 | ||
Combined Parent and Guarantor Subsidiaries Summarized Results of Operations | 39-Week Period Ended Mar. 28, 2026 | |
(In millions) | ||
Sales | $37,632 | |
Gross profit | 6,719 | |
Operating income | 1,599 | |
Interest expense from non-obligor subsidiaries | 111 | |
Net earnings | 956 | |
Critical Accounting Estimates
Critical accounting estimates are those that are most important to the portrayal of our financial position and results of
operations. These require our most subjective or complex judgments, often employing the use of estimates about the effect of
matters that are inherently uncertain. We have reviewed with the Audit Committee of the Board of Directors the development
and selection of the critical accounting estimates and this related disclosure. Our most critical accounting estimates pertain to
goodwill and intangible assets, income taxes and company-sponsored pension plans, which are described in Item 7 of our fiscal
2025 Form 10-K.
As part of the rebranding initiative in the United Kingdom discussed above, we performed impairment testing on the
related indefinite-lived intangible assets during fiscal 2026. The assets were determined not to be impaired. The rebranding
initiative will result in Sysco amortizing previously indefinite-lived intangible assets on a straight-line basis over a two-year
period.
Forward-Looking Statements
Certain statements made herein that look forward in time or express management’s expectations or beliefs with respect
to the occurrence of future events are forward-looking statements under the Private Securities Litigation Reform Act of 1995.
Forward-looking statements provide current expectations of future events based on certain assumptions and include any
statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by
words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,”
“could,” “can,” “may,” “projected,” “continues,” “continuously,” variations of such terms, and similar terms and phrases
denoting anticipated or expected occurrences or results. This report contains various statements relating to future financial
performance and results, business strategy, plans, goals and objectives, including certain outlook, business trends, our dividend
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and share repurchase programs, our expectation of future macroeconomic conditions and other statements that are not historical
facts about the expected timing and completion of the Proposed Transaction with JRD and the anticipated benefits of such
Proposed Transaction.
These statements are based on management’s current expectations and estimates; actual results may differ materially
due in part to the risk factors set forth below, those within Part II, Item 1A of this Form 10-Q and those discussed in Item 1A of
our fiscal 2025 Form 10-K:
•the risk that if sales from our locally managed customers do not grow at the same rate as sales from multi-unit
customers, our gross margins may decline;
•the risk that economic uncertainties can negatively impact consumer confidence and negatively impact foot traffic
to restaurants;
•periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability
generally, and our inability to predict inflation over the long term;
•the risk that our efforts to modify truck routing in order to reduce outbound transportation costs may be
unsuccessful;
•the risk that we may not realize anticipated benefits from our operating cost reduction efforts, including our ability
to accelerate and/or identify additional administrative cost savings;
•risks related to unfavorable conditions in the Americas and Europe and the impact on our results of operations and
financial condition;
•the risks related to our efforts to implement our transformation initiatives and meet our other long-term strategic
objectives, including the risk that these efforts may not provide the expected benefits in our anticipated time
frame, if at all, and may prove costlier than expected;
•the risk that competition in our industry and the impact of GPOs may adversely impact our margins and our ability
to retain customers and make it difficult for us to maintain our market share, growth rate and profitability;
•the risk that our relationships with long-term customers may be materially diminished or terminated;
•the risk that changes in consumer eating habits could materially and adversely affect our business, financial
condition, or results of operations;
•the impact and effects of public health crises, pandemics and epidemics, and the adverse impact thereof on our
business, financial condition and results of operations;
•the risk that we may not be able to fully compensate for increases in fuel costs, and forward purchase
commitments intended to contain fuel costs could result in above market fuel costs;
•the risk of interruption of supplies and increase in product costs as a result of conditions beyond our control;
•the potential impact on our reputation and earnings of adverse publicity or lack of confidence in our products;
•risks related to unfavorable changes to the mix of locally managed customers versus corporate-managed
customers;
•difficulties in successfully expanding into international markets and complimentary lines of business;
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•the potential impact of product liability claims;
•the risk that we fail to comply with requirements imposed by applicable law or government regulations, including
but not limited to those related to environmental and tax and accounting laws, rules and regulations;
•risks related to our ability to effectively finance and integrate acquired businesses;
•risks related to our access to borrowed funds in order to grow and any default by us under our indebtedness that
could have a material adverse impact on cash flow and liquidity;
•our level of indebtedness and the terms of our indebtedness could adversely affect our business and liquidity
position;
•the risk that we may not be able to effectively execute our capital allocation framework;
•the risk that divestiture of one or more of our businesses may not provide the anticipated effects on our operations;
•risks related to our ability to return capital to stockholders, including those related to the timing and amounts
(including any plans or commitments in respect thereof) of any dividends and share repurchases;
•due to our reliance on technology, any technology disruption or delay in implementing new technology could have
a material negative impact on our business;
•the risk of negative impacts to our business and our relationships with customers from a cybersecurity incident
and/or other technology disruptions;
•risks related to our ability to attract, motivate and retain employees, including key personnel;
•risks related to labor issues, including the renegotiation of union contracts and shortage of qualified labor;
•the risk that the exclusive forum provisions in our amended and restated bylaws could limit our stockholders’
ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees;
•the risk that the Proposed Transaction with JRD is not consummated as expected, in a timely manner or at all; and
•the risk that any of the anticipated benefits of the Proposed Transaction will not be realized or will not be realized
within the expected time period.
In light of the significant risks and uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by us or any other person that such results will be
achieved, and readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the
date hereof. Except as required by law, we undertake no obligation to revise the forward-looking statements contained herein to
reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. You should read this
Form 10-Q, our fiscal 2025 Form 10-K and the documents we file with the SEC, with the understanding that our actual future
results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of
our forward-looking statements by the cautionary statements referenced above.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Our market risks consist of interest rate risk, foreign currency exchange rate risk, fuel price risk and investment risk.
For a discussion on our exposure to market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market
Risks” in our fiscal 2025 Form 10-K. There have been no significant changes to our market risks since June 28, 2025, except
for the addition of interest rate risk as a result of the Proposed Transaction. See Note 15 “Subsequent Events” for more
information on the terms of the Proposed Transaction. We have 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 purchase of
JRD. As these interest rate lock transactions are contingent upon whether the transaction is successfully consummated, we have
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not elected to apply hedge accounting at this time and any unrealized gains or losses will be recognized in Other income and
expense within our statement of consolidated results of operations.
Item 4. Controls and Procedures
Sysco’s management, with the participation of our chief executive officer and chief financial officer, evaluated the
effectiveness of our disclosure controls and procedures as of March 28, 2026. The term “disclosure controls and procedures,” as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), means
controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company
in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management,
including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding the required
disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-
benefit relationship of possible controls and procedures. Sysco’s disclosure controls and procedures have been designed to
provide reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as
of March 28, 2026, our chief executive officer and chief financial officer concluded that, as of such date, Sysco’s disclosure
controls and procedures were effective at the reasonable assurance level.
There have been no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f)
and 15d-15(f) of the Exchange Act) that occurred during the fiscal quarter ended March 28, 2026, that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Environmental Matters
Item 103 of SEC Regulation S-K requires disclosure of certain environmental proceedings in which a governmental
authority is a party to and when such proceedings involve potential monetary sanctions that Sysco’s management reasonably
believes will exceed a specified threshold. Pursuant to recent SEC amendments to this Item, Sysco has chosen a reporting
threshold for such proceedings of $1 million. Applying this threshold, there are no material environmental matters to disclose
for this reporting period.
From time to time, we may be party to legal proceedings that arise in the ordinary course of our business. We do not
believe there are any pending legal proceedings that, individually or in the aggregate, will have a material adverse effect on the
company’s financial condition, results of operations or cash flows.
Item 1A. Risk Factors
Except as provided below, there were no material changes from the Risk Factors disclosed in Item 1A of our fiscal
2025 Form 10-K.
Risks Related to the Proposed Transaction
The Proposed Transaction is subject to conditions, some or all of which may not be satisfied or completed on a
timely basis, if at all. Failure to complete the Proposed Transaction in a timely manner or at all could have adverse effects
on the company.
The completion of the Proposed Transaction is subject to a number of conditions, including the expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, some of which are not in
our control. The failure to satisfy the required conditions could delay the completion of the Proposed Transaction for a
significant period of time or prevent it from occurring at all. A failure to complete the Proposed Transaction would mean that
we will not realize the anticipated benefits of the transaction, including our proposed expansion into the cash & carry channel.
Without realizing any of the benefits of having completed the Proposed Transaction, the Company will be subject to a number
of risks, including the following:
•the market price of our common stock could decline to the extent that the current market price reflects a market
assumption that the Proposed Transaction will be completed;
•we could owe a termination fee of $1.164 billion under certain circumstances;
•we may experience negative publicity, which could have an adverse effect on our ongoing operations, including
on our ability to retain and attract employees and those with whom we do business, such as customers, suppliers
and business partners;
•we have committed and will continue to commit time and resources to matters relating to the Proposed
Transaction that could otherwise have been devoted to ongoing business operations and pursuing other beneficial
opportunities for the company;
•we will still be required to pay significant fees and expenses relating to financing arrangements, which may
include investment banking fees and commissions, professional fees and other costs and expenses;
•we will be required to pay costs relating to the Proposed Transaction, such as legal, accounting, financial advisory
and printing fees, whether or not the Proposed Transaction is completed; and
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•we may commit significant time and resources to defending against litigation related to any failure to complete the
Proposed Transaction or related to any enforcement proceeding commenced against the company to perform our
obligations pursuant to the transaction agreement.
In addition, one or more conditions in the transaction agreement may not be satisfied on a timely manner. A delay in
completing the Proposed Transaction could cause us to realize some or all of the expected benefits later than we otherwise
expect if the Proposed Transaction is successfully completed within the anticipated timeframe, which could result in additional
transaction costs or in other negative effects associated with uncertainty about completion of the Proposed Transaction. Any of
the foregoing could have a material adverse effect on our business, financial condition and results of operations.
We are subject to business uncertainties while the Proposed Transaction is pending.
While the Proposed Transaction is pending, uncertainty about the effect of the Proposed Transaction on employees,
clients, customers, suppliers and vendors may have an adverse effect on our ongoing business operations. These uncertainties
may impair our ability to retain and hire key personnel and maintain business relationships; result in the loss of suppliers,
customers and other business partners or in the termination of existing contracts or relationships; and divert our management’s
attention from our business as we work to take all steps necessary to close the Proposed Transaction. Any of these could have a
material adverse effect on our business and results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
We made the following share repurchases during the third quarter of fiscal 2026:
ISSUER PURCHASES OF EQUITY SECURITIES | |||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | |||
Month #1 | |||||||
December 28 - January 24 | — | $— | — | — | |||
Month #2 | |||||||
January 25 - February 21 | 1,918,075 | 89.64 | 1,912,374 | — | |||
Month #3 | |||||||
February 22 - March 28 | 318,041 | 89.84 | 318,041 | — | |||
Totals | 2,236,116 | $89.66 | 2,230,415 | — | |||
(1) | The total number of shares purchased includes 0, 5,701, and 0 shares tendered by individuals in connection with stock option exercises in Month #1, Month #2 and Month #3, respectively. |
(2) | See the discussion in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Equity Transactions” for additional information regarding Sysco’s share repurchase program. |
On May 20, 2021, our Board of Directors approved a share repurchase program to authorize the repurchase of up to
$5.0 billion of the company’s common stock, in which the program will remain available until fully utilized.
We repurchased 2,230,415 shares for $200 million during the first 39 weeks of fiscal 2026. As of March 28, 2026, we
had a remaining authorization of approximately $1.3 billion. We repurchased no additional shares under our authorization from
the end of our fiscal third quarter through April 10, 2026.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Insider Trading Arrangements and Policies
During the quarter ended March 28, 2026, no director or executive officer of Sysco adopted terminated
10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (each term as defined in Item 408(a) of Regulation S-K).
Item 6. Exhibits
The exhibits listed on the Exhibit Index below are filed as a part of this Quarterly Report on Form 10-Q.
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EXHIBIT INDEX
2.1** | — | Agreement and Plan of Merger, dated as of March 30, 2026, by and among Sysco Corporation, JRD Unico, Inc., Warehouse Realty, LLC, New Slider Holdco, Inc., Slider Merger Sub 1, Inc., Slider Merger Sub 2, Inc., Slider Merger Sub 3, LLC, and Holder Representative, incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed on March 30, 2026 (File No. 1-6544). |
3.1 | — | Restated Certificate of Incorporation, incorporated by reference to Exhibit 3(a) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544). |
3.2 | — | Certificate of Amendment to Restated Certificate of Incorporation increasing authorized shares, incorporated by reference to Exhibit 3(e) to Form 10-Q for the quarter ended December 27, 2003 (File No. 1-6544). |
3.3 | — | Form of Amended Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, incorporated by reference to Exhibit 3(c) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544). |
3.4 | — | Amended and Restated Bylaws of Sysco Corporation dated June 20, 2024, incorporated by reference to Exhibit 4.4 to the Form S-8 filed on December 6, 2024 (File No. 1-6544). |
4.1 | — | Forty-Eighth Supplemental Indenture, dated as of February 13, 2026, by and among the Company, the Subsidiary Guarantors and the Trustee relating to the 2031 Notes (including the Form of 4.400% Senior Note), incorporated by reference to Exhibit 4.1 to the current report on Form 8-K filed on February 13, 2026 (File No. 1-6544). |
4.2 | — | Forty-Ninth Supplemental Indenture, dated as of February 13, 2026, by and among the Company, the Subsidiary Guarantors and the Trustee relating to the 2036 Notes (including the Form of 4.950% Senior Note), incorporated by reference to Exhibit 4.2 to the current report on Form 8-K filed on February 13, 2026 (File No. 1-6544). |
10.1** | — | Stockholders Agreement, dated as of March 30, 2026, by and among New Slider Holdco, Inc and certain other parties thereto, incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on March 30, 2026 (File No. 1-6544). |
22.1# | — | Subsidiary Guarantors and Issuers of Guaranteed Securities. |
31.1# | — | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2# | — | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | — | CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | — | CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.SCH# | — | Inline XBRL Taxonomy Extension Schema Document |
101.CAL# | — | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF# | — | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB# | — | Inline XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE# | — | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
63
104 | — | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
___________
# Filed herewith
* Furnished, not filed.
**Certain portions of this exhibit have been redacted pursuant to Item 601(b)(2)(ii) and Item 601(b)(10)(iv) of Regulation S-K,
as applicable. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Commission upon its
request. Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The
Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Commission upon its request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
Sysco Corporation | ||
(Registrant) | ||
Date: April 28, 2026 | By: | /s/ KEVIN P. HOURICAN |
Kevin P. Hourican | ||
Chair of the Board and | ||
Chief Executive Officer | ||
Date: April 28, 2026 | By: | /s/ BRANDON SEWELL |
Brandon Sewell | ||
Interim Chief Financial Officer | ||
Date: April 28, 2026 | By: | /s/ JENNIFER L. JOHNSON |
Jennifer L. Johnson | ||
Senior Vice President, | ||
Chief Accounting Officer |
FAQ
How did Sysco (SYY) perform financially in its fiscal Q3 2026?
Sysco’s fiscal Q3 2026 sales rose 4.7% to $20.5 billion, driven by volume gains across segments. Gross profit increased 6.5%, but operating income fell to $619 million and net earnings declined to $340 million as incentive compensation and transformation-related expenses increased.
What are Sysco’s year-to-date results for the first 39 weeks of fiscal 2026?
For the first 39 weeks of fiscal 2026, Sysco generated $62.4 billion in sales, up 3.6% year over year. Operating income was $2.1 billion and net earnings $1.2 billion. Diluted EPS was $2.51, while adjusted diluted EPS reached $3.08, reflecting Certain Item adjustments.
What details did Sysco (SYY) provide about acquiring Jetro Restaurant Depot?
Sysco agreed to acquire Jetro Restaurant Depot for about $29.1 billion, including $21.6 billion in cash and 91.5 million Sysco shares. After closing, JRD holders should own roughly 16% of Sysco. The transaction is expected to close by fiscal Q3 2027, subject to regulatory approvals.
How will Sysco finance the Jetro Restaurant Depot acquisition?
Sysco plans to fund the JRD cash portion mainly with new senior unsecured notes, hybrid debt, cash on hand, and equity or equity-linked securities. It arranged a $19 billion bridge loan facility and a $3 billion delayed draw term loan. Fees, including $88 million upfront, will flow through interest expense.
What is Sysco’s current debt and liquidity position from the 10-Q?
Sysco reported total debt of about $14.0 billion and a fair value of $13.4 billion. Cash, cash equivalents and restricted cash totaled $2.06 billion. The company also has a new $3.0 billion revolving credit facility, expandable to $4.0–5.0 billion after the JRD acquisition closes.
How are Sysco’s earnings per share trending in fiscal 2026?
In Q3 2026, Sysco’s basic and diluted EPS were both $0.71, down from $0.82 a year earlier. For the first 39 weeks, basic EPS was $2.52 and diluted EPS $2.51, both below prior-year levels, while adjusted diluted EPS increased to $3.08.
What termination fee applies if Sysco’s JRD acquisition is blocked?
If the Jetro Restaurant Depot merger agreement ends because required regulatory clearances are not obtained, Sysco has agreed to pay JRD a $1.164 billion termination fee. This obligation highlights regulatory approval as a key condition for completing the transaction as outlined in the filing.