Sysco (SYY) investor relations material

Executive summary

• Sales grew 3.2% year-over-year to $21.1 billion, with gross profit up 3.9% to $3.9 billion and gross margin expanding 13 basis points to 18.5%.

• Adjusted operating income rose 2.9% to $898 million, while GAAP operating income declined 1.0% to $800 million; adjusted EPS increased 5.5% to $1.15.

• Net earnings decreased 2.9% to $476 million, but adjusted net earnings increased 2.0% to $551 million, reflecting higher restructuring and acquisition costs.

• International and SYGMA segments delivered double-digit operating income growth, while U.S. Foodservice saw modest volume gains and sequential improvement in local case growth.

• Management highlighted strong local business momentum and reaffirmed full-year guidance.

Financial highlights

• U.S. Foodservice sales increased 2.9% to $14.8 billion; international sales rose 4.5% to $4.0 billion; SYGMA sales up 4.1% to $2.1 billion.

• Gross margin improved to 18.5% from 18.3% year-over-year; adjusted operating margin held steady at 4.3%.

• Adjusted EBITDA was $1.1 billion, up 0.1% year-over-year; EBITDA decreased 3.1% to $1.0 billion.

• Free cash flow was negative $50 million, down from positive $8 million a year ago, due to higher capital expenditures and seasonality.

• Cash and cash equivalents at quarter-end were $844 million; total liquidity was $3.5 billion.

Outlook and guidance

• Full-year guidance reiterated: sales growth of 3%-5% and adjusted EPS growth of 1%-3%, including a $100 million headwind from incentive compensation.

• Excluding the incentive compensation impact, adjusted EPS growth is expected at 5%-7%.

• Q2 expected to deliver at least 100 basis points sequential improvement in USFS local volume; EPS growth of 4%-6% anticipated.

• Dividend payout to increase 6% year-over-year; $1 billion targeted for both dividends and share repurchases.

• Management expects continued sales and net earnings per share growth for fiscal 2026, despite macroeconomic headwinds.