WS Investor
28 Oct 2025, 16:26
Sysco (NYSE: SYY) Q1 FY2026: sales up, adjusted profit rises despite higher costs
Sysco reported fiscal first-quarter 2026 sales of 21.1 billion dollars, up 3.2 percent year over year, as U.S. Foodservice volume inched up 0.1 percent. Gross profit grew 3.9 percent to 3.9 billion dollars, driven by pricing and sourcing efficiencies, lifting gross margin by 13 basis points to 18.5 percent. Reported operating income slipped 1 percent to 800 million dollars, while adjusted operating income rose 2.9 percent to 898 million dollars. Net earnings declined 2.9 percent to 476 million dollars, but adjusted net income increased 2 percent to 551 million dollars; adjusted EPS climbed 5.5 percent to 1.15 dollars.
In the U.S. Foodservice segment, sales rose 2.9 percent to 14.8 billion dollars, with adjusted operating income down 1 percent to 916 million dollars. International operations performed strongly, with sales up 4.5 percent (7.9 percent excluding the Mexico JV divestiture) and adjusted operating income up 13 percent to 147 million dollars, helped by margin expansion to 20.8 percent.
Sysco ended the quarter with 844 million dollars in cash and 3.5 billion dollars in liquidity. Free cash flow was negative 50 million dollars, and 259 million dollars was returned to shareholders via dividends. The company reaffirmed full-year guidance for sales growth of 3–5 percent and adjusted EPS growth of 1–3 percent (or about 5–7 percent excluding last year’s lower incentive comp). CEO Kevin Hourican said Sysco is seeing strong local business momentum and expects continued margin expansion through fiscal 2026.
Sysco reported fiscal first-quarter 2026 sales of 21.1 billion dollars, up 3.2 percent year over year, as U.S. Foodservice volume inched up 0.1 percent. Gross profit grew 3.9 percent to 3.9 billion dollars, driven by pricing and sourcing efficiencies, lifting gross margin by 13 basis points to 18.5 percent. Reported operating income slipped 1 percent to 800 million dollars, while adjusted operating income rose 2.9 percent to 898 million dollars. Net earnings declined 2.9 percent to 476 million dollars, but adjusted net income increased 2 percent to 551 million dollars; adjusted EPS climbed 5.5 percent to 1.15 dollars.
In the U.S. Foodservice segment, sales rose 2.9 percent to 14.8 billion dollars, with adjusted operating income down 1 percent to 916 million dollars. International operations performed strongly, with sales up 4.5 percent (7.9 percent excluding the Mexico JV divestiture) and adjusted operating income up 13 percent to 147 million dollars, helped by margin expansion to 20.8 percent.
Sysco ended the quarter with 844 million dollars in cash and 3.5 billion dollars in liquidity. Free cash flow was negative 50 million dollars, and 259 million dollars was returned to shareholders via dividends. The company reaffirmed full-year guidance for sales growth of 3–5 percent and adjusted EPS growth of 1–3 percent (or about 5–7 percent excluding last year’s lower incentive comp). CEO Kevin Hourican said Sysco is seeing strong local business momentum and expects continued margin expansion through fiscal 2026.
