Sysco Corporation (SYY) — Agentic Tribune

Item 1. Business

Unless this Form 10-K indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Sysco,” or the “company” as used in this Form 10-K refer to Sysco Corporation together with its consolidated subsidiaries and divisions.

Overview

Sysco Corporation is the global leader in selling, marketing and distributing food and related products to customers who prepare meals away from home. This includes restaurants, healthcare and educational facilities, lodging establishments, entertainment venues, and more.

Founded in 1969, Sysco commenced operations as a public company in March 1970 when the stockholders of nine companies exchanged their stock for Sysco common stock. Since our formation, we have grown from $115 million to our all-time high of $84.6 billion in annual sales in fiscal 2026, both through internal expansion of existing operations and acquisitions.

Sysco’s fiscal year ends on the Saturday nearest to June 30th. This resulted in a 52-week year ended June 27, 2026 for fiscal 2026, a 52-week year ended June 28, 2025 for fiscal 2025 and a 52-week year ended June 29, 2024 for fiscal 2024. We will have a 53-week year ending July 3, 2027 for fiscal 2027.

Available Information

Sysco Corporation is organized under the laws of Delaware. The address and telephone number of our executive offices are 1390 Enclave Parkway, Houston, Texas 77077-2099, (281) 584-1390. This annual report on Form 10-K, as well as all other annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished by Sysco pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), with the Securities and Exchange Commission (SEC) are available free of charge on Sysco’s website at www.sysco.com as soon as reasonably practicable after they are electronically filed with or furnished with the SEC. Sysco also periodically provides certain information for investors on its website at www.sysco.com. This includes press releases and other information about financial performance, information on environmental, social and governance matters, and details related to Sysco’s annual meeting of stockholders. The information contained on the websites referenced in this Form 10-K is not incorporated by reference into this filing.

Proposed Merger with Jetro Restaurant Depot

On March 30, 2026, Sysco Corporation entered into an agreement and plan of merger (the Merger Agreement) pursuant to which Sysco Corporation will acquire JRD Unico, Inc. and Warehouse Realty LLC (collectively, Jetro Restaurant Depot or JRD) through a series of transactions (the merger and the other transactions contemplated by the Merger Agreement, the Transactions). JRD is 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 equity holders, comprised of $21.6 billion in cash, subject to customary adjustments, and 91.5 million shares of Sysco Holdings common stock. Following the closing of the Transactions, former holders of Sysco Corporation common stock and former equity holders of JRD will own shares of Sysco Holdings Corporation, which are expected to be listed for trading on the NYSE. JRD’s equity holders are expected to hold approximately 16% and our stockholders are expected to hold approximately 84% of the outstanding Sysco Holdings common stock in the aggregate. Refer to Note 12, “Debt and Other Financing Arrangements” for discussion on how Sysco is financing the acquisition of JRD and Note 10, “Derivative Financial Instruments” for details on how Sysco is hedging the interest rate risk associated with its financing arrangements.

This Transactions are expected to close by the third quarter of Sysco’s fiscal 2027, subject to the satisfaction of customary closing conditions, including regulatory clearance under the Hart-Scott-Rodino Act.

Reporting Segments

Sysco distributes food and related products to restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. Our primary operations are in North America and Europe. Under the accounting provisions related to disclosures about segments of an enterprise, we have combined certain operations into three reportable segments. “Other” financial information is attributable to our other operations 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.

Foodservice operating sites distribute a full line of food products and a wide variety of non-food products to both independent and chain restaurant customers, hospitals, schools, hotels, industrial caterers and other venues where foodservice products are served. SYGMA operating sites distribute a full line of food products and a wide variety of non-food products to certain chain restaurant customer locations. Selected financial data for each of our reportable segments, as well as financial information concerning geographic areas, can be found in Note 21, “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 8.

Customers and Products

Sysco’s customers in the foodservice industry include restaurants, hospitals and skilled nursing facilities, schools and colleges, hotels and motels, industrial caterers and other similar venues where foodservice products are served.

The products we distribute include:

•frozen foods, such as meats, seafood, fully prepared entrées, fruits, vegetables and desserts;

•canned and dry foods;

•fresh meats and seafood;

•dairy products;

•beverage products;

•imported specialties; and

•fresh produce.

We also supply a wide variety of non-food items, including:

•paper products such as disposable napkins, plates and cups;

•tableware such as glassware and silverware;

•cookware such as pots, pans and utensils;

•restaurant and kitchen equipment and supplies; and

•cleaning supplies.

A comparison of the sales mix in the principal product categories during the last three years is presented below:

Principal product categories	2026		2025		2024
Fresh and frozen meats	20	%	19	%	18	%
Canned and dry products	18		18		19
Frozen fruits, vegetables, bakery and other	15		15		15
Dairy products	10		11		10
Poultry	9		10		10
Fresh produce	8

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-K filed 2026-08-21 (period ending 2026-06-27).

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of Sysco’s financial condition, results of operations and liquidity and capital resources for the fiscal years ended June 27, 2026 and June 28, 2025 should be read as a supplement to our Consolidated Financial Statements and the accompanying notes contained in Item 8 of this report, and in conjunction with the “Forward-looking Statements” section set forth in Part II and the “Risk Factors” section set forth in Item 1A of Part I. All discussion of changes in our results of operations from fiscal 2025 to fiscal 2024 has been omitted from this Form 10-K, but may be found in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended June 28, 2025, filed with the Securities and Exchange Commission on August 22, 2025.

Overview

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;

•SYGMA – our U.S. customized distribution operations serving quick-service chain restaurant customer locations; and

•Other – primarily our hotel supply operations, Guest Worldwide.

We estimate that we serve about 18% of an approximately $377 billion annual foodservice market in the U.S. based on industry data obtained from Technomic, Inc. (Technomic) as of the end of calendar year 2025. Technomic projects the market size to increase to approximately $390 billion by the end of calendar year 2026. From time to time, Technomic may revise the methodology used to calculate the size of the foodservice market and, as a result, our percentage can change not only from our sales results, but also from such revisions. We also serve certain international geographies that vary in size and amount of market share.

According to industry sources, the foodservice, or food-away-from-home, market represents approximately 56% of the total dollars spent on food purchases made at the consumer level in the U.S. as of the end of calendar year 2025.

Highlights

Our fiscal 2026 results reflected sales growth of 3.9% as compared to fiscal 2025, driven by inflation and volume growth, including contributions from recent acquisitions. Sales increased across our U.S. Foodservice Operations, International Foodservice Operations, and SYGMA segments. Gross profit increased 4.5% as compared to fiscal 2025, primarily due to our strategic sourcing efforts and higher volumes from local customers. Operating income increased 0.2% as compared to fiscal 2025, primarily due to gross profit gains, partially offset by increased sales headcount investments, increased restructuring and transformational project costs, higher incentive compensation, and higher acquisition and due diligence costs. We consider restructuring and transformational project costs and acquisition and due diligence costs to be “Certain Item” expenses (as defined below). Excluding Certain Item expenses, adjusted operating income increased 2.6% as compared to fiscal 2025. See below for a comparison of our fiscal 2026 results to our fiscal 2025 results, both including and excluding Certain Items (as defined below).

Below is a comparison of results from fiscal 2026 to fiscal 2025:

•Sales:

◦increased 3.9%, or $3.2 billion, to $84.6 billion;

•Operating income:

◦increased 0.2%, or $7 million, to $3.1 billion;

◦adjusted operating income increased 2.6%, or $91 million, to $3.6 billion;

•Net earnings:

◦decreased 3.9%, or $71 million, to $1.8 billion;

◦adjusted net earnings increased 1.4%, or $31 million, to $2.2 billion;

•Basic earnings per share:

◦decreased 1.9%, or $0.07, to $3.67 from the comparable prior year amount of $3.74 per share;

•Diluted earnings per share:

◦decreased 1.9%, or $0.07, to $3.66 from the comparable prior year amount of $3.73 per share;

◦adjusted diluted earnings per share were $4.61 in fiscal 2026, a $0.15 increase from the comparable prior year amount of $4.46 per share;

•EBITDA:

◦decreased 0.7%, or $26 million, to $4.0 billion; and

◦adjusted EBITDA increased 2.2%, or $94 million, to $4.4 billion.

The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and

free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove (1) restructuring charges; (2) expenses associated with our various transformation initiatives; (3) severance charges; and (4) acquisition-related costs consisting of: (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions. Fiscal year 2026 results of operations also remove the impact of a charge associated with a legal matter, amortization expense associated with debt issuance costs on a bridge loan facility, and a loss on deal contingent rate lock transactions entered into to mitigate interest rate risk on future permanent debt that could potentially be issued to finance the purchase of Jetro Restaurant Depot. No similar charges were applicable in fiscal year 2025. Fiscal year 2025 results of operations were also negatively impacted by a noncash goodwill impairment charge. No similar charge was applicable in fiscal year 2026.

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. Our discussion below of our results includes certain non-GAAP financial measures that we believe provide important perspective with respect to underlying business trends. Other than free cash flow, any non-GAAP financial measures will be denoted as adjusted measures and exclude the impact from Certain Items, and certain metrics are stated on a constant currency basis.

Management believes that adjusting its operating expenses, operating income, interest expense, other (income) expense, net earnings and diluted earnings per share to remove these Certain Items, provides an important perspective with respect to our underlying business trends and results. Additionally, it provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company’s underlying operations, (2) facilitates comparisons on a year-over-year basis and (3) removes those items that are difficult to predict and are often unanticipated and that, as a result, are difficult to include in analysts’ financial models and our investors’ expectations with any degree of specificity.

The company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes. These financial measures should not be used as a substitute for GAAP measures in assessing the company’s results of operations for periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. Any metric within this section referred to as “adjusted” will reflect the applicable impact of Certain Items. More information on the rationale for the use of these measures and reconciliations to GAAP numbers can be found under “Non-GAAP Reconciliations.”

Key Performance Indicators

Sysco seeks to meet its strategic goals by continually measuring its success in its key performance metrics that drive stakeholder value through sales growth and capital allocation and deployment. We believe the following are our most significant performance metrics in our current business environment:

•Adjusted operating income growth (non-GAAP);

•Adjusted diluted earnings per share growth (non-GAAP);

•Adjusted EBITDA (non-GAAP);

•Case volume growth for U.S. Foodservice and International Foodservice operations;

•Sysco brand penetration for U.S. Broadline operations; and

•Free cash flow (non-GAAP).

We use these financial metrics and related computations, as well as sales and gross profit growth, to evaluate our business and to plan for near and long-term operating and strategic decisions. We believe it is useful to provide investors with the same financial information that we use internally to make comparisons of our historical operating results, identify trends in our underlying operating results and evaluate our business.

Key Financial Definitions

•Sales – Sales are equal to gross sales subtracted by, (1) sales returns and (2) sales incentives that we offer to certain customers, such as upfront monies and discounts. Our sales are driven by changes in case volumes and product inflation that is reflected in the pricing of our products and mix of products sold.

•Gross profit – Gross profit is equal to our net sales subtracted by our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of supplier consideration) and inbound freight. Cost of goods sold generally changes as we incur higher or lower costs from our suppliers and as our customer and product mix changes.

Adjusted Operating Income and Adjusted Diluted Earnings per Share Growth

Adjusted operating income represents our consolidated operating income, adjusted for the impact of Certain Items that we do not consider representative of our underlying performance. Adjusted diluted earnings per share represents our consolidated diluted earnings per share, adjusted for the impact of Certain Items that we do not consider representative of our underlying performance. Sysco’s management considers growth in these metrics to be useful measures of operating efficiency and profitability as they facilitate comparison of performance on a consistent basis from period to period by providing a measurement of recurring factors and trends affecting our business.

Adjusted EBITDA

EBITDA represents net earnings plus: (1) interest expense, (2) income tax expense and benefit, (3) depreciation and (4) amortization. The net earnings component of our EBITDA calculation is impacted by Certain Items that we do not consider representative of our underlying performance. As a result, in the non-GAAP reconciliations below for each period presented, adjusted EBITDA is computed as EBITDA plus the impact of Certain Items, excluding Certain Items related to interest expense, income taxes, depreciation and amortization. Sysco’s management considers growth in this metric to be a measure of overall financial performance that provides useful information to management and investors about the profitability of the business. It facilitates comparison of performance on a consistent basis from period to period by providing a measurement of recurring factors and trends affecting our business. Additionally, it is a commonly used component metric used to inform on capital structure decisions.

Case Volume Growth for U.S. Foodservice and International Foodservice Operations

Case volume represents the volume of products sold to customers during a period of time and improvements in this metric are a primary driver of Sysco’s top line performance. We define a case as the lowest level of packaged products that are sold from our warehouses, with one case potentially containing several pieces of a product packaged in bulk. Case size does not generally vary by location or from period to period due to the design of our warehouses but can vary within our international operations. Case volume growth is calculated by dividing the change in the volume of cases sold year-over-year by the volume of cases sold in the prior year. Sysco management considers case volume growth within its U.S. Foodservice and International Foodservice operations to be a measure that provides useful information to management and investors in evaluating sales performance and as an indicator of gross margin performance. Management monitors case volume growth by customer type, with bifurcation between local customers and national customers, as this provides a measure of gross profit performance due to the pricing strategies attached to each customer type. Local customers are primarily street customers, such as independent restaurants that do not have long-term contracts, or locally managed customers, such as local chain restaurants, while national customers are the multi-unit customers requiring national coverage from a customer-centric view and are managed centrally from our Global Support Center, specific to U.S. Foodservice. Sysco management seeks to drive higher case volume growth to local customers, which allows more favorable pricing terms for these operations and generates higher gross margins as a result. National customers benefit from purchasing power as they are able to negotiate pricing agreements across multiple businesses reducing our gross profit potential, but reducing our overall cost per case, as national customers have bigger drop sizes. While overall case volume growth reflects a key component of sales growth, local customer case growth provides additional context around gross profit performance.

Sysco Brand Penetration for U.S. Broadline Operations

Sysco management considers Sysco brand penetration to be a measure that provides useful information to management and investors in evaluating the gross profit performance of the company’s U.S. Broadline operations. Sysco offers an assortment of Sysco-branded products which are differentiated from privately branded products. These Sysco Branded products enable us to achieve higher gross margin by administering and leveraging a consolidated product procurement program for quality food and non-food products. Due to cost efficiencies, Sysco-branded products generate a higher gross margin than sales from other privately branded products. We define Sysco brand penetration as the percentage of Sysco-branded case volume sold to U.S. Broadline customers over all cases sold to U.S. Broadline customers. It is calculated by dividing Sysco-branded case volume sold to U.S. Broadline customers by total cases sold to U.S. Broadline customers. This performance indicator, also measured at the customer type level, including local and national customers, is driven by growth in the distribution of Sysco branded products to more customers and more geographies, as well as increasing Sysco branded offerings through innovation and the launch of new products.

Free Cash Flow

Free cash flow represents net cash provided from operating activities, subtracted by purchases of plant and equipment, added to proceeds from sales of plant and equipment. Sysco management considers free cash flow to be a non-GAAP liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases and sales of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of cash, including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for discretionary expenditures as it may be necessary that we use it to make mandatory debt service or other payments. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See “Liquidity and Capital Resources” for discussions of GAAP metrics, including net cash provided by operating activities and our reconciliation of this non-GAAP financial measure.

Trends

Unless otherwise stated, future trend expectations discussed below exclude the impact of the pending acquisition of JRD. See the “Mergers and Acquisitions” section below and Note 4, “Acquisitions,” in the Notes to the Consolidated Financial Statements in Item 8 for more information.

Economic and Industry Trends

During fiscal 2026, Sysco experienced the effects of negative year-over-year restaurant foot traffic trends. We expect restaurant foot traffic and the broader macroeconomic environment in fiscal 2027 to remain generally consistent with fiscal 2026 conditions. Despite these near-term trends, we continue to believe the food-away-from-home sector is a healthy long-term growth market, and Sysco is diversified and well positioned as a market leader in food service.

Sales and Gross Profit Trends

Our sales and gross profit performance are influenced by multiple factors including price, volume, inflation, customer mix and product mix. The most significant factor affecting our sales and gross profit performance in fiscal 2026 was product cost inflation, as we experienced 3.0% inflation at the total enterprise level. U.S. Foodservice experienced a 1.4% improvement in total case volume and a 1.7% increase in local case volume as compared to fiscal 2025. This volume reflects our broadline and specialty businesses. We experienced growth in local case volume in our International Foodservice segment of approximately 4.3% in fiscal 2026, as compared to fiscal 2025.

We experienced inflation at a rate of 2.8% and 3.0% in the fourth quarter and for fiscal 2026, respectively, at the total enterprise level, primarily driven by inflation in the meat, seafood, and fresh produce categories. We have been successful in managing inflation, resulting in an increase in gross profit dollars. Gross margin increased 10 basis points in fiscal 2026 as compared to fiscal 2025, primarily as a result of our strategic sourcing efforts and a shift in our customer mix driven by local case growth outpacing national case growth. Gross margin decreased 17 basis points in the fourth quarter of fiscal 2026 as compared to the fourth quarter of fiscal 2025, primarily due to the lapping of favorable benefits from strategic sourcing initiatives in the fourth quarter of fiscal 2025 and the increased cost of fuel across the business.

We expect to grow our revenue in fiscal 2027. We expect the rate of inflation for fiscal 2027 to be approximately 1.5% to 2.0%. We also expect volume growth in fiscal 2027, including local case volume growth, as a result of continued productivity gains with sales professionals based on improving tenure. In total, we expect these factors to result in net sales growth across the enterprise of 6% to 7% in fiscal 2027.

Operating Expense Trends

Total operating expenses increased 5.6% during fiscal 2026, as compared to fiscal 2025, driven by sales headcount investments, increased restructuring and transformational project costs, higher incentive compensation, and higher acquisition and due diligence costs. Adjusted operating expenses increased 5.1% during fiscal 2026, as compared to fiscal 2025, as a result of higher sales headcount investments and incentive compensation.

In fiscal 2027, we expect to achieve cost savings benefits through the continued use of technology, including artificial intelligence, and business efficiency initiatives across sales, merchandising, supply chain, and back office functions. Collectively, these efforts are expected to generate approximately $100 million of cost savings during fiscal 2027. In addition, we believe the advancements that have been made in our operational capabilities and ongoing investments in employee training will continue to drive supply chain productivity gains and reduce the cost to serve our customers.

Mergers and Acquisitions

We continue to focus on mergers and acquisitions as a part of our growth strategy. Our strategy is to grow our existing businesses, while cultivating new channels, new business lines and new capabilities.

In October 2025, we acquired Fairfax Meadow, a leading specialty meat supplier based in the United Kingdom. This acquisition follows our acquisition of Campbells Prime Meat last fiscal year and positions our team in the United Kingdom to achieve additional growth by leveraging additional specialty meat capabilities geographically. This company’s results are included within International Foodservice Operations and were not material to our results in fiscal 2026.

In December 2025, we acquired Ginsberg’s Foods, a broadline distributor servicing restaurants, schools, and healthcare facilities across eastern New York and neighboring states. This acquisition opens opportunities to new customers while creating procurement efficiencies through Sysco buying programs and expanded access to Sysco brand products. This company’s results are included within U.S. Foodservice Operations and were not material to our results in fiscal 2026.

In March 2026, we announced that we had entered into the Merger Agreement, pursuant to which we would acquire Jetro Restaurant Depot, a leading U.S. wholesale cash-and-carry foodservice provider serving smaller, independent restaurants and businesses. JRD operates 167 large-format warehouse stores across 35 states that serve more than 725,000 independent restaurants and foodservice operators with a broad assortment of fresh and low-priced products. The Transactions are expected to close by the third quarter of Sysco’s fiscal 2027, subject to the satisfaction of customary closing conditions, including regulatory clearance under the Hart-Scott-Rodino Act. We expect to incur increased operating expenses for acquisition-related costs in fiscal 2027. See Note 4, “Acquisitions,” in the Notes to the Consolidated Financial Statements in Item 8 for more information.

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 nineteen months to complete and will result in Sysco amortizing previously indefinite-lived intangible assets on a straight-line basis over nineteen month period. The rebranding is expected to result in approximately $100 million of additional amortization expense over nineteen months. $29 million of amortization expense was recorded in fiscal 2026 and approximately $76 million of amortization expense is expected to be recorded in fiscal 2027. This amortization expense is treated as a Certain Item, which is consistent with our treatment of amortization expense of other previously acquired intangible assets.

Income Tax Trends

Our provision for income taxes primarily reflects a combination of income earned and taxed in the various U.S. federal and state as well as foreign jurisdictions. Tax law changes, increases or decreases in book versus tax basis differences, accruals or adjustments of accruals for unrecognized tax benefits or valuation allowances, and our change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate. Our effective tax rate for fiscal 2026 was 22.8% and is expected to be approximately 23.7% to 24.2% in fiscal 2027.

On July 4, 2025, President Trump signed into law the legislation of OBBBA, that includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. These provisions decreased cash taxes paid in fiscal 2026 and may change the timing of cash tax payments in future periods.

Interest Expense and Other Income and Expense Trends

The cash portion of the purchase price of the Transactions is expected to be financed with a combination of new senior unsecured notes, hybrid debt, cash on hand and equity or equity-linked securities. Sysco has executed a commitment letter for a $22 billion senior unsecured 364-day bridge loan facility that could be used to fund the cash portion of the purchase price and pay related fees and expenses. Subsequent to the execution of the bridge loan facility, Sysco entered into a $3 billion senior unsecured delayed draw term loan facility, comprised of a $1.25 billion 364-day tranche and a $1.75 billion 2-year tranche, reducing the bridge loan facility commitments from $22 billion to $19 billion. Fees paid upfront for this facility as of August 4, 2026 total $126 million and will be amortized to interest expense within our statement of consolidated results of operations over the expected life of the bridge facility unless it is terminated at an earlier date. This bridge facility added approximately $30 million of interest expense in fiscal 2026 and is expected to add approximately $96 million of interest expense in fiscal 2027.

Additionally, Sysco has executed cash-settled deal contingent rate lock transactions to mitigate interest rate risk on $6.3 billion of future permanent debt that could potentially be issued to finance the Transactions. As these interest rate lock transactions are contingent upon whether the Transactions are successfully consummated, we have not elected to apply hedge accounting at this time, and any unrealized gains or losses will be recognized in Other expense (income), net within our statement of consolidated results of operations. Sysco incurred approximately $54 million in losses on these rate lock transactions in the fourth quarter of fiscal 2026, which was recorded to Other expense (income), net. Our incremental interest expense from the bridge loan facility and any fair value gains or losses on these interest rate locks are treated as Certain Items. The exact timing, aggregate principal amount, and specific terms of any future debt or equity issuances related to the Transactions have not been finalized and remain subject to prevailing market conditions, investor demand, and macroeconomic factors. See Note 12, “Debt and Other Financing Arrangements,” and Note 10, “Derivative Financial Instruments” in the Notes to the Consolidated Financial Statements in Item 8 for more information.

Strategy

Our purpose is “Connecting the World to Share Food and Care for One Another.” Purpose driven companies are believed to perform better, and 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 continue to enable us to better serve our customers, including:

•Digital – We have and will continue to enrich the customer experience through personalized digital tools that reduce friction in the purchase experience and introduce innovation to our customers.

•Products and Solutions – We are providing customer-focused marketing and merchandising solutions that inspire increased sales of our broad assortment of fair priced products and services. We continue to improve our merchandising strategies globally to secure the best possible cost for our customers.

•Supply Chain – We are efficiently and consistently serving customers with the products they need, when and how they need them, through a flexible delivery framework. We are developing a more nimble, accessible and productive supply chain that is better positioned to support our customers.

•Customer Teams – Our greatest strength is our people - people who are passionate about food and food service. Our team - diverse in perspectives, backgrounds, and life experiences - delivers expertise and differentiated services designed to help our customers grow their businesses. We will continue to invest in the sales organization through incremental sales colleagues and intend to improve the effectiveness by leveraging data to increase the yield of the sales process.

•Future Horizons – We are committed to responsible growth. We will cultivate new channels, new segments, and new capabilities, organically and through strategic acquisitions, while being stewards of our company and our planet for the long term. We will utilize cost-out and efficiency improvements to mitigate the costs of our future investments.

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:

	2026		2025
Sales	100.0	%	100.0	%
Cost of sales	81.5		81.6
Gross profit	18.5		18.4
Operating expenses	14.8		14.6
Operating income	3.7		3.8
Interest expense	0.9		0.8
Other expense (income), net	0.1		—
Earnings before income taxes	2.7		3.0
Income taxes	0.6		0.8
Net earnings	2.1	%	2.2	%

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:

	2026
Sales	3.9	%
Cost of sales	3.8
Gross profit	4.5
Operating expenses	5.6
Operating income	0.2
Interest expense	12.9
Other expense (income), net (1)	168.4
Earnings before income taxes	(5.8)
Income taxes	(11.6)
Net earnings	(3.9)	%
Basic earnings per share	(1.9)	%
Diluted earnings per share	(1.9)
Average shares outstanding	(1.8)
Diluted shares outstanding	(1.9)

(1)

Other expense (income), net totaled $102 million of expense in fiscal 2026 and $38 million of expense in fiscal 2025.

Segment Results

The following represents our results by reportable segments:

	Year Ended Jun. 27, 2026
	U.S. Foodservice Operations			International Foodservice Operations			SYGMA			Other			Global Support Center		Consolidated Totals
	(In millions)
Sales	$	58,803		$	16,042		$	8,623		$	1,085		$	—	$	84,553
Sales increase (decrease)	3.2		%	7.6		%	2.5		%	(0.5)		%			3.9		%
Percentage of total	69.5		%	19.0		%	10.2		%	1.3		%			100.0		%
Operating income (loss)	$	3,518		$	463		$	94		$	30		$	(1,010)	$	3,095
Operating income increase	0.1		%	5.9		%	16.0		%	141.1		%			0.2		%
Percentage of total segments	85.7		%	11.3		%	2.3		%	0.7		%			100.0		%
Operating income as a percentage of sales	6.0		%	2.9		%	1.1		%	2.8		%			3.7		%

	Year Ended Jun. 28, 2025
	U.S. Foodservice Operations			International Foodservice Operations			SYGMA			Other			Global Support Center		Consolidated Totals
	(In millions)
Sales	$	56,965		$	14,905		$	8,410		$	1,090		$	—	$	81,370
Percentage of total	70.0		%	18.3		%	10.3		%	1.4		%			100.0		%
Operating income (loss)	$	3,516		$	437		$	81		$	(73)		$	(873)	$	3,088
Percentage of total segments	88.8		%	11.0		%	2.0		%	(1.8)		%			100.0		%
Operating income as a percentage of sales	6.2		%	2.9		%	1.0		%	(6.7)		%			3.8		%

Our U.S. Foodservice Operations and our International Foodservice Operations segments represent a substantial majority of our total segment results when compared to other reportable segments. In fiscal 2026, U.S. Foodservice Operations and International Foodservice Operations represented approximately 69.5% and 19.0%, respectively, of Sysco’s overall sales, compared to 70.0% and 18.3%, respectively, in fiscal 2025. In fiscal 2026 and fiscal 2025, U.S. Foodservice Operations represented approximately 85.7% and 88.8%, respectively, of the total segment operating income. See Note 21, “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 8 for more information.

Cost of sales primarily includes our product costs, net of vendor consideration, and includes in-bound freight. Operating expenses include the costs of facilities, product handling, delivery, selling and general and administrative activities. Fuel surcharges are reflected within sales and gross profit; fuel costs are reflected within operating expenses. Along with sales, operating income is the most relevant measure for evaluating segment performance and allocating resources, as operating income includes cost of goods sold in addition to the costs to warehouse and deliver goods, which are significant and relevant costs when evaluating a distribution business.

Results of U.S. Foodservice Operations

In fiscal 2026, the U.S. Foodservice Operations operating results represented approximately 69.5% of Sysco’s overall sales and 85.7% of the aggregated operating income of Sysco’s reporting segments. Several factors contributed to these higher operating results as compared to the other operating segments. We have invested substantial amounts in assets, operating methods, technology and management expertise in this segment. The breadth of its sales force, geographic reach of its distribution area and its purchasing power enable this segment to generate its relatively stronger results of operations.

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 prior year:

	2026		2025		Change in Dollars		% Change
	(Dollars in millions)
Sales	$	58,803	$	56,965	$	1,838	3.2	%
Gross profit	11,239		10,875		364		3.3
Operating expenses	7,721		7,359		362		4.9
Operating income	$	3,518	$	3,516	$	2	0.1	%
Gross profit	$	11,239	$	10,875	$	364	3.3	%
Adjusted operating expenses (Non-GAAP) (1)	7,582		7,243		339		4.7
Adjusted operating income (Non-GAAP) (1)	$	3,657	$	3,632	$	25	0.7	%

(1)

See “Non-GAAP Reconciliations” below.

Sales

The following table sets forth the percentage and dollar value increase or decrease in sales over the prior year in order to demonstrate the cause and magnitude of change.

	Increase (Decrease)
	2026
	(Dollars in millions)
Cause of change	Percentage		Dollars
Case volume (1)	1.4	%	$	811
Inflation	1.7		960
Other (2)	0.1		67
Total change in sales	3.2	%	$	1,838

(1)			Case volumes increased 1.4% compared to fiscal 2025. This volume increase resulted in a 1.4% increase in the dollar value of sales compared to fiscal 2025.
(2)			Case volume reflects our broadline and specialty businesses, with the exception of our specialty meats business, which measures its volume in pounds. Any impact in volumes from our specialty meats operations is included within “Other.”

The sales growth in our U.S. Foodservice Operations in fiscal 2026 was driven by higher inflation and case volume growth. Case volumes from our U.S. Foodservice Operations increased 1.4%, as compared to fiscal 2025. This included a 1.7% increase in local customer case volume as compared to fiscal 2025 and a 1.3% increase in national customer case volume as compared to fiscal 2025.

Operating Income

The increase in operating income for fiscal 2026, as compared to fiscal 2025, was driven by increases in gross profit dollar growth and case volume growth, partially offset by increases in operating expenses.

Gross profit dollar growth in fiscal 2026 was driven primarily by benefits from strategic sourcing efforts and case volume growth, including contributions from recent acquisitions and stronger performance from local customers. The estimated change in product costs, an internal measure of inflation or deflation, increased in fiscal 2026. For fiscal 2026, this change in product costs was primarily driven by inflation in the meat, seafood, and fresh produce categories. Sysco brand penetration for U.S. Broadline decreased by 59 basis points to 35.4% for fiscal 2026, as compared to fiscal 2025. Specific to local customers, Sysco brand penetration for U.S. Broadline decreased by 45 basis points to 45.8% for fiscal 2026, as compared to fiscal 2025.

Gross margin, which is gross profit as a percentage of sales, was 19.11% in fiscal 2026, compared to 19.09% in fiscal 2025. The 2 basis point increase was primarily due to a favorable shift in customer mix, driven by local sales volume growth outpacing national sales volume growth.

The increase in operating expenses for fiscal 2026, as compared to fiscal 2025, was primarily driven by increases in colleague-related costs, which is inclusive of investments in sales headcount and incentive compensation.

Results of International Foodservice Operations

In fiscal 2026, the International Foodservice Operations operating results represented approximately 19.0% of Sysco’s overall sales.

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 prior year:

	2026		2025		Change in Dollars		% Change
	(Dollars in millions)
Sales	$	16,042	$	14,905	$	1,137	7.6	%
Gross profit	3,401		3,109		292		9.4
Operating expenses	2,938		2,672		266		10.0
Operating income	$	463	$	437	$	26	5.9	%
Gross profit	$	3,401	$	3,109	$	292	9.4	%
Adjusted operating expenses (Non-GAAP) (1)	2,720		2,524		196		7.8
Adjusted operating income (Non-GAAP) (1)	$	681	$	585	$	96	16.4	%
Comparable sales using a constant currency basis (Non-GAAP) (1)

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holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 3 transactions across 2 insiders. Net: +6,652 shares, $441,868.

Date	Insider	Role	Action	Shares	Price	Value
2026-08-11	Phillips Ronald L	EVP and CHRO	Sell	-367	$83.39	-$30,604
2026-08-10	Phillips Ronald L	EVP and CHRO	Sell	-6,285	$83.94	-$527,563
2026-05-26	Hinshaw John M	Director	Buy	+13,304	$75.17	$1,000,035

Source: SEC Form 4 filings.

Next expected filings

~2026-10-28 10-Q expected by 2026-11-05 (in 66 days)
~2027-01-27 10-Q expected by 2027-02-04 (in 157 days)
~2027-04-28 10-Q expected by 2027-05-06 (in 248 days)
~2027-08-20 10-K expected by 2027-08-25 (in 362 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-08-21 10-K Annual Report
2026-08-20 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
2026-08-04 8-K Earnings Release; Financial Statements and Exhibits
2026-07-02 8-K Other Events
2026-04-29 10-Q Quarterly Report
2026-04-28 8-K Earnings Release; Financial Statements and Exhibits
2026-04-20 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
2026-04-02 8-K Officer/Director Change
2026-03-30 8-K Material Agreement Entered; Financial Statements and Exhibits
2026-03-30 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
2026-03-05 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
2026-02-13 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
2026-02-11 8-K Other Events; Financial Statements and Exhibits
2026-01-28 10-Q Quarterly Report
2026-01-27 8-K Earnings Release; Financial Statements and Exhibits

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