Fiscal year 2026 and fourth fiscal quarter
Filed Aug 4, 2026SYSCO REPORTS FISCAL FOURTH QUARTER AND FULL YEAR 2026 RESULTS; ISSUES FY27 GUIDANCE OF 9%-11% ADJUSTED EPS GROWTH
Fourth-quarter sales, volumes, operating income, net earnings and EPS increased, while fiscal-year sales, gross profit, cash flow and adjusted EPS grew despite lower fiscal-year GAAP net earnings and EPS.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Fourth-quarter total Sysco salesGAAP | $22.1 billion | – | increased 4.7% |
| Fourth-quarter gross profitGAAP | $4.1 billion | – | increased 3.7% |
| Fourth-quarter gross marginGAAP | 18.7% | – | decreased 17 basis points |
| Fourth-quarter product cost inflationother | 2.8% | – | – |
| Fourth-quarter operating expensesGAAP | increased 1.7% | – | increased 1.7% |
| Fourth-quarter adjusted operating expensesnon-GAAP | increased 3.6% | – | increased 3.6% |
| Fourth-quarter operating incomeGAAP | $983 million | – | increased 10.6% |
| Fourth-quarter adjusted operating incomenon-GAAP | $1.1 billion | – | increased 4.1% |
| Fourth-quarter net earningsGAAP | $551 million | – | increased 3.8% |
| Fourth-quarter adjusted net earningsnon-GAAP | $734 million | – | increased 2.5% |
| Fourth-quarter EBITDAnon-GAAP | $1.2 billion | – | increased 5.4% |
| Fourth-quarter adjusted EBITDAnon-GAAP | $1.3 billion | – | increased 4.7% |
| Fourth-quarter diluted EPSGAAP | $1.15 | – | increased 4.5% |
| Fourth-quarter adjusted diluted EPSnon-GAAP | $1.53 | – | increased 3.4% |
| Fourth-quarter higher incentive compensation costsother | $11 million | – | – |
| Fourth-quarter incentive compensation impact to EPSother | $0.01 impact to EPS | – | – |
| Fiscal-year total Sysco salesGAAP | $84.6 billion | – | increased 3.9% |
| Fiscal-year gross profitGAAP | $15.6 billion | – | increased 4.5% |
| Fiscal-year gross marginGAAP | 18.5% | – | increased 10 basis points |
| Fiscal-year product cost inflationother | 3.0% | – | – |
| Fiscal-year operating expensesGAAP | increased 5.6% | – | increased 5.6% |
| Fiscal-year adjusted operating expensesnon-GAAP | increased 5.1% | – | increased 5.1% |
| Fiscal-year operating incomeGAAP | $3.1 billion | – | increased 0.2% |
| Fiscal-year adjusted operating incomenon-GAAP | $3.6 billion | – | increased 2.6% |
| Fiscal-year net earningsGAAP | $1.8 billion | – | decreased 3.9% |
| Fiscal-year adjusted net earningsnon-GAAP | $2.2 billion | – | increased 1.4% |
| Fiscal-year cash flow from operationsGAAP | $2.6 billion | – | increased 5.1% |
| Fiscal-year free cash flownon-GAAP | $2.1 billion | – | increased 16.3% |
| Fiscal-year EBITDAnon-GAAP | $4.0 billion | – | decreased 0.7% |
| Fiscal-year adjusted EBITDAnon-GAAP | $4.4 billion | – | increased 2.2% |
| Fiscal-year diluted EPSGAAP | $3.66 | – | decreased 1.9% |
| Fiscal-year adjusted diluted EPSnon-GAAP | $4.61 | – | increased 3.4% |
| Fiscal-year higher incentive compensation costsother | $100 million | – | – |
| Fiscal-year incentive compensation impact to EPSother | $0.16 impact to EPS | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. Foodservice Operations, fourth quarterTotal case volume increased 2.5%; local case volume increased 2.6%; improved Sysco Brand penetration and supply chain productivity improvements were partially offset by planned investments in sales headcount and expanded capacity. | $15.4 billion | – | increased 4.4% |
| International Foodservice Operations, fourth quarterConstant-currency sales increased 5.6% to $4.1 billion; local volume growth was 4.5%; foreign exchange rates increased segment sales by $46 million. | $4.2 billion | – | increased 6.7% |
| U.S. Foodservice Operations, fiscal year 2026Total case volume increased 1.4%; local case volume increased 1.7%; gross profit increased 3.3% to $11.2 billion and gross margin increased 2 basis points to 19.1%. | $58.8 billion | – | increased 3.2% |
| International Foodservice Operations, fiscal year 2026Constant-currency sales increased 4.1% to $15.5 billion; foreign exchange rates increased segment sales by 3.5%; adjusted operating income increased 16.4% to $681 million. | $16.0 billion | – | increased 7.6% |
Fiscal year 2027 on a 53-week basis outlook
- Revenue6%-7% sales growth
- Note9%-11% adjusted EPS growth
- Noteapproximately $100 million of efficiency improvements
- Notecombined cost-outs of approximately $100 million
Capital returns
- We returned approximately $1.2 billion of capital to shareholders via $1.0 billion of dividends and $200 million of share repurchases.
What drove it
- Fourth-quarter total sales growth included U.S. Foodservice volume growth of 2.5% and U.S. local volume growth of 2.6%.
- Fourth-quarter gross-profit growth was driven by U.S. local volume growth, improved Sysco Brand penetration, strategic sourcing efficiencies and management of product cost inflation.
- Fiscal-year gross-profit growth was driven by positive volumes, strategic sourcing efficiencies and management of product cost inflation.
- Fiscal year 2027 cost initiatives focus on inventory management and forecasting accuracy, coding efficiency, routing optimization and back-office automation.
Concerns
- Fourth-quarter gross margin decreased 17 basis points to 18.7%.
- U.S. Foodservice fourth-quarter gross margin decreased 26 basis points to 19.2%.
- Fiscal-year GAAP net earnings decreased 3.9% to $1.8 billion and GAAP diluted EPS decreased 1.9% to $3.66.
- Fiscal-year operating income increased 0.2% to $3.1 billion while operating expenses increased 5.6%.
- Product cost inflation was 2.8% in the fourth quarter and 3.0% for fiscal year 2026.
What to watch
- Delivery of 6%-7% fiscal-year 2027 sales growth on a 53-week basis.
- Delivery of 9%-11% fiscal-year 2027 adjusted EPS growth.
- Realization of approximately $100 million of fiscal-year 2027 efficiency improvements and combined cost-outs.
- Gross-margin progression, including the effect of product cost inflation, Sysco Brand penetration and strategic sourcing efficiencies.
- Volume growth in U.S. Foodservice and International Foodservice Operations.
Balance sheet and cash flow
- Cash flow from operations increased 5.1% to $2.6 billion.
- Free cash flow increased 16.3% to $2.1 billion on a year-over-year basis.
- As of the end of the quarter, the company had a cash balance of $1.8 billion and total liquidity of $4.8 billion.
- Debt to net earnings was approximately 7.7 times.
Analysis
Sysco reported a solid fourth quarter, with total sales increasing 4.7% to $22.1 billion. U.S. Foodservice total case volume increased 2.5% and local case volume increased 2.6%, while International Foodservice sales increased 6.7% to $4.2 billion. The company cited local-volume momentum, Sysco Brand penetration, strategic sourcing efficiencies and management of product cost inflation as gross-profit drivers.
Quarterly profitability improved, although gross-margin performance was softer. Gross profit increased 3.7% to $4.1 billion, while gross margin decreased 17 basis points to 18.7%. Operating expenses increased 1.7%, and operating income increased 10.6% to $983 million. Adjusted operating income increased 4.1% to $1.1 billion, while adjusted diluted EPS increased 3.4% to $1.53.
For fiscal year 2026, sales increased 3.9% to $84.6 billion and gross profit increased 4.5% to $15.6 billion, with gross margin increasing 10 basis points to 18.5%. However, operating expenses increased 5.6%, fiscal-year GAAP operating income increased 0.2% to $3.1 billion, and GAAP net earnings and diluted EPS declined. Adjusted operating income, adjusted net earnings and adjusted diluted EPS all increased. Cash flow from operations increased 5.1% to $2.6 billion, and free cash flow increased 16.3% to $2.1 billion.
International Foodservice remained the faster-growing reported segment. Fourth-quarter sales increased 6.7%, and adjusted operating income increased 15.7% to $228 million. For the fiscal year, International sales increased 7.6% to $16.0 billion and adjusted operating income increased 16.4% to $681 million. Foreign exchange contributed to reported International sales, gross profit, operating expenses and operating income in both periods.
Capital allocation included approximately $1.2 billion returned to shareholders, consisting of $1.0 billion of dividends and $200 million of share repurchases. Sysco introduced fiscal-year 2027 guidance on a 53-week basis for 6%-7% sales growth and 9%-11% adjusted EPS growth. The outlook includes approximately $100 million of efficiency improvements and combined cost-outs from AI-enabled transformation and previously announced actions, intended to support profit growth and margin expansion.
Management, verbatim
Sysco delivered strong results in the fourth quarter of fiscal year 2026, including positive case growth across our local, national, and international businesses. This included local volume growth of 2.6% in our USFS segment, as well as local volume growth of 4.5% in our International segment. Continued productivity gains from our supply chain enabled year over year profit growth across each of our four business segments.
Kevin Hourican, Sysco’s Chair of the Board and Chief Executive Officer
We exceeded our previously communicated guidance for the quarter and the year, as our company specific initiatives drove tangible results across our business. For the year, we generated robust cash flows and returned $1.2 billion to our shareholders through dividends and share repurchase. We expect positive momentum to continue in FY27 and are introducing guidance on a 53-week basis that includes sales growth of 6%-7% and adjusted EPS growth of 9%-11%. Today, we are also announcing incremental cost out efforts which we expect, when combined with our Q3 update, to deliver a combined $100 million of net cost savings in FY27.
Brandon Sewell, Sysco’s Interim Chief Financial Officer
Not in the filing
stated, not guessed- Prior-year absolute values for total sales, gross profit, operating income, net earnings, EBITDA, EPS, cash flow from operations and free cash flow
- Prior-quarter comparisons for reported metrics
- Fourth-quarter cash flow from operations and free cash flow
- Total debt amount
- Net Debt to adjusted EBITDA ratio, as the filing text is truncated after “Net Debt to a”
- Fiscal-year 2027 gross-margin, operating-expense and tax-rate guidance
- Prior outlook section and prior guidance figures
- Full financial statements and non-GAAP reconciliations, which are not included in the provided filing text
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.