Slides
Page 1
Fiscal Q1 2026 Earnings Results October 28, 2025
Page 2
Forward-Looking Statements Statements made in this presentation that look forward in time or that express management’s beliefs, expectations or hopes are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements concern, among other things, our future financial performance and results, business strategy, plans, goals and objectives, including certain outlook, business trends, our dividend and share repurchase programs, our expectation of future macroeconomic conditions and other statements that are not historical facts, including our expectations regarding foot traffic and volume growth and benefits to gross margins; our expectations regarding the incremental investments in hiring; our plans to improve the capabilities of our sales team; and our future growth, including growth in sales and earnings per share. 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. Such forward-looking statements reflect the views of management at the time such statements are made and are subject to a number of risks, uncertainties, estimates, and assumptions, including those outside of Sysco’s control. Risks and uncertainties include without limitation: the impact of geopolitical, economic and market conditions and developments, including changes in global trade policies and tariffs; risks related to our business initiatives; periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability generally; risks related to our efforts to implement our transformation initiatives and meet our other long-term strategic objectives; risk of interruption of supplies and increase in product costs; risks related to changes in consumer eating habits; and impact of natural disasters or adverse weather conditions, public health crises, adverse publicity or lack of confidence in our products, and product liability claims. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those indicated in our forward-looking statements. Therefore, you should not place undue reliance on any of the forward-looking statements contained herein. For more information on these risks and other concerning factors that could cause actual results to differ from those expressed or forecasted, see our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC. We do not undertake to update our forward-looking statements, except as required by applicable law. This presentation also includes non-GAAP financial measures, please refer to non-GAAP reconciliations at the end of this presentation for definitions and the reconciliation from GAAP to Non-GAAP. 2
Page 3
Kevin Hourican CHAIR OF THE BOARD AND CHIEF EXECUTIVE OFFICER 3
Page 4
Note: Growth rates compared to fiscal Q1 2025 1 See Non-GAAP reconciliations at the end of the presentation. Q1: Strong Revenue Growth Across USFS, International, and SYGMA Fiscal Q1 2026 Highlights +30 bps +120 bps $259 million +13.1% +38.9% Sequential Improvement in USFS Case Growth Q1 2026 vs Q4 2025 Sequential Improvement in USFS Local Case Growth Q1 2026 vs Q4 2025 Returned to shareholders via dividends in the quarter International segment adjusted operating income1 growth to $147 million SYGMA segment operating income growth to $25 million +3.2% Revenue growth to $21.1 billion +5.5% Adjusted EPS1 growth to $1.15 +3.9% Gross profit dollar increase to $3.9 billion +2.9% Adjusted operating income1 increase to $898 million 4
Page 5
Source: The United States Census Bureau Advance Monthly Sales for Retail and Food Services Food Away From Home Continues to Gain Share 30% 35% 40% 45% 50% 55% 60% 65% 70% Aug-94 Aug-95 Aug-96 Aug-97 Aug-98 Aug-99 Aug-00 Aug-01 Aug-02 Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Aug-22 Aug-23 Aug-24 Aug-25 Multi-Decade Trend of Consumer Spending Favoring Food Away From Home Occasions Remains Intact Grocery Stores Food Services and Drinking Places Wallet Share 5
Page 6
$161 B $197 B $224 B $268 B $231 B $300 B $353 B $360 B $370 B 2000 2005 2010 2015 2020 2021 2022 2023 Total Addressable Market Since 2000 17% $370B Source: Technomic U.S. Foodservice Industry Wallchart for Calendar Year as of June 2025 2024 Sysco is #1 in an Attractive, Growing Industry 6
Page 7
FUTURE HORIZONS We are committed to responsible growth. We will cultivate new channels, segments, and capabilities while being stewards of our company and our planet for the long- term. We will fund our journey through cost-out and efficiency improvements DIGITAL Enrich the customer experience through personalized digital tools that reduce friction in the purchase experience and introduce innovation to our customers PRODUCTS AND SOLUTIONS Customer focused marketing and merchandising solutions that inspire increased sales of our broad assortment of fair priced products and services CUSTOMER TEAMS Our greatest strength is our people. People who are passionate about food and food service. Our diverse team delivers expertise and differentiates services designed to help our customers grow their business SUPPLY CHAIN Efficiently and consistently serve our customers with the products they need, when and how they need them, through a flexible delivery framework Sysco’s Recipe For Growth is Creating Multiple Vectors to Drive Long-term, Profitable Growth 7
Page 8
(3.4%) (1.4%) (0.2%) (4.0%) (3.0%) (2.0%) (1.0%) 0.0% 1.0% 2.0% Q3 2025 Q4 2025 Q1 2026 Q2 2026E Q1 Included a >50bps Impact from Exiting a Business Within FreshPoint Sequentially Improved Case Performance Driven By: • Sysco-Specific Initiatives • Productivity Improvements • Strengthened Retention Levels • Sequentially Improved New Account Penetration • Sequentially Lower Customer Churn + Improvement in Restaurant Industry Traffic Data represents USFS local case growth. Sequentially Improving Local Performance 8 In Q1 2026, Local Case Growth Improved +120 bps Sequentially; USFS Local Case Growth Projecting at Least 100 bps + of Sequential Improvement
Page 9
FY 2026: Key Growth Initiatives
Page 10
Gross Profit in Billions 1 See Non-GAAP reconciliations at the end of the presentation. Q1 2026 Consolidated Results 3.2% YoY • Gross profit growth of 3.9% was driven by effective management of product cost inflation and strategic sourcing efficiencies • Adj. EPS 1 of $1.15 increased 5.5% YoY • USFS volume increased 0.1% • Local volume declined 0.2%, a 120 basis point sequential improvement from Q4 • International revenue increased 4.5% YoY and adjusted operating income 1 grew 13.1% YoY Net Sales in Billions Adj. Operating Income 1 in Millions $20.5 $21.1 Q1 2025 Q1 2026 $3.8 $3.9 Q1 2025 Q1 2026 $873 $898 Q1 2025 Q1 2026 10 3.9% YoY 2.9% YoY
Page 11
Kenny Cheung EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 11
Page 12
Gross Profit in Billions 1 See Non-GAAP reconciliations at the end of the presentation. Q1 2026 Consolidated Results 3.2% YoY • Gross profit growth of 3.9% was driven by effective management of product cost inflation and strategic sourcing efficiencies • Adj. EPS 1 of $1.15 increased 5.5% YoY • USFS volume increased 0.1% • Local volume declined 0.2%, a 120-basis point sequential improvement from Q4 • International revenue increased 4.5% YoY and adjusted operating income 1 grew 13.1% YoY Net Sales in Billions Adj. Operating Income 1 in Millions $20.5 $21.1 Q1 2025 Q1 2026 $3.8 $3.9 Q1 2025 Q1 2026 $873 $898 Q1 2025 Q1 2026 12 3.9% YoY 2.9% YoY
Page 13
1 See Non-GAAP reconciliations at the end of the presentation. Q1 2026 U.S. Foodservice Results 2.9% YoY • USFS volumes increased 0.1% • USFS local volumes declined 0.2%, a 120-basis point sequential improvement from Q4 • Gross profit dollars increased 2.8% to $2.8 billion driven by effective management of product cost inflation and strategic sourcing efficiencies • Adj. operating income 1 decreased 1.0% YoY, GAAP operating income declined 3.1% YoY Net Sales in Billions Adj. Operating Income 1 in Millions -1.0% YoY 13 $14.4 $14.8 Q1 2025 Q1 2026 $925 $916 Q1 2025 Q1 2026
Page 14
Updating USFS Case Growth Metric to Include Specialty Meat Business 14 • Updating reported case growth metrics to include Specialty Meat volumes (Buckhead Newport Meat & Seafood). • More holistic view of entire business with metrics now including important growth engine within Specialty. • Relatively minor change overall, accounting for an approximate 0-10 bps impact on average over the last 5 quarters. + = USFS Case Growth Q1-FY25 Q2-FY25 Q3-FY25 Q4-FY25 FY-FY25 Q1-FY26 Local 0.2% (0.9%) (3.5%) (1.5%) (1.4%) (0.3%) Total 2.7% 1.4% (2.0%) (0.3%) 0.5% 0.0% Local +0.0% +0.0% +0.1% +0.1% +0.0% +0.1% Total +0.0% +0.1% +0.1% +0.1% +0.0% +0.1% Local 0.2% (0.9%) (3.4%) (1.4%) (1.4%) (0.2%) Total 2.7% 1.5% (1.9%) (0.2%) 0.5% 0.1% Historically Reported Case Growth Excluding Specialty Meat Specialty Meat Business Volume Impact Updated Case Growth Including Specialty Meat Business
Page 15
13.1% YoY 1 See Non-GAAP reconciliations at the end of the presentation. Q1 2026 International Results • Sales increased 4.5% YoY; increased 2.1% on a constant currency basis 1 • Excluding the impact of the Mexico joint venture divestiture, sales 1 grew 7.9% • Adj. operating income 1 increased 13.1%; GAAP operating income increased 12.9% • Strong profit reflecting local case growth and effective margin management Net Sales in Billions Adj. Operating Income 1 in Millions 15 4.5% YoY $3.8 $4.0 Q1 2025 Q1 2026 $130 $147 Q1 2025 Q1 2026
Page 16
Q1 2026 SYGMA Results 4.1% YoY • Gross Profit dollars increased 4.3% YoY • Flat operating expenses despite 4.1% increase in sales YoY • Continued segment sales and volume growth after shifting the customer base to a more favorable mix Net Sales in Billions Operating Income in Millions 16 38.9% YoY $2.0 $2.1 Q1 2025 Q1 2026 $18 $25 Q1 2025 Q1 2026
Page 17
1 See Non-GAAP reconciliations at the end of the presentation. Strong Balance Sheet, Strong Investment Grade Credit Rating • Ended the quarter with a 2.9x net debt leverage ratio 1 and continue to target a range of 2.5-2.75x • Committed to Investment Grade debt rating • Ended the quarter with $12.4 billion in net debt1 and approximately $3.5 billion in total liquidity, providing substantial headroom above our minimum threshold • Debt is well-laddered Net Debt to Adj. EBITDA1 17 2.74x 2.90x Q1 2025 Q1 2026
Page 18
Cumulative Cash Returned to Shareholders in billions On-Track to return approximately $21.5 billion in cumulative cash to shareholders over 12 years Strong Cash Generation Drives Shareholder Returns 18 $0.7 $3.3 $5.9 $7.6 $9.4 $11.1 $12.0 $13.5 $15.0 $17.2 $19.5 $21.5 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26E Dividends Share Repurchase
Page 19
1 See Non-GAAP reconciliations at the end of the presentation. Reiterating Fiscal Year 2026 Guidance Sales Growth 3%-5% Adj. EPS Growth 1 1%-3% 19 5%-7% Adj. EPS Growth Excluding Incentive Compensation Headwind
Page 20
1 See Non-GAAP reconciliations at the end of the presentation. Fiscal Year 2026 Guidance Modeling Details 20 Incentive Compensation Headwind By Quarter 1 $10 $16 $63 $11 $0 $25 $50 $75 $100 1Q26 2Q26 3Q26 4Q26 Dollars in Millions • FY26 adjusted EPS guidance includes approximately $100 million in carry over impact from incentive comp for the year, impacting year over year comparability • Excluding this impact, our outlook reflects adjusted EPS growth of approximately 5% to 7%, with the midpoint in-line with our long- term growth algorithm
Page 22
NON-GAAP RECONCILIATIONS
Page 23
Impact of Certain Items 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. 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 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 2026 and fiscal 2025. Set forth below 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. 23
Page 24
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items Q1 FY26 vs. Q1 FY25 (Dollars in Millions, Except for Share and Per Share Data) 24 13-Week Period Ended Sep. 27, 2025 13-Week Period Ended Sep. 28, 2024 Change in Dollars %/bps Change Sales (GAAP) $ 21,148 $ 20,484 $ 664 3.2% Impact of Mexico joint venture sales - (117) 117 0.6% Comparable sales excluding Mexico joint venture (Non-GAAP) $ 21,148 $ 20,367 $ 781 3.8% Sales (GAAP) $ 21,148 $ 20,484 $ 664 3.2% Impact of currency fluctuations (1) (91) (91) -0.4% Comparable sales using a constant currency basis (Non-GAAP) $ 21,057 $ 20,484 $ 573 2.8% Cost of sales (GAAP) $ 17,247 $ 16,731 $ 516 3.1% Gross profit (GAAP) $ 3,901 $ 3,753 $ 148 3.9% Impact of currency fluctuations (1) (24) (24) -0.6% Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 3,877 $ 3,753 $ 124 3.3% Gross margin (GAAP) 18.45% 18.32% 13 bps Impact of currency fluctuations (1) -0.04% -4 bps Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) 18.41% 18.32% 9 bps Operating expenses (GAAP) $ 3,101 $ 2,945 $ 156 5.3% Impact of restructuring and transformational project costs (2) (56) (27) (29) NM Impact of acquisition-related costs (3) (42) (38) (4) -10.5% Operating expenses adjusted for Certain Items (Non-GAAP) 3,003 2,880 123 4.3% Impact of currency fluctuations (1) (23) (23) -0.8% Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 2,980 $ 2,880 $ 100 3.5% Operating expense as a percentage of sales (GAAP) 14.66% 14.38% 28 bps Impact of certain items adjustments -0.46% -0.32% -14 bps Adjusted operating expense as a percentage of sales (Non-GAAP) 14.20% 14.06% 14 bps Operating income (GAAP) $ 800 $ 808 $ (8) -1.0% Impact of restructuring and transformational project costs (2) 56 27 29 NM Impact of acquisition-related costs (3) 42 38 4 10.5% Operating income adjusted for Certain Items (Non-GAAP) 898 873 25 2.9% Impact of currency fluctuations (1) (1) (1) -0.2% Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 897 $ 873 $ 24 2.7%
Page 25
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items Q1 FY26 vs. Q1 FY25 (Dollars in Millions, Except for Share and Per Share Data) continued 25 Operating margin (GAAP) 3.78% 3.94% -16 bps Operating margin adjusted for Certain Items (Non-GAAP) 4.25% 4.26% -1 bp Operating margin adjusted for Certain Items on a constant currency basis (Non-GAAP) 4.26% 4.26% 0 bps Net earnings (GAAP) $ 476 $ 490 $ (14) -2.9% Impact of restructuring and transformational project costs (2) 56 27 29 NM Impact of acquisition-related costs (3) 42 38 4 10.5% Tax impact of restructuring and transformational project costs (4) (13) (6) (7) NM Tax impact of acquisition-related costs (4) (10) (9) (1) -11.1% Net earnings adjusted for Certain Items (Non-GAAP) $ 551 $ 540 $ 11 2.0% Diluted earnings per share (GAAP) $ 0.99 $ 0.99 $ - 0.0% Impact of restructuring and transformational project costs (2) 0.12 0.05 0.07 NM Impact of acquisition-related costs (3) 0.09 0.08 0.01 12.5% Tax impact of restructuring and transformational project costs (4) (0.03) (0.01) (0.02) NM Tax impact of acquisition-related costs (4) (0.02) (0.02) - 0.0% Diluted earnings per share adjusted for Certain Items (Non-GAAP) (5) $ 1.15 $ 1.09 $ 0.06 5.5% Diluted shares outstanding 480,365,666 493,785,973 NM represents that the percentage change is not meaningful. (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. (3) Fiscal 2026 includes $31 million of intangible amortization expense and $11 million in acquisition and due diligence costs. Fiscal 2025 includes $32 million of intangible amortization expense and $6 million in acquisition and due diligence costs. (2) Fiscal 2026 includes $10 million related to restructuring and severance charges and $46 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. Fiscal 2025 includes $4 million related to restructuring and severance charges and $23 million related to various transformation initiative costs, primarily consisting of supply chain transformation costs and changes to our business technology strategy. (1) Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results. (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.
Page 26
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items Q1 FY26 vs Q1 FY25 (Dollars in Millions) 26 13-Week Period Ended Sep. 27, 2025 13-Week Period Ended Sep. 28, 2024 Change in Dollars %/bps Change U.S. FOODSERVICE OPERATIONS Sales (GAAP) $ 14,780 $ 14,362 $ 418 2.9% Gross Profit (GAAP) $ 2,823 $ 2,747 $ 76 2.8% Gross Margin (GAAP) 19.10% 19.13% -3 bps Operating expenses (GAAP) $ 1,943 $ 1,839 $ 104 5.7% Impact of restructuring and transformational project costs (1) (7) (5) (2) -40.0% Impact of acquisition-related costs (2) (29) (12) (17) NM Operating expenses adjusted for Certain Items (Non-GAAP) $ 1,907 $ 1,822 $ 85 4.7% Operating income (GAAP) $ 880 $ 908 $ (28) -3.1% Impact of restructuring and transformational project costs (1) 7 5 2 40.0% Impact of acquisition-related costs (2) 29 12 17 NM Operating income adjusted for Certain Items (Non-GAAP) $ 916 $ 925 $ (9) -1.0% INTERNATIONAL FOODSERVICE OPERATIONS Sales (GAAP) $ 3,966 $ 3,794 $ 172 4.5% Impact of Mexico joint venture sales - (117) 117 3.4% Comparable sales excluding Mexico joint venture (Non-GAAP) $ 3,966 $ 3,677 $ 289 7.9% Sales (GAAP) $ 3,966 $ 3,794 $ 172 4.5% Impact of currency fluctuations (3) (91) (91) -2.4% Comparable sales using a constant currency basis (Non-GAAP) $ 3,875 $ 3,794 $ 81 2.1% Gross Profit (GAAP) $ 826 $ 774 $ 52 6.7% Impact of currency fluctuations (3) (24) (24) -3.1% Comparable gross profit using a constant currency basis (Non-GAAP) $ 802 $ 774 $ 28 3.6% Gross Margin (GAAP) 20.83% 20.40% 43 bps Impact of currency fluctuations (3) -0.13% -13 bps Comparable gross margin using a constant currency basis (Non-GAAP) 20.70% 20.40% 30 bps Operating expenses (GAAP) $ 712 $ 673 $ 39 5.8% Impact of restructuring and transformational project costs (4) (23) (12) (11) -91.7% Impact of acquisition-related costs (5) (10) (17) 7 41.2% Operating expenses adjusted for Certain Items (Non-GAAP) 679 644 35 5.4% Impact of currency fluctuations (3) (23) (23) -3.5% Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 656 $ 644 $ 12 1.9% Operating income (GAAP) $ 114 $ 101 $ 13 12.9% Impact of restructuring and transformational project costs (4) 23 12 11 91.7% Impact of acquisition-related costs (5) 10 17 (7) -41.2% Operating income adjusted for Certain Items (Non-GAAP) 147 130 17 13.1% Impact of currency fluctuations (3) (1) (1) -0.8% Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 146 $ 130 $ 16 12.3%
Page 27
Sysco Corporation and its Consolidated Subsidiaries Segment Results Non-GAAP Reconciliation (Unaudited) Impact of Certain Items Q1 FY26 vs Q1 FY25 (Dollars in Millions) continued 27 SYGMA Sales (GAAP) $ 2,129 $ 2,046 $ 83 4.1% Gross Profit (GAAP) 170 163 7 4.3% Gross Margin (GAAP) 7.98% 7.97% 1 bp Operating expenses (GAAP) $ 145 $ 145 $ - 0.0% Operating income (GAAP) 25 18 7 38.9% OTHER Sales (GAAP) $ 273 $ 282 $ (9) -3.2% Gross Profit (GAAP) $ 68 $ 72 $ (4) -5.6% Gross Margin (GAAP) 24.91% 25.53% -62 bps Operating expenses (GAAP) $ 64 $ 63 $ 1 1.6% Operating income (GAAP) 4 9 (5) -55.6% GLOBAL SUPPORT CENTER Gross profit (loss) (GAAP) $ 14 $ (3) $ 17 NM Operating expenses (GAAP) $ 237 $ 225 $ 12 5.3% Impact of restructuring and transformational project costs (6) (26) (10) (16) NM Impact of acquisition related costs (7) (3) (9) 6 66.7% Operating expenses adjusted for Certain Items (Non-GAAP) $ 208 $ 206 $ 2 1.0% Operating loss (GAAP) $ (223) $ (228) $ 5 2.2% Impact of restructuring and transformational project costs (6) 26 10 16 NM Impact of acquisition related costs (7) 3 9 (6) -66.7% Operating loss adjusted for Certain Items (Non-GAAP) $ (194) $ (209) $ 15 7.2% TOTAL SYSCO Sales (GAAP) $ 21,148 $ 20,484 $ 664 3.2% Gross Profit (GAAP) $ 3,901 $ 3,753 $ 148 3.9% Gross Margin (GAAP) 18.45% 18.32% 13 bps Operating expenses (GAAP) $ 3,101 $ 2,945 $ 156 5.3% Impact of restructuring and transformational project costs (1)(4)(6) (56) (27) (29) NM Impact of acquisition-related costs (2)(5)(7) (42) (38) (4) -10.5% Operating expenses adjusted for Certain Items (Non-GAAP) $ 3,003 $ 2,880 $ 123 4.3% Operating income (GAAP) $ 800 $ 808 $ (8) -1.0% Impact of restructuring and transformational project costs (1)(4)(6) 56 27 29 NM Impact of acquisition-related costs (2)(5)(7) 42 38 4 10.5% Operating income adjusted for Certain Items (Non-GAAP) $ 898 $ 873 $ 25 2.9% (5) Primarily represents 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 costs primarily in Europe. NM represents that the percentage change is not meaningful. (7) Represents due diligence costs. (1) Primarily represents severance and transformation initiative costs. (2) Fiscal 2026 and fiscal 2025 include intangible amortization expense and acquisition costs. (6) Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
Page 28
Earnings Before Interest, Taxes, Depreciation and Amortization 28 EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) 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, as 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. Adjusted EBITDA should not be used as a substitute for the most comparable GAAP financial measure in assessing the company’s 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. In the tables that follow, adjusted EBITDA for each period presented is reconciled to net earnings.
Page 29
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Q1 FY26 vs. Q1 FY25) (Dollars in Millions) 29 13-Week Period Ended Sep. 27, 2025 13-Week Period Ended Sep. 28, 2024 Change in Dollars %/bps Change Net earnings (GAAP) $ 476 $ 490 $ (14) -2.9% Interest (GAAP) 172 160 12 7.5% Income taxes (GAAP) 124 152 (28) -18.4% Depreciation and amortization (GAAP) 233 235 (2) -0.9% EBITDA (Non-GAAP) $ 1,005 $ 1,037 $ (32) -3.1% Certain Item adjustments: Impact of restructuring and transformational project costs (1) 54 26 28 NM Impact of acquisition-related costs (2) 11 6 5 83.3% EBITDA adjusted for Certain Items (Non-GAAP) (3) $ 1,070 $ 1,069 $ 1 0.1% Other expense (income), net 28 6 22 NM Depreciation and amortization, as adjusted (Non-GAAP) (4) (200) (202) 2 1.0% Operating income adjusted for Certain Items (Non-GAAP) $ 898 $ 873 $ 25 2.9% (4) Fiscal 2026 includes $233 million in GAAP depreciation and amortization expense, less $33 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2025 includes $235 million in GAAP depreciation and amortization expense, less $33 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. NM represents that the percentage change is not meaningful. (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. (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 $30 million in fiscal 2026 and fiscal 2025, respectively.
Page 30
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBITDA (In Millions) 30 September 27, 2025 Current maturities of long-term debt $ 1,894 Long-term debt 11,459 Total Debt (GAAP) 13,353 Cash & Cash Equivalents (1) (919) Net Debt (Non-GAAP) $ 12,434 Net Earnings for the previous 12 months (GAAP) $ 1,814 Adjusted EBITDA for the previous 12 months (Non-GAAP) (2) $ 4,294 Total Debt/Net Earnings Ratio (GAAP) 7.36 Total Debt/Adjusted EBITDA Ratio (Non-GAAP) 3.11 Net Debt/Adjusted EBITDA Ratio (Non-GAAP) 2.90 (1) Includes cash reserved for an acquisition in the UK. Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. It is an important measure used by management to evaluate our access to liquidity, and we believe it is a representation of our financial strength. Our Net Debt to Adjusted EBITDA ratio is calculated using a numerator of our debt minus cash and cash equivalents, divided by the sum of the most recent four quarters of Adjusted EBITDA. In the table that follows, we have provided the calculation of our debt and net debt as a ratio of Adjusted EBITDA. (2) Refer to Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Trailing Twelve Months) Non-GAAP Reconciliation
Page 31
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Trailing Twelve Months) (In Millions) 31 13-Week Period Ended Sep. 27, 2025 13-Week Period Ended Jun. 28, 2025 13-Week Period Ended Mar. 29, 2025 13-Week Period Ended Dec. 28, 2024 Total Net earnings (GAAP) $ 476 $ 531 $ 401 $ 406 $ 1,814 Interest (GAAP) 172 166 149 160 647 Income taxes (GAAP) 124 186 122 127 559 Depreciation and amortization (GAAP) 233 234 238 238 943 EBITDA (Non-GAAP) $ 1,005 $ 1,117 $ 910 $ 931 $ 3,963 Certain Item adjustments: Impact of restructuring and transformational project costs (1) 54 74 49 30 207 Impact of acquisition-related costs (2) 11 3 10 8 32 Impact of goodwill impairment - 92 - - 92 EBITDA adjusted for Certain Items (Non-GAAP) (3) $ 1,070 $ 1,286 $ 969 $ 969 $ 4,294 (1) Includes 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. (2) Includes acquisition and due diligence costs. (3) In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $6 million or non-cash stock compensation expense of $31 million in Q1 fiscal 2026, interest income of $8 million or non- cash stock compensation expense of $19 million in Q4 fiscal 2025, interest income of $7 million or non-cash stock compensation expense of $15 million in Q3 fiscal 2025, and interest income of $7 million or non-cash stock compensation expense of $30 million in Q2 fiscal 2025.
Page 32
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Net Debt to Adjusted EBITDA (In Millions) 32 September 28, 2024 Current Maturities of long-term debt $ 487 Long-term debt 11,869 Total Debt (GAAP) 12,356 Cash & Cash Equivalents (733) Net Debt (Non-GAAP) $ 11,623 Net Earnings for the previous 12 months (GAAP) $ 1,942 Adjusted EBITDA for the previous 12 months (Non-GAAP) (1) $ 4,236 Total Debt/Net Earnings Ratio (GAAP) 6.36 Total Debt/Adjusted EBITDA Ratio (Non-GAAP) 2.92 Net Debt/Adjusted EBITDA Ratio (Non-GAAP) 2.74 Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. It is an important measure used by management to evaluate our access to liquidity, and we believe it is a representation of our financial strength. Our Net Debt to Adjusted EBITDA ratio is calculated using a numerator of our debt minus cash and cash equivalents, divided by the sum of the most recent four quarters of Adjusted EBITDA. In the table that follows, we have provided the calculation of our debt and net debt as a ratio of Adjusted EBITDA. (1) Refer to Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Trailing Twelve Months) Non-GAAP Reconciliation
Page 33
Sysco Corporation and its Consolidated Subsidiaries Non-GAAP Reconciliation (Unaudited) Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (Trailing Twelve Months) (In Millions) 33 13-Week Period Ended Sep. 28, 2024 13-Week Period Ended Jun. 29, 2024 13-Week Period Ended Mar. 30, 2024 13-Week Period Ended Dec. 30, 2023 Total Net earnings (GAAP) $ 490 $ 612 $ 425 $ 415 $ 1,942 Interest (GAAP) 160 165 158 150 633 Income taxes (GAAP) 152 192 129 130 603 Depreciation and amortization (GAAP) 235 226 221 219 901 EBITDA (Non-GAAP) $ 1,037 $ 1,195 $ 933 $ 914 $ 4,079 Certain Item adjustments: Impact of restructuring and transformational project costs (1) 26 60 27 11 124 Impact of acquisition-related costs (2) 6 8 17 2 33 EBITDA adjusted for Certain Items (Non-GAAP) (3) $ 1,069 $ 1,263 $ 977 $ 927 $ 4,236 (1) Includes 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. (2) Includes acquisition and due diligence costs. (3) In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $7 million or non-cash stock compensation expense of $30 million in Q1 fiscal 2025, interest income of $10 million or non- cash stock compensation expense of $27 million in Q4 fiscal 2024, interest income of $7 million or non-cash stock compensation expense of $24 million in Q3 fiscal 2024, and interest income of $9 million or non-cash stock compensation expense of $29 million in Q2 fiscal 2024.
Page 34
Projected Adjusted EBITDA Guidance Adjusted EBITDA is a non-GAAP financial measure; however, we cannot predict with certainty the particular certain items that would be excluded from the calculation of this measure for future periods. Due to these uncertainties, we cannot provide a quantitative reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure without unreasonable effort. However, we expect to calculate adjusted EBITDA for future periods in the same manner as the reconciliations provided for the historical periods herein. 34
Page 35
Net Debt to Adjusted EBITDA Leverage Ratio Targets 35 Form of calculation: Current maturities of long-term debt Long term debt Total Debt (GAAP) Less cash and cash equivalents Net Debt (Non-GAAP) Net earnings (GAAP) Interest (GAAP) Income taxes (GAAP) Depreciation and amortization (GAAP) EBITDA (Non-GAAP) Certain Item adjustments: Impact of restructuring and transformational project costs Impact of acquisition-related intangible amortization EBITDA adjusted for Certain Items (Non-GAAP) Total Debt to Net Earnings Ratio (GAAP) Total Debt to Adjusted EBITDA Ratio (Non-GAAP) Net Debt to Adjusted EBITDA Ratio (Non-GAAP) We expect to target our net debt to adjusted EBITDA leverage ratio forecast in fiscal 2026. We cannot predict with certainty when we will achieve these results or whether the calculation of our EBITDA will be on an adjusted basis in future periods to exclude the effect of certain items. Due to these uncertainties, we cannot provide a quantitative reconciliation of these potentially non-GAAP measures to the most directly comparable GAAP measure without unreasonable effort. However, we expect to calculate these adjusted results, if applicable, in the same manner as the reconciliations provided for the historical periods that are presented herein.
Page 36
Projected Adjusted EPS Guidance Adjusted earnings per share is a non-GAAP financial measure; however, we cannot predict with certainty certain items that would be included in the most directly comparable GAAP measure for the relevant future periods. Due to these uncertainties, we cannot provide a quantitative reconciliation of projected adjusted EPS to the most directly comparable GAAP financial measure without unreasonable effort. However, we expect to calculate adjusted earnings per share for future periods in the same manner as the reconciliations provided for the historical periods herein. 36