Sysco(US:SYY)2025-10-28 21:40Financial Performance - Net earnings for the 13-week period ended September 27, 2025, were $476 million, compared to $490 million for the same period in 2024, reflecting a decrease of approximately 2.9%[49] - Basic earnings per share for the first quarter of fiscal 2026 were $0.99, down from $1.00 in the first quarter of fiscal 2025, indicating a decline of 1%[49] - Comprehensive income for the first quarter of fiscal 2026 was $445 million, a decrease of 32.9% from $663 million in the first quarter of fiscal 2025[50] - Total sales for the 13-week period ended September 27, 2025, were $21,148 million, compared to $20,484 million for the same period in 2024, reflecting a year-over-year increase of 3.2%[72] - Total operating income for the 13-week period ended September 27, 2025, was $800 million, compared to $808 million for the same period in 2024[72] Tax and Benefits - The effective tax rate for the first quarter of fiscal 2026 was 20.6%, lower than the statutory rate of 21.0%, primarily due to foreign income tax benefits[62] - As of September 27, 2025, the gross amount of unrecognized tax benefits was $68 million, with related accrued interest of $18 million[64] - Sysco recorded a benefit of $131 million related to foreign tax credits under the Tax Cuts and Jobs Act of 2017; potential reversal may occur if the company loses its legal challenge[65] - Sysco entered into a contract to purchase approximately $200 million of Transferable Tax Credits to offset fiscal 2026 federal income taxes[66] Share-Based Compensation - Share-based compensation costs recognized in the first quarter of fiscal 2026 totaled $31 million, slightly higher than $30 million in the same period of fiscal 2025[61] - A total of 721,368 stock options were granted to employees in the first 13 weeks of fiscal 2026, with a weighted average grant-date fair value of $19.53 per option[57] - Employees were granted 451,638 performance share units (PSUs) in the first 13 weeks of fiscal 2026, with a weighted average grant-date fair value of $86.23 per PSU[58] - The company had a total of $219 million of unrecognized compensation cost related to share-based compensation arrangements as of September 27, 2025, expected to be recognized over 2.18 years[61] - The number of securities excluded from the diluted earnings per share calculation due to anti-dilutive effects was approximately 1,718,000 for the first 13 weeks of fiscal 2026[49] Assets and Expenditures - Capital expenditures for the 13-week period ended September 27, 2025, totaled $160 million, an increase from $122 million in the same period in 2024[73] - Total assets as of September 27, 2025, were $27,044 million, up from $26,774 million as of June 28, 2025[73] Segment Performance - The company’s U.S. Foodservice Operations segment reported sales of $14,780 million for the 13-week period ended September 27, 2025[72] - The International Foodservice Operations segment reported sales of $3,966 million for the same period, compared to $3,794 million in the prior year[72] Market Risks - Sysco's market risks include interest rate risk, foreign currency exchange rate risk, fuel price risk, and investment risk, with no significant changes reported since June 28, 2025[140]