Sysco(US:SYY) Globenewswire·2025-10-28 12:03Core Insights - Sysco Corporation reported a solid start to fiscal year 2026, with improved sales performance, margin management, and supply chain operations, leading to adjusted EPS performance exceeding expectations [1][2] - The company anticipates full-year sales growth of 3%-5% and adjusted EPS growth of 1%-3%, with an adjusted outlook reflecting EPS growth of approximately 5% to 7% when excluding the impact of lower incentive compensation from fiscal 2025 [2] Financial Performance - Total sales for the first quarter increased by 3.2% to $21.1 billion compared to the same period in fiscal year 2025 [4][22] - Gross profit rose by 3.9% to $3.9 billion, with gross margin increasing by 13 basis points to 18.5% [5][22] - Operating income decreased by 1.0% to $800 million, while adjusted operating income increased by 2.9% to $898 million [6][22] - Net earnings fell by 2.9% to $476 million, but adjusted net earnings increased by 2.0% to $551 million [8][22] Segment Performance - U.S. Foodservice Operations saw sales increase by 2.9% to $14.8 billion, with total case volume increasing by 0.1% [9][22] - International Foodservice Operations reported a 4.5% increase in sales to $4.0 billion, with comparable sales growth of 7.9% when excluding the impact of the Mexico joint venture [12][22] Cost Management - Operating expenses increased by 5.3%, driven by investments in business capacity and sales headcount [6][22] - Product cost inflation was recorded at 3.4%, primarily affecting meat and seafood categories, but effective management helped mitigate its impact on gross profit [5][22] Balance Sheet and Cash Flow - As of the end of the quarter, Sysco had a cash balance of $844 million and total liquidity of $3.5 billion [17] - The company returned $259 million to shareholders via dividends during the first quarter, with cash flow from operations at $86 million and free cash flow negative at $50 million [17][18]