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- **Revenue and EPS Beat**: Q1 2026 revenue up 3.2%, adjusted EPS $1.08 (5.5% growth), driven by local business improvement and cost control.
- **Local Volume Momentum**: U.S. Broadline local volumes +0.4%, International local +5%. Q2 local volume growth expected to improve by at least 100 basis points.
- **AI and Perks Impact**: AI360 adoption by 90% of sales consultants, correlating with improved selling. Perks 2.0 enhancing retention and penetration of high-value customers.
- **FY26 Guidance**: $84-85 billion in sales, adjusted EPS $4.50-4.60, with 1%-3% growth excluding $0.16 per share headwind.
- **Specialty Growth**: Targeting $10 billion in specialty sales growth over the next period, leveraging unique product availability and service models.

**【CEO Summary Section】**
- Q1 2026 revenue grew 3.2% year-over-year, with adjusted EPS up 5.5% to $1.08, beating expectations. Local business volume improved sequentially, outpacing industry traffic by 2x in Q1.
- U.S. Broadline local volumes grew 0.4%, while International local volumes expanded 5%, driven by strategic initiatives like AI360 and Perks 2.0.
- Management expects at least 100 basis points of sequential improvement in U.S. Foodservice local volumes in Q2, with momentum continuing into the year.
- AI360 adoption is strong, with 90% of sales consultants using the tool daily, correlating with improved selling performance.

**【CFO Financial Commentary】**
- Gross profit rose 3.9% to $3.9 billion, with margin expanding 13 basis points to 18.5%, reflecting cost management and strategic sourcing.
- Operating expenses were $3 billion (14.2% of sales), up 14 basis points due to planned investments in growth areas.
- Adjusted operating income reached $898 million, up 13.1% in International and 39% in SYGMA.
- FY26 guidance: $84-85 billion in sales, adjusted EPS $4.50-4.60, with 1% to 3% growth excluding $0.16 per share headwind from lapped incentive compensation.

**【Q&A Highlights】**
- **Sales Force Productivity**: 130 basis points of local volume improvement vs. industry, driven by stable sales force retention and AI360 adoption. Q2 local volume growth expected to improve by at least 100 basis points.
- **Inflation Trends**: U.S. Broadline inflation at 2.6%, International at 4.5% (constant currency). Gross margin expansion of 13 basis points despite higher inflation.
- **Market Share**: 17% overall market share, with opportunities in specialty segments (e.g., produce, meat) and International markets. Specialty sales are expected to grow significantly over the next period.
- **Balance Sheet**: $3.5 billion liquidity, 2.9x net debt leverage, and $1 billion in dividends/dividends and buybacks planned for FY26.

Sysco Corporation (SYY) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

SYY

SYY fundamentals

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