Sysco 2025-26: International +20% OI, FY26 Sales $84-$85B
FY25 (Jun 2025 FYE) revenue $81.37B (+3%); Op income $3.09B (-4%); NI $1.83B (-7%); EPS $3.73 (-4%). Q4 sales $21.1B (+2.8%) / +3.7% ex-Mexico divestiture; adj EPS $1.48 (+6.5%). US Foodservice local case volume -1.5% (200bp improvement vs Q3). International +8.3% top-line ex-Mexico, +20.1% adj op income (7th consecutive quarter of double-digit growth). FY26 guide: revenue $84-$85B (+3-5%); adj EPS $4.50-$4.60 (+1-3%, with $0.16 incentive headwind).
Key takeaways
- Q4 traffic improving + international standout. Restaurant traffic improved through Q4. International +8.3% ex-Mexico divestiture; +20.1% adj operating income (7 consecutive quarters double-digit OI growth).
- US local case volume showing improvement. -1.5% Q4 vs -3.5% Q3 (~200bp improvement). Restaurant traffic recovery + new customer acquisition.
- FY26 guide $84-$85B revenue (+3-5%). Modest revenue growth + stable margin = adj EPS $4.50-$4.60 (+1-3%). $0.16/share headwind from FY25 lower incentive comp lapping.
- $1B buyback + $1B dividend planned FY26. Continued capital return at scale. Target net leverage 2.5x.
- Mexico divestiture continuing. Selling Mexican foodservice business; reflected in YoY comparisons. Streamlines focus on core US + International.
Business
Sysco is the largest US foodservice distributor with ~750K customers across restaurants + healthcare + education + lodging + hospitality. Three reporting segments:
- US Foodservice Operations (~70% of revenue): Local + chain customer foodservice distribution. Q4 sales $21.1B (+2.8% reported / +3.7% ex-Mexico). Local case volume -1.5% Q4 (vs -3.5% Q3 — 200bp improvement).
- International Foodservice Operations (~15% of revenue): Canada + UK + Ireland + France + Sweden + Mexico (divesting). Q4 +3.6% reported / +8.3% ex-Mexico; local case +4%; adj OI +20.1% (7 consecutive Q DD growth).
- Sygma + Other (~15% of revenue): Specialty + Sygma (chain distribution) + other.
Strategic positioning: largest scale + national footprint + private label + technology. Differentiation through customer service + scale economics + tech-enabled distribution.
FY25 financial performance (Jun 2025 FYE)
| Metric (FY) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue ($B) | 76.33 | 78.84 | 81.37 |
| Gross profit ($B) | 13.96 | 14.61 | 14.97 |
| Op income ($B) | 3.04 | 3.20 | 3.09 |
| Op margin | 4.0% | 4.1% | 3.8% |
| EBITDA ($B) | 3.70 | 4.17 | 4.14 |
| Net income ($B) | 1.77 | 1.96 | 1.83 |
| Diluted EPS ($) | 3.47 | 3.89 | 3.73 |
| FCF ($B) | 2.08 | 2.16 | 1.78 |
| Capex ($M) | -793 | -832 | -906 |
| Total debt ($B) | 11.17 | 12.95 | 14.49 |
| Dividends ($B) | -1.00 | -1.01 | -1.00 |
| Buyback ($B) | -0.50 | -1.23 | -1.25 |
The earnings print: Revenue +3%, op margin -30bp to 3.8%, EPS -4%. International strong; US continued recovery.
Capital allocation
- Capex: $-906M FY25 (1.1% of revenue).
- Dividends: $-1.00B FY25 (held flat).
- Buybacks: $-1.25B FY25.
- M&A / Divestitures: Mexican business divestiture continuing.
- Debt: $14.49B (+$1.54B YoY).
FY26 outlook (per Q4 FY25 call, 2025-07-29)
| FY26 guide | Range |
|---|---|
| Reported net sales | $84B-$85B (+3-5%) |
| Adjusted EPS | $4.50-$4.60 (+1-3% with $0.16 incentive headwind) |
| Dividends | ~$1B planned |
| Share repurchases | ~$1B planned |
| Target net leverage ratio | 2.5x |
Key risks
- Restaurant traffic cycle: Foodservice volume tied to dining-out frequency. Recession would compress.
- Local case volume: Improving but still negative; needs to inflect positive for thesis.
- Inflation pass-through: Food cost inflation typically passes through but with lag.
- Competition: US Foods + Performance Food Group + regional distributors.
- International cycle: Strong currently; FX exposure.
- Labor + driver: Foodservice distribution labor-intensive.
Bottom line
SYY FY25 is the international standout + US recovery year. Revenue +3%, EPS -4% on operating expense investment + incentive comp. International +20.1% adj OI (7 consecutive Q DD). FY26 guide $84-$85B + EPS $4.50-$4.60. Risks are restaurant cycle + local volume + inflation. Quality leader with continued capital return.
Citations
- Sysco Corp. FY25 Form 10-K (filed July 2025, SEC EDGAR; June 28, 2025 fiscal year end).
- SYY Q4 FY25 earnings call, 2025-07-29 — Q4 sales $21.1B (+2.8% reported / +3.7% ex-Mexico); adj EPS $1.48 (+6.5%); US local case -1.5% Q4 (200bp improvement vs Q3); International +8.3% ex-Mexico, +20.1% adj OI (7 consecutive Q DD growth); FY26 guide ($84-$85B sales, adj EPS $4.50-$4.60, $1B div + $1B buyback, target 2.5x net leverage).
- Internal financial_statements view (consolidated annual + cash flow + capital structure).