Sysco Corporation Q3 FY2026 earnings call

• Kevin Harkin mentioned Cisco delivered strong results in Q3 2026 with improving case volume trends, gross margin performance, and disciplined execution. USFS local volume had 3.3% growth, strongest in three years. • Discussed strategic rationale for acquiring Jethro Restaurant Depot, including creating combined company with faster growth, more profitability, and ability to serve more restaurant operators. • Brandon Sewell highlighted Q3 results with 4.7% sales growth, accelerated volume improvement, continued margin management, adjusted EPS in line with expectations, and strong performance in USFS segment with adjusted operating income growth and free cash flow growth. • Mentioned details of Restaurant Depot acquisition, including its financials, expected synergies, and growth potential.

Total revenue was nearly $21 billion, a 4.7% growth. USFS local case volume grew 3.3%, with national contract business having 1.4% case volume growth and international segment local case growth at 3.8%. Adjusted operating income for international segment grew nearly 13% for 10th consecutive quarter of double-digit growth. Restaurant Depot had 4% volume growth in its most recently completed calendar quarter with operating margins in line with expectations.

• Remain confident in full year adjusted EPS to be at high end of $4.50 to $4.60 range. • Expect at least 2.5% local volume growth in Q4. • Reiterate net sales growth expectation of approximately 3% to 5% to $84 billion to $85 billion. • Identified $60 million run rate cost savings through organization-wide spending optimization, starting in Q4 with carryover benefits. • Board approved one-penny increase to quarterly dividend to 55 cents per share for FY27.

• Integration risks associated with acquiring Restaurant Depot, to be managed through integration management office. • Concerns from investors regarding unknown entity of Restaurant Depot, its size, profitability, etc., and purchase price. • Potential impact of macroeconomic conditions on national chain restaurants affecting Cisco's national business.

• Q: Concerns about Restaurant Depot acquisition and near-term stock price overhang, A: Investors were concerned about unknown entity and purchase price, but more exposure to Restaurant Depot makes investors more excited, deal is day one, year one, year two accretive. • Q: Assessment of underlying fundamental momentum in restaurant trends, A: Both one-year and two-year trends matter, Cisco's performance improving due to sales colleague retention and productivity, non-commercial business performing well. • Q: Composition of net new account wins and account losses, A: Continued acceleration in new, consistent improvement in loss, strong penetration performance. • Q: Color on local volumes cadence and confidence, A: April performance in line with expectations, on track for 2.5% local volume growth in Q4 with AI360 usage increasing. • Q: Net cost synergies with Restaurant Depot and mix shift, A: $250 million net cost synergies, will share benefit with customers, national restaurant business impacted by traffic declines but new wins onboarding. • Q: Restaurant Depot's comps, margin sustainability, A: RD had 4% volume growth and expected profitability, CapEx appropriate, stores in good shape, profitability sustainable. • Q: Private label sales and cross-marketing, A: Cisco brand progress with new tools, will work collaboratively on private labels, let customers give feedback on labels