The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are diversified, electronics, and food and grocery.

Fortune Sector Leaders: Wholesalers

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-056-Sysco

Sysco, a food marketer and distributor, jumped up 14 spots on the Fortune 500 and posted a 34% increase in revenue in 2022, as restaurant demand—abnormally low during the height of the pandemic—rebounded. 
<ul> 
 	<li>The majority of Sysco's sales come from operations in the U.S., but international growth outstripped domestic in 2022, partly due to the reversal of more stringent pandemic restrictions abroad.</li> 
 	<li>The company sued a slew of meat companies in 2022, alleging that they violated antitrust regulations through price fixing. Although Sysco moved to settle the lawsuits, it is now mired in a legal battle with Burford Capital, which financed Sysco’s litigation.</li> 
 	<li>The workforce for the food marketer and distributor grew 22% in size from 2021, the third largest increase among the top 100 companies in the Fortune 500.</li> 
</ul>

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500-2022-070-Sysco

Food product marketer and distributor Sysco continued its slide down the Fortune 500 this year as the pandemic kept restaurant demand largely depressed. The company dropped 10 spots on this list, its revenue decreasing 3% to $51 billion. However, it managed to more than double its profits year over year, to $524 million—a fact that reflects the gradual loosening of COVID-related restrictions throughout the year. In its fourth quarter, the company’s sales finally surpassed 2019 quarterly volume levels—another encouraging sign.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-199-Sysco

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The coronavirus chewed through Sysco’s core grub-supplying business as restaurants around the world shuttered last year. Revenues for Sysco, America’s biggest wholesale food distributor, fell 12% year on year to $52.9 billion, a decline that caused it to slide four places in the Fortune 500 rankings. COVID-19 took a bite out of profits, too, causing a stomach-churning 87% drop to $215 million. The Houston-based company pivoted amid pandemic-related closures to help its eatery customers offer alternative options, like takeout-meal kits and contactless menus. But Sysco’s financial prospects are mostly tied to people’s desire to dine out again as the economy reopens.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:280,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:287}">The coronavirus chewed through Sysco’s core grub-supplying business as restaurants around the world shuttered last year. Revenues for Sysco, America’s biggest wholesale food distributor, fell 12% year on year to $52.9 billion, a decline that caused it to slide 20 places in the Global 500 rankings. COVID-19 took a bite out of profits, too, causing a stomach-churning 87% drop to $215 million. The Houston, Texas-based company pivoted amid pandemic-related closures to help its eatery customers offer alternative options, like takeout-meal kits and contactless menus. But Sysco’s financial prospects are mostly tied to people’s desire to dine out again as the economy reopens.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-60-Sysco

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The coronavirus chewed through Sysco’s core grub-supplying business as restaurants around the world shuttered last year. Revenues for Sysco, America’s biggest wholesale food distributor, fell 12% year on year to $52.9 billion, a decline that caused it to slide four places in the Fortune 500 rankings. COVID-19 took a bite out of profits, too, causing a stomach-churning 87% drop to $215 million. The Houston-based company pivoted amid pandemic-related closures to help its eatery customers offer alternative options, like takeout-meal kits and contactless menus. But Sysco’s financial prospects are mostly tied to people’s desire to dine out again as the economy reopens.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:280,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:287}">The coronavirus chewed through Sysco’s core grub-supplying business as restaurants around the world shuttered last year. Revenues for Sysco, America’s biggest wholesale food distributor, fell 12% year on year to $52.9 billion, a decline that caused it to slide four places in the Fortune 500 rankings. COVID-19 took a bite out of profits, too, causing a stomach-churning 87% drop to $215 million. The Houston-based company pivoted amid pandemic-related closures to help its eatery customers offer alternative options, like takeout-meal kits and contactless menus. But Sysco’s financial prospects are mostly tied to people’s desire to dine out again as the economy reopens.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-179-Sysco

Sysco is America’s biggest and most profitable wholesale food distributor. While the Houston company took in $60.1 billion in 2019, up 2.4% from the year prior, it slid seven places in the Global 500 rankings. Rising food costs, due to inflation and international tariffs, plus higher labor expenses, exacerbated by a shortage of commercial truck drivers, gnawed at the bottom line. Regardless, Sysco grew profits by 17% to $1.6 billion, partly through layoffs, subsidiary consolidation in France, and facility closures in Canada and Europe. Now, as the coronavirus pandemic shutters restaurants around the world, Sysco’s new CEO, Kevin Hourican, formerly of CVS Health, will have to figure out how to keep the business cooking.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-056-Sysco

Sysco is America’s biggest and most profitable wholesale food distributor. While the Houston company took in $60.1 billion in 2019, up 2.4% from the year prior, it slid two places in the Fortune 500 rankings. Rising food costs, due to inflation and international tariffs, plus higher labor expenses, exacerbated by a shortage of commercial truck drivers, gnawed at the bottom line. Regardless, Sysco grew profits by 17% to $1.6 billion, partly through layoffs, subsidiary consolidation in France, and facility closures in Canada and Europe. Now, as the coronavirus pandemic shutters restaurants around the world, Sysco’s new CEO, Kevin Hourican, formerly of CVS Health, will have to figure out how to keep the business cooking.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Sector

Strongest Dimension

Years on list

Previous rank

State

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Sysco is a marketer and distributor of food and related products to the food service or food-away-from-home industries in the U.S., Canada, the U.K., France, and elsewhere. The company serves restaurants, hospitals and nursing facilities, schools and colleges, hotels and motels, industrial caterers, and other food service venues. Sysco was incorporated in 1969 and is headquartered in Houston.

Q4 2026

Q3 2026

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Sysco (SYY): Company Profile, Stock Price, News, Rankings

legacy

Sysco

sysco

Welcome to Cisco's Fourth Quarter Fiscal Year twenty twenty five Conference Call. As a reminder, today's call is being recorded. We will begin with opening remarks and introductions. I would now like to turn the call over to Kevin Kim, Vice President of Investor Relations. Sir, you may begin.

Good morning, everyone, and welcome to Sysco's fourth quarter fiscal year twenty twenty five earnings call. On today's call, we have Kevin Herkin, our Chair of the Board and CEO and Kenny Chao, our CFO. Before we begin, please note that statements made during this presentation that state the company's or management's intentions, beliefs, expectations or predictions of the future are forward looking statements within the meaning of the Private Securities Litigation Reform Act, and actual results could differ in a material manner. Additional information about factors that could cause results to differ from those in the forward looking statements is contained in the company's SEC filings. This includes, but is not limited to, risk factors contained in our annual report on Form 10 ks for the year ended 06/29/2024, subsequent SEC filings and in the news release issued earlier this morning.

A copy of these materials can be found in the Investors section at cisco.com. Non GAAP financial measures are included in our comments today and in our presentation slides. The reconciliation of these non GAAP measures to the corresponding GAAP measures is included at the end of the presentation slides and can be found in the Investors section of our website. During the discussion today, unless otherwise stated, all results are compared to the same quarter in the prior year. At this time, I'd like to turn the call over to Kevin Harkin.

Good morning, everyone. We appreciate you joining our call this morning. Today, we will recap our fourth quarter performance, highlight our full year 2025 outcomes, provide an update on key initiatives that will drive our momentum in the new fiscal year and finally, Kenny will share our view on our guidance for fiscal year twenty twenty six. Let's get started with a highlight of our fourth quarter financial outcomes. We are pleased to report that our fourth quarter adjusted results exceeded our expectations.

Traffic to restaurants improved throughout the quarter and Sysco specific initiatives delivered improved financial outcomes top to bottom. The progress accelerated throughout the quarter and has continued into July for Sysco. All considered, Q4 was a relatively steady quarter from the perspective of restaurant foot traffic. On a monthly basis, April traffic trends for the industry were down 1.5%, May was down 1% and June was down approximately 0.9. The quarter overall was down 1.1%, which represented approximately 190 basis points of improvement versus Q3's traffic level of down 3%.

It is good to see the industry stabilizing after a rocky start to the calendar year. I'll now pivot to Sysco's results for the quarter. As you can see on Slide four, we delivered sales results of $21,100,000,000 up 2.8% on a reported basis and up 3.7% to last year when excluding the divestiture of our Mexican business. We delivered adjusted operating income of $1,100,000,000 up 1.1% to last year and adjusted EPS growth of $1.48 up 6.5% relative to last year. Importantly, we made solid progress on our $100,000,000 profit improvement target with a strong contribution in Q4 from our strategic sourcing efforts.

Our international segment posted another compelling quarter with 3.6% top line growth on a reported basis and up 8.3% to last year when excluding the divestiture of Mexico. International posted strong local case growth of plus 4% in the quarter. Adjusted operating income increased 20.1%, representing the seventh consecutive quarter of double digit profit growth. Strength was delivered from across all international geographies with notable strong performances from Canada, Great Britain, Ireland and Latin America. We expect a continuation of strong international financial performance in fiscal twenty twenty six.

Within USFS, our national sales business delivered 1.3% volume growth for the quarter. Unpacking those results further, our non commercial national business continues to perform at a very high level with strength in food service management, education and travel and leisure. Most importantly, gross profit within national sales grew almost three times faster than volume due to the excellent efforts by the team to improve profitability of the national business. The strong profit improvement was delivered through customer optimization and the creation of win win provisions in our contracts that motivate customers to partner with Cisco to optimize efficiency. Our Cigna segment delivered sales growth of 5.9% for the quarter, driven by strong customer wins versus prior year.

For the year, Sigma grew top line 8.3% and bottom line 12.5. It was a record year for our Sigma business from top and a bottom line perspective. It is important to note that the Sigma top line growth rates will begin to moderate in the coming year as we begin to lap large customer wins earned in 2025. On the local side of our business, we delivered negative 1.5% case volume within our U. S.

Foodservice segment during the quarter. As shown on Slide eight, this was a meaningful 200 basis point step up versus our Q3 outcomes. U. S. Foodservice volume reporting included impact from exiting a business within FreshPoint that did not meet our profit thresholds, which negatively impacted our total local performance by over 50 basis points.

When excluding this intentional business exit, our USFS local business performed at a negative 1% rate, again, a meaningful step up versus Q3 and a strong improvement relative to our full year results. More importantly, as I mentioned, we had a strong exit velocity in the quarter with June performance being the highlight of the quarter. It is important to call out that the positive momentum has carried into July as Sysco specific initiatives to improve our local performance are taking root. I'll discuss these efforts in more detail in a moment. Now that we have reviewed our business results for the quarter, I'd like to discuss the key initiatives that are going to drive our performance and local case volume growth for fiscal twenty twenty six.

Let's start with our international segment. We are very pleased with our international business and have strong confidence that the compelling top and bottom line results will continue into fiscal twenty twenty six. We are advancing selling initiatives like Cisco Your Way across the globe. Additionally, we have improved our customer and colleague facing technology in the international segment, making it easier to do business with Cisco. We are adding incremental local sales resources in key international geographies, primarily metro areas like Toronto, Dublin and London to drive new customer wins and improve customer engagement.

Lastly, our international supply chain capacity expansion efforts continue with our newest facility outside of London on track to open later this calendar year. National, our national sales business continues to perform well with exceptionally high customer retention rates and continued new wins on the selling circuit. We expect Sysco's national sales growth in 2026 will be driven by our food service management sector, travel and leisure and increases in our healthcare business. To further unlock growth, we are allocating our national sales resources to the highest potential segments of the business and are making technology investments to deepen our connectivity with our largest customers. Lastly, total team selling is beginning to gain traction amongst our largest customers with an increasing percentage of national customers purchasing from at least one of our specialty platforms.

Lastly, I'd like to discuss our improvement efforts and strategic growth drivers for our local business. Let me start by saying that we are very confident that we will deliver profitable local volume growth in 2026 within every country we operate, especially in The United States. We have addressed the key challenge of 2025 head on and we have growth activation initiatives launching this summer. First off, I want to start by discussing our sales colleague population. We have fully stabilized our sales colleague retention and are now fully focused on improving sales colleague training, productivity and effectiveness.

The stabilized colleague retention is important because it will drive significantly improved customer retention in 2026. As we enter 2026, we will be lapping last year's excessive colleague turnover and will replace that condition with strong in year retention. A headwind in 2025 will be converted into a tailwind in 2026. We are seeing the beginning positive impact of this equation in our July results. That positive impact will grow throughout 2026.

As I mentioned a moment ago, now that we have stabilized retention, our leadership focus turns to driving improved productivity of the sales force through training and upscaling of our sales colleagues. Additionally, our initial cohorts of sales consultant hires from calendar twenty twenty four are beginning to eclipse their twelve month to eighteen month anniversary with Cisco. As Kenny has said many times, this time horizon is important as it is when the productivity of a sales consultant significantly improves. As each quarter progresses, an increased number of our sales consultants will eclipse their twelve month to eighteen month mark, increasing their positive impact on Sysco's results. As sales colleague tenure improves, our results improve.

Lower turnover in 2026 means higher customer retention and higher retention means more productive colleagues. These two factors will be powerful drivers of improved outcomes for Cisco in 2026. To complement the strength and productivity of our sales professionals and further improve our business results, we are launching select growth initiatives this summer and fall. First up is a rewiring of our Perks customer loyalty program. Perks will evolve from a marketing and rewards platform into a hard hitting exceptional customer service program targeting our most important customers.

The why is clear. These customers buy the most, buy the most often and they deserve the absolute best from Cisco. We have trained our operations, inventory, merchandising and sales teams on the key tenants of Perks two point zero and we are ready to launch this summer. The program will improve customer retention and will improve penetration of business with existing customers. Next up is an AI empowered sales tool to help improve the productivity of our sales colleagues.

As you know, we leverage a CRM platform to guide the work of our sales teams. Our technology teams have been hard at work to supercharge our CRM capabilities by leveraging AI to help our sales consultants succeed. The enhanced capabilities will reside in the palm of the colleague's hand on their smartphone. The features of the tool will help our team to drive increased levels of selling effectiveness, increased close rates on sales suggestions and deliver higher rates of customer satisfaction. To say that we are excited about this capability would be an understatement.

Our newer sales colleagues will benefit the most from the powerful capabilities of our AI powered CRM. Last up is price agility. As we have previously communicated, we are piloting improvements to our pricing architecture that improves sales colleague engagement with customers by providing the sales force the ability to be more agile in responding to pricing requests. Our sales reps will be enabled to make decisions in the moment, leveraging the science of our pricing software. In July, we are expanding our pilot to additional geographies to learn more about the change management process required for a national rollout.

As I wrap up my prepared remarks, we are pleased with our strong performance in Q4 and the progress that we are making in local volume. Most importantly, we are excited about the exit velocity of the quarter and that the momentum has carried into July. We are confident that improved sales consultant retention, increased sales consultant tenure and the three growth programs I just covered will drive profitable and positive case growth for Cisco in fiscal twenty twenty six. We expect that positive local case growth will in turn support our financial targets. With that, I'd now like to turn the call over to Kenny. Kenny, over to you.

Thank you, Kevin, and good morning, everyone. I plan to start with high level thoughts on our performance, detail our financials and then introduce our full year 2026 guidance. As we outlined before, business plans don't always materialize the exact way you draw them up on paper.

This year was no different. However, our teams remain both nimble and focused as we leverage our leadership position within the industry to successfully apply the Cisco playbook. The operational rigor of our organization provides us a high degree of confidence for delivering our 2026 guidance across the P and L and our capital allocation commitments. To start, financial results this quarter included sales growth of 2.8% and adjusted EPS growth of 6.5%, representing strong year over year performance and noteworthy sequential improvements compared to the prior quarter. This sequential acceleration is visible across sales, including both national and local volume performance, but also across gross margins, adjusted operating income and adjusted EPS.

This is an important proof point as we enter FY 2026. Q4 adjusted EPS growth included benefits from our disciplined strategic sourcing efforts, aiding in the delivery of 3.9% growth in gross profit, translating to 19 basis points of gross margin expansion. These results include an increase in both dollars and rates of performance and reflect structural improvements that we expect to carry into the next fiscal year. Our investments in sales headcount and capacity expansion continued this quarter alongside benefits from ongoing efforts to optimize cost and prudent tax planning. This ultimately rendered outsized profit growth with adjusted EPS growth of 6.5% accounting for the strongest rate of growth for the year.

During fiscal twenty twenty five, we remain committed to rewarding our shareholders by repurchasing $1,300,000,000 in shares and paying out $1,000,000,000 in dividends. Now let's discuss our performance and financial drivers for the quarter, starting on Slide 12. For the fourth quarter, our enterprise sales grew 2.8% on an as reported basis, driven by U. S. Foodservice, International and Sigma.

Excluding the impact of our divested Mexico business, sales grew 3.7%. Volumes across the enterprise sequentially improved with total U. S. Foodservice volumes decreasing 0.3% and local volume decreasing 1.5% in the quarter. This represents a 200 basis points improvement in local case performance and 170 basis points improvement in total foodservice on a sequential basis quarter over quarter.

The sequential improvement was consistent with the industry traffic for the quarter, but importantly, our performance accelerated in the quarter with a strong June exit rate. We are seeing stronger contributions from newer sales professionals as they work up the productivity curve and the benefits from the stabilization of colleague retention. These factors directly contributed to an acceleration in new account growth for the quarter. We expect an acceleration in sales productivity to continue in FY 2026. These sequential volume improvements also benefited our U.

S. FS segment results. Top and bottom line results for the quarter represents a sequential improvement and we expect our investment actions in 2025 to deliver financial tailwinds for 2026 and beyond. International segment results included continued top line momentum and double digit operating income growth. This was across all markets and marked our seventh consecutive quarter of double digit operating income growth, adding to our impressive multi year track record.

These results reflect ongoing success as we apply the Cisco playbook to generate local volume growth of 4% and broad based operating income growth across our international portfolio. Cisco produced $4,000,000,000 in gross profit, up 3.9% and gross margins of 18.9% with improved gross profit per case performance. This notable margin improvement includes a mentality of continual improvement with cost savings driven by our strategic sourcing initiatives. Inflation rates and USBL were approximately 2.4%. International inflation was slightly higher for the quarter at 3.4%.

Overall, adjusted operating expenses were $2,900,000,000 for the quarter or 13.7% of sales, a 28 basis points increase from the prior year. The increase was driven by planned investments and higher growth areas of the business with fleet, building expansion and sales headcount. Corporate adjusted expenses were up 9.8% from the prior year, driven by insurance, investments and other costs, partially offset by accretive productivity cost out. For the full year, corporate adjusted expense were down 6%, reflecting solid progress on our existing cost savings program. Overall, adjusted operating income grew to $1,100,000,000 for the quarter, reflecting continued strong growth in our international segment, Sigma and more stable results in our U.

S. FS segment. For the quarter, adjusted EBITDA of $1,300,000,000 was up 1.8% versus the prior year. Fourth quarter results also includes a non cash goodwill impairment charge of $92,000,000 related to our guests worldwide business as reflected in our other segment. Let's now turn to balance sheet and cash flow.

Our balance sheet remains robust and reflects a healthy financial profile. This includes flexibility and optionality from approximately $3,800,000,000 in total liquidity, well above our minimum threshold. We ended the year at a 2.85 times net debt leverage ratio with plans to return to our target ratio at FY 2026. Turning to our cash flow, we generated approximately $2,500,000,000 in operating cash flow and $1,800,000,000 in free cash flow. Free cash flow compared to the prior year was impacted by higher cash taxes, interest and working capital timing.

Now, I would like to share with you our expectations for FY 2026 as seen on Slide 22. During FY 2026, we expect reported net sales growth of approximately 3% to 5% to approximately $84,000,000,000 to $85,000,000,000 These assumptions include inflation of approximately 2%, which we are seeing now, volume growth and contributions from M and A. We expect full year 2026 adjusted EPS of $4.5 to $4.6 representing growth of 1% to three percent, which includes an approximate $100,000,000 of headwind from lapping lower incentive compensation in FY 2025, an impact of roughly $0.16 per share. With FY 2025 behind us, we wanted to provide full visibility to the carryover impact from incentive comp for the year and by quarter as outlined on Slide '23. This impacts year over year comparability for expenses.

Our compensation structure rewards for business performance. As such, this carryover impact reflects challenges this past year in 2025. Importantly, our incentive comp structure is focused on core business drivers and aligned with long term interest of our shareholders. Excluding this impact, our outlook reflects adjusted EPS growth of approximately 5% to 7% within midpoint in line with a long term growth algorithm. To help with phasing for Q1, we expect to grow our adjusted EPS consistent with the annual growth rate of 1% to 3% driven by part of carryover benefit from strategic sourcing to gross margins and the impact from lapping incentive compensation.

Q1 and Q2 sales growth rates will be impacted by the divestiture of our Mexico JV in December 2024. We plan to provide additional modeling updates as the year progresses. This financial guidance assumes improvements to be driven by our Cisco specific initiatives with industry foot traffic and macro environment similar to current conditions. It also includes carryover impact related to sourcing benefits from our 100,000,000 of cost savings program. As mentioned on prior calls, this muscle memory is built across the organization leveraging a stronger operating model that positions us to grow share profitably.

We remain on target for shareholder returns through approximately dividends and approximately $1,000,000,000 in share repurchases planned for FY 2026. This is all based on our current expectation and economic conditions and could flex based on M and A activity for the year. Specific to our dividend, our expected payout for FY 2026 equates to a 6% year over year increase on a per share basis, highlighting our commitment to our standing as a dividend aristocrat. In terms of leverage, we expect to end the year within our stated target of 2.5 to 2.75 times net leverage ratio and maintain our investment grade balance sheet. Now turning to a few other modeling items.

For FY 2026, we expect a tax rate of approximately 23.5% to 24% and adjusted depreciation and amortization of approximately $870,000,000 Interest expense is now expected to be approximately $700,000,000 while other expense is expected to be approximately $45,000,000 The elevated D and A levels will be driven by continued capacity expansion, such as the expansion outside of London this coming year, as Kevin highlighted. CapEx is expected to be approximately $700,000,000 representing less than 1% of sales. This includes growth and maintenance CapEx and an eye towards optimizing spend levels across the enterprise as the organization further sharpens our collective efforts around driving ROIC. Looking ahead, we like our position and we remain focused on leveraging our position as the industry leader to support the growth of our customer, while also continuing to unlock value for our shareholders. With that, we'll turn the call back to Kevin for closing remarks.

Thank you, Kenny. We are pleased with the strong performance in Q4 and more importantly, the strong exit velocity of the quarter. Our leadership team placed tremendous focus on improving our local business, strengthening our gross profit through strategic sourcing and tightly managing our expenses through productivity improvement. The team stepped up and delivered a beat performance versus what we expected ninety days ago and I am proud of their efforts.

As we look toward 2026, we expect to build upon the Q4 momentum and deliver improved financial results for Sysco and our investors. Our top line results will strengthen based on the sequential improvement of our local business throughout 2026. The improvement starts and ends with our colleague population. We have stabilized colleague retention. As a result, our customer loss rate will improve greatly in 2026 versus 2025.

Stabilizing colleague retention will also enable us to improve colleague productivity in 2026. We will measure our improvement through the continued expansion of our gap between new customer wins and reducing customer losses. The spread between new customer wins and customer losses improved greatly in our Q4. In fact, the gap between new and loss doubled in Q4 versus the year to date results in Q1 through Q3. We see the positive spread between new and lost expanding further in 2026 through the growth initiatives that I covered on today's call.

Our future is bright at Sysco and we are excited for the year ahead. We head into this next fiscal year with positive momentum and we are well positioned for continued improvements. We plan to leverage our competitive advantages as the industry leader. This includes strong diversification across our diverse customer types, our wide product assortment and our geographic diversity as the only global player in the food away from home landscape. Food away from home is a good business.

It takes share from the grocery channel every year. As I've said before, the pie is getting bigger and Sysco intends to take a bigger slice of that expanding pie. We are confident shareholders are positioned to benefit from our industry leading dividend, compelling ROIC, intentional share buybacks and improving financial results. Q4 displays the beginning of improving our local business and the momentum will accelerate throughout 2026. I am thankful for our leadership team and our entire 75,000 colleague population for the strong efforts in 2025.

The team leaned into some stiff challenges in the macro and at Cisco specifically. The hard work of the past year is poised to have a positive impact in 2026. With that operator, we are now ready for questions.

We'll take our first question from Jake Bartlett with Truist Securities. Please go ahead. Your line is open.

Great. Thank you for taking the question. Mine was on the momentum in the local case growth and you saw it in the fourth quarter, an improvement from the third. That was roughly in line with what industry traffic trends were. You mentioned an improvement in June and July.

The question is whether you're gaining share within June and July. Are you seeing that acceleration that should be that you expect to come with the better with the sales force getting more productive? Just trying to gauge the inflection that you're seeing there, the impact that that's having on your market share gains.

Good morning, Jake. It's Kevin. Thanks for the question. Yes, so we're really pleased with Q4's progress versus Q3, but more importantly that exit velocity. So it's in the data that we shared, June versus May was flat from an industry traffic perspective.

Our performance in June was considerably better than May, which obviously conveys progress that we're making and that progress has continued into July. It's important to note that drivers, yes, improvement helped and we're pleased that the industry overall is seeing some strength relative to the tough start to the year. It's the colleague retention piece that is the most notable. We stabilized our colleague retention in Q4 and that will have meaningful positive impact as we enter 2026. Because the 2025 story is about customer loss that occurred tied to colleague separation or colleague departure.

And we're not going to be lapping those losses until we're in Q1. That's the point. So the strength of that, that the headwind of '25 being replaced by a tailwind in '26 will be evident as we enter our Q1. So we wouldn't have expected that positive impact to be in Q4 because these are losses that have already occurred and you carry that loss into your at month 13. So we've stabilized retention.

That is an important key point. As Kenny says many times, the new hires from the past year to year and a half are hitting their month 12, month 13, month 14, where their contribution positive significantly increases. An important data point I put in my prepared remarks, I just want to make sure it came through clearly. The gap between new and lost in Q4 was double the gap that we experienced in Qs one through Q3. And again, that strength will be visible and evident in fiscal twenty twenty six as that loss rate comes down significantly.

And when I add on top of that, the three growth initiatives that I referenced on today's call that launched this summer and into early fall, we have significant confidence in our ability to deliver positive and profitable local case growth to take share and that gives us the confidence in the guide that we put out there. It starts and ends with the colleague population stability, which we have achieved and the tools that we are providing to our colleagues that help them increase their productivity. I'll toss to Kenny if he wants to add anything.

Sure. I agree with Kevin. Three things from me. The first is, we are encouraged by the fact that we continue to see select geographies already hitting our growth expectations driven by SE additions and improved retention as Kevin just mentioned and that's carrying over into Q1 twenty twenty six. That's point number one.

Point number two is, Kevin talked about this, the twelve to eighteen months is really important for us as the SE jumps on their productivity curve. And we're also seeing our retention playbook work across experienced SEs as well, right? So you have your year two, goes to year three, three to four, four to five years as well and that helps on the overall sales pool, which actually drives our new customer accounts. This past quarter, we opened more new account to any other period this year. And Jake, you know, accounts are tomorrow's penetration opportunities.

And then last but not least, we're seeing our service levels go up as well. Bill rates are up, on time delivery is up as well and this is the leading indicator for our future business generation.

Take our next question from Jeffrey Bernstein Please go ahead. Your line is open.

Great. Thank you very much. Just following on the top line trends, encouraged to see the improvement in recent months. I'm just wondering to what you attribute in terms of the broader industry that gives you confidence in sustaining the momentum over the next twelve months? And then just to clarify within Cisco's expectations, again, not looking at the industry, but specific to your momentum. Just wondering if you could share any color in terms of local case volume growth within the 3% to 5% sales. I think you mentioned positive. And maybe thoughts on M and A, whether for yourself or perhaps related to headlines that we've seen recently about consolidation among some of your larger peers. Just hoping to get a little bit more perspective on that. Thank you.

Okay. Good morning, Jeff. I'll start with broad industries. Traffic to restaurants down approximately 1% in the quarter, certainly better than Q3. We believe Q3 was a bit of an anomaly.

That's when the external news was quite negative. Consumer confidence dropped. The conversations about tariffs and the impact on consumer confidence that was happening. In our Q3 calendar Q1, the industry took a pretty significant step back. It's good to see in the most recent quarter, an improvement against that.

We think the anomaly was actually the start to the year and what we just saw as an industry in our Q4 is more reflective of the operating environment. And Kenny said it in his prepared remarks, we're expecting the current conditions to continue for 2026, read down slight traffic to the industry overall for this next fiscal year. And the growth that we will deliver will come from taking share. And we're confident in our ability to do that. As I mentioned a few moments ago, we're not going to repeat the customer loss rate that we experienced in 2025.

We will be lapping those customer losses. We've been doing great with new customer wins over the past three quarters. I've shared that pretty openly on earnings calls. So we will sustain our new customer win rate. We will significantly improve our customer loss rate.

And when we layer on top of that, the Perks two point zero program I mentioned, which is going to significantly improve the service experience that our top customers will benefit from, That's going to drive penetration improvement, that will drive improved customer retention as well. The AI three sixty capability, which is our name internally for the AI empowered CRM is going to be meaningfully helpful. I'll talk more about that. I'm sure as a part of this call. We put all those things together.

We are confident even in a flat to down overall macro that we can grow local, that we will grow it profitably and that will occur in fiscal twenty twenty six. So Kenny, toss to you for additional comments about the guide. Over to Yes, sure.

Absolutely. So in terms of foot traffic, Kevin is right. One thing to put things in perspective though, foot traffic, it's a good proxy as a whole for Cisco, if you think about our business, right, we have two thirds of our business is restaurant and one third of our business is recession resilient categories such as education, healthcare, travel and the like. And even within restaurants, our customer ranges from QSRs to casual dining to fine dining. So let's not forget that 20% of our business is international segment, which serves as a in our view, a strategic counterbalance, right, enhances the resiliency and stability of our overall business.

In terms of the guide itself, Jeff, on the 3% to 5%, let me unpack that a little bit for you. So top line 3% to 5%, which is $84,000,000,000 to $85,000,000,000 Remember on a year on year standpoint, there is a lapping impact here from the divestiture of Mexico that is roughly 50 basis points on a year on year standpoint, right. So and then if you decouple between volume and inflation, inflation is roughly assumed at 2% inflation. Right now, Jeff, we are operating right around that ballpark right now. U.

S. BL this quarter was 2.4 and international was roughly 3.4%. The majority of the spread between U. S. And international was FX driven.

So again, long story short, 2%, it's where we're upping right now and it bodes well for the industry. On volume and M and A contributions, those two combined, you can probably model in 2% to 3% growth and that's where you tie back to the 3% to 5%.

Okay. And then the third part of your question, which was the speculation on industry news. We're not going to speculate on M and A rumors in the industry for Cisco. We're focused on driving profitable growth within our strategic capabilities. What we are very pleased with is that Q4 was better than the entire year.

June was better than Q4. July, that momentum has continued. As we progress into 2026, we've a lapping and accelerated or elevated loss rate last year that will not be repeated. When we layer on top of that condition, the growth initiatives that I just referenced, we have strong confidence in our ability to take share, profitably grow the business and deliver upon the guidance that was just communicated by Kenny and we're positioned therefore to have compounding improvement to the overall financial health of the company. So we have confidence in our ability to succeed in the marketplace.

We'll take our next question from Alex Slagle with Jefferies. Please go ahead. Your line is open.

All right. Thanks. Good morning. A question on international. Just given the recent strength in this business, do you expect the year over year growth momentum we've seen to moderate a bit as you lap this growth?

Maybe you can just kind of call out some of the specific drivers, that give you the visibility for that growth to continue as we roll through the year.

Yes. Good morning, Alex. This is Kevin. We expect the success in our international segment to continue in 2026, not to moderate or slow down. The why is it's the health is coming from all geographies.

It's coming in the top, the middle and on the bottom of the P and L. And I'll just highlight a few of the examples. The success we're having on the top line, which is volume strength, in local, we're driving a 4% plus case growth in local. We expect for that level of performance to continue into 2026 for the following reasons. We're adding sales resource headcount into the street sales side of the business, the local side of the business in major metro.

So Toronto has an opportunity to see increased headcount, boots on the ground, boots on the street, increasing our ability to serve local restaurant customers. We're doing that play in Dublin. We're doing that play in London. We are doing that play in Stockholm. When we do that in international, we're increasing our physical presence on the ground and we are seeing market share capture coming from that.

We've improved our website in each of those countries. We've improved our ability to have relevant pricing in each of those countries. And each of those three vectors is driving volume capture examples like Cisco Your Way are enabling that success. In the middle of the P and L, we've launched strategic sourcing in every country. We did that first in The United States.

We've carried that playbook to each international geography. Food is inherently purchased local, but that capability of strategic sourcing exists and that opportunity exists in every country, and we're expanding our profit margins because of that excellent work done by our merchandising and buying teams. And on the bottom line, deploying enterprise technology, improved warehouse technology, improved routing technology, improved back end software to increase efficiency in businesses that were more manual than Cisco is used to and accustomed to has driven significant bottom line growth, seventh consecutive quarter of double digit profit growth. So Alex, we're really bullish on international and this is just within the countries that we compete within today. Our opportunities are bright in international and we are very bullish on our long term future internationally. Kenny, anything to add?

Yes. So Alex, as we think about the margin profile of this business, there's nothing structural that impedes our ability to achieve the same profit levels in The U. S. There's a lot of upside here. Just think back a few years ago, the margin of the business is roughly 2%.

Since then, we've doubled the margins to 4% now. So that trend will continue. And the last thing I would say is that it's a place that we will continue to invest for growth as part of our working capital strategy And the two capital allocation strategy, the two recent acquisitions, Ready, Stress and Campbell's, sitting in Ireland and GB, they're doing really well, off to a great start and ahead of our own deal model from both a commercial go to market standpoint as well as a cost synergy standpoint.

We'll take the next question from John Heinbockel with Guggenheim. Please go ahead. Your line is open.

Hey. So Kevin, I wanted to drill down right on the sort of the sales force local case growth relationship. So I assume with your commentary that local case growth is maybe this is a wrong assumption, it's positive today or it's crossed into positive territory. What's your current thinking on how you want to grow the sales force, right, versus that seven goal that you had originally? And then what do you think what's the right number?

If the effort is working, what's the right number that local case growth should grow at, in your mind?

Hey, good morning, John. Thanks for the question. I'll start with our expectations of Kali growth for fiscal twenty twenty six. We anticipate adding approximately 4% incremental sales professional headcount in fiscal twenty twenty six. As we look back on fiscal twenty twenty five, one of the reasons the headcount investments that we have already made are not showing up in the outcomes of the year just completed is the excess or excessive colleague turnover that we had, which resulted in an increased customer loss ratio, which was masking the incremental benefit that was coming from the new hires.

It's incredibly important to note that we track every single new hire in a cohort or class that they join with. We're able to model where should they be from a productivity perspective in month three, month six, month nine, month 12. Every one of the hiring classes that we have done, those colleagues are hitting those productivity targets. Kenny has said many times, month 13 matters, it's when they break through to begin to be productive and eclipsing month 18 matters even more because there's a turbocharge of their productivity between month 12 and month 18. For fiscal twenty twenty six, it's very important to do the understanding of the math of increased headcount each and every quarter is hitting that incredibly pivotal twelve to eighteen month period.

And we're not going to be repeating the customer loss rate. Therefore, we will inflect to positive case growth in fiscal twenty twenty six from local and profitable case growth to boot. So Kenny, any additional comments you'd like to make about guidance for 2026?

Yes. So as you think about the headcount, just putting in numbers context. So in 2024, we hired four fifty and 2025, we hired 300. And then as Kevin said, 4% increased in 2026. If you add that altogether, the CAGR of the growth rate of sales headcount is roughly mid single digits.

On the forward, we do believe we will render a return from this investment. That's point number one. Number two, I think we talked about this analogy before, the faucet is turning on right now. In on the forward from a long term stability standpoint, we do expect headcount growth to be in line with volume growth, therefore driving positive leverage on our P and L.

We'll take our next question question from Kelly Bania with BMO Capital. Please go ahead. Your line is open.

Hi, good morning. I was wondering if we could go back to the price agility initiative and what are the financial implications of that initiative? I believe it's intended to drive growth, but is there any sort of trade off between margin and case growth? And you mentioned maybe the desire to learn more about the change management required to support a broader rollout. Wondering if you can elaborate on that.

And is it in your plan for this fiscal year that that does broadly rollout to more regions or does this remain kind of a pilot and regional test?

Kelly, good question. Thank you. It's Kevin. I'll start. So the stated financial objectives would be to improve volume, but to do so profitably.

So maintaining margin percentage, but driving increased volume through the pipe. That's the stated objective. The objective is not to lower margin rate to drive volume. We could do that centrally if that was something that we wanted to do. It's to give that sales colleague the opportunity to be responsive in the spot moment to the needs of the customer.

That sales colleague understands even better than a computer does the emotional items that a customer has within their menu, within their book of business. And if that customer presents themselves with, hey, I think I can do $2 better elsewhere, we need to give that colleague the opportunity to respond in the moment. The change management I'm referring to is the need for that colleague to then be able to do something we call sell around the room, which is I'm going to give you that price that you just asked for, but I know you're buying produce from someone else. I have the best produce program in town. And can we talk about having my FreshPoint colleague join me next week when I visit you to get that product put onto the Cisco truck?

That's the change management. That's the selling skills development that is necessary as a part of giving more decision making authority into the hands of that sales colleague. Kenny always makes the point, the compensation for that colleague will reward them if they do the right things, which is I'm going to make an investment in price, I offset it elsewhere. It will punish them if they make an investment in price and they don't succeed in offsetting that elsewhere. So again, responsibly rolling this out.

Sysco (SYY) Q4 2025 Earnings Call Transcript

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