Company: SYY
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0000096021-25-000157
Chunk: 2

Company: SYSCO CORP
Filing Date: 2025-10-29
Form: 10-Q
Item: Item 2
Chunk 2
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 including price, volume, inflation, customer mix and product mix. We experienced a 0.1% increase in U.S. Foodservice Operations case volume in the first quarter of fiscal 2026, as compared to the first quarter of fiscal 2025. Our volume growth trends were attributable to national case volume increasing 0.7% and local volume decreasing 0.2% in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025. Our volume reflects our broadline and specialty businesses. Beginning in fiscal 2026, we are now including volumes from our specialty meat business for all periods presented. 

We experienced inflation at a rate of 3.4% in the first quarter of fiscal 2026, at the total enterprise level, primarily driven by inflation in the meat and seafood categories. We continue to manage inflation by successfully passing on cost increases to our customers in a timely manner. Gross margin increased 13 basis points in the first quarter of fiscal 2026, as compared to the first quarter of fiscal 2025, primarily due to benefits from our strategic sourcing initiatives.

Operating Expense Trends

Total operating expenses were $3.1 billion in the first quarter of fiscal 2026, a 5.3% increase compared to the first quarter of fiscal 2025. Total adjusted operating expenses were $3.0 billion in the first quarter of fiscal 2026, a 4.3% increase as compared to the first quarter of fiscal 2025. Operating expenses increased primarily due to sales headcount investments, higher incentive compensation, and costs associated with expanded building capacity, including depreciation expense related to new facilities. Adjusted operating expenses were 14.2% of sales during the first quarter of fiscal 2026, which represents a 14-basis point increase as compared to the first quarter of fiscal 2025, as a result of planned investments in higher growth areas of the business with sales headcount, fleet, and building expansions. 

Mergers and Acquisitions

In October 2025, we acquired Fairfax Meadow, a leading specialty meat supplier based in the United Kingdom. This acquisition follows our acquisition of Campbells Prime Meat last fiscal year and positions our team in the United Kingdom to achieve additional growth by leveraging additional specialty meat capabilities geographically. This company’s results will be included within International Foodservice Operations and are not expected to be material to our results of operations.

Strategy

Our purpose is “Connecting the World to Share Food and Care for