REVENUE RECOGNITION
The Company recognizes revenue when the performance obligation is satisfied, which occurs when a customer obtains control of the promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these goods or services. The Company generates substantially all of its revenue from the distribution and sale of food and food-related products and recognizes revenue when title and risk of loss passes and the customer accepts the goods, which occurs at delivery. Customer sales incentives such as volume-based rebates or discounts are treated as a reduction of revenue at the time the revenue is recognized. Sales taxes invoiced to customers and remitted to governmental authorities are excluded from net sales. Shipping and handling costs are treated as fulfillment costs and included in distribution, selling and administrative costs.
The Company did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of December 27, 2025 or December 28, 2024.
The Company has certain customer contracts under which incentives are paid upfront to its customers. These payments have become industry practice and are not related to financing any customer’s business, nor are these costs associated with any distinct good or service to be received from any customer. These incentive payments are capitalized in prepaid expenses and other assets and amortized as a reduction of revenue over the life of the contract or as goods or services are transferred to the customer. The Company’s contract assets for these upfront payments were $63 million and $43 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of December 27, 2025 and December 28, 2024, respectively, and $74 million and $50 million included in other assets in the Company’s Consolidated Balance Sheets as of December 27, 2025 and December 28, 2024, respectively.
The following table presents the disaggregation of revenue for each of the Company’s principal product categories for the last three fiscal years:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Meats and seafood | $ | 13,974 | | | $ | 12,930 | | | $ | 11,953 | |
| Dry grocery products | 6,685 | | | 6,624 | | | 6,407 | |
| Refrigerated and frozen grocery products | 6,635 | | | 6,423 | | | 6,053 | |
| Dairy | 4,214 | | | 4,036 | | | 3,727 | |
| Equipment, disposables and supplies | 3,631 | | | 3,567 | | | 3,571 | |
| Beverage products | 2,338 | | | 2,161 | | | 1,971 | |
| Produce | 1,947 | | | 2,136 | | | 1,915 | |
| Total Net sales | $ | 39,424 | | | $ | 37,877 | | | $ | 35,597 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.