Sysco (NYSE:SYY) Releases Earnings Results, Hits Estimates

Sysco (NYSE:SYY) posted its earnings results on Tuesday. The company reported $1.19 earnings per share (EPS) for the quarter, meeting analysts’ consensus estimates of $1.19, FiscalAI reports. The company had revenue of $21.74 billion during the quarter, compared to analysts’ expectations of $22.02 billion. Sysco had a net margin of 2.08% and a return on equity of 95.05%. Sysco’s quarterly revenue was up 2.8% compared to the same quarter last year. During the same quarter in the previous year, the company posted $1.15 earnings per share.

Here are the key takeaways from Sysco’s conference call:

• Sysco met Q1 expectations with adjusted EPS of $1.19, up 3.5% year over year, while local case volume rose 2.7% despite soft restaurant traffic, Cyclospora disruption, fuel costs, and U.S. food deflation.
• Gross margin expanded 18 basis points to 18.6%, supported by local volume growth, stronger Sysco Brand penetration, sourcing savings, and effective cost management. International operations delivered 12.2% adjusted operating income growth, extending their streak of double-digit profit growth to 12 quarters.
• Management expects its AI and technology transformation to generate $100 million in FY2027 net cost savings and $500 million by FY2029. Early routing pilots improved pieces per mile by 2%-4%, while AI-powered procurement and the AI360 selling tool are showing encouraging productivity and sales results.
• Sysco remains on track to close its Restaurant Depot transaction by the end of fiscal Q3 after substantially completing responses to the FTC’s second request. The company also completed $16.75 billion of debt and equity financing at an effective debt cost of 5.8%, while highlighting potential procurement, cross-selling, and technology synergies.
• Sysco lowered its expected full-year reported sales growth to the lower end of its prior 6%-7% range because of weaker food inflation, now forecasting approximately 1%-1.5% inflation for the year. Management reaffirmed its 9%-11% adjusted EPS growth outlook, but expects the largest cost-savings benefits and profit acceleration to arrive in the second half.

Sysco Trading Up 4.0%

Shares of NYSE SYY traded up $2.99 during midday trading on Wednesday, hitting $77.10. The stock had a trading volume of 1,629,905 shares, compared to its average volume of 4,005,559. The company’s 50-day simple moving average is $80.30 and its 200 day simple moving average is $80.52. The firm has a market cap of $37.93 billion, a P/E ratio of 21.05, a price-to-earnings-growth ratio of 2.30 and a beta of 0.66. Sysco has a fifty-two week low of $68.19 and a fifty-two week high of $91.85. The company has a debt-to-equity ratio of 4.62, a current ratio of 1.28 and a quick ratio of 0.77.

Sysco Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, October 23rd. Shareholders of record on Friday, October 2nd were given a $0.55 dividend. This represents a $2.20 dividend on an annualized basis and a yield of 2.9%. The ex-dividend date was Friday, October 2nd. Sysco’s dividend payout ratio (DPR) is presently 60.11%.

Key Sysco News

Here are the key news stories impacting Sysco this week:

• Positive Sentiment: Sysco reported adjusted EPS of $1.19, up from $1.15 a year earlier, and reaffirmed its fiscal 2027 adjusted EPS growth outlook of 9%–11%. Local case volume rose 2.7%, while margin gains helped support earnings. Sysco Q1 results
• Positive Sentiment: Management said its AI transformation program is aimed at generating $100 million in savings in fiscal 2027, offering a potential efficiency and margin tailwind if delivered. Sysco: 3 Key Takeaways for Long-Term Investors
• Neutral Sentiment: Sysco named longtime company executive Brandon Sewell its CFO after he served as interim CFO. The appointment provides leadership continuity, though it was not a major change to the operating outlook. Sysco names Brandon Sewell CFO
• Negative Sentiment: Quarterly revenue of $21.74 billion fell short of the $22.02 billion analyst estimate, despite increasing 2.8% year over year. Reports also pointed to softer sales guidance and a cyclosporiasis outbreak that hurt first-quarter sales, adding to investor concerns about near-term growth. Reuters: Outbreak hit Q1 sales
• Negative Sentiment: Sysco’s planned $29.1 billion acquisition has raised concerns about deal-related costs and execution, which may have contributed to the market’s cautious reaction alongside the sales miss. Sysco under pressure on acquisition costs and sales guidance

Insider Activity

In related news, EVP Ronald Phillips sold 7,350 shares of the firm’s stock in a transaction dated Friday, August 21st. The stock was sold at an average price of $83.61, for a total value of $614,533.50. Following the transaction, the executive vice president owned 38,650 shares in the company, valued at $3,231,526.50. This trade represents a 15.98% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 15,525 shares of company stock worth $1,299,736 over the last quarter. Corporate insiders own 0.55% of the company’s stock.

Analyst Upgrades and Downgrades

Several brokerages have issued reports on SYY. Piper Sandler lifted their price objective on Sysco from $77.00 to $84.00 and gave the company a “neutral” rating in a research report on Wednesday, August 5th. JPMorgan Chase & Co. cut their price target on Sysco from $100.00 to $95.00 and set an “overweight” rating for the company in a report on Tuesday, September 29th. Melius Research downgraded shares of Sysco from a “hold” rating to a “sell” rating in a research report on Tuesday, July 7th. Morgan Stanley upped their price target on shares of Sysco from $88.00 to $91.00 and gave the stock an “equal weight” rating in a research report on Thursday, October 15th. Finally, Guggenheim restated a “buy” rating and issued a $90.00 price objective on shares of Sysco in a research report on Wednesday, September 16th. Nine analysts have rated the stock with a Buy rating, six have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $90.42.

Sysco Company Profile

Sysco Corporation is a global foodservice distribution company headquartered in Houston, Texas. It supplies food and related products to restaurants, healthcare and educational institutions, hotels, government facilities, and other foodservice operators.

The company distributes a broad range of products, including fresh and frozen foods, meat and seafood, produce, dairy products, canned and packaged goods, beverages, and specialty food items. Sysco also provides nonfood products such as kitchen and dining supplies, equipment, and cleaning products, along with services intended to help customers manage menus, procurement, and operations.

Founded in 1969, Sysco serves customers primarily across the United States and Canada, as well as in parts of Europe and other international markets.