Sysco (NYSE:SYY) Announces Quarterly Earnings Results, Meets Estimates

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

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 Down 8.6%

SYY traded down $7.02 during trading on Tuesday, reaching $74.72. 3,148,823 shares of the stock traded hands, compared to its average volume of 3,985,074. The company has a quick ratio of 0.77, a current ratio of 1.28 and a debt-to-equity ratio of 4.62. The stock’s 50-day moving average is $80.49 and its 200 day moving average is $80.54. Sysco has a 12 month low of $68.19 and a 12 month high of $91.85. The stock has a market capitalization of $36.76 billion, a PE ratio of 20.46, a P/E/G ratio of 2.31 and a beta of 0.66.

Sysco Announces Dividend

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

Sysco News Roundup

Here are the key news stories impacting Sysco this week:

• Positive Sentiment: Sysco reported first-quarter adjusted EPS of $1.19, up from $1.15 a year earlier and above the Zacks consensus estimate of $1.17. The result was in line with the broader consensus cited in other reports. Sysco Q1 Earnings Estimates
• Positive Sentiment: Management reiterated its fiscal 2027 adjusted EPS growth outlook of 9% to 11% and maintained its local case volume guidance, providing some reassurance that the company’s full-year targets remain intact. Sysco Q1 Earnings and Outlook
• Neutral Sentiment: Sysco appointed Brandon E. Sewell as executive vice president and chief financial officer, effective November 1. Sewell had served as interim CFO since March and has 12 years of experience at the company, reducing uncertainty around the finance leadership transition. Sysco Names Brandon Sewell CFO
• Negative Sentiment: First-quarter revenue rose 2.8% year over year to $21.74 billion, but fell short of the $22.02 billion analyst estimate. The sales miss suggests softer demand or volume trends and was the primary catalyst for the negative stock reaction despite the EPS performance. Sysco First Quarter 2027 Results

Insider Buying and Selling at Sysco

In other news, EVP Ronald Phillips sold 7,350 shares of the business’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 directly owned 38,650 shares of the company’s stock, valued at $3,231,526.50. The trade was a 15.98% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 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. Over the last three months, insiders sold 15,525 shares of company stock valued at $1,299,736. Company insiders own 0.55% of the company’s stock.

Analyst Upgrades and Downgrades

SYY has been the subject of several recent research reports. UBS Group increased their price target on Sysco from $90.00 to $95.00 and gave the company a “buy” rating in a research note on Wednesday, August 5th. Wall Street Zen downgraded Sysco from a “buy” rating to a “hold” rating in a research report on Saturday, October 24th. Citigroup reiterated a “neutral” rating on shares of Sysco in a report on Monday, October 26th. JPMorgan Chase & Co. reduced their target price on Sysco from $100.00 to $95.00 and set an “overweight” rating on the stock in a report on Tuesday, September 29th. Finally, Weiss Ratings raised shares of Sysco from a “buy (b-)” rating to a “buy (b)” rating in a research report on Thursday, October 15th. Nine investment analysts have rated the stock with a Buy rating, six have given a Hold rating and one has issued a Sell rating to the company’s stock. According to data from 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.