Sysco Corporation (SYY) Earnings & Analysis

Latest quarter

Sysco reported Q4 FY2026 revenue of $22.1 billion, compared with the consensus of $21.9 billion, and adjusted EPS of $1.53, compared with the consensus of $1.51. The company reported revenue growth of 4.67% from Q4 FY2025, while diluted EPS rose 4.55% to $1.15.

Sysco said positive case growth across its local, national and international businesses supported the quarter, with Q4 revenue also reflecting inflation. The company reported gross margin of 18.7%, down −0.2 percentage points from Q4 FY2025, which it attributed to the comparison with prior strategic-sourcing benefits and increased fuel costs. Sysco reported operating margin of 4.45%, up 0.3 percentage points, and free cash flow of $981.0 million, up 13.5% from a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Kevin Hourican said U.S. Foodservice local case volume grew 2.6% in Q4, with June the strongest month of the quarter on one- and two-year bases. He said national case volume also grew 2.6%, led by healthcare, travel and hospitality, and foodservice management, while national restaurants faced industry-wide softness. Hourican said Sysco expects positive national-contract case-volume growth in FY2027 despite the foot-traffic environment.

Hourican said Q4 local customer growth reflected improved sales-colleague retention and productivity, targeted growth initiatives, new-customer wins, lower customer losses and greater sales to existing customers. He said Sysco brand mix in the local business rose 30 basis points to 46.4%, and the company expects brand-mix penetration to be positive in FY2027. He also said Sysco was making pricing decisions to remain competitive when inbound fuel costs affected product costs.

Brandon Sewell said gross profit grew 3.7% and adjusted operating profit grew 4.1% in Q4, while fuel costs and the comparison with strategic-sourcing benefits in Q4 FY2025 affected gross-margin comparability. Sewell said Sysco’s FY2027 plan incorporates the fuel-cost conditions seen in Q4 and that the company expects to expand gross-profit margins in the coming year.

In response to questions about the cost program, Sewell said the $100.0 million of FY2027 net savings is net of investment, begins toward the end of Q1 and is weighted toward the second half. Hourican said projects include routing-software upgrades, inventory forecasting, indirect-procurement tools, coding technology and contract-management tools; he said the company did not quantify individual project savings beyond the stated program total and run-rate figure. Hourican said a one-day improvement in inventory or working capital could release $250.0 million of cash for deleveraging.

Hourican said the planned Restaurant Depot acquisition remained expected to close by Q3 FY2027 after a second request from the FTC. He said Sysco plans $250.0 million of procurement cost synergies and expects the combined company’s EBITDA margins to expand by more than 140 basis points.

Guidance

Sysco introduced FY2027 guidance for reported net sales growth of 6.00% to 7.00%, adjusted EPS of $5.02 to $5.12, and U.S. Foodservice local case growth of approximately 2.50%. Brandon Sewell said the outlook covers Sysco’s standalone core business and includes the 53rd week. The company also guided for Q1 FY2027 adjusted EPS of $1.18 to $1.20, $100.0 million in net cost savings, capital expenditures of approximately $720.0 million, and approximately $1.0 billion in dividends.