Sysco Now Sees Full-Year Sales Growth At Low End Of 6%-7% Range, Keeps Profit Goal
The food distributor cites lower industry inflation for the sales trim and holds its 9%-11% adjusted EPS growth guidance.
Sysco, the food distributor that supplies restaurants, hospitals, schools and hotels, now expects full-year sales growth at the lower end of its 6%-7% range, reflecting a lower inflation environment for the industry, while it kept its adjusted earnings-per-share growth target of 9%-11%. The company reported the changes with first-quarter results on Tuesday.
Sales up 2.8%, operating income down 10.4%
Sales for the 13 weeks ended September 26 rose 2.8% to $21.7 billion. Net earnings climbed 10.5% to $526 million, or $1.09 a share, and adjusted EPS rose 3.5% to $1.19, which the company said was in line with its own expectations.
Operating income fell 10.4% to $717 million, driven by acquisition costs tied to Jetro Restaurant Depot. Adjusted operating income rose 3.2% to $927 million.
The bottom line got a lift from a $234 million gain on deal-contingent rate lock transactions, which are hedges against interest rate risk on permanent debt issued to finance the Jetro purchase. Sysco excludes that gain from adjusted results. Product cost inflation ran at 0.3% across the enterprise, mostly in meat.
Chief Executive Kevin Hourican said the quarter was delivered "despite continued softness in restaurant foot traffic, higher than expected fuel costs, and lower than expected U.S. food cost inflation."
What Sysco kept, and what it trimmed
Chief Financial Officer Brandon Sewell said the company remains confident in adjusted EPS growth of 9%-11%, built on unchanged local volume growth assumptions of about 2.5%. Guidance includes $100 million of savings from AI technology, with benefits accelerating in the second half, he said.
In the U.S. Foodservice segment, which the company's annual report puts at about 70% of sales, sales rose 2.4% to $15.1 billion and local case volume rose 2.7%. International sales rose 5.1% to $4.2 billion, and its adjusted operating income rose 12.2% to $165 million.
A permanent CFO and a Jetro financing
Sewell, interim CFO since March 2026, was named permanent CFO effective November 1, with a $775,000 base salary, according to an 8-K filed Tuesday.
Sysco ended the quarter with $3.2 billion in cash and $5.8 billion in total liquidity. It took in $1.0 billion from common stock issuances, part of $1.15 billion of net cash from financing as it funded the pending Jetro purchase. Operating cash flow was $278 million, and the company paid $264 million in dividends.
Sysco hosts its earnings call at 10:00 a.m. Eastern on Tuesday, with preparing for the anticipated closing of the Jetro Restaurant Depot deal among its three stated priorities for the year.
Sources
- 8-K Filing — SYSCO CORP (SYY) — SEC EDGAR
- Exhibit syy2027q1pressrelease.htm — SYSCO CORP 8-K exhibit — SEC EDGAR
- Exhibit ex992_syycfoprx1103261405.htm — SYSCO CORP 8-K exhibit — SEC EDGAR
- Sysco (NYSE:SYY) misses Q3 CY2026 sales expectations, stock drops — Yahoo Finance
- Sysco Cuts Sales Outlook as Soft Restaurant Traffic, Fuel Costs Weigh on 1Q Results — MarketWatch
- Sysco: Fiscal Q1 Earnings Snapshot — Associated Press
- Sysco Reports First Quarter 2027 Results; Reiterates FY27 — globenewswire.com
