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Are Sysco's U.S. Foodservice Operations Gaining Executional Traction?
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Key Takeaways
Sysco's U.S. Foodservice sales rose 2.9% to $14.8B in Q1, driven by improved execution.
SYY's U.S. Broadline local volumes grew 0.4%, a 130-bps sequential improvement versus Q4.
Sysco enhanced service levels and expects U.S. local volume to improve by at least 100 bps in Q2.
Sysco Corporation’s (SYY - Free Report) U.S. Foodservice business showed improving execution in the first quarter of fiscal 2026, reflecting steadier operational performance and sequential progress in local volume trends. While overall demand conditions across food-away-from-home remained mixed, internal execution was the key driver behind improved results during the quarter.
U.S. Foodservice sales rose 2.9% year over year to $14.8 billion. Total U.S. Foodservice case volume increased 0.1%, marking a sequential improvement from the fourth quarter. Local case volume within U.S. Foodservice declined 0.2%, though this included an intentional business exit within the FreshPoint business, which negatively impacted local volumes by more than 50 basis points. Excluding this impact, U.S. Foodservice local volumes increased 0.3% during the quarter.
Within local performance, Sysco’s U.S. Broadline local business turned positive, delivering volume growth of 0.4%. This represented a 130-basis-point sequential improvement versus the prior quarter and significantly outpaced the 60-basis-point improvement in industry restaurant traffic during the period, as measured by Black Box.
Execution improvements were also evident in operating consistency. Sysco witnessed meaningful gains in customer service levels, including improvements in on-time and in-full deliveries. Supply-chain performance strengthened during the quarter, supported by better colleague productivity, reduced product shrink and improved safety outcomes across warehouses and transportation operations.
Momentum in U.S. Foodservice execution carried into the early part of the second quarter. On its first-quarter earnings call, management stated that October results showed continued progress and indicated expectations for total U.S. local volume to improve by at least 100 basis points more in the second quarter compared with the first.
Sysco’s first-quarter results underscore that its U.S. Foodservice business is benefiting from tighter execution, improved service reliability and sequential volume stabilization, even as broader industry demand remains uneven.
Image Source: Zacks Investment Research
SYY, which currently carries a Zacks Rank #3 (Hold), has seen its shares rise 0.5% in the past year against the industry’s decline of 15.7%.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures. MAMA delivered a trailing four-quarter earnings surprise of 133.3%, on average.
United Natural Foods, Inc. (UNFI - Free Report) engages in the distribution of natural, organic, specialty, produce, and conventional grocery and non-food products. It currently sports a Zacks Rank #1. United Natural Foods delivered a trailing four-quarter earnings surprise of 52.1%, on average.
The Zacks Consensus Estimate for United Natural Foods’ current fiscal-year sales and earnings implies growth of 1% and 187.3%, respectively, from the year-ago figures.
McCormick & Company, Incorporated (MKC - Free Report) manufactures, markets, and distributes spices, seasoning mixes, condiments and other flavorful products to the food industry. It carries a Zacks Rank #2 (Buy) at present. MKC delivered a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings indicates growth of 1.6% and 2.4%, respectively, from the year-ago figures.
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Are Sysco's U.S. Foodservice Operations Gaining Executional Traction?
Key Takeaways
Sysco Corporation’s (SYY - Free Report) U.S. Foodservice business showed improving execution in the first quarter of fiscal 2026, reflecting steadier operational performance and sequential progress in local volume trends. While overall demand conditions across food-away-from-home remained mixed, internal execution was the key driver behind improved results during the quarter.
U.S. Foodservice sales rose 2.9% year over year to $14.8 billion. Total U.S. Foodservice case volume increased 0.1%, marking a sequential improvement from the fourth quarter. Local case volume within U.S. Foodservice declined 0.2%, though this included an intentional business exit within the FreshPoint business, which negatively impacted local volumes by more than 50 basis points. Excluding this impact, U.S. Foodservice local volumes increased 0.3% during the quarter.
Within local performance, Sysco’s U.S. Broadline local business turned positive, delivering volume growth of 0.4%. This represented a 130-basis-point sequential improvement versus the prior quarter and significantly outpaced the 60-basis-point improvement in industry restaurant traffic during the period, as measured by Black Box.
Execution improvements were also evident in operating consistency. Sysco witnessed meaningful gains in customer service levels, including improvements in on-time and in-full deliveries. Supply-chain performance strengthened during the quarter, supported by better colleague productivity, reduced product shrink and improved safety outcomes across warehouses and transportation operations.
Momentum in U.S. Foodservice execution carried into the early part of the second quarter. On its first-quarter earnings call, management stated that October results showed continued progress and indicated expectations for total U.S. local volume to improve by at least 100 basis points more in the second quarter compared with the first.
Sysco’s first-quarter results underscore that its U.S. Foodservice business is benefiting from tighter execution, improved service reliability and sequential volume stabilization, even as broader industry demand remains uneven.
Image Source: Zacks Investment Research
SYY, which currently carries a Zacks Rank #3 (Hold), has seen its shares rise 0.5% in the past year against the industry’s decline of 15.7%.
3 Solid Consumer Staple Stocks
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures. MAMA delivered a trailing four-quarter earnings surprise of 133.3%, on average.
United Natural Foods, Inc. (UNFI - Free Report) engages in the distribution of natural, organic, specialty, produce, and conventional grocery and non-food products. It currently sports a Zacks Rank #1. United Natural Foods delivered a trailing four-quarter earnings surprise of 52.1%, on average.
The Zacks Consensus Estimate for United Natural Foods’ current fiscal-year sales and earnings implies growth of 1% and 187.3%, respectively, from the year-ago figures.
McCormick & Company, Incorporated (MKC - Free Report) manufactures, markets, and distributes spices, seasoning mixes, condiments and other flavorful products to the food industry. It carries a Zacks Rank #2 (Buy) at present. MKC delivered a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings indicates growth of 1.6% and 2.4%, respectively, from the year-ago figures.