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Sysco (SYY) Down 2.9% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Sysco (SYY - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Sysco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
SYY Q4 Earnings Beat Estimates on Volume and Cost Gains
Sysco's fourth-quarter fiscal 2026 top and bottom lines increased year over year and came ahead of the respective Zacks Consensus Estimate. The company ended fiscal 2026 with positive case growth across its local, national and international businesses. Supply-chain productivity, improved Sysco Brand penetration and cost-saving actions supported profit growth, while investments in sales capacity continued.
Adjusted earnings were $1.53 per share, up 3.4% year over year, outpacing the Zacks Consensus Estimate of $1.51. Sales grew 4.7% to $22,124 million and beat the consensus mark of $21,921 million.
Sysco’s top line benefited from positive case growth across local and national customers in the United States, along with continued international gains. U.S. Foodservice volume increased 2.5%, while local volume advanced 2.6%.
Comparable sales on a constant-currency basis were $22,077 million, up 4.4% year over year. Foreign exchange added $47 million to total reported sales, including a $46-million benefit to International Foodservice Operations.
Gross profit increased 3.7% year over year to $4,134 million. Growth reflected higher volumes, improved mix from increased Sysco Brand penetration, strategic sourcing efficiencies and effective management of product costs. Product cost inflation was 2.8% at the total enterprise level, primarily reflecting higher costs in meat and fresh produce. Adjusted operating expenses increased 3.6% to $2,994 million as sales headcount and capacity investments were partly offset by cost-out efficiencies.
Adjusted operating income rose 4.1% to $1,140 million. Adjusted operating margin was 5.15%, down three basis points from the prior-year quarter as adjusted expense growth slightly outpaced the increase in gross profit. Adjusted EBITDA advanced 4.7% to $1,346 million, reflecting the benefit of operating productivity and continued business growth.
Sysco’s Segments Deliver Broad-Based Sales Growth
U.S. Foodservice Operations sales increased 4.4% to $15,406 million. Total case volume rose 2.5%, while local case volume advanced 2.6%. Gross profit grew 3% to $2,958 million, though gross margin contracted 26 basis points to 19.20%. Adjusted operating income edged up 0.1% to $1,059 million.
International Foodservice Operations sales climbed 6.7% to $4,191 million. On a constant-currency basis, sales increased 5.6% to $4,145 million. Gross margin expanded 12 basis points to 21.69%, while adjusted operating income jumped 15.7% to $228 million. Constant-currency adjusted operating income rose 14.7%.
SYGMA sales increased 3.1% to $2,231 million. Gross profit rose 2.9% to $175 million, while operating income advanced 11.1% to $30 million despite a two-basis-point decline in gross margin.
The Other segment generated sales of $296 million, up 2.8%. Gross margin expanded 273 basis points to 26.69%, while adjusted operating income increased 30% to $13 million.
SYY’s Cash Flow Supports Capital Returns
For fiscal 2026, cash flow from operations increased 5.1% to $2,638 million. Free cash flow rose 16.3% to $2,114 million, aided by lower additions to plant and equipment compared with the prior year. Sysco returned $1,237 million to shareholders through $1,037 million in dividends and $200 million in share repurchases. The company ended fiscal 2026 with cash and cash equivalents of $1,786 million and total liquidity of $4,800 million.
Sysco Issues Fiscal 2027 Growth Guidance
Management introduced fiscal 2027 guidance, calling for sales growth of 6-7% and adjusted earnings growth of 9-11% on a 53-week basis. The outlook reflects expectations for continued positive momentum and further productivity gains. The guidance includes approximately $100 million in cost savings from AI-enabled inventory management, improved forecasting accuracy, coding efficiency, routing optimization and back-office automation. Sysco expects these initiatives and previously announced cost actions to support profit growth and operating-margin expansion.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Sysco has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Sysco has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Sysco is part of the Zacks Food - Miscellaneous industry. Over the past month, Chefs' Warehouse (CHEF - Free Report) , a stock from the same industry, has gained 4.5%. The company reported its results for the quarter ended June 2026 more than a month ago.
Chefs' Warehouse reported revenues of $1.17 billion in the last reported quarter, representing a year-over-year change of +12.9%. EPS of $0.78 for the same period compares with $0.52 a year ago.
For the current quarter, Chefs' Warehouse is expected to post earnings of $0.61 per share, indicating a change of +22% from the year-ago quarter. The Zacks Consensus Estimate has changed +11.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Chefs' Warehouse. Also, the stock has a VGM Score of B.
View the Zacks #1 Rank List
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Sysco (SYY) Down 2.9% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Sysco (SYY - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Sysco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
SYY Q4 Earnings Beat Estimates on Volume and Cost Gains
Sysco's fourth-quarter fiscal 2026 top and bottom lines increased year over year and came ahead of the respective Zacks Consensus Estimate. The company ended fiscal 2026 with positive case growth across its local, national and international businesses. Supply-chain productivity, improved Sysco Brand penetration and cost-saving actions supported profit growth, while investments in sales capacity continued.
Adjusted earnings were $1.53 per share, up 3.4% year over year, outpacing the Zacks Consensus Estimate of $1.51. Sales grew 4.7% to $22,124 million and beat the consensus mark of $21,921 million.
Sysco’s top line benefited from positive case growth across local and national customers in the United States, along with continued international gains. U.S. Foodservice volume increased 2.5%, while local volume advanced 2.6%.
Comparable sales on a constant-currency basis were $22,077 million, up 4.4% year over year. Foreign exchange added $47 million to total reported sales, including a $46-million benefit to International Foodservice Operations.
Gross profit increased 3.7% year over year to $4,134 million. Growth reflected higher volumes, improved mix from increased Sysco Brand penetration, strategic sourcing efficiencies and effective management of product costs. Product cost inflation was 2.8% at the total enterprise level, primarily reflecting higher costs in meat and fresh produce. Adjusted operating expenses increased 3.6% to $2,994 million as sales headcount and capacity investments were partly offset by cost-out efficiencies.
Adjusted operating income rose 4.1% to $1,140 million. Adjusted operating margin was 5.15%, down three basis points from the prior-year quarter as adjusted expense growth slightly outpaced the increase in gross profit. Adjusted EBITDA advanced 4.7% to $1,346 million, reflecting the benefit of operating productivity and continued business growth.
Sysco’s Segments Deliver Broad-Based Sales Growth
U.S. Foodservice Operations sales increased 4.4% to $15,406 million. Total case volume rose 2.5%, while local case volume advanced 2.6%. Gross profit grew 3% to $2,958 million, though gross margin contracted 26 basis points to 19.20%. Adjusted operating income edged up 0.1% to $1,059 million.
International Foodservice Operations sales climbed 6.7% to $4,191 million. On a constant-currency basis, sales increased 5.6% to $4,145 million. Gross margin expanded 12 basis points to 21.69%, while adjusted operating income jumped 15.7% to $228 million. Constant-currency adjusted operating income rose 14.7%.
SYGMA sales increased 3.1% to $2,231 million. Gross profit rose 2.9% to $175 million, while operating income advanced 11.1% to $30 million despite a two-basis-point decline in gross margin.
The Other segment generated sales of $296 million, up 2.8%. Gross margin expanded 273 basis points to 26.69%, while adjusted operating income increased 30% to $13 million.
SYY’s Cash Flow Supports Capital Returns
For fiscal 2026, cash flow from operations increased 5.1% to $2,638 million. Free cash flow rose 16.3% to $2,114 million, aided by lower additions to plant and equipment compared with the prior year. Sysco returned $1,237 million to shareholders through $1,037 million in dividends and $200 million in share repurchases. The company ended fiscal 2026 with cash and cash equivalents of $1,786 million and total liquidity of $4,800 million.
Sysco Issues Fiscal 2027 Growth Guidance
Management introduced fiscal 2027 guidance, calling for sales growth of 6-7% and adjusted earnings growth of 9-11% on a 53-week basis. The outlook reflects expectations for continued positive momentum and further productivity gains. The guidance includes approximately $100 million in cost savings from AI-enabled inventory management, improved forecasting accuracy, coding efficiency, routing optimization and back-office automation. Sysco expects these initiatives and previously announced cost actions to support profit growth and operating-margin expansion.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Sysco has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Sysco has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Sysco is part of the Zacks Food - Miscellaneous industry. Over the past month, Chefs' Warehouse (CHEF - Free Report) , a stock from the same industry, has gained 4.5%. The company reported its results for the quarter ended June 2026 more than a month ago.
Chefs' Warehouse reported revenues of $1.17 billion in the last reported quarter, representing a year-over-year change of +12.9%. EPS of $0.78 for the same period compares with $0.52 a year ago.
For the current quarter, Chefs' Warehouse is expected to post earnings of $0.61 per share, indicating a change of +22% from the year-ago quarter. The Zacks Consensus Estimate has changed +11.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Chefs' Warehouse. Also, the stock has a VGM Score of B.