Sysco Q4 Earnings Call Highlights

Sysco exceeded its fiscal 2026 expectations: Fourth-quarter revenue rose 4.7% to more than $22 billion, while adjusted EPS reached $1.53 and full-year adjusted EPS totaled $4.61. U.S. local and national case volumes each increased 2.6%, supported by stronger customer growth and productivity initiatives. Management issued a positive fiscal 2027 outlook: Sysco expects 6%–7% sales growth, 2.5% U.S. local case-volume growth and 9%–11% adjusted EPS growth to approximately $5.02–$5.12. The forecast includes a 53rd week and about $100 million in in-year cost savings from efficiency and AI-enabled projects. The Restaurant Depot acquisition remains targeted for fiscal Q3 2027: Sysco expects the deal to generate $250 million in cost synergies and expand Restaurant Depot into more than 125 additional geographies. The company is preparing to preserve cash and accelerate debt reduction following the transaction. Sysco NYSE: SYY reported fourth-quarter fiscal 2026 results that exceeded its prior expectations for adjusted earnings per share and U.S. foodservice volumes, citing accelerating local customer growth, supply-chain productivity gains and early benefits from efficiency initiatives. Chief Executive Officer Kevin Hourican said the company generated more than $22 billion in quarterly revenue, up 4.7% from the prior-year period, while adjusted earnings per share reached $1.53. For the full fiscal year, Sysco reported adjusted EPS of $4.61, above its previously provided guidance range. “Our business momentum accelerated on a two-year stack basis,” Hourican said, adding that the company expects that momentum to continue into fiscal 2027. Local, National and International Volumes Rise Sysco’s U.S. Foodservice, or USFS, local case volumes increased 2.6% in the fourth quarter. The company said local case growth improved 130 basis points sequentially on a two-year stacked basis, with June representing the strongest month of the quarter on both a one- and two-year basis. Local case growth was 0.5% in the first half of fiscal 2026 and 2.9% in the second half, according to Hourican. He attributed the improvement to better sales-colleague retention and productivity, as well as targeted growth programs including Sysco Your Way, Perks 2.0 and the company’s AI 360 sales tool. Sysco said AI 360 is intended to identify selling opportunities, including opportunities to convert customers to Sysco Brand products. The company’s independent customer business grew faster than the overall industry as it exited the fiscal year, Hourican said. Sysco Brand mix in the local business rose 30 basis points year over year to 46.4% in the fourth quarter. Sales of the company’s value-tier items grew four times faster than its overall business, which Hourican said represented new cases from customers previously purchasing comparable products from competitors. National contract case volume also rose 2.6%, supported by growth in healthcare, travel and hospitality, and foodservice management. That growth was partly offset by industrywide softness in national restaurant traffic. Sysco said it expects positive national contract volume growth in fiscal 2027, despite continued pressure on restaurant foot traffic. International local case volume grew 4.5%, while international sales increased 6.7%, gross profit rose 7.3% and adjusted operating income increased 15.7%. The quarter marked Sysco’s 11th consecutive quarter of double-digit adjusted operating-income growth in its international segment.