Sysco shares fall 5.9% premarket after Q1 sales miss estimates
Sysco shares fell 5.9% premarket. Fiscal Q1 adjusted EPS of $1.19 was in line with the $1.20 consensus estimate compiled by Finnhub, and sales of $21.74 billion fell short of the $22.24 billion estimate.
Key takeaways
- Sysco (SYY) shares fell 5.9% premarket after the company reported fiscal first-quarter adjusted EPS of $1.19 and sales of $21.74 billion, up 2.8%, on Nov. 3. Adjusted EPS was in line with the $1.20 consensus estimate compiled by Finnhub, while sales missed the $22.24 billion estimate. It reaffirmed its fiscal 2027 adjusted EPS growth forecast of 9% to 11%.
Shares fell 5.9% in premarket trading as of 9:17 a.m. ET, from a regular-session close of $81.74.
Sysco (SYY) said on Nov. 3 that adjusted earnings per share rose 3.5% to $1.19 in its fiscal first quarter, in line with the $1.20 consensus estimate compiled by Finnhub. Sales of $21.74 billion fell short of the $22.24 billion estimate.
The results cover the 13 weeks ended Sept. 26, 2026. Sales rose 2.8% from $21.15 billion a year earlier. Net earnings rose 10.5% to $526 million, and diluted earnings per share rose 10.1% to $1.09 on a GAAP basis.
Here's how the company did:
- Adjusted EPS: $1.19 vs. $1.15 a year earlier, in line with $1.20 expected, according to Finnhub
- Revenue: $21.74 billion vs. $21.15 billion a year earlier, below $22.24 billion expected, according to Finnhub
- GAAP diluted EPS: $1.09 vs. $0.99 a year earlier
- Net earnings: $526 million vs. $476 million a year earlier
Fiscal 2027 guidance
The company reaffirmed its fiscal 2027 adjusted EPS growth guidance of 9% to 11%. It also kept its local volume growth assumption of approximately 2.5%.
Full-year sales growth is now expected at the lower end of the company's 6% to 7% range. Chief Financial Officer Brandon Sewell said, "full year sales growth is now expected to be at the lower end of our 6%-7% range, reflecting a lower inflation environment for the industry."
Chief Executive Kevin Hourican said the company remains confident in its net cost savings targets enabled by AI technology, including its expectation for $100 million in savings included in its fiscal 2027 guidance.
Segment results
U.S. Foodservice Operations sales rose 2.4% to $15.14 billion. Local case volume rose 2.7%. Adjusted operating income rose 2.7% to $941 million.
International Foodservice Operations sales rose 5.1% to $4.17 billion, or 6.0% on a constant currency basis. Adjusted operating income rose 12.2% to $165 million.
Costs and charges
Operating income fell 10.4% to $717 million, driven by acquisition costs related to Jetro Restaurant Depot. The company recorded a gain of $234 million in other income on deal contingent rate lock transactions tied to its permanent debt financing for that acquisition.
EBITDA, or earnings before interest, taxes, depreciation and amortization, rose 20.4% to $1.2 billion. Adjusted EBITDA rose 5.4% to $1.1 billion.
Cash and balance sheet
Sysco had a cash balance of $3.2 billion and total liquidity of $5.8 billion at quarter end. Net debt to adjusted EBITDA was approximately 2.4 times. The company returned $264 million to shareholders through dividends during the quarter.
Free cash flow was $230 million. The company said it is preparing for the anticipated closure of the Jetro Restaurant Depot transaction.
Leadership change
The company also named Brandon Sewell Executive Vice President and Chief Financial Officer, effective Nov. 1. Sewell had served as interim Chief Financial Officer since March 2026. Hourican said Sewell had earned the trust and confidence of the company's leadership team, colleagues, board and investors.