Core Insights - Sysco Corporation reported strong second-quarter fiscal 2026 earnings, with adjusted earnings per share of 99 cents, surpassing the analyst consensus estimate of 98 cents [1] - Quarterly sales reached $20.762 billion, closely aligning with the expected $20.767 billion, reflecting a 3.0% year-over-year increase [1] Financial Performance - The company achieved its third consecutive quarter of sequentially improving local case growth, with USFS local case volume showing a positive growth of 1.2% in the quarter [2] - Sysco expects fiscal 2026 adjusted EPS growth to be at the high end of its previously provided guidance range of $4.50-$4.60, consistent with its long-term financial targets [2] Adjusted EPS Outlook - Sysco's CFO announced an increase in the full-year adjusted EPS outlook to the high end of the prior range, despite facing a headwind of approximately $100 million, or $0.16 per diluted share, from lower incentive compensation in fiscal 2025 [3] - Sysco shares closed at $83.92 following the earnings announcement [3] Analyst Ratings and Price Targets - Barclays analyst Jeffrey Bernstein maintained an Overweight rating on Sysco and raised the price target from $88 to $92 [4] - Wells Fargo analyst Edward Kelly also maintained an Overweight rating and increased the price target from $88 to $92 [4] - Piper Sandler analyst Brian Mullan maintained a Neutral rating and raised the price target from $80 to $83 [4]

Core Viewpoint - Sysco Corporation reported strong second-quarter fiscal 2026 earnings, exceeding analyst expectations for adjusted earnings per share and achieving a notable year-over-year sales increase [1][2]. Financial Performance - The company reported adjusted earnings per share of 99 cents, surpassing the analyst consensus estimate of 98 cents [1]. - Quarterly sales reached $20.762 billion, closely aligning with the expected $20.767 billion, reflecting a 3.0% year-over-year growth [1]. Growth Indicators - Sysco experienced its third consecutive quarter of improving local case growth, with USFS local case volume showing a positive growth of 1.2% in the quarter [2]. - The company anticipates fiscal 2026 adjusted EPS growth to be at the high end of its previously provided guidance range of $4.50-$4.60, consistent with long-term financial targets [2]. Adjusted EPS Outlook - Sysco's CFO indicated an increase in the full-year adjusted EPS outlook to the high end of the prior range, despite facing a $100 million headwind from lower incentive compensation in fiscal 2025, equating to $0.16 per diluted share [3]. Analyst Ratings and Price Targets - Barclays and Wells Fargo analysts maintained an Overweight rating on Sysco, raising their price targets from $88 to $92 [4]. - Piper Sandler maintained a Neutral rating while increasing the price target from $80 to $83 [4].

Core Insights - Sysco Corporation is a leading player in the foodservice distribution industry, providing a wide range of food and related products to various sectors including restaurants, healthcare, and educational facilities [1] - The company reported earnings per share (EPS) of $0.99, a 6.5% increase from the previous year, surpassing estimates [2][6] - Sysco's revenue for the quarter was $20.76 billion, reflecting a year-over-year increase from $20.15 billion, driven by international market growth and positive local case growth in U.S. Foodservice operations [3][6] - The company raised its fiscal year 2026 earnings outlook, indicating confidence in its strategic growth initiatives [4][6] Financial Performance - Sysco's EPS of $0.99 exceeded the estimated $0.97 and the adjusted EPS surpassed the Zacks Consensus Estimate of $0.98 [2] - The revenue of $20.76 billion was slightly above estimates but fell short of the Zacks Consensus Estimate by 0.2% [3] - The company has a price-to-earnings (P/E) ratio of approximately 22.15 and a price-to-sales ratio of about 0.49, indicating favorable market valuation [5] Strategic Outlook - Despite challenges from incentive compensation, Sysco's leadership raised its earnings outlook for fiscal year 2026, expecting EPS to be at the high end of its guidance [4] - The company's strategic directions were likely discussed during its Q2 2026 earnings call, providing insights into its competitive positioning and future business strategies [4]

Financial Performance - Net earnings for the 13-week period ended December 27, 2025, were $389 million, compared to $406 million for the same period in 2024, representing a decrease of approximately 4.2%[55] - Basic earnings per share for the 13-week period ended December 27, 2025, were $0.81, down from $0.83 in the prior year, reflecting a decline of 2.4%[55] - Comprehensive income for the second quarter of fiscal 2026 was $430 million, significantly higher than $176 million for the same quarter in fiscal 2025, indicating an increase of 143.2%[56] - The total comprehensive income for the first 26 weeks of fiscal 2026 was $876 million, compared to $839 million for the same period in fiscal 2025, showing a growth of 4.4%[56] - Total sales for the 13-week period ended December 27, 2025, reached $20,762 million, an increase from $20,151 million in the same period of 2024, representing a growth of 3.0%[79] - Total segment operating income for the 13-week period ended December 27, 2025, was $964 million, compared to $952 million for the same period in 2024, reflecting a 1.3% increase[79] - Total operating income for the 26-week period ended December 27, 2025, was $1,493 million, a decrease from $1,519 million in the same period of 2024, representing a decline of 1.7%[80] Shareholder Information - The weighted-average diluted shares outstanding for the 13-week period ended December 27, 2025, were 480,662,627, compared to 492,803,849 for the same period in 2024, a decrease of approximately 2.4%[55] - Approximately 3,503,000 securities were excluded from the diluted earnings per share calculation for the second quarter of fiscal 2026 due to anti-dilutive effects[55] - Sysco granted options to purchase 724,780 shares with a weighted average grant-date fair value of $19.53 during the first 26 weeks of fiscal 2026[64] - A total of 456,430 performance share units (PSUs) were granted, with a weighted average grant-date fair value of $86.23[65] - Sysco recognized share-based compensation costs of $64 million for the first 26 weeks of fiscal 2026, compared to $60 million for the same period in fiscal 2025[68] - As of December 27, 2025, there was $188 million of unrecognized compensation cost related to share-based compensation arrangements, expected to be recognized over 2.00 years[68] Income and Expenses - Cost of sales for the 13-week period ended December 27, 2025, was $16,981 million, compared to $16,509 million in 2024, indicating an increase of 2.9%[79] - Interest expense for the 13-week period ended December 27, 2025, was $173 million, compared to $160 million in the same period of 2024, indicating an increase of 8.1%[79] - Global Support Center expenses for the 13-week period ended December 27, 2025, were $272 million, up from $240 million in 2024, reflecting a rise of 13.3%[79] - Earnings before income taxes for the 13-week period ended December 27, 2025, were $510 million, compared to $533 million in the same period of 2024, showing a decrease of 4.3%[79] Comprehensive Income and Adjustments - The foreign currency translation adjustment for the 13-week period ended December 27, 2025, resulted in an income of $53 million, contrasting with a loss of $257 million for the same period in 2024[58] - The total other comprehensive income (loss) for the 13-week period ended December 27, 2025, was $36 million, compared to a loss of $230 million for the same period in 2024[59] - The change in cash flow hedges for the 13-week period ended December 27, 2025, resulted in a loss of $15 million before tax, with a net effect of $11 million[58] - As of December 27, 2025, the total accumulated other comprehensive loss was $1,088 million, a decrease from $1,129 million as of September 27, 2025[61] Taxation and Benefits - The effective tax rate for the first 26 weeks of fiscal 2026 was 22.1%, higher than the statutory rate of 21.0% due to state income taxes and other factors[69] - Sysco purchased approximately $200 million of Transferable Tax Credits to apply against fiscal 2026 federal income taxes[73] - The gross amount of unrecognized tax benefits as of December 27, 2025, was $68 million, with related accrued interest of $19 million[71] - The balance of pension and other postretirement benefits as of December 27, 2025, was $(132) million[62] - The balance of marketable securities as of December 27, 2025, was $(903) million[62] Capital and Assets - Capital expenditures for the 26-week period ended December 27, 2025, totaled $300 million, down from $333 million in 2024, reflecting a decrease of 9.9%[81] - Total assets as of December 27, 2025, amounted to $27,181 million, an increase from $26,774 million as of June 28, 2025, representing a growth of 1.5%[82]

Investors applauded the foodservice leader's efforts to mitigate inflation.Shares of Sysco (SYY +10.96%) popped on Tuesday after the food distributor said its full-year profits would come in near the top of its forecast.By the close of trading, Sysco's stock price was up more than 10%. Solid performance in a challenging economic environmentSysco's sales rose 3% year over year to $20.8 billion in the quarter ended Dec. 27. The food giant's gross profit, in turn, grew 3.9% to $3.8 billion, as its gross margin ...

Core Viewpoint - Cisco, a leading food service distributor in North America, has reported strong earnings, leading to a significant increase in its stock price, marking its best performance in over five years [1][4]. Company Performance - Cisco's adjusted earnings profit was 99 cents, beating estimates by one cent and reflecting a 6.5% increase year-over-year from 93 cents [4]. - Sales reached approximately $20.76 billion, which, while $14 million below consensus estimates, still represented a 3% year-over-year growth [5]. - The company has been on an acquisition spree, including the purchase of Ginsburg Foods, which is expected to enhance gross margins going forward [5]. Market Position and Strategy - Cisco services a diverse range of clients, including restaurants, hotels, hospitals, and schools, and is expanding its offerings with its Commerce 360 software to enhance digital infrastructure [3]. - The company is experiencing local volume growth of 1.2%, indicating pricing power despite a modest increase in sales [6]. - Cisco's net income margins are currently at 2.25%, which is low compared to other businesses but acceptable given its high volume [6]. Financial Metrics - Cisco's gross margin has expanded by 25 basis points, contributing to a better margin profile, with net income margins higher by 50 basis points compared to five-year averages [7]. - The stock is approaching new 52-week and five-year highs, supported by a dividend yield of approximately 2.9%, with 47% of earnings paid out as dividends [8][14]. Industry Context - The food distribution sector, including companies like Walmart and Costco, is performing well amid inflation, contrasting with the struggles faced by food brands like General Mills and Conagra [12]. - Cisco's brand-agnostic approach allows it to thrive in the wholesale distribution network, which is currently outperforming other segments of the food industry [13].

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Core Insights - Sysco Corporation (SYY) reported strong second-quarter fiscal 2026 results, with both revenue and earnings increasing year over year, surpassing the Zacks Consensus Estimate, driven by improving volume trends and margin expansion [1][9] Financial Performance - Adjusted earnings per share were 99 cents, exceeding the Zacks Consensus Estimate of 98 cents, marking a 6.5% increase year over year [2] - Total sales reached $20.8 billion, a 3% year-over-year increase, nearly matching the Zacks Consensus Estimate of $20.81 billion, with foreign exchange movements contributing 0.7% to sales growth [3] - Gross profit rose 3.9% to $3.8 billion, with gross margin improving by 15 basis points to 18.3%, driven by pricing actions and sourcing initiatives [4] - Operating expenses increased by 5.5% year over year to $3.1 billion, leading to a 2.8% decline in operating income to $692 million, while adjusted operating income increased by 3.1% to $807 million [5] Segment Performance - U.S. Foodservice Operations saw sales increase by 2.4% year over year to $14.4 billion, with local case volume improving by 1.2% [6] - International Foodservice Operations reported a 7.3% year-over-year sales increase to $4 billion, with adjusted operating income surging 25.6% to $162 million [7][8] - The SYGMA segment's sales edged up 0.5% year over year to $2.1 billion, with operating income improving by 10.5% [8] - The Other segment experienced a sales decline of 3.4% year over year to $254 million, although operating income improved modestly [10] Financial Health - Sysco ended the quarter with $1.2 billion in cash and cash equivalents, and total liquidity of $2.9 billion, generating $611 million in operating cash flow and $413 million in free cash flow during the first half of fiscal 2026 [11] - Capital expenditures totaled $198 million for the first 26 weeks of fiscal 2026, with $518 million returned to shareholders through dividends [12] Future Outlook - Management expects adjusted earnings per share for fiscal 2026 to be at the high end of the previously issued guidance range of $4.50-$4.60, despite an approximate $100 million adverse effect from incentive compensation comparisons [13]

Core Viewpoint - Sysco Corporation reported strong second-quarter fiscal 2026 results, with adjusted earnings per share exceeding analyst expectations, leading to a rise in stock price [1][6]. Quarterly Metrics - Quarterly sales reached $20.762 billion, reflecting a 3.0% year-over-year increase and closely aligning with analyst expectations of $20.767 billion [2]. - U.S. Foodservice volume increased by 0.8%, while U.S. local volumes grew by 1.2% [2]. - Operating income decreased by 2.8% to $692 million, while adjusted operating income increased by 3.1% to $807 million [3]. - EBITDA fell by 0.9% to $923 million, whereas adjusted EBITDA rose by 3.3% to $1.0 billion [3]. - The company reported a cash balance of $1.2 billion and total liquidity of $2.9 billion at the end of the quarter [4]. Outlook - Sysco expects fiscal 2026 adjusted EPS growth to be at the high end of the previously provided guidance range of $4.50-$4.60, aligning with long-term financial targets [5]. - The company anticipates adjusted EPS growth at the high end of its 5% to 7% long-term target, excluding a $100 million headwind from lower incentive compensation in fiscal 2025 [6]. - Sysco shares increased by 7.36% to $81.20 following the earnings report [6].

Sysco (NYSE:SYY) Q2 2026 Earnings call January 27, 2026 10:00 AM ET Company ParticipantsJohn Heinbockel - Managing DirectorKenny Cheung - CFOKevin Hourican - Chair of the Board and CEOKevin Kim - VP of Investor RelationsLauren Silberman - DirectorMark Carden - Director of Equity ResearchConference Call ParticipantsAlexander Slagle - AnalystDanilo Gargiulo - Senior Research AnalystJake Bartlett - Senior Equity Research AnalystJeffrey Bernstein - Equity Research AnalystJohn Ivankoe - Managing Director and Equ ...