Financial Data and Key Metrics Changes - Sysco reported sales growth of 3.2% on a reported basis and 3.8% excluding the divestiture of Mexico, with gross profit growing by 3.9% and adjusted EPS increasing by 5.5% [6][19][21] - The company achieved gross margin expansion of 13 basis points year over year, reflecting structural improvements [21][28] - Operating cash flow increased by 62% year over year to approximately $86 million, while free cash flow was negative $50 million due to typical seasonality [29][30] Business Line Data and Key Metrics Changes - Sysco's U.S. Broadline local business experienced a positive inflection with volume growth of 0.4%, significantly outpacing the overall industry traffic improvement [7][24] - The international segment delivered sales growth of 4.5% on a reported basis and 7.9% excluding the divestiture of Mexico, with local case volume growth of approximately 5% [9][10] - Sigma segment reported 4% sales growth and 39% operating income growth, although more moderate results are expected for the remainder of the year [26][29] Market Data and Key Metrics Changes - U.S. food service volume reporting included a negative impact from an intentional business exit within the FreshPoint business, which negatively affected total local performance by over 50 basis points [9][24] - Restaurant traffic improved by 60 basis points in Q1, with Sysco's local volume improvement being more than double the overall industry rate [8][24] Company Strategy and Development Direction - Sysco aims to deliver profitable growth across U.S. Food Service, international, and Sigma segments, focusing on local business momentum and strategic sourcing [4][19] - The company is leveraging technology initiatives like AI 360 and customer loyalty programs such as Perks 2.0 to enhance sales productivity and customer retention [14][16] - Sysco's strategy includes expanding its specialty capabilities through acquisitions, such as Fairfax Meadow, to unlock incremental growth [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering full-year financial guidance despite a challenging macro backdrop, citing strong operational momentum and improved retention rates [4][20][22] - The company anticipates continued sequential improvement in local business volume, projecting at least an additional 100 basis points improvement in Q2 versus Q1 [8][32] - Sysco's diversified business model and strong international segment performance are expected to provide resilience and growth opportunities [37] Other Important Information - Sysco's investment-grade balance sheet remains robust, with total liquidity of $3.5 billion and a net debt leverage ratio of 2.9 times [29][30] - The company plans to return approximately $1 billion to shareholders through dividends and share repurchases in FY26 [32][33] Q&A Session Summary Question: Local Salesforce productivity metrics and correlation to case growth - Management highlighted a 130 basis points improvement in local volume, with retention of sales colleagues exceeding targets, contributing to positive momentum [41][42] Question: Guidance for the back half of the year - Management expressed confidence in guidance, citing strong momentum and operational improvements, with expectations for continued growth in national sales [47][48] Question: Case volumes and customer type performance - Management noted that every month in Q1 showed improvement, with strong retention in national sales and growth in non-commercial segments [55][56] Question: Food cost and inflation trends - Management clarified that while inflation was higher in Q1, it is expected to normalize around 2% for the full year, with ongoing improvements in gross profit margins [72][74] Question: Drivers of industry weakness - Management acknowledged that while the overall restaurant industry showed weakness, Sysco's performance improved due to internal initiatives and workforce stability [79]

Financial Data and Key Metrics Changes - Sysco reported sales growth of 3.2% on a reported basis and 3.8% excluding the divestiture of Mexico, with gross profit growing by 3.9% and adjusted EPS increasing by 5.5% [5][18][19] - The company achieved gross margin expansion of 13 basis points year over year, reflecting structural improvements and effective management of product cost inflation [19][26] Business Line Data and Key Metrics Changes - The U.S. Broadline local business showed a positive inflection with volume growth of 0.4%, significantly outpacing the overall industry traffic improvement [6][22] - International segments delivered sales growth of 4.5% on a reported basis and 7.9% excluding the divestiture of Mexico, with local case volume growth of approximately 5% [8][21] Market Data and Key Metrics Changes - Restaurant traffic in Q1 improved by 60 basis points, with Sysco's local volume improvement being more than two times the overall industry rate [7][18] - The company anticipates an additional 100 basis points improvement in total U.S. local volume in Q2 compared to Q1, continuing the positive momentum [6][31] Company Strategy and Development Direction - Sysco aims to deliver profitable growth across its U.S. Food Service, international, and Sigma segments, focusing on local business momentum and strategic sourcing [4][19] - The company is leveraging technology initiatives like AI 360 and customer loyalty programs such as Perks 2.0 to enhance sales productivity and customer retention [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering full-year financial guidance despite a challenging macro backdrop, citing strong operational execution and momentum in local business [4][18] - The company expects to continue improving its local business performance, driven by stabilized sales force retention and effective growth initiatives [20][36] Other Important Information - Sysco's adjusted operating income grew to $898 million for the quarter, reflecting strong growth in international and Sigma segments [27] - The company generated approximately $86 million in operating cash flow, up 62% year-over-year, indicating effective working capital optimization [28] Q&A Session Summary Question: Local Salesforce productivity and metrics - Management highlighted a positive inflection in local volume growth, with retention of sales colleagues exceeding targets, contributing to improved productivity [40][41] Question: Guidance on earnings and confidence - Management expressed strong confidence in guidance, citing momentum in local case growth and successful initiatives within their control [46][47] Question: Total case volumes and customer type performance - Management noted that while local volumes improved significantly, total case volumes showed more modest growth, with national accounts expected to pick up due to strong retention and new customer onboarding [51][56] Question: Food cost and inflation trends - Management clarified that while inflation in Q1 was higher than the targeted 2%, it is expected to normalize, with some categories experiencing deflation [70][74] Question: Broader restaurant industry trends - Management observed that independents are performing better than larger national chains, indicating a shift in market dynamics [79]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Core Insights - Sysco reported quarterly earnings of $1.15 per share, exceeding the Zacks Consensus Estimate of $1.12 per share, and showing an increase from $1.09 per share a year ago, resulting in an earnings surprise of +2.68% [1] - The company generated revenues of $21.15 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.23% and increasing from $20.48 billion year-over-year [2] - Sysco's stock has underperformed the market, gaining about 2% since the beginning of the year compared to the S&P 500's gain of 16.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.98 on revenues of $20.86 billion, and for the current fiscal year, it is $4.57 on revenues of $84.56 billion [7] - The estimate revisions trend for Sysco was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Zacks Industry Rank for Food - Miscellaneous is currently in the bottom 27% of over 250 Zacks industries, suggesting that the industry outlook may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Fiscal Q1 2026 Earnings Results October 28, 2025 Forward-Looking Statements Statements made in this presentation that look forward in time or that express management's beliefs, expectations or hopes are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements concern, among other things, our future financial performance and results, business strategy, plans, goals and objectives, including certain outlook, business trends, our dividend and share repurchase prog ...

Core Viewpoint - Sysco has maintained its annual forecasts despite exceeding first-quarter estimates, indicating rising concerns regarding the effects of economic uncertainty on the food distributor's foodservice customers [1] Group 1: Financial Performance - Sysco reported better-than-expected first-quarter results, which suggests strong operational performance [1] - The company continues to project its annual forecasts, reflecting confidence in its business model despite external economic pressures [1] Group 2: Market Concerns - There are growing worries about the impact of economic uncertainty on Sysco's foodservice customers, which could affect future performance [1] - The maintenance of annual forecasts amidst these concerns highlights the company's cautious optimism in navigating potential market challenges [1]

Sysco (NYSE:SYY) traded lower in early action on Tuesday despite topping revenue, adjusted EBITDA, and EPS estimates with its FQ1 earnings report. Revenue rose 3.3% year-over-year to $21.5 billion to edge past the consensus mark by $70 million. U.S. foodservice volume was up 2.9% during the ...

Financial Performance - Sales for the first quarter increased 3.2% to $21.1 billion compared to $20.5 billion in the same period last year[7]. - Gross profit increased 3.9% to $3.9 billion, with a gross margin of 18.5%, up 13 basis points[6][8]. - Adjusted EPS increased 5.5% to $1.15, while diluted EPS remained flat at $0.99[6][18]. - Operating income decreased 1.0% to $800 million, while adjusted operating income increased 2.9% to $898 million[6][9]. - Net earnings for the 13-week period ended September 27, 2025, were $476 million, a decrease of 2.9% compared to $490 million for the same period in 2024[27][34]. - Adjusted net earnings for Sysco Corporation increased to $551 million, up 2.0% from $540 million[35]. - Diluted earnings per share (EPS) adjusted for Certain Items rose to $1.15, reflecting a 5.5% increase from $1.09[35]. - Operating income for Sysco Corporation decreased to $800 million, down 1.0% from $808 million[37]. - Adjusted EBITDA for the 13-week period ended September 27, 2025, was $1,070 million, showing a slight increase of 0.1% from $1,069 million in the prior year[41]. Sales and Revenue - U.S. Foodservice volume increased 0.1%, with local case volume decreasing 0.2%[10][18]. - International Foodservice Operations sales increased 4.5% to $4.0 billion, with gross profit up 6.7% to $826 million[13][14]. - Comparable sales excluding the impact of the Mexico joint venture increased by 3.8% to $21,148 million for the 13-week period ended September 27, 2025, compared to $20,367 million in the prior year[34]. - U.S. Foodservice Operations sales reached $14.78 billion, a 2.9% increase from $14.36 billion[36]. - International Foodservice Operations sales grew to $3.97 billion, marking a 4.5% increase from $3.79 billion[36]. - Comparable sales excluding Mexico joint venture increased by 7.9% to $3.97 billion[36]. Expenses and Liabilities - Operating expenses rose to $3,101 million, an increase of 5.3% from $2,945 million in the previous year[34]. - Operating expenses adjusted for Certain Items were $3.00 billion, reflecting a 4.3% increase from $2.88 billion[37]. - Total current liabilities increased to $10,810 million as of September 27, 2025, compared to $9,916 million on June 28, 2025[26]. Cash Flow and Liquidity - Cash flow from operations was $86 million, while free cash flow was negative $50 million for the first quarter[15][16]. - Cash provided by operating activities was $86 million for the 13-week period, up from $53 million in the same period last year[27]. - Cash, cash equivalents, and restricted cash at the end of the period were $1,127 million, compared to $834 million at the end of the same period last year[27]. - Sysco had a cash balance of $844 million and total liquidity of $3.5 billion as of the end of the quarter[14]. - Free cash flow for the 13-week period ended September 27, 2025, was $(50) million, a decrease of $58 million compared to $8 million in the prior year[39]. Shareholder Returns - Sysco returned $259 million to shareholders via dividends during the first quarter[15]. Debt and Taxation - The company's total debt as of September 27, 2025, was $13,353 million, resulting in a Net Debt to Adjusted EBITDA ratio of 2.90[43]. - Interest expense for the 13-week period ended September 27, 2025, was $172 million, an increase of 7.5% from $160 million in the same period last year[41]. - Income tax expense for the 13-week period decreased by 18.4% to $124 million from $152 million in the prior year[41]. Future Outlook - The company expects full-year sales growth of 3%-5% and adjusted EPS growth of 1%-3%, with a potential headwind of approximately $100 million from lower incentive compensation[4][19]. - Sysco expects to calculate adjusted earnings per share for future periods similarly to historical reconciliations, although specific guidance cannot be provided at this time[45].

Core Insights - Sysco Corporation reported a solid start to fiscal year 2026, with improved sales performance, margin management, and supply chain operations, leading to adjusted EPS performance exceeding expectations [1][2] - The company anticipates full-year sales growth of 3%-5% and adjusted EPS growth of 1%-3%, with an adjusted outlook reflecting EPS growth of approximately 5% to 7% when excluding the impact of lower incentive compensation from fiscal 2025 [2] Financial Performance - Total sales for the first quarter increased by 3.2% to $21.1 billion compared to the same period in fiscal year 2025 [4][22] - Gross profit rose by 3.9% to $3.9 billion, with gross margin increasing by 13 basis points to 18.5% [5][22] - Operating income decreased by 1.0% to $800 million, while adjusted operating income increased by 2.9% to $898 million [6][22] - Net earnings fell by 2.9% to $476 million, but adjusted net earnings increased by 2.0% to $551 million [8][22] Segment Performance - U.S. Foodservice Operations saw sales increase by 2.9% to $14.8 billion, with total case volume increasing by 0.1% [9][22] - International Foodservice Operations reported a 4.5% increase in sales to $4.0 billion, with comparable sales growth of 7.9% when excluding the impact of the Mexico joint venture [12][22] Cost Management - Operating expenses increased by 5.3%, driven by investments in business capacity and sales headcount [6][22] - Product cost inflation was recorded at 3.4%, primarily affecting meat and seafood categories, but effective management helped mitigate its impact on gross profit [5][22] Balance Sheet and Cash Flow - As of the end of the quarter, Sysco had a cash balance of $844 million and total liquidity of $3.5 billion [17] - The company returned $259 million to shareholders via dividends during the first quarter, with cash flow from operations at $86 million and free cash flow negative at $50 million [17][18]

Group 1 - Sysco Corporation is collaborating with the MICHELIN Guide to announce the latest Texas recipients of Michelin stars, with a ceremony scheduled for October 29, 2025, in Houston [1][2] - The MICHELIN Guide is recognized globally for its prestigious ratings and reviews, representing a high standard in culinary achievement [2] - Sysco's South Texas Region President, Ryan Forth, emphasized the importance of honoring chefs for their contributions to creating memorable dining experiences [2][3] Group 2 - Sysco provides a wide range of products and innovative solutions to the foodservice community, supporting chefs in enhancing their menu concepts [3][7] - The MICHELIN Guide Young Chef Award will be presented by Sysco at the upcoming ceremony, highlighting the significance of emerging culinary talent [4][5] - Sysco has been in partnership with the MICHELIN Guide since November 2024, celebrating Texas chefs and their achievements [5] Group 3 - Sysco is the global leader in distributing food and related products to various sectors, including restaurants, healthcare, and educational facilities, with over $81 billion in sales for fiscal year 2025 [6][7] - The company operates 339 distribution centers across 10 countries, serving approximately 730,000 customer locations with a workforce of 75,000 [6][7] - Sysco offers customized supply chain solutions and culinary support to help customers innovate and optimize their operations [7]