Core Points - A California jury awarded approximately $52 million to truck drivers and yard workers at Sysco for alleged retaliation after they raised safety, wage, and regulatory concerns [1] - The lawsuit was filed against Sysco Riverside Inc. and Sysco Corp., with claims of a culture of intimidation towards employees reporting unsafe practices [2] - The lead attorney indicated that the jury's verdict reflected overwhelming evidence of Sysco's legal violations and the company's inaction in response to complaints [3] Allegations of Unsafe Practices - Employees raised concerns about yard safety, excessive working hours, falsified time records, food safety violations, and retaliation for contacting regulators like Cal/OSHA [4] - Plaintiffs reported being pressured to move trucks quickly in unsafe conditions and to load perishable food into inadequately refrigerated trailers [6] Retaliation Claims - Central to the lawsuit were allegations of retaliation against workers who reported unsafe practices, including reduced hours, harassment, surveillance, and termination [7]

Core Insights - The company remains confident in its long-term targets, focusing on market share gains, margin enhancement, and operating leverage, with technology as a key area of focus alongside organic growth and acquisitions [1][6] - CEO Scott McPherson emphasized the commitment to a three-year strategic plan that balances revenue growth with gross margin initiatives and improved operating leverage [3][6] - The company reported fiscal second-quarter 2026 results within prior guidance despite a challenging macro environment, including declining restaurant foot traffic and a government shutdown [4][7] Financial Performance - Total net sales increased by 5.2% and cases rose by 3.4%, with net income up 45.5% to $61.7 million and adjusted EBITDA climbing 6.7% to $451 million [7][9] - The company updated its fiscal 2026 targets to net sales of $67.25 billion to $68.25 billion and adjusted EBITDA of $1.875 billion to $1.975 billion [24] Segment Performance - The Foodservice segment achieved 5.3% organic independent case growth, driven by strong performance in chicken, burger, barbecue, and seafood restaurant concepts [11] - The Convenience segment saw net sales rise by 6.1%, with adjusted EBITDA increasing by 13.4%, attributed to cost discipline and contributions from new store onboardings [14][15] - The Specialty segment faced challenges, particularly from theater sales, which were down over 30%, representing a $50 million headwind to overall sales [16] Cost and Inflation Insights - Total company cost inflation was approximately 4.5% in the quarter, with foodservice inflation at 1.8% and specialty inflation at 5.4% [17] - Management expects inflation to remain in the low- to mid-single-digit range through fiscal 2026, with notable deflation in cheese and poultry categories [18] Cash Flow and Capital Allocation - Operating cash flow for the first half of fiscal 2026 totaled $456 million, up $77 million year-over-year, with free cash flow at approximately $264 million [19] - The company prioritized debt reduction in its capital allocation strategy, with no share repurchases during the quarter [19] Guidance and Outlook - For the fiscal third quarter, the company guided to net sales of $16.0 billion to $16.3 billion and adjusted EBITDA of $390 million to $410 million, considering ongoing challenges in specialty and recent winter storms [20] - The company reiterated its fiscal 2028 targets of $73 billion to $75 billion in sales and adjusted EBITDA of $2.3 billion to $2.5 billion [20]

Core Viewpoint - US Foods (USFD) is experiencing strong growth and positive market sentiment, reflected in its stock performance and technical indicators [2][7]. Group 1: Company Overview - US Foods is valued at $18.64 billion and operates as a foodservice distributor serving various sectors including independent and multi-unit restaurants, healthcare, hospitality, government, and educational institutions [1]. - The company has achieved a new all-time high stock price of $86.35, with a recent 5-year high of $88.32 [5][8]. Group 2: Technical Indicators - US Foods has a 100% "Buy" opinion from Barchart, indicating strong technical momentum [7][8]. - The stock has gained 20.61% over the past 52 weeks and 16.13% over the past month, with a current Relative Strength Index (RSI) of 64.65 [8]. - The stock maintains a Trend Seeker "Buy" signal, and the technical support level is around $85.51 [8]. Group 3: Financial Performance - Revenue is projected to grow by 4.36% this year and an additional 6.23% next year [8]. - Earnings are estimated to increase by 25.13% this year and an additional 19.35% next year [9]. - The trailing price-earnings ratio for US Foods is 24.31x, reflecting its valuation relative to earnings [8].

Core Insights - Performance Food Group (PFGC) reported revenue of $16.44 billion for the quarter ended December 2025, marking a year-over-year increase of 5.2% [1] - The earnings per share (EPS) for the same period was $0.98, unchanged from the previous year, but below the consensus estimate of $1.07, resulting in an EPS surprise of -8.09% [1] - The reported revenue fell short of the Zacks Consensus Estimate of $16.56 billion, leading to a surprise of -0.71% [1] Revenue Breakdown - Convenience revenue reached $6.33 billion, exceeding the two-analyst average estimate of $6.24 billion, with a year-over-year change of +6.1% [4] - Foodservice revenue was reported at $8.8 billion, below the estimated $9.01 billion from two analysts [4] - Intersegment Eliminations revenue was -$181.4 million, slightly worse than the estimated -$175.96 million, but showed a year-over-year improvement of +5.2% [4] - Corporate & All Other revenue was $239.7 million, marginally below the average estimate of $240.64 million, reflecting a -0.2% change year over year [4] - Specialty revenue totaled $1.25 billion, slightly below the estimated $1.26 billion, with a year-over-year increase of +1.5% [4] Stock Performance - Shares of Performance Food have returned +11% over the past month, significantly outperforming the Zacks S&P 500 composite, which saw a change of +0.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - PFG's total net sales grew by 5.2% in Q2 2026, with total company cases increasing by 3.4% [19] - Net income reached $61.7 million, a 45.5% increase year-over-year [21] - Adjusted EBITDA increased by 6.7% to $451 million, with diluted earnings per share at $0.39 and adjusted diluted earnings per share flat at $0.98 year-over-year [22] Business Line Data and Key Metrics Changes - Food service segment delivered 5.3% organic independent case growth, driven by a 5.8% independent account growth [7] - Convenience segment net sales increased by 6.1%, benefiting from market share gains and onboarding of new accounts [13] - Specialty segment saw modest improvement in top-line trends, with sales growth in vending, office coffee, retail, campus, and travel channels [16] Market Data and Key Metrics Changes - Industry-wide foot traffic decelerated, with December traffic down 3.5% [9] - Convenience segment sales were driven by low single-digit dollar growth from food and mid-teen non-combustible nicotine product sales growth [14] - Total company cost inflation was approximately 4.5%, with food service inflation at 1.8% and convenience cost inflation at 7.4% [20] Company Strategy and Development Direction - The company is focused on a three-year strategic vision aimed at revenue growth, market share gains, gross margin enhancement, and improving operating leverage [6] - PFG is committed to pursuing strategic M&A opportunities, with a robust pipeline and a history of successful acquisitions [25] - The integration of Cheney Brothers is expected to contribute significantly to revenue and profit growth in the future, with synergies anticipated to flow through in years two and three post-acquisition [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive growth and EBITDA performance despite a challenging macro environment [6] - The company anticipates a modest sequential decline in net interest expense and expects to maintain a tax rate close to historical averages [23][24] - Management remains optimistic about achieving the full-year guidance and the three-year projections announced at Investor Day [27] Other Important Information - The company generated $456 million of operating cash flow in the first half of 2026, an increase of $77 million compared to the same period last year [24] - PFG did not repurchase any shares under its share repurchase program in the quarter, prioritizing debt reduction instead [25] Q&A Session Summary Question: Can you provide additional color on performance by month for organic independent case growth? - Management noted strong performance in October, followed by a decline due to the government shutdown, with a rebound in January despite weather impacts [30][32] Question: How did the pace of your sales force growth compare to recent quarters? - The sales force growth remained consistent at around 6%, with a focus on market share performance [34] Question: Can you discuss the dynamics at play for the food service business in the second quarter? - Management highlighted strong independent growth but noted elevated operating expenses due to Cheney investments and deflation in cheese and poultry [38][40] Question: What is the outlook for the convenience segment's EBITDA margins? - Management expressed optimism about margin expansion due to growth in food service and non-combustible nicotine products [42][44] Question: How is the company managing procurement opportunities? - Management indicated confidence in achieving procurement synergies over the three-year plan, with progress expected in the back half of the year [47][49] Question: What is the impact of deflation on margins? - Deflation is expected to impact margins, particularly in cheese and poultry, which the company overindexes [50][91] Question: How does the company view the competitive environment? - Management noted consistent market share gains and did not observe significant changes in the competitive landscape [82]

Company Overview - Sysco Corporation (NYSE:SYY) is a food distributor that supplies products such as meats, produce, and frozen meals to various sectors including restaurants, healthcare facilities, and schools. Additionally, the company provides kitchen equipment, tableware, and cleaning supplies [2]. Earnings Report Insights - Sysco's stock experienced a nearly 11% increase following its earnings report, which showed a modest beat on both the top and bottom lines. This performance is notable given the general pessimism surrounding the restaurant industry, which constitutes Sysco's core customer base [1]. - Management indicated a strong start to January, which is atypical for the industry, and revised their earnings expectations for fiscal 2026 to the high end of previous forecasts [1].

Company Overview - Sysco Corporation is the global leader in selling, marketing, and distributing food and related products to customers who prepare meals away from home, including restaurants, healthcare, educational facilities, lodging establishments, and entertainment venues [3]. - The company operates 337 distribution centers across 10 countries, employing 75,000 colleagues and serving approximately 730,000 customer locations [3]. - In fiscal year 2025, Sysco generated sales of over $81 billion, ending on June 28, 2025 [3]. Business Operations - As the world's largest food-away-from-home distributor, Sysco provides customized supply chain solutions, specialty product offerings, and culinary support to help customers innovate and optimize their operations [4]. - The company acts as a trusted business partner, offering an industry-leading portfolio that includes fresh produce, premium proteins, specialty products, sustainably focused items, equipment and supplies, and innovative culinary solutions [4]. Investor Relations - Sysco will webcast its presentation at the CAGNY 2026 Conference on February 17, 2026, at 3:00 p.m. ET, with access available at investors.sysco.com [1]. - The investor relations section of Sysco's website is the primary channel for publishing key information to investors, which may include material and previously non-public information [2].

Company Overview - The Chefs' Warehouse, Inc. (NASDAQ:CHEF) is a premier distributor of specialty food products in the United States, serving chefs and culinary professionals across the hospitality industry, culinary schools, and specialty food retailers [3] Recent Developments - On January 29, Benchmark raised its price target on The Chefs' Warehouse, Inc. to $84 from $79 while maintaining a Buy rating, citing strong underlying momentum in the business as a key driver [1] - The company announced the acquisition of Italco Food Products during its third-quarter 2025 earnings call, enhancing its presence in the Denver market [2] - The Chefs' Warehouse's Middle East operations reported double-digit growth, supported by facility expansions in Dubai, Qatar, and Oman, which extend its global distribution footprint [2]

Core Insights - Altria Group Inc. reported fourth-quarter 2025 results with top-line revenue exceeding estimates but declining year over year, while bottom-line earnings missed expectations and remained flat compared to the previous year [1] Financial Performance - Adjusted earnings per share (EPS) for the fourth quarter were $1.30, flat year over year, and below the Zacks Consensus Estimate of $1.31, influenced by a lower adjusted tax rate and reduced share count, offset by lower adjusted operating companies' income (OCI) [2] - Net revenues totaled $5,846 million, a decline of 2.1% year over year, primarily due to decreased revenues in the smokeable products segment, although it surpassed the consensus estimate of $5,002 million [3] Segment Analysis - **Smokeable Products**: Net revenues fell 2.7% year over year to $5,119 million, driven by reduced shipment volume and increased promotional investments, partially offset by higher pricing. Revenues net of excise taxes decreased 1.1% [4] - Domestic cigarette shipment volumes dropped 7.9%, attributed to industry decline and trade inventory movements, while cigar shipment volumes increased by 4.2% [5] - Adjusted OCI in this segment decreased 2.4% to $2,643 million, impacted by reduced shipment volume and higher costs, with adjusted OCI margins falling 0.8 percentage points to 60.4% [6] - **Oral Tobacco Products**: Net revenues increased 2% to $706 million, driven by higher pricing, although shipment volumes declined by 6.3% due to retail share losses and trade inventory movements [7][8] - Adjusted OCI in this segment decreased 4.6%, influenced by elevated SG&A costs and a decline in shipment volumes, with adjusted OCI margins decreasing 5 percentage points to 64.5% [9] Capital Management - Altria ended the quarter with cash and cash equivalents of $4,474 million and long-term debt of $24,140 million, alongside a total stockholders' deficit of $3,502 million [10] - In Q4 2025, the company repurchased 4.8 million shares for $288 million, and for the full year, it repurchased 17.1 million shares totaling $1 billion, with $1 billion remaining under the share repurchase program [11] Future Outlook - For 2026, Altria expects adjusted EPS in the range of $5.56 to $5.72, indicating year-over-year growth of 2.5% to 5.5% from a base of $5.42 in 2025, with growth anticipated to be weighted towards the second half of the year [12] - The company projects an adjusted effective tax rate of 22.5% to 23.5%, capital expenditures of $300-$375 million, and depreciation and amortization expenses of approximately $225 million [13]

We recently published 10 Big Names With Easy 10-30% Gains. Sysco Corp. (NYSE:SYS) was one of the best performers on Tuesday. Sysco snapped a three-day losing streak on Tuesday, slashing 10.96 percent to finish at $83.92 apiece as investors took heart from a more optimistic outlook for the full fiscal period of 2026. In an updated report, Sysco Corp. (NYSE:SYS) said that it now expects to hit the high end of its earnings per share (EPS) guidance of $4.50 to $4.60 for the full fiscal year 2026, primarily ...