Core Insights - Diamond Hill Capital's "Large Cap Fund" reported a 1.41% return in Q4 2025, underperforming the Russell 1000 Value Index, which increased by 3.8% [1] - The information technology and communication services sectors led the market rally, driven by optimism surrounding AI [1] - The firm remains cautious about AI-driven market enthusiasm, favoring fundamentally stable, high-quality, cash-generative businesses [1] Company-Specific Insights - Sysco Corporation (NYSE:SYY) was identified as a leading performance detractor for the Diamond Hill Large Cap Fund [2] - As of February 2, 2026, Sysco's stock closed at $82.86, with a market capitalization of $39.684 billion [2] - Sysco's stock delivered a 13.48% return in the past month and a 16.05% return over the past twelve months [2] - Concerns regarding the macro environment for restaurants and weakening consumer sentiment contributed to a decline in Sysco's shares [3] - Despite these concerns, the company maintains a strong market position due to its economies of scale, buying power, and product assortment [3] - Sysco's second-quarter fiscal 2025 revenue was reported at $21 billion, reflecting a 3% year-over-year growth [4] - Sysco is not among the 30 most popular stocks among hedge funds, although the number of hedge funds holding its shares increased from 45 to 54 [4]

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].

Core Viewpoint - Sysco Corporation has demonstrated strong financial performance, leading to a notable increase in stock price and positive market outlook, supported by earnings surpassing estimates and a solid return on equity [2][4]. Financial Performance - Sysco reported earnings of $0.99 per share for the quarter, exceeding the consensus estimate of $0.98 [2][4]. - The company achieved revenue of $20.76 billion, slightly below expectations of $20.80 billion, but reflecting a 3% increase compared to the same period last year [2][4]. - Sysco's net margin stood at 2.21%, with a remarkable return on equity of 112.04% [2][4]. Stock Performance - Sysco's stock is currently priced at $83.92, marking a significant increase of 10.96% with a change of $8.29 [3]. - The stock has fluctuated between a low of $77.33 and a high of $83.96 today, with the latter being its highest price over the past year [3]. - The company has a market capitalization of approximately $40.19 billion, and the trading volume today reached 11,002,083 shares [3]. Dividend and Market Outlook - Sysco recently paid a quarterly dividend of $0.54 to stockholders of record as of January 2nd, indicating its commitment to returning value to shareholders [3]. - Barclays has set a price target of $92 for Sysco, suggesting a potential increase of 9.63% from its current trading price [2][4].

Company Overview - Sysco Corporation is a leading entity in the food distribution sector, serving a diverse clientele including restaurants and educational institutions [1] - The company has a strong presence in the U.S. market, positioning it as a formidable competitor against key distributors like US Foods and Performance Food Group [1] Financial Performance - Sysco reported an earnings per share (EPS) of $0.99, surpassing the consensus estimate of $0.98 [2][5] - The company's quarterly revenue was $20.76 billion, slightly below the expected $20.80 billion, but still reflecting a 3% increase compared to the same period last year [2][5] - Sysco achieved a net margin of 2.21% and a return on equity of 112.04% [3] Stock Performance - The stock price reached a new 52-week high of $83.91 following a strong earnings report, with the last trading price at $80.05 [2][3] - Barclays upgraded Sysco's rating to "Overweight" and raised its price target from $88 to $92 [2][5] - The stock has fluctuated between a low of $77.33 and a high of $83.96 over the past year, with a market capitalization of approximately $40.19 billion [4] Future Outlook - Sysco has raised its annual profit forecast to $4.60 per share, indicating confidence in continued strong performance [3][5] - The company’s strong performance in the U.S. market is driven by high demand for its products [3]

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].