Core Insights - Sysco reported strong financial results for Q2, with total revenue of nearly $21 billion, a 3% increase year over year, and adjusted EPS rising by 6.5% [3][6]. - The company highlighted improving case volume trends and expanding gross margins, despite a soft broader restaurant environment [4][6]. Financial Performance - Gross profit totaled $3.8 billion, up 3.9%, with a gross margin increase to 18.3% [1]. - Adjusted operating expenses were $3 billion, representing 14.4% of sales, reflecting planned investments and the impact of prior year incentive compensation [1][2]. - Sysco's free cash flow grew by 25% year-to-date, indicating high quality of earnings [2]. Volume and Growth Expectations - U.S. Local case volumes improved by 1.2% in Q2, a sequential gain of 140 basis points, with expectations of at least 2.5% growth in both Q3 and Q4 [5][8]. - The company anticipates that 2.1% of this growth will come from organic Local case growth, with the remainder from M&A activity [8]. Segment Performance - The National contract business saw a 0.4% volume growth, while SYGMA reported 0.5% sales growth and 10.5% operating income growth [10][11]. - International sales grew by 7.3% on a reported basis and 9.9% excluding the divestiture of Mexico, with Local case growth of 4.5% [12]. Strategic Initiatives - Sysco is focusing on sales retention, AI-driven tools, and loyalty programs to enhance customer engagement and retention [13][14]. - The company completed a tuck-in acquisition of Ginsberg's Foods, which is expected to unlock growth and margin opportunities [16]. Capital Returns and Outlook - Sysco plans approximately $1 billion in dividends and $1 billion in share repurchases for fiscal 2026, with a 6% year-over-year increase in dividend payout expected [19]. - The company maintains its fiscal 2026 adjusted EPS guidance at the high end of the $4.50 to $4.60 range, driven by inflation, volume growth, and M&A contributions [17][18].

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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 ...

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 ...

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Financial Data and Key Metrics Changes - Sysco reported nearly $21 billion in total revenue for Q2, reflecting a growth rate of 3% year-over-year [5] - Adjusted EPS is expected to be at the high end of the previously provided guidance range of $4.50-$4.60, with a growth of 6.5% in Q2 [4][20] - Free cash flow grew by 25% year-to-date, indicating strong quality of earnings [20] Business Line Data and Key Metrics Changes - USFS local case volume increased by 1.2% in Q2, an improvement of 140 basis points compared to Q1 [5][6] - National contract business generated volume growth of 0.4%, with strong growth in food service management and healthcare, but softness in the national restaurant segment [7][8] - International segment sales grew by 7.3%, with local case growth of 4.5%, contributing to nearly 26% growth in adjusted operating income [10][24] Market Data and Key Metrics Changes - The overall restaurant traffic declined by more than 200 basis points year-over-year, yet Sysco managed to gain market share [6][8] - Sysco's performance improved relative to the industry, with a strong exit rate in December [42] Company Strategy and Development Direction - Sysco is focusing on enhancing its value tier product offerings to meet customer needs and improve profitability [9] - The company completed a tuck-in acquisition of Ginsberg's Foods, which is expected to enhance growth potential in the Northeast [17][24] - Continued investments in sales headcount and technology, such as the AI 360 CRM tool, are aimed at improving sales productivity [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving at least 2.5% local case growth in the second half of fiscal 2026, driven by improved sales colleague retention and productivity [19][36] - The company anticipates a stable macroeconomic environment, with growth primarily driven by internal initiatives rather than external factors [30][74] Other Important Information - Sysco's adjusted operating expenses were $3 billion for the quarter, reflecting planned investments in growth areas [28] - The company maintains a robust balance sheet with $2.9 billion in total liquidity [29] Q&A Session Summary Question: Variations in local case growth on a monthly basis and impact of winter storms - Sysco's performance strengthened each month of Q2, with January showing continued strength despite potential weather impacts [40][41] Question: Sales growth expectations for the second half of fiscal 2026 - Sysco anticipates at least 2.5% growth in local case volumes for Q3 and Q4, with expectations for improved performance compared to the previous year [50][76] Question: Contribution of new account wins versus existing account penetration - Growth is coming from both new account wins and improved penetration with existing accounts, with the spread between new and lost accounts widening [61][62] Question: Changes in sales force growth and hiring - Sysco is committed to growing its sales headcount in 2026, focusing on high-growth markets and optimizing training programs to enhance productivity [65]

Shares of Sysco Corporation ( SYY ) have been a poor performer over the past year, losing just over 1% of their value. While the company has been gaining market share and benefits from a weaker U.S. dollar (Over fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure: I/we hav ...

Core Insights - Sysco reported quarterly earnings of $0.99 per share, exceeding the Zacks Consensus Estimate of $0.98 per share, and showing an increase from $0.93 per share a year ago, representing an earnings surprise of +1.43% [1] - The company posted revenues of $20.76 billion for the quarter ended December 2025, slightly missing the Zacks Consensus Estimate by 0.2%, but up from $20.15 billion year-over-year [2] - Sysco has surpassed consensus EPS estimates three times over the last four quarters and has topped revenue estimates twice in the same period [2] Earnings Outlook - The sustainability of Sysco's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.91 on revenues of $20.53 billion, and for the current fiscal year, it is $4.55 on revenues of $84.45 billion [7] Industry Context - The Zacks Industry Rank for Food - Miscellaneous, which includes Sysco, is currently in the bottom 21% of over 250 Zacks industries, indicating potential challenges ahead [8] - Freshpet, another company in the same industry, is expected to report quarterly earnings of $0.43 per share, reflecting a year-over-year increase of +19.4%, with revenues projected at $285.8 million, up 8.8% from the previous year [9]