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Investing.com -- Sysco Corporation (NYSE:SYY) reported better-than-expected fourth quarter results on Tuesday, with adjusted earnings per share exceeding analyst estimates, though shares fell 3.4% as investors focused on declining foodservice volumes.
The food distribution giant posted adjusted earnings of $1.48 per share for its fiscal fourth quarter, surpassing the analyst consensus of $1.39. Revenue increased 2.8% to $21.1 billion, slightly above analysts’ expectations of $21 billion. Despite the earnings beat, U.S. Foodservice volume decreased 0.3% YoY, with local case volume down 1.5%, signaling continued challenges in restaurant traffic.
"Sysco’s Q4 results exceeded expectations, as improved financial outcomes were driven by Sysco-specific initiatives and improved restaurant industry traffic," said Kevin Hourican, Sysco’s Chair and CEO. "USFS local volumes improved sequentially by 200 bps, including a strong exit rate in June."
Gross profit for the quarter rose 3.9% to $4 billion, with gross margin expanding 19 basis points to 18.9%. Adjusted operating income increased 1.1% to $1.1 billion, while adjusted EBITDA grew 1.8% to $1.3 billion.
For fiscal year 2026, Sysco provided guidance of approximately $84 billion to $85 billion in revenue, representing growth of 3% to 5%, and adjusted EPS of $4.50 to $4.60, an increase of 1% to 3%. The company noted its outlook includes an approximate $100 million ($0.16 per share) headwind from lapping lower incentive compensation in fiscal 2025.
"Excluding this impact, our outlook reflects EPS growth of approximately 5% to 7%, with the midpoint in-line with our long-term algorithm," said Kenny Cheung, Sysco’s CFO. "We also plan to reward our shareholders with approximately $1 billion in dividends and approximately $1 billion in share repurchases for FY26."