Sysco Corp
Q3 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +6.29%.
Did SYY Beat Earnings? Q3 2026 Results
Sysco Corporation posted a modest earnings miss in fiscal Q3 2026, with adjusted EPS of $0.94 falling just short of the $0.94 consensus estimate and revenue of $20.52 billion trailing expectations of $20.56 billion by 0.19%, even as top-line sales climbed 4.7% year-over-year. The shortfall was largely attributable to a 10.1% surge in operating expenses, including a $63 million incentive compensation headwind from lapping lower prior-year payouts, which dragged GAAP net earnings down 15.2% to $340 million despite gross profit growing 6.5% to $3.81 billion. Bright spots were evident beneath the headline numbers: U.S. local case volume grew 3.3%, the strongest rate in over three years, and gross margin expanded 31 basis points to 18.58%. The quarter also carried a major strategic headline, as Sysco announced its pending acquisition of Jetro Restaurant Depot, a move that has drawn analyst scrutiny over leverage and integration risk. Looking ahead, management expressed confidence in delivering full-year adjusted EPS at the high end of its $4.50 to $4.60 guidance range.
- U.S. local case volume growth of 3.3%, highest quarterly rate in over three years
- U.S. Foodservice total case volume growth of 2.3%
- Gross margin expansion of 31 basis points to 18.58%
- Strategic sourcing efficiencies
- Effective management of 2.8% product cost inflation in dairy, meat, and seafood
- International Foodservice Operations delivered 12.4% sales growth and double-digit adjusted operating income growth
- Year-to-date free cash flow increased 19% to $1.1 billion
- Foreign exchange rates increased total Sysco sales by 1.3% during the quarter
“Sysco delivered strong results in the third quarter of fiscal 2026, driven by continued acceleration in local case volume and expanded gross margins. Importantly, our U.S. local volumes grew 3.3%, the highest quarterly rate in over three years. This exceeded our prior commitment, and we remain confident in delivering over 2.5% U.S. local growth in Q4, which would put us on pace to accelerate on a two-year stack basis. Our USFS segment returned to operating profit growth for the quarter. We are encouraged by the progress, results, and momentum across each of our business segments. As we look ahead, our strong operating foundation, improving productivity, and the compelling opportunity presented by the pending Jetro Restaurant Depot combination, position Sysco to grow profitably, deepen our relationships with more local customers, and create incremental value for our shareholders.”
Sysco CEO, on the earnings call
Forward Guidance & Outlook
Management expressed confidence in delivering full-year adjusted EPS at the high end of the $4.50 to $4.60 guidance range, which includes an approximately $100 million ($0.16 per diluted share) headwind from lapping lower incentive compensation in fiscal 2025. The company expects U.S. local volume growth to exceed 2.5% in Q4, which would position it to accelerate on a two-year stack basis. The pending acquisition of Jetro Restaurant Depot is expected to close by Sysco's third quarter of fiscal 2027, subject to regulatory approvals and customary closing conditions.
SYY YoY Financials
SYY Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.