Sysco Reports $21.7 Billion in Sales and Reaffirms 9% to 11% Earnings Growth
Key Facts
Sysco said sales rose 2.8% to $21.7 billion in the first quarter of its 2027 fiscal year, and reaffirmed its guidance for full-year adjusted earnings per share growth of 9% to 11%. The results covered the 13 weeks ended September 26, 2026, according to the company statement published on November 3. The chief executive said performance benefited from volume growth, improved gross margins and expense discipline. The results showed a divergence between growth in sales and adjusted operating income on one hand, and a decline in reported operating income on the other. That divergence reflects costs associated with the Jetro deal, while the annual earnings guidance remained unchanged.
Gross profit rose 3.8% to $4.1 billion, and its margin increased 18 basis points to 18.6% compared with the same period a year earlier. By contrast, operating income fell 10.4% to $717 million, while adjusted operating income rose 3.2% to $927 million. The chief executive said adjusted earnings per share were in line with the company's expectations.
U.S. foodservice operations recorded volume growth of 2.6%, while U.S. local volume rose 2.7% year over year. The chief executive said improved volume and margins, along with expense control, supported results despite weak restaurant traffic. The company added that fuel costs were higher than expected, while U.S. food price inflation was lower than expected. The chief financial officer said the annual sales growth outlook was now at the low end of the 6% to 7% range because of lower inflation. This sets operating activity growth against pressure on nominal sales and spending, while the company continues to expect adjusted earnings growth within its stated range.
Sysco issued guidance in August for fiscal 2027 that included sales growth of 6% to 7% and adjusted earnings per share growth of 9% to 11%, based on a 53-week year. The company reaffirmed its adjusted earnings growth range in September, then repeated it with the first-quarter results. Its latest statement indicates that the sales outlook is now at the low end of the annual range, while the adjusted earnings growth range is unchanged. In the fourth quarter of fiscal 2026, sales rose 4.7% and adjusted earnings per share increased 3.4% to $1.53. Those figures provide a comparison with the preceding period, while first-quarter results remain the latest measure of performance in the new fiscal year.
The company continues to pursue efficiency targets announced in September, including targeted net savings of $100 million during fiscal 2027 and at least $500 million in AI-enabled savings by fiscal 2029. The chief executive identified the program's areas of focus as updating truck routing software, improving warehouse productivity, reducing miles driven, and automating marketing, procurement and indirect spend management, as well as simplifying the customer experience and back-office operations. He said momentum from fiscal 2026 carried into the new year and linked the efficiency program to a lasting change in the management of day-to-day operations. These targets represent a stated path to improving efficiency alongside easing food price inflation. Sysco operates in 10 countries, runs 333 distribution centers and serves about 670,000 customer locations, according to company data in September.
The stock closed at $81.74 on November 2, before the results were published, and this does not include a later post-announcement price. The company had scheduled its results review call for November 3 at 10:00 a.m. Eastern time. The call gives the company an opportunity to present details of performance and annual guidance, but the statement confirms only its announced timing. Sales and margin trends, fuel costs and the execution of efficiency targets will remain among the indicators used to track the company's performance during the fiscal year.