Sysco Q1 sales rise 2.8% but miss estimates

Overview

• US food distributor's Q1 sales rose 2.8% but missed analyst expectations

• Adjusted EPS met analyst expectations

• Company cites volume growth and margin expansion, but notes soft restaurant foot traffic and higher fuel costs

Outlook

• Sysco expects $100 mln in AI-enabled cost savings in FY27, with benefits accelerating in H2

• Company maintains FY27 adjusted EPS growth guidance of 9%-11%

• Sysco now expects FY27 sales growth at lower end of 6%-7% range due to lower inflation

Result Drivers

• VOLUME AND MARGIN GAINS - Co said gross profit growth was driven by higher local volumes, tariff benefits, sourcing efficiencies, and Sysco Brand penetration

• EXPENSE CONTROL - Co attributed adjusted EPS performance to disciplined expense control and expanding gross margins

• INITIATIVES AMID SOFT DEMAND - Co said company initiatives supported results despite soft restaurant foot traffic and higher fuel costs

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 8 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the food retail & distribution peer group is "buy."

• Wall Street's median 12-month price target for Sysco Corporation is $91.00, about 11.3% above its November 2 closing price of $81.74

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 17 three months ago

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For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)