Sysco Corporation (NYSE:SYY) posted fiscal first-quarter 2026 results that came in slightly ahead of expectations on both earnings and revenue, but its stock fell 5.2% as weak volume trends weighed on sentiment.
The food distribution company reported adjusted earnings per share of $1.15, beating analyst estimates of $1.12. Revenue rose 3.2% year over year to $21.1 billion, narrowly topping the $21.07 billion consensus forecast. Still, U.S. Foodservice Operations volume growth was muted at just 0.1%, while local case volume declined 0.2%.
Operating income slipped 1.0% to $800 million, but adjusted operating income improved 2.9% to $898 million. Sysco reaffirmed its full-year fiscal 2026 outlook, projecting 3–5% sales growth and adjusted EPS growth of 1–3%.
“We are pleased with the start to our fiscal 2026, with solid improvement in our sales performance, margin management, and supply chain operations,” said Kevin Hourican, Sysco’s Chair and CEO. “Our broadline local business was positive for the quarter, and improved sequentially each period of the quarter.”
Gross profit rose 3.9% to $3.9 billion, while gross margin expanded 13 basis points to 18.5%. Operating expenses, however, climbed 5.3%, outpacing revenue growth as the company invested in business capacity and sales headcount.
The International Foodservice Operations segment was a key bright spot, with sales increasing 4.5% and adjusted operating income rising 13.1% to $147 million.
“Based on a strong Q1 and trends observed in October, we are confident in our full year guidance,” said Kenny Cheung, Sysco’s CFO. He added that excluding a $0.16 per share headwind from lower incentive compensation in the prior year, the outlook implies 5–7% EPS growth.
During the quarter, Sysco returned $259 million to shareholders in dividends and ended the period with $844 million in cash and total liquidity of $3.5 billion.