Sysco Raises FY26 Profitability Outlook to Upper End
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 27 2026
0mins
Should l Buy SYY?
Source: seekingalpha
- Profitability Outlook Raised: Thanks to advancements in growth initiatives and cost management, Sysco now expects FY26 earnings to reach the upper end of $4.50 to $4.60 per share, despite a $0.16 headwind from lower incentive compensation, indicating strong profitability.
- Strong Sales Growth: In the second quarter of FY26, Sysco's U.S. foodservice segment saw a 2.4% increase in sales to $14.4 billion and a 2.5% rise in gross profit to $2.7 billion, demonstrating sustained market demand and business resilience.
- International Market Performance: International foodservice sales rose 7.3% to $4 billion, with gross profit improving 9.5% to $832 million and gross margin expanding by 42 basis points to 20.8%, indicating enhanced competitiveness in global markets.
- Positive Stock Reaction: Following the second-quarter results that beat expectations, Sysco's shares rose over 3% at Tuesday's open, reflecting investor confidence in the company's future growth prospects.
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Analyst Views on SYY
Wall Street analysts forecast SYY stock price to fall
10 Analyst Rating
5 Buy
5 Hold
0 Sell
Moderate Buy
Current: 89.910
Low
80.00
Averages
87.56
High
98.00
Current: 89.910
Low
80.00
Averages
87.56
High
98.00
About SYY
Sysco Corporation is engaged in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. It also supplies a variety of non-food items. Its segments include U.S. Foodservice Operations, International Foodservice Operations, SYGMA and Other. U.S. Foodservice Operations segment includes United States Broadline operations and United States Specialty operations. International Foodservice Operations include operations outside of the United States. SYGMA segment includes its United States customized distribution operations serving quick-service chain restaurant customer locations. Other segment includes primarily its hotel supply operations, Guest Worldwide. It distributes various products, such as frozen foods, fresh meats and seafood, dairy products, beverage products, imported specialties, and fresh produce. It operates around 340 distribution facilities worldwide.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Correction Notice: The document corrects previous information regarding the final pricing terms for a two-part senior notes offering.
Offering Amount: The offering is for up to $1.25 billion, clarifying that it is not $12.5 million as previously stated.
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- Portfolio Composition Differences: VDC encompasses over 100 consumer stocks, with 98% in consumer defensive, whereas PBJ focuses on 31 food and beverage companies, including Sysco and Corteva, which may increase specific company risk due to its concentrated investments.
- Market Performance and Risk: Over the past year, VDC achieved a return of 4.6%, while PBJ only managed 1.2%, and VDC's maximum drawdown of 16.55% is lower than PBJ's 15.84%, indicating VDC's relative stability amid market volatility.
- Investment Strategy Choices: As a pure index fund, VDC provides comprehensive defensive exposure to consumer staples, while PBJ employs quantitative analysis for a concentrated portfolio, charging nearly seven times the fees of VDC, yet recent performance suggests this may not justify the cost, prompting investors to choose wisely.
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SYSCO TEAMSTERS APPROVE NEW CONTRACT
- Team Announcement: The S.Y.S.C.O. team has officially ratified a new contract.
- Contract Details: The new contract outlines updated terms and conditions for team members.
- Implications for Team: This ratification is expected to enhance team morale and productivity.
- Future Prospects: The agreement sets a positive tone for future negotiations and collaborations.
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- Insurance Cost Reduction: Tesla's partnership with Lemonade introduces a pay-per-mile insurance product that offers a 50% discount when full self-driving is activated, alleviating financial burdens for users and enhancing the market appeal of Tesla's autonomous driving services.
- Intensifying Market Competition: Despite advancements, analysts note that Tesla does not hold an absolute lead in the autonomous driving market, suggesting that future competition will be more intense, particularly regarding safety and technological maturity.
- Subscription Model Challenges: Tesla's introduction of a $100 monthly subscription for full self-driving raises potential revenue but faces challenges in consumer acceptance, especially as other manufacturers offer more standard features without additional costs.
See More
Tesla's Robo-Taxi Launch Marks a New Era
- Robo-Taxi Launch: Tesla has officially launched its robo-taxi service in Austin, Texas, marking a significant advancement in its autonomous driving efforts, although it still lags behind competitors like Waymo, which could impact Tesla's market competitiveness.
- Insurance Cost Reduction: Tesla's partnership with Lemonade introduces a pay-per-mile insurance product that offers a 50% discount when FSD is activated, which not only lowers operational costs for users but may also attract more consumers to Tesla's autonomous driving services.
- Intensifying Market Competition: While Tesla has made strides in autonomous technology, the competition remains fierce, with companies like Waymo and Zoox leading in fully driverless operations, necessitating Tesla to accelerate its technology iterations to maintain market share.
- Subscription Model Raises Concerns: The introduction of a monthly subscription model for FSD may boost short-term revenues, but it could also lead to consumer skepticism regarding long-term value, reflecting challenges in Tesla's market positioning.
See More
Sysco Reports Strong Q2 Earnings, Raises EPS Outlook
- Earnings Beat: Sysco reported adjusted earnings per share of 99 cents for Q2 FY2026, surpassing the analyst consensus estimate of 98 cents, indicating a robust earnings capacity.
- Steady Sales Growth: Quarterly sales reached $20.762 billion, closely aligning with the Street's expectation of $20.767 billion, marking a 3.0% year-over-year increase that reflects the company's stable market performance.
- Improving Local Case Growth: The company achieved its third consecutive quarter of local case growth, with USFS local case volume showing a positive 1.2% increase, highlighting its strong recovery in market demand.
- Optimistic Outlook: Despite facing a $100 million headwind from lower incentive compensation, Sysco raised its adjusted EPS outlook for FY2026 to the high end of its previous guidance range of $4.50-$4.60, demonstrating confidence in future performance.
See More
SYSCO SUBMITS FINAL PRICING TERMS SHEET FOR TWO-PART SENIOR NOTES OFFERING OF UP TO $1.25 BILLION (CORRECTS '$12.5 MILLION' AND INCLUDES DROPPED WORD 'TWO-PART') - SEC FILING
Correction Notice: The document corrects previous information regarding the final pricing terms for a two-part senior notes offering.
Offering Amount: The offering is for up to $1.25 billion, clarifying that it is not $12.5 million as previously stated.
See More
Comparison Analysis of Consumer Staples ETFs
- Cost and Yield Comparison: Vanguard Consumer Staples ETF (VDC) charges an annual fee of just 0.09%, significantly lower than Invesco Food & Beverage ETF (PBJ) at 0.61%, while VDC also offers a higher dividend yield of 2.1% compared to PBJ's 1.7%, making VDC more appealing for income-focused investors.
- Portfolio Composition Differences: VDC encompasses over 100 consumer stocks, with 98% in consumer defensive, whereas PBJ focuses on 31 food and beverage companies, including Sysco and Corteva, which may increase specific company risk due to its concentrated investments.
- Market Performance and Risk: Over the past year, VDC achieved a return of 4.6%, while PBJ only managed 1.2%, and VDC's maximum drawdown of 16.55% is lower than PBJ's 15.84%, indicating VDC's relative stability amid market volatility.
- Investment Strategy Choices: As a pure index fund, VDC provides comprehensive defensive exposure to consumer staples, while PBJ employs quantitative analysis for a concentrated portfolio, charging nearly seven times the fees of VDC, yet recent performance suggests this may not justify the cost, prompting investors to choose wisely.
See More
SYSCO TEAMSTERS APPROVE NEW CONTRACT
- Team Announcement: The S.Y.S.C.O. team has officially ratified a new contract.
- Contract Details: The new contract outlines updated terms and conditions for team members.
- Implications for Team: This ratification is expected to enhance team morale and productivity.
- Future Prospects: The agreement sets a positive tone for future negotiations and collaborations.
See More
Tesla's Robo-Taxis Without Safety Drivers Launch in Texas
- Robo-Taxi Launch: Tesla has launched its robo-taxis without safety drivers in Austin, Texas, marking a significant advancement in its autonomous driving technology, although it still trails competitors like Waymo, indicating Tesla's ongoing commitment to innovation in this space.
- Insurance Cost Reduction: Tesla's partnership with Lemonade introduces a pay-per-mile insurance product that offers a 50% discount when full self-driving is activated, alleviating financial burdens for users and enhancing the market appeal of Tesla's autonomous driving services.
- Intensifying Market Competition: Despite advancements, analysts note that Tesla does not hold an absolute lead in the autonomous driving market, suggesting that future competition will be more intense, particularly regarding safety and technological maturity.
- Subscription Model Challenges: Tesla's introduction of a $100 monthly subscription for full self-driving raises potential revenue but faces challenges in consumer acceptance, especially as other manufacturers offer more standard features without additional costs.
See More
Tesla's Robo-Taxi Launch Marks a New Era
- Robo-Taxi Launch: Tesla has officially launched its robo-taxi service in Austin, Texas, marking a significant advancement in its autonomous driving efforts, although it still lags behind competitors like Waymo, which could impact Tesla's market competitiveness.
- Insurance Cost Reduction: Tesla's partnership with Lemonade introduces a pay-per-mile insurance product that offers a 50% discount when FSD is activated, which not only lowers operational costs for users but may also attract more consumers to Tesla's autonomous driving services.
- Intensifying Market Competition: While Tesla has made strides in autonomous technology, the competition remains fierce, with companies like Waymo and Zoox leading in fully driverless operations, necessitating Tesla to accelerate its technology iterations to maintain market share.
- Subscription Model Raises Concerns: The introduction of a monthly subscription model for FSD may boost short-term revenues, but it could also lead to consumer skepticism regarding long-term value, reflecting challenges in Tesla's market positioning.
See More
Sysco Reports Strong Q2 Earnings, Raises EPS Outlook
- Earnings Beat: Sysco reported adjusted earnings per share of 99 cents for Q2 FY2026, surpassing the analyst consensus estimate of 98 cents, indicating a robust earnings capacity.
- Steady Sales Growth: Quarterly sales reached $20.762 billion, closely aligning with the Street's expectation of $20.767 billion, marking a 3.0% year-over-year increase that reflects the company's stable market performance.
- Improving Local Case Growth: The company achieved its third consecutive quarter of local case growth, with USFS local case volume showing a positive 1.2% increase, highlighting its strong recovery in market demand.
- Optimistic Outlook: Despite facing a $100 million headwind from lower incentive compensation, Sysco raised its adjusted EPS outlook for FY2026 to the high end of its previous guidance range of $4.50-$4.60, demonstrating confidence in future performance.
See More
