Sysco Corporation, through its subsidiaries, sells, markets, and distributes food and related products to restaurants, healthcare and educational facilities, lodging establishments, and other foodservice customers. It operates through U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. Its products include frozen foods, canned and dry foods, fresh meats and seafood, dairy and beverages, imported specialties, fresh produce, paper products, tableware, cookware, restaurant and kitchen equipment, and cleaning supplies. The company operates in the United States, Canada, the United Kingdom, France, Sweden, and internationally. Sysco Corporation was incorporated in 1969 and is headquartered in Houston, Texas.
Sysco's AI savings and Jetro deal drive growth outlook
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Q4 beat and strong FY27 guidance Sysco beat Q4 expectations with adjusted EPS of $1.53 and revenue over $22 billion, up 4.7%. Management guided FY27 EPS growth of 9-11% and revenue growth of 6-7%, citing AI cost savings. This positive earnings surprise and optimistic outlook push the stock up.
This is the core earnings event that sets the positive tone for the period.
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D.E. Shaw backs AI and Jetro acquisition Hedge fund D.E. Shaw, with a $1 billion stake, supports Sysco's board changes and AI push, and may help fund the $29.1 billion Jetro Restaurant Depot acquisition. This expands exposure to independent restaurants, boosting demand and investor confidence.
It shows major investor support and a strategic acquisition that could drive future growth.
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New $500M AI efficiency program and raised mid-term targets Sysco reaffirmed FY27 guidance and launched a $500 million multi-year AI efficiency program, targeting at least $500 million in savings by FY29. It raised mid-term EPS growth targets to 9-11% from 6-8%, signaling durable cost savings and faster deleveraging after the Jetro deal.
This is a new, concrete plan that enhances profitability and supports the bull case.
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Regenerative agriculture credibility gap A FAIRR report shows food companies, including Sysco, are failing to meet regenerative agriculture hype, with no pesticide reduction targets and limited company-wide measurement. This poses reputational risk and could pressure the stock if investors focus on sustainability.
It provides a real counterweight, highlighting a potential risk that could weigh on sentiment.
Q3 2026
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Sysco's AI savings and Jetro deal drive growth outlook
▲
Q4 beat and strong FY27 guidance Sysco beat Q4 expectations with adjusted EPS of $1.53 and revenue over $22 billion, up 4.7%. Management guided FY27 EPS growth of 9-11% and revenue growth of 6-7%, citing AI cost savings. This positive earnings surprise and optimistic outlook push the stock up.
This is the core earnings event that sets the positive tone for the period.
▲
D.E. Shaw backs AI and Jetro acquisition Hedge fund D.E. Shaw, with a $1 billion stake, supports Sysco's board changes and AI push, and may help fund the $29.1 billion Jetro Restaurant Depot acquisition. This expands exposure to independent restaurants, boosting demand and investor confidence.
It shows major investor support and a strategic acquisition that could drive future growth.
▲
New $500M AI efficiency program and raised mid-term targets Sysco reaffirmed FY27 guidance and launched a $500 million multi-year AI efficiency program, targeting at least $500 million in savings by FY29. It raised mid-term EPS growth targets to 9-11% from 6-8%, signaling durable cost savings and faster deleveraging after the Jetro deal.
This is a new, concrete plan that enhances profitability and supports the bull case.
▼
Regenerative agriculture credibility gap A FAIRR report shows food companies, including Sysco, are failing to meet regenerative agriculture hype, with no pesticide reduction targets and limited company-wide measurement. This poses reputational risk and could pressure the stock if investors focus on sustainability.
It provides a real counterweight, highlighting a potential risk that could weigh on sentiment.
News & notes movingSYY
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Sysco Closes C$1.5 Billion Senior Notes Offering to Fund Jetro Restaurant Depot Acquisition
Sysco Corporation and its wholly-owned subsidiary Sysco Holdings Corporation have closed a public offering of C$1.5 billion in aggregate principal amount of senior notes, split evenly between C$750 million of 4.250% Senior Notes due 2030 and C$750 million of 4.800% Senior Notes due 2034. The issuers estimate they will receive approximately C$1.49 billion from the offering after deducting underwriting discounts and estimated offering expenses. Sysco intends to use the net proceeds to pay a portion of the cash consideration for its pending acquisition of Jetro Restaurant Depot, along with related fees, costs and expenses, or, if the acquisition is not consummated, to fund the special mandatory redemption of the notes under their terms. The offering was made under the issuers' shelf registration statement on Form S-3ASR filed with the Securities and Exchange Commission and was also made on a private placement basis in Canada. Goldman Sachs & Co. LLC, TD Securities Inc. and Merrill Lynch Canada Inc. acted as joint book-running managers.
Sysco Falls on $1 Billion Stock Offering; Waystar Gains on Sale Report
Sysco shares fell 1.3% in premarket trading to $82.49 after the foodservice distributor announced late Monday a $1 billion common stock offering to help partially finance its pending acquisition of Jetro Restaurant Depot. The company priced 12.35 million shares at $81 each, a discount of roughly 3% to Monday's closing price of $83.54, with the offering expected to close on September 16 and likely to result in near-term dilution for existing shareholders. Investor concerns were also heightened by the broader financing structure of the $29.1 billion Jetro Restaurant Depot acquisition, which is being funded primarily through about $21 billion of new and hybrid debt, alongside the equity offering. Waystar shares rose 3.3% to $25.73 in premarket trading after reports that the healthcare software company is exploring strategic options, including a potential sale that could take it private again just two years after its initial public offering in 2024. EQT holds the largest stake in Waystar at 13%, followed by the Canada Pension Plan Investment Board with 10% and BlackRock with 8%.
SYY · Capital · Negative Sysco announced a $1 billion discounted stock offering to partly finance the Jetro acquisition, causing near-term dilution for existing shareholders.
WAY · Capital · Positive Waystar is exploring strategic options including a potential sale that could take it private again, lifting its shares.
Dave & Buster's Shares Plunge 17% on Q2 Earnings Miss
Dave & Buster's Entertainment shares plunged 17% in premarket trading after the arcade and restaurant company's second-quarter results disappointed investors. Reported revenue of $544.1 million missed the $556.8 million FactSet consensus estimate, while adjusted EBITDA of $98.9 million fell short of the expected $120.4 million. The company also posted an unexpected adjusted loss of 27 cents per share, missing the profit of 18 cents a share expected by analysts polled by FactSet. Enova International tumbled more than 15% after the online provider of loans and credit services said it is withdrawing its regulatory applications for the proposed acquisition of Grasshopper Bancorp, though it reaffirmed third quarter and full year guidance and announced an intention to accelerate share repurchases. Sysco slid nearly 2% after the wholesale distributor to restaurants, hospitals and schools announced a common stock offering of 12.3 million shares priced at $81 per share, and Etsy popped 3% after Oppenheimer upgraded the online marketplace to outperform from perform with a $90 price target.
ENVA · Regulation · Negative Enova is withdrawing its regulatory applications for the proposed Grasshopper Bancorp acquisition, a setback that sent shares down over 15%.
ETSY · Capital · Positive Oppenheimer upgraded Etsy to outperform from perform with a $90 price target, lifting the stock 3%.
PLAY · Capital · Negative Dave & Buster's Q2 revenue, EBITDA, and EPS all missed consensus, driving a 17% premarket plunge.
SYY · Capital · Negative Sysco announced a 12.3 million share common stock offering priced at $81 per share, pressuring shares nearly 2%.
Sysco prices 12.3M-share offering at $81 to fund Jetro purchase
Sysco Corporation priced an offering of roughly 12.34 million shares of its common stock at $81 per share, according to a company statement on Tuesday. The company expects the offering to close September 16 and plans to use the net proceeds to finance a portion of the consideration for its pending acquisition of Jetro Restaurant Depot. Underwriters hold a 30-day option to purchase up to an additional $150 million of common stock at the same price, solely to cover overallotments. Goldman Sachs and TD Securities are lead bookrunners, with BofA Securities, J.P. Morgan Securities, and Wells Fargo Securities also serving as bookrunning managers. The stock eased 2.2% in extended trading on Monday.
Sysco raises mid-term targets with $500M AI efficiency plan
Sysco has reaffirmed its fiscal 2027 outlook while raising its mid-term growth targets, backed by a new $500 million AI-powered efficiency program designed to reduce structural costs over the next three years. The company continues to expect 9% to 11% growth in adjusted earnings per share in fiscal 2027 on a 53-week basis, with net sales growth of approximately 6% to 7% to about $90 billion. For fiscal 2028 and 2029, Sysco raised its mid-term outlook for net sales growth to approximately 4% to 7%, up from 4% to 6% previously, and increased its adjusted EPS growth target to 9% to 11%, up from 6% to 8%. The company also introduced the $500 million AI-powered efficiency program to remove structural costs across the next three fiscal years, while remaining on target for the $100 million of in-year net cost savings previously announced for fiscal 2027. Sysco said the combination of AI-enabled cost savings and underlying business performance should support stronger earnings growth over the three-year period.
Sysco Shares Down 2.9% Since Q4 Beat, Can It Rebound?
Sysco's shares have fallen 2.9% since its last earnings report, underperforming the S&P 500, but the company posted a fourth-quarter fiscal 2026 beat on volume and cost gains. Adjusted earnings were $1.53 per share, up 3.4% year over year and above the Zacks Consensus Estimate of $1.51, while sales grew 4.7% to $22,124 million, beating the consensus of $21,921 million. The company issued fiscal 2027 guidance for sales growth of 6-7% and adjusted earnings growth of 9-11% on a 53-week basis, including about $100 million in cost savings from AI-enabled initiatives. Despite the positive results, estimates have been revised downward since the release, and Sysco holds a Zacks Rank #2 (Buy) with a VGM Score of C.
D.E. Shaw Backs Sysco's AI and Restaurant Depot Growth Plans
D.E. Shaw, holding a stake worth over $1 billion in Sysco Corporation, is supporting the food distributor's push to strengthen its board and accelerate its AI transformation. Sysco plans to add two directors with technology and e-commerce experience, and expects AI and automation to generate $100 million in net savings in fiscal 2027. The hedge fund is also expected to help raise capital for Sysco's planned $29.1 billion acquisition of Jetro Restaurant Depot, which would expand its exposure to independent restaurants. Sysco's stock has risen less than 4% over the past year, and the company faces rising food and transportation costs and cautious consumer spending. The bull case hinges on successful AI implementation and integration of Restaurant Depot, while the bear case centers on execution risks, higher leverage, and potential delays in synergies.
Trump's 90-Day Beef Tariff Waiver Boosts These ETFs
President Donald Trump announced a temporary 90-day waiver on out-of-quota tariffs for up to 300,000 metric tons of imported ground beef trimmings, aiming to ease domestic food prices. With the U.S. cattle herd at its lowest since 1951, domestic beef prices have hit record highs, straining restaurants and consumers. The waiver is expected to lower wholesale ground beef costs over the next three months, benefiting fast-food chains like McDonald's and Yum! Brands, as well as meat processors and distributors such as JBS, US Foods, and Sysco. Consequently, ETFs with significant exposure to these companies, including the State Street Consumer Discretionary Select Sector SPDR ETF (XLY), Invesco Leisure and Entertainment ETF (PEJ), and First Trust Consumer Staples AlphaDEX ETF (FXG), are poised to gain from improved profitability in the foodservice supply chain.
Sysco declared a quarterly dividend of $0.55 per share, in line with its previous payout. The dividend is payable on October 23 to shareholders of record on October 2, with the ex-dividend date also set for October 2. Based on the current share price, the forward yield is 2.65%.
Sysco announced strategic governance and operating initiatives to accelerate its enterprise-wide AI transformation. Effective September 1, the company will add Jason Murray and Thomas Ondrof to its board, increasing it to 13 members. Murray, co-founder and CEO of Shipium and a former Amazon vice president, will join the Artificial Intelligence Transformation & Technology board committee, while Ondrof, former CFO of Aramark, will serve on the Audit Committee. Sysco also expanded the mandate of its former Technology Committee, renaming it the Artificial Intelligence Transformation & Technology Committee, which will meet monthly with management. The company reaffirmed fiscal 2027 guidance of 6% to 7% revenue growth and 9% to 11% adjusted EPS growth on a 53-week basis, including a $100 million cost-savings program driven by AI-enabled process improvements. Shares of Sysco rose 1.8% in late morning trading.
Jim Cramer Says Sysco's Solid Quarter Is Being Given Away for Free
Jim Cramer argued on Mad Money that investors are getting Sysco's solid quarter for free after the stock dipped 2.6% post-earnings before recovering. Sysco reported adjusted non-GAAP EPS of $1.53, up 3.4% year-over-year and beating consensus by $0.02, with total revenue of $22.1 billion, up 4.7% and $210 million above expectations. Management guided fiscal 2027 sales growth of 6% to 7% and adjusted EPS growth of 9% to 11%, citing about $100 million in AI-driven efficiency improvements. Cramer also highlighted the pending Jetro Restaurant Depot acquisition, which he said would give Sysco a hammer lock on the industry, though the deal adds debt and pauses buybacks.
Sysco Beats Q4 Expectations, Guides for 9-11% EPS Growth in Fiscal 2027
Sysco reported strong fourth-quarter results, with adjusted earnings per share of $1.53 and total revenue exceeding $22 billion, a growth rate of 4.7%. The company provided fiscal 2027 guidance calling for revenue growth of 6% to 7% to approximately $90 billion and adjusted EPS growth of 9% to 11%, equating to $5.02 to $5.12. Sysco also announced approximately $100 million in in-year cost savings from AI-driven efficiency initiatives, with a run rate of approximately $160 million. USFS local case volumes grew 2.6% in the quarter, and the International segment posted its 11th consecutive quarter of double-digit adjusted operating income growth, with local case growth of 4.5% and adjusted operating income growth of 15.7%. Free cash flow for the year rose 16.3% to $2.1 billion, while net debt leverage stood at 2.7 times at quarter end.
SYY · Capital · Positive Sysco beat Q4 expectations and guided for 9-11% EPS growth in fiscal 2027, with strong revenue growth and cost savings from AI initiatives.
Food distribution giant Sysco will report its second-quarter earnings before the bell on Tuesday. The company met revenue expectations last quarter with $20.52 billion, up 4.7% year on year, but missed EBITDA estimates. For this quarter, analysts expect revenue growth of 3.8% year on year, and estimates have been largely reconfirmed over the last 30 days. Sysco has missed Wall Street revenue estimates multiple times over the past two years, and its stock price was unchanged over the last month heading into earnings with an average analyst price target of $87.64 compared to the current share price of $84.52.
Zacks Highlights Four Food Stocks Amid Industry Headwinds
Zacks Equity Research has identified Mondelez International, Sysco, United Natural Foods, and Mama's Creations as stocks to watch within the Food-Miscellaneous industry, which faces pressure from value-conscious consumers and persistent cost inflation. The industry carries a Zacks Industry Rank of 214, placing it in the bottom 13% of more than 247 Zacks industries, and its consensus earnings estimate for the current financial year has declined 2.7% since the beginning of May 2026. United Natural Foods holds a Zacks Rank of 1, or Strong Buy, with shares gaining 109.4% over the past year, while Mama's Creations is ranked 2, or Buy, and has rallied 115.2%. Mondelez and Sysco both carry a Zacks Rank of 3, or Hold, with Mondelez shares down 10.4% and Sysco shares up 9.2% over the same period.
We are skeptical of three consumer stocks: Gray Television, Warner Music Group, and Sysco. Gray Television, with a market cap of $410.1 million, saw its sales grow at just 5.2% annually over five years, below the typical consumer discretionary company, and its return on invested capital has not improved, raising doubts about recent investments. Warner Music Group, valued at $15 billion, posted 8.6% annual revenue growth over five years, slower than peers, with free cash flow margin not expected to grow and eroding returns on capital from a low base. Sysco, with a market cap of $39.91 billion, achieved only 1.1% average unit sales growth over two years, lacks free cash flow generation, and also faces declining returns on capital.
GTN · Capital · Negative Article expresses skepticism about Gray Television due to slow sales growth and poor return on invested capital.
SYY · Capital · Negative Article expresses skepticism about Sysco due to low unit sales growth, lack of free cash flow, and declining returns on capital.
WMG · Capital · Negative Article expresses skepticism about Warner Music Group due to slower revenue growth than peers and eroding returns on capital.
Sysco Stock Looks Undervalued on Earnings Despite Mixed Broader Checks
Sysco stock appears undervalued on earnings-based measures, trading at a price-to-earnings ratio of about 23.0 times, which is below its estimated fair P/E of roughly 30.0 times. The shares recently closed at US$83.58, having delivered a 25.8% total return over the past five years. However, broader valuation checks present a more mixed picture, with four out of six tests pointing to attractive pricing but the overall assessment remaining balanced rather than a clear bargain. The key question is whether current margins and growth expectations can hold up enough for the P/E to re-rate closer to its fair multiple, or if cost pressures and demand risks in foodservice distribution justify the current discount.
Sysco Q1 Margin Gains Offset Russell 1000 Dynamic Index Removal
Sysco reported higher local case volumes and wider gross margins in its first quarter of fiscal 2026, with revenue growing year on year and matching analyst expectations. The company was removed from the Russell 1000 Dynamic Index around the same time, but the operational improvements drew investor attention. The continued rollout of Sysco's pricing agility tools is seen as key to sustaining the margin gains. The broader investment case still hinges on restaurant traffic resilience amid a choppy macro backdrop.
Consumer Discretionary Stocks Q1 In Review: Sysco Vs Peers
The consumer discretionary sector saw mixed Q1 results, with revenues beating analyst estimates by 2% on average but next-quarter guidance coming in 4.1% below expectations. Sysco reported revenues of $20.52 billion, up 4.7% year-on-year and in line with estimates, while Smith & Wesson posted the best performance with revenues of $178.4 million, a 26.7% increase that beat expectations by 14.9%. Leggett & Platt was the weakest, with revenues of $918.2 million, down 10.2% and missing estimates by 3.3%. Wyndham and Figs also reported, with Figs seeing a 28% revenue jump to $159.9 million but its stock falling 26.5% since the release.
Big Food failing to meet hype on regenerative agriculture
The FAIRR investor network reports a widening credibility gap in how the world's biggest food companies are implementing regenerative agriculture plans. Quantified regenerative agriculture targets have fallen from 35% of assessed companies in 2023 to 28%, and no company has set a pesticide reduction target despite more than half identifying reduced agrochemical inputs as a goal. Only Conagra Brands, Danone, Nestlé, and Sysco measure herbicide use in their programmes. While the share of companies measuring regenerative agriculture outcomes rose from 16% in 2023 to 54% in 2026, most measurement remains at the project level rather than company-wide, making it difficult for investors to assess scale and impact.
BN.PA · Regulation · Negative FAIRR report notes Danone measures herbicide use but industry-wide credibility gap on regenerative agriculture targets may affect investor confidence.
CAG · Regulation · Negative FAIRR report highlights lack of pesticide reduction targets and declining quantified regenerative agriculture targets, indicating credibility gap for Conagra.
NESN.SW · Regulation · Negative FAIRR report highlights Nestlé among few measuring herbicide use but overall failure to meet regenerative agriculture targets, indicating gap.
SYY · Regulation · Negative FAIRR report shows Sysco among few measuring herbicide use but overall industry failing to meet regenerative agriculture hype, posing reputational risk.
UNFI Turns to AI and Lean Ops as Organic Demand Grows
United Natural Foods is leveraging AI-powered supply-chain tools and lean management practices to improve efficiency and cash flow while natural and organic demand supports growth. The company has expanded its AI procurement platform across all distribution centers and broadened its AI fleet management system, helping on-time deliveries rise more than 4% year to date and average miles per delivery fall nearly 5%. Lean Daily Management has been implemented across 40 distribution centers, contributing to a more than 7% increase in distribution-center productivity and a nearly 7% year-over-year decline in operating expenses in the fiscal third quarter. Free cash flow reached $243 million year to date, up $90 million from the prior-year period, reducing net debt to $1.63 billion and net leverage to 2.5 times. Natural segment sales rose 4.4% year over year to $4.34 billion in the fiscal third quarter, with underlying natural growth again outperforming the market and the two-year stack remaining in the mid-teens for the past five quarters. The company also introduced more than 30 new private-brand SKUs and offers an Endless Aisle marketplace for emerging brands. Macro pressures from inflation, fuel costs, and competition from Sysco and US Foods remain risks, and the stock carries a Neutral recommendation with no Zacks Rank or Style Scores provided.
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