Sysco Earnings Lift Guidance After Q2

Sysco Corporation (SYY) raised its full-year adjusted EPS guidance on Jan. 27, 2026, after second-quarter earnings showed sales and adjusted-profit gains despite product-cost inflation, supporting management’s confidence in growth for the second half.

Quarter Results and Margins

The company reported sales of $20.8 billion for the 13 weeks ended Dec. 27, 2026, a 3.0% increase year over year. U.S. Foodservice volume rose 0.8%, while U.S. local volumes grew 1.2%. Gross profit increased 3.9% to $3.8 billion, and gross margin expanded 15 basis points to 18.3%.

GAAP operating income declined 2.8% to $692 million, but adjusted operating income rose 3.1% to $807 million. Adjusted EBITDA increased 3.3% to $1.0 billion. GAAP net earnings fell 4.2% to $389 million, while adjusted net earnings grew 3.9% to $476 million. GAAP diluted EPS was $0.81, down 1.2%, compared with adjusted EPS of $0.99, up 6.5%.

Product-cost inflation ran about 2.9% enterprise-wide, mainly driven by meat and seafood. Operating expenses increased 5.5% on a GAAP basis, reflecting added sales headcount, capacity investments, and the effect of lapping lower incentive compensation from the prior year.

Guidance and Financial Position

Sysco raised its full-year adjusted EPS guidance to the high end of the $4.50–$4.60 range. The outlook factors in a roughly $100 million ($0.16 per share) headwind from lapping lower FY2025 incentive compensation and assumes at least 2.5% local case growth for the rest of the year. Excluding the incentive-compensation impact, adjusted EPS growth would be at the upper end of the company’s long-term 5%–7% range. The guidance relies on continued momentum in U.S. local volumes, further gross-margin expansion, and Sysco-specific initiatives as product-cost inflation moderates.

Year-to-date free cash flow for the 26 weeks was $413 million, and net debt to adjusted EBITDA on a trailing 12-month basis stood at 2.86.