Sysco Corporation

Sysco reported fourth-quarter total revenue of over $22 billion, up 4.7% year over year. Adjusted EPS was $1.53 in Q4, and full-year adjusted EPS was $4.61, both above prior expectations. Gross profit increased 3.7% to $4.1 billion, while gross margin declined 17 basis points to 18.7%. Adjusted operating income grew 4.1% to $1.1 billion, and adjusted EBITDA grew 4.7% to $1.3 billion. For the full year, free cash flow was $2.1 billion, up 16%. For FY2027, management expects reported net sales growth of approximately 6% to 7% to approximately $90 billion, including about 2% from the 53rd week, and adjusted EPS growth of 9% to 11%, or approximately $5.02 to $5.12. They also guided to approximately 2.5% USFS local case growth, about $100 million of in-year cost-out savings, a Q1 FY2027 adjusted EPS range of $1.18 to $1.20, and capex of about 0.8% of sales or $720 million.

Kevin Hourican struck an upbeat tone, saying the quarter showed accelerating momentum and that Sysco exceeded expectations on both the top and bottom line. He emphasized stronger local and international volume trends, better Sysco Brand mix, and productivity gains from AI-enabled selling and routing tools. He also framed the Restaurant Depot acquisition as a strategic growth lever that could expand local reach, improve profitability, and help accelerate TSR.

Brandon Sewell focused on the financial mechanics behind the beat and the FY2027 outlook. He pointed to Q4 sales growth of 4.7%, gross profit of $4.1 billion, gross margin of 18.7%, adjusted operating expenses of $3 billion, adjusted operating income of $1.1 billion, and free cash flow of $2.1 billion for the year; he also noted a 2.7x net debt leverage ratio and that the company paid out $1 billion in dividends while repurchasing $200 million of shares in fiscal 2026. On guidance, he outlined about $90 billion in sales, about $5.02 to $5.12 in adjusted EPS, approximately $100 million in in-year cost-out, roughly $675 million of adjusted interest expense, a 23.7% to 24.2% tax rate, and continued dividend growth to $0.55 per share quarterly.

Analysts focused on the incremental savings from AI and tech initiatives, the path for USFS profit growth, local case trends, and how fuel costs affect gross margin. Management said the $100 million in FY2027 savings is net of investment, back-half weighted, and weighted toward USFS, with additional runway beyond that as projects expand. On USFS profitability, they cited easing fuel pressure, the positive turn in Sysco Brand, full-year local growth, and ongoing supply chain productivity as the main building blocks. They also said local case growth should be relatively steady through the year, with no large quarter-to-quarter step-up needed, and that FTC questions on Restaurant Depot were as expected.