Sysco Corp Performance Overview

(Reuters) – Food distributor Sysco Corp (NYSE:SYY) beat first-quarter revenue estimates on Tuesday, supported by steady demand for its specialty seafood and fresh-cut meat products, but missed profit expectations.

Why is it Important?

Sysco's quarterly sales numbers offer a bright spot at a time when the broader U.S. restaurant industry is struggling with weaker traffic due to strained household budgets and higher menu prices.

However, the company has been facing pressure from still-elevated prices of packaged and fresh food products, even as supply chain constraints and input costs ease from their peaks.

Context

Sysco supplies fresh meat, seafood, and dairy products to a wide client base that includes educational, healthcare, and recreational institutions.

The Texas-based company's efforts to help local restaurants attract customers in recent quarters, including providing low-cost menu alternatives, gave it an edge over consumer staple peers such as Hormel Foods (NYSE:HRL) and Conagra Brands (NYSE:CAG).

Key Quote

> "We remain on track to accelerate local volume growth and margins in the second half of the year, with an improving pipeline," said CEO Kevin Hourican.

By the Numbers

The company's first-quarter net sales rose 4.4% to $20.48 billion, topping analysts' average estimate of $20.46 billion, according to data compiled by LSEG.

Excluding items, Sysco earned $1.09 per share for the quarter ended Sept. 28, compared with estimates of $1.13. Its gross profit margin fell 27 basis points to 18.3% in the first quarter.

The company reiterated its 2025 forecasts, expecting full-year sales growth of 4% to 5% and adjusted EPS growth of 6% to 7%.