Sysco 2025 Q3 Earnings Misses Targets as Net Income Declines 5.6%

Sysco Corporation (SYY) released its fiscal 2025 Q3 earnings report on April 29th, revealing a slight increase in revenue but a decline in net income compared to the previous year. The company's results fell short of analysts' expectations, with reported earnings per share (EPS) of $0.82, missing the forecasted $1.03 per share. Sysco has adjusted its FY25 guidance, now projecting sales growth of approximately 3% and adjusted EPS growth of at least 1%. Despite challenges, Sysco remains committed to returning $2.25 billion to shareholders through dividends and share repurchases.

Revenue

Sysco's total revenue for fiscal 2025 Q3 rose by 1.1% to $19.60 billion, compared to $19.38 billion in the same quarter last year. The U.S. Foodservice Operations contributed $13.80 billion, showcasing its strength as the primary revenue driver. The International Foodservice Operations followed with $3.46 billion, demonstrating steady international growth. The SYGMA segment reported $2.08 billion, reflecting robust sales, while other segments brought in $257 million, rounding out the total revenue figure.

Earnings/Net Income

Sysco's earnings report shows a 3.5% decline in EPS to $0.82 in Q3 2025, down from $0.85 in Q3 2024. Net income dropped 5.6% to $401 million this quarter, compared to $425 million the previous year. Despite these declines, Sysco's 20-year streak of profitability in this fiscal quarter showcases its operational resilience. This performance indicates challenges in meeting market expectations.

Post Earnings Price Action Review

Following Sysco's earnings report, the stock price demonstrated mixed results across various time frames. In the short term, a 3-Day win rate of 57.14% for revenue indicates a moderate chance of price increase post-release, though the 10-Day and 30-Day rates both stand at 47.62%, suggesting a stable yet subdued medium-term impact. Net income and EPS exhibited similar trends, with all metrics showing a maximum return of 4.24% over 30 days, peaking on day 67 post-release. Overall, while gains are possible, the stock price impact remains inconsistent and modest, reflecting a muted long-term performance.

CEO Commentary

"Sysco's Q3 results were negatively impacted by multiple factors, including California wildfires, adverse weather, and weakening consumer confidence, which led to lower foot traffic to restaurants. Despite these challenges, Sysco is progressing on key growth and profit improvement initiatives, with improved local case volume in March. Our strong income statement and balance sheet position us well to navigate a challenging macroeconomic environment. Going forward, we will remain agile while continuing to invest in long-term growth, supported by over $4 billion in liquidity and disciplined capital allocation," said Kevin Hourican, Chair of the Board and Chief Executive Officer.

Guidance

FY25 guidance now includes expected sales growth of approximately 3% and adjusted EPS growth of at least 1%. Sysco remains on target to return approximately $2.25 billion to shareholders through share repurchases and dividends. The company anticipates driving improvements across its business, including $100 million of annualized cost savings that will carry into the next fiscal year.

Additional News

Sysco Corporation recently announced a $0.03 increase in its quarterly cash dividend, bringing it to $0.54 per share, payable on July 25, 2025, to stockholders of record by July 3. This decision underscores Sysco's commitment to delivering long-term shareholder value. Additionally, Sysco faced challenges with a product recall due to a Listeria outbreak, which could affect its commitment to safety standards. The appointment of Jennifer Kaplan Schott as Executive Vice President and Chief Legal Officer signals positive executive strength for the company, showcasing its focus on leadership amidst industry challenges.