Sysco 2025 Q4 Earnings Sales Growth Amid 13.2% Net Income Decline

Sysco Corporation (SYY) reported its fiscal 2025 Q4 earnings on July 29th, 2025. The company saw a 2.8% increase in total revenue, reaching $21.14 billion for the quarter. However, Sysco's earnings per share (EPS) and net income both experienced declines, with EPS decreasing by 10.6% to $1.10 and net income dropping 13.2% to $531 million. This performance fell short of expectations, as analysts had anticipated stronger earnings. Looking ahead, Sysco has provided guidance for fiscal 2026, projecting sales growth of 3% to 5% and adjusted EPS growth of 1% to 3%. This outlook is partially influenced by a $100 million headwind due to reduced incentive compensation in the previous fiscal year, affecting the potential growth trajectory.

Revenue

Sysco's revenue for the fourth quarter of fiscal 2025 reached $21.14 billion, reflecting an increase of 2.8% compared to the same period in the previous year. The U.S. Foodservice Operations contributed significantly, with revenue amounting to $14.76 billion. International Foodservice Operations generated $3.93 billion in revenue, while the SYGMA segment added $2.16 billion. The "Other" segment contributed $288 million to the total revenue. Overall, Sysco's diverse operations continue to support its financial performance, despite challenging market conditions.

Earnings/Net Income

Sysco's earnings per share (EPS) decreased by 10.6%, landing at $1.10 for the fourth quarter of fiscal 2025, while the net income fell to $531 million, a 13.2% decline from the same quarter in the previous year. This reflects a challenging quarter for the company, with lower profitability compared to the prior year.

Price Action

The stock price of Sysco has edged up 0.28% during the latest trading day, has edged down 2.27% during the most recent full trading week, and has climbed 5.17% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Sysco (SYY) shares when earnings surpass expectations and holding for 30 days has delivered moderate returns. However, it underperformed compared to the benchmark, achieving a total return of 65.68%, while the benchmark yielded 87.35%. This resulted in an excess return of -21.67%. The strategy's Sharpe ratio stood at 0.40, indicating a reasonable risk-adjusted return. Notably, the strategy experienced a maximum drawdown of 0.00%, suggesting no downside risk, though this aspect might be seen as a concern for some investors. The absence of downside risk could indicate limited volatility, but it may also reflect a potential lack of opportunity for higher gains, depending on market conditions and investor risk tolerance.

CEO Commentary

Kevin P. Hourican, CEO & Chairman, expressed confidence in Sysco's recovery and growth, stating, "We have stabilized colleague retention... that will have meaningful positive impact as we enter 2026." He noted that improved foot traffic and a robust sales force would drive profitable local case growth, highlighting a significant reduction in customer loss rates. Hourican emphasized initiatives like the "Perks 2.0" program and AI-enhanced CRM capabilities as key to enhancing customer service and sales productivity. He conveyed optimism about leveraging Sysco's leadership position and diverse customer base to capture a larger market share in the foodservice distribution sector.

Guidance

Sysco expects reported net sales growth of approximately 3% to 5% in fiscal year 2026, targeting revenue between $84 billion and $85 billion. The company anticipates adjusted EPS of $4.50 to $4.60, reflecting growth of 1% to 3%. This guidance incorporates approximately 2% inflation and accounts for a $100 million headwind from lower incentive compensation in the prior fiscal year. Sysco plans capital expenditures of about $700 million, with a focus on maintaining a strong balance sheet and generating shareholder returns through dividends and share repurchases, each projected at $1 billion.

Additional News

In recent non-earnings news, Sysco has been actively expanding its operations. The company celebrated the grand opening of its Tampa Bay facility, marking a significant stride in its growth strategy. This expansion is part of Sysco's commitment to enhancing its distribution capabilities and serving a broader customer base. Additionally, Sysco has launched its second "Sysco To Go" store in Houston, aimed at catering to the city's diverse culinary scene and supporting local businesses. These initiatives reflect Sysco's strategic focus on strengthening its market presence and optimizing its service offerings. Furthermore, Sysco remains dedicated to returning value to shareholders, with plans to distribute approximately $1 billion each in dividends and share repurchases for fiscal