Sysco Corporation International Growth: Key Profit Driver?

Sysco Corporation SYY delivered a standout performance in the International segment in second-quarter fiscal 2026, reinforcing its role as a meaningful contributor to overall profitability. The International Foodservice Operations segment reported a 7.3% increase in sales to $4 billion. Excluding the impact of the Mexico joint venture divestiture from the prior year, sales rose a stronger 9.9%, pointing to solid underlying demand trends and continued momentum across key global markets.

Margin performance was particularly strong in the International segment, setting the tone for its bottom-line expansion. International gross profit rose 9.5%, with gross margin expanding 42 basis points to 20.8%. This compares favorably with the total enterprise’s 15-basis-point increase and a modest 1-basis-point improvement in the U.S. Foodservice segment, highlighting superior margin execution internationally. Building on this strength, adjusted operating income surged 25.6% to $162 million, or 21.7% on a constant-currency basis, significantly outpacing revenue growth. The sharp increase reflects the segment’s ability to translate higher volumes and disciplined cost management into meaningful profitability gains.

Importantly, this marks the ninth consecutive quarter of double-digit operating income growth in the International business, underscoring consistent execution. The segment’s performance continues to benefit from structural drivers, including expanded supply-chain capacity, deeper penetration of Sysco-branded products, increased sales headcount and ongoing investments in digital tools. These initiatives are enhancing both efficiency and customer reach, supporting sustained growth across regions.

The breadth of growth across international geographies further highlights the scalability of Sysco’s operating model. Management continues to view the segment as a key growth engine, reflecting its increasing importance in driving earnings momentum. Overall, Sysco’s International segment is delivering both faster growth and stronger margins, solidifying its position as a key contributor to the profit mix.

Sysco’s Zacks Rank & Share Price Performance

Shares of this Zacks Rank #3 (Hold) company have lost 5.7% in the past month compared with the broader Consumer Staples sector and the S&P 500 index’s decline of 5.3% and 1.9%, respectively. SYY has outperformed the industry’s decline of 7.1% during the same period.

SYY Stock's Past Month Performance

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Is Sysco a Value Play Stock?

Sysco currently trades at a forward 12-month P/E ratio of 17.13 compared with the industry average of 14.68. This valuation places the stock at a premium relative to peers, indicating broader market expectations around its business stability and ability to navigate current cost and demand dynamics.

SYY Valuation Picture

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Stocks to Consider

Mama's Creations, Inc. MAMA manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures. Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average.

The Hershey Company HSY engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. It sports a Zacks Rank #1 at present. HSY delivered a trailing four-quarter earnings surprise of 17.2%, on average.

The Zacks Consensus Estimate for Hershey’s current financial-year sales and earnings indicates growth of 4.8% and 30.1%, respectively, from the prior-year reported levels.

US Foods Holding Corp. USFD engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 2.2%, on average.

The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.4% and 20.9%, respectively, from the year-ago figures.

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