$SYY · SYSCO CORP
Sysco reported Q1 FY2027 results: revenue of $21.7B (+2.8% YoY), GAAP EPS of $1.09, and adjusted EPS of $1.19. GAAP operating income declined 10.4% to $717M due to JRD acquisition costs, while adjusted operating income rose 3.2% to $927M. The company reiterated FY27 adjusted EPS growth guidance of 9%-11% but now expects full-year sales at the lower end of its 6%-7% range. Separately, Brandon Sewell was named permanent CFO.
- Sales rose 2.8% YoY to $21.7B; U.S. Foodservice local volume grew 2.7%.
- GAAP operating income fell 10.4% to $717M, dragged by JRD acquisition costs; adjusted operating income rose 3.2% to $927M.
- GAAP EPS of $1.09 (+10.1% YoY); adjusted EPS of $1.19 (+3.5% YoY).
- Interest expense surged 51.7% YoY to $261M, reflecting debt taken for the pending Jetro Restaurant Depot acquisition.
- Brandon Sewell named permanent CFO effective Nov 1, 2026, after serving as interim since March 2026.
Extended-hours trading shows shares at $77.00, down 5.80% vs the regular close of $81.74. The selloff likely reflects the GAAP operating income decline, the sharp interest expense increase, and full-year sales guidance moving to the lower end of the 6%-7% range.
Sysco's earnings reveal a bifurcated story: solid underlying operations with 2.7% local volume growth and reiterated EPS guidance, overshadowed by a ballooning interest burden and GAAP profit compression from the pending JRD megadeal.
Sysco's 2.7% local volume growth in U.S. Foodservice contrasts with "continued softness in restaurant foot traffic," suggesting share gains. The 0.3% enterprise-level product cost inflation is notably low, pressuring top-line growth across food distribution peers.
Interest expense jumped to $261M from $172M YoY due to bridge-loan financing for the JRD acquisition; debt-to-net-earnings stands at 7.7x. Full-year sales growth guided to the lower end of 6%-7% on weaker food-cost inflation, and the JRD deal closure remains pending with no firm date.