Food distribution giant Sysco (NYSE: SYY) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 4.7% year on year to $20.52 billion. Its non-GAAP profit of $0.94 per share was in line with analysts’ consensus estimates.
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Sysco (SYY) Q1 CY2026 Highlights:
- Revenue: $20.52 billion vs analyst estimates of $20.57 billion (4.7% year-on-year growth, in line)
- Adjusted EPS: $0.94 vs analyst estimates of $0.94 (in line)
- Adjusted EBITDA: $970 million vs analyst estimates of $998.1 million (4.7% margin, 2.8% miss)
- Operating Margin: 3%, in line with the same quarter last year
- Free Cash Flow Margin: 3.4%, similar to the same quarter last year
- Sales Volumes rose 2.3% year on year (-2% in the same quarter last year)
- Market Capitalization: $36.04 billion
“Sysco delivered strong results in the third quarter of fiscal 2026, driven by continued acceleration in local case volume and expanded gross margins,” said Kevin Hourican, Sysco’s Chair of the Board and Chief Executive Officer.
Company Overview
Powering more than 730,000 commercial kitchens across North America and Europe, Sysco (NYSE: SYY) is a global food distributor that supplies restaurants, healthcare facilities, schools, hotels, and other foodservice establishments with food products and related services.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Sysco grew its sales at a 13.7% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Sysco’s recent performance shows its demand has slowed as its annualized revenue growth of 3.5% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
Sysco also reports its number of units sold. Over the last two years, Sysco’s units sold averaged 1.1% year-on-year growth. Because this number is lower than its revenue growth, we can see the company benefited from price increases. 
This quarter, Sysco grew its revenue by 4.7% year on year, and its $20.52 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and indicates its newer products and services will not accelerate its top-line performance yet.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
Sysco’s operating margin has generally stayed the same over the last 12 months, and we generally like to see margin increases due to economies of scale and cost efficiency over time.
This quarter, Sysco generated an operating margin profit margin of 3%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sysco’s EPS grew at 59.6% compounded annual growth rate over the last five years, higher than its 13.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
In Q1, Sysco reported adjusted EPS of $0.94, down from $0.96 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Sysco’s full-year EPS of $4.56 to grow 5.5%.
Key Takeaways from Sysco’s Q1 Results
We struggled to find many positives in these results. Its adjusted operating income missed and its EBITDA fell short of Wall Street’s estimates. Revenue and EPS didn't positive surprise either, coming in in line with expectations. Overall, this was a weaker quarter. The stock traded down 1.4% to $74.28 immediately following the results.
Sysco’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
