Sysco Corporation (NYSE:SYY) shares fell Tuesday after the company reported mixed third-quarter results, with earnings meeting expectations but revenue missing Wall Street estimates.

Sysco’s customers include restaurant chains KFC, Subway, Burger King, and Applebee’s.

Quarterly Details

Sysco reported third-quarter adjusted earnings per share of 94 cents, in line with the Street view. Quarterly sales of $20.519 billion missed the analyst consensus estimate of $20.568 billion.

A Reuters report said Sysco missed sales estimates due to weaker restaurant demand, higher costs, and incentive payouts, amid reduced consumer spending on dining out.

Sales increased 4.7%. U.S. Foodservice volume rose 2.3%, while U.S. local volumes increased 3.3%.

“This exceeded our prior commitment, and we remain confident in delivering over 2.5% U.S. local growth in Q4, which would put us on pace to accelerate on a two-year stack basis,” said CEO Kevin Hourican. 

U.S. Foodservice Operations sales increased 3.1% to $14.2 billion in the third quarter, while International Foodservice Operations’ sales increased 12.4% to $3.9 billion (up 5.2% to $3.6 billion in constant currency).

In the quarter under review, Sysco said its gross profit increased 6.5% to $3.8 billion. Operating income decreased 9.1% to $619 million, and adjusted operating income decreased 0.6% to $768 million.

Quarterly EBITDA decreased 5.1% to $864 million, and adjusted EBITDA increased 0.1% to $970 million.

“Third quarter results reflected strong earnings execution and solid cash flow generation, supported by continued volume acceleration, gross margin expansion, and disciplined cost management, which included headwinds from lapping $63 million of incentive compensation,” said Interim CFO Brandon Sewell.

As of the end of the quarter, the company had a cash balance of $1.9 billion and total liquidity of $4.4 billion.

Outlook

Sysco affirmed 2026 adjusted EPS guidance of $4.60, compared with the $4.59 estimate. Sysco Interim CFO said on the conference call that the company reaffirmed its full-year net sales growth outlook of approximately 3% to 5%, projecting revenue in the range of $84 billion to $85 billion.

“As we look ahead, our strong operating foundation, improving productivity, and the compelling opportunity presented by the pending Jetro Restaurant Depot combination, position Sysco to grow profitably, deepen our relationships with more local customers, and create incremental value for our shareholders,” the company said.

SYY Price Action: Sysco shares were down 3.58% at $72.66 at the time of publication on Tuesday, according to Benzinga Pro data.

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