Sysco Says Consumer Woes Hamper Long-Term Outlook
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Consumers are cutting back on restaurant spending as they cope with economic uncertainties, causing Sysco Corp. to forecast annual sales at the lower end of its target range, CEO Kevin Hourican said in an interview.
The Houston-based food distributor — which ranks No. 3 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 1 among food service carriers — expects sales growth of about 3% to 5% in fiscal 2026, less than the three-year sales growth target of 4% to 6% it gave last year.
“Confidence is not high right now,” Hourican told Bloomberg on July 29 after the company released earnings. He believes reaching the midpoint of the range is feasible.
Sysco’s shares were down more than 2% in July 29 trading in New York. Analysts attributed the drop in shares to the guidance following the earnings report.
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“Performance will be led by initial F26 guide below their LT [long-term] algo,” wrote Barclays analyst Jeffrey Bernstein, who has an overweight rating on the stock.
In Canada, Sysco is emphasizing domestic products in response to “buy local” sentiment following U.S. tariffs, Hourican said. About 75% of items sold there are locally sourced, the company said.
The company plans to grow its sales team by 4% and boost productivity with AI tools while cutting back-office roles to invest more in customer-facing staff.
“Our investors will be rewarded for that type of decision because it will have a higher return on invested capital and return on human capital,” Hourican said.
Fourth-quarter revenue grew 2.8% from a year earlier to $21.14 billion, Sysco said, beating the $21.04 billion estimate. Adjusted earnings per share of $1.48 also topped an estimated $1.39.
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