Sysco (NYSE:SYY) Reports Q3 CY2025 In Line With Expectations

Food distribution giant Sysco (NYSE:SYY) met Wall Streets revenue expectations in Q3 CY2025, with sales up 3.2% year on year to $21.15 billion. Its non-GAAP profit of $1.15 per share was 2.6% above analysts’ consensus estimates.

Sysco (SYY) Q3 CY2025 Highlights:

• Revenue: $21.15 billion vs analyst estimates of $21.07 billion (3.2% year-on-year growth, in line)

• Adjusted EPS: $1.15 vs analyst estimates of $1.12 (2.6% beat)

• Adjusted EBITDA: $1.07 billion vs analyst estimates of $1.11 billion (5.1% margin, 3.8% miss)

• Operating Margin: 3.8%, in line with the same quarter last year

• Free Cash Flow was -$74 million compared to -$69 million in the same quarter last year

• Sales Volumes were flat year on year (2.5% in the same quarter last year)

• Market Capitalization: $36.92 billion

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 performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Sysco grew its sales at a 10.7% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

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 3.3% over the last two years was below its five-year trend.

We can dig further into the company’s revenue dynamics by analyzing its number of units sold. Over the last two years, Sysco’s units sold averaged 1.4% 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 3.2% year on year, and its $21.15 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 4.1% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and suggests its newer products and services will not lead to better top-line performance yet.

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