On January 27, Sysco, a major food distributor, announced it has raised its annual profit outlook. The company exceeded expectations for its second-quarter profits and sales, largely due to strong demand for its steaks, fillets, and frozen foods. This demand has bolstered Sysco’s recovery in the U.S. market.
Why does this matter? Sysco supplies food to popular chains like KFC and Subway. Recently, there’s been an uptick in customers visiting restaurants, especially with those in higher income brackets indulging more. In contrast, families with lower incomes are feeling the pinch from the fluctuating trade policies of former President Donald Trump, causing them to be more cautious with their spending.
Additionally, Sysco has been strategically cutting costs. They’ve streamlined shipping expenses and renegotiated supplier contracts. This approach has been essential in managing rising input costs and improving their bottom line. The company’s international sales also showed strength, jumping 7.3% with a gross margin rise of 20.8% for the quarter ending December 27.
CEO Kevin Hourican highlighted the company’s progress, stating, “We delivered our third consecutive quarter of sequentially improving local case growth.” Notably, they achieved a positive 1.2% growth in U.S. foodservice volume during this period.
Looking ahead, Sysco is optimistic. They now expect their adjusted earnings per share to grow between 5% and 7% in fiscal 2026, which translates to about $4.50 to $4.60—an increase from the previous projection of just 1% to 3% growth.
In the last quarter, Sysco posted adjusted profits of 99 cents per share, barely surpassing analysts’ predictions of 98 cents. Their quarterly net sales hit $20.76 billion, matching forecasts, with a gross margin expansion of 18.3%.
Market reactions have been positive, with Sysco’s shares, which dropped about 4% in 2025, rising around 3.7% during premarket trading following this news. This turnaround highlights how Sysco is adapting to changing market conditions and consumer trends.
As of now, food service trends reveal a growing interest in dining out, reflecting a post-pandemic recovery. According to a recent survey by the National Restaurant Association, 83% of consumers are eager to return to restaurants, further supporting Sysco’s positive trajectory.
For more insights on food service trends, check out the National Restaurant Association’s website.
