Guidance for FY27 implies EPS growth at high end of long-term algorithm
Sysco reported strong Q4 results, exceeding guidance on EPS and volume growth, with accelerating momentum in local and national segments. Management provided optimistic FY27 guidance at the high end of its long-term algorithm, driven by AI-led cost savings, despite pausing share buybacks. The call heavily focused on the strategic and financial merits of the Restaurant Depot acquisition, emphasizing future synergies, EPS accretion, and debt reduction plans. Q4 FY26 revenue grew 4.7% to $22B, with adjusted EPS of $1.53, beating guidance.
Buzzberg readGuidance for FY27 implies EPS growth at high end of long-term algorithmSysco reported strong Q4 results, exceeding guidance on EPS and volume growth, with accelerating momentum in local and national segments. Management provided optimistic FY27 guidance at the high end of its long-term algorithm, driven by AI-led cost savings, despite pausing share buybacks. The call heavily focused on the strategic and financial merits of the Restaurant Depot acquisition, emphasizing future synergies, EPS accretion, and debt reduction plans. Q4 FY26 revenue grew 4.7% to $22B, with adjusted EPS of $1.53, beating guidance.Read full analysisCollapse analysis
Sysco reported strong Q4 results, exceeding guidance on EPS and volume growth, with accelerating momentum in local and national segments. Management provided optimistic FY27 guidance at the high end of its long-term algorithm, driven by AI-led cost savings, despite pausing share buybacks. The call heavily focused on the strategic and financial merits of the Restaurant Depot acquisition, emphasizing future synergies, EPS accretion, and debt reduction plans. Q4 FY26 revenue grew 4.7% to $22B, with adjusted EPS of $1.53, beating guidance.
USFS local case volumes grew 2.6%, with June being the strongest month.
FY27 guidance: revenue of ~$90B (6-7% growth), adjusted EPS of $5.02-$5.12 (9-11% growth), includes the 53rd week.
Announced $100M in-year AI-driven cost savings, with a run-rate of $160M.
Revenue$22.124B
+8% QoQ
EPS$1.53
reported
Gross margin18.69%
reported
Op margin4.45%
reported
What changed this quarter
01
Guidance
Guidance for FY27 implies EPS growth at high end of long-term algorithm
Guidance · revenue to $89.5B
02
AI
AI and tech initiatives to deliver $100 million in-year savings
Management emphasized AI-driven transformation as a key driver of efficiency and growth, with initiatives like AI360 improving sales productivity and penetration. They expect AI and technology modernization to deliver $100 million in in-year savings in fiscal 2027, with a…
03
AI
AI360 selling tool improving productivity and penetration
Management emphasized AI-driven transformation as a key driver of efficiency and growth, with initiatives like AI360 improving sales productivity and penetration. They expect AI and technology modernization to deliver $100 million in in-year savings in fiscal 2027, with a…
04
Demand
Local case growth accelerated to 2.9% in second half
Management expressed strong confidence in momentum, raised guidance for fiscal 2027, and highlighted accelerating local case growth and AI-driven efficiencies, while maintaining a positive outlook on the Restaurant Depot acquisition.
AI, capex & demand read
AI
Platform & monetization
Management emphasized AI-driven transformation as a key driver of efficiency and growth, with initiatives like AI360 improving sales productivity and penetration. They expect AI and technology modernization to deliver $100 million in in-year savings in fiscal 2027, with a multi-year operating margin expansion commitment to be announced later.
Demand
Bookings & conversion
Local case growth accelerated to 2.9% in second half. Management expressed strong confidence in momentum, raised guidance for fiscal 2027, and highlighted accelerating local case growth and AI-driven efficiencies, while maintaining a positive outlook on the Restaurant Depot acquisition.
Capex
Investment and capacity
CapEx is expected to remain at approximately 0.8% of sales or $720 million in fiscal 2027. The company is investing in technology upgrades, including routing software and AI tools, to drive efficiency and productivity gains.
Tone · Upbeat
Management expressed strong confidence in momentum, raised guidance for fiscal 2027, and highlighted accelerating local case growth and AI-driven efficiencies, while maintaining a positive outlook on the Restaurant Depot acquisition.
Supply-chain alpha
A1
Sysco plans to leverage Restaurant Depot store locations for rapid same-day delivery to its traditional delivery customers who run out of product between deliveries.
“leveraging restaurant depot stores to fulfill orders for Cisco delivery customers When the customer needs product immediately. In many instances, the Restaurant Depot store is closer to our end customer.”
Sysco's Q4 gross margin was pressured by unhedged inbound fuel costs, but the company chose to absorb the impact rather than raise prices to remain competitive.
“with the inbound, we monitored it during the quarter and We made purposeful choices to absorb some of that cost.”
Sysco's 'value tier' Cisco brand products are seeing sales growth four times faster than the overall book of business, and these are net-new cases, not cannibalization of existing brands.
“Our value tier item sales growth was four times faster than our overall book of business, and this is not cannibalizing our existing business.”
Identifies Costco as a major competitor in the cash-and-carry space, contextualizing the competitive landscape that the Restaurant Depot acquisition will operate within.
“You've got Costco, you've got Sam's Club, you have thousands of independent cash and carry operators.”
Yeah, thanks. Good morning. I don't know if you're willing to answer this, but just the questions that have come up as part of the FTC review process Restaurant Depot. What's the nature of those? I guess have those been largely as you expected at the outset here?
The questions are as we expected. And if I could just step back to the bigger picture, we have confidence that the deal will get approved. We've said on today's prepared remarks by our Q3, the facts as the government will see when they review the case file is that these are independent customer channels. that a customer is a cash and carry customer. They choose that channel. That is where they shop. And there is meaningfully ample competition within cash and carry. You've got Costco, you've got Sam's Club, you have thousands of independent cash and carry operators. Two of our competitors operate cash and carry channels as well. So there's meaningfully ample competition in cash and carry. The other customer is a customer who prefers delivery. They want white glove service. They want a delivery to their restaurant. They don't want to own their own van and have to take time out of their their day to have to go over to a store to get their product. And obviously there's ample competition in the delivery. There's very little overlap between the two customer channels today at this time. And that can be back tested looking at, you know, when Restaurant Depot opens a store, what happens? So that's point one. Point two is pricing. They're going to look at, you know, will this deal negatively impact the end restaurant customer? And I cannot be more clear on this topic. We Cisco have no intentions to raise prices at Restaurant Depot stores. As I said in my prepared remarks, we actually think we can improve affordability. How we will do that is by bringing their model to 125 net new geographies. That creates many thousands of jobs. It brings the affordable low-cost leader to net new communities, and that's a positive for restaurants. stores that are operating today we have no intentions of raising prices at those stores it would hurt the stores it would decrease their competitiveness and the value that they're providing to their end customers we would have no economic incentive to do that so we are answering all the government's questions it's a big deal meaning the deal is a large transaction they have to go through their data discovery and we have confidence that the facts will result in the deal getting approved as we said by Q3. What we're most excited about is being able to buy product together, sharing in that procurement efficiency to produce value for our end …
Understanding JRD's current performance and growth trajectory is key to evaluating Sysco's acquisition thesis and the combined company's future EPS and debt reduction potential.
“We have been advised by Restaurant Depot leadership that in their most recently completed calendar quarter, their sales growth was approximately 4% and their operating margins were in line with expectations.”
… Our initial expectations for the deal to close by the third quarter of fiscal 2027 remain unchanged. This deal expands affordable food options, creates jobs, and is good for restaurant operators. We are confident that the government review will conclude that the deal is positive for restaurants and for competition. Lastly, I would like to provide an update on the performance results from Restaurant Depot. We have been advised by Restaurant Depot leadership that in their most recently completed calendar quarter, their sales growth was approximately 4% and their operating margins were in line with expectations. Through half of their calendar year, Restaurant Depot is delivering strong profit growth versus prior year in compelling overall financial performance. The Restaurant Depot business will substantially increase Cisco's profitability. It will also provide a natural hedge to a softer economy as the business benefits during economic downturns. More importantly, our combined company can create customer engagement opportunities that will be unmatched in the industry, enabling us to grow our business profitably and the important local customer segment. We believe Cisco's …
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