Can Sysco's Strategic Efforts & Acquisitions Power Growth?

Sysco Corporation SYY holds a leading position in the global foodservice industry. The company is enhancing its customer base by leveraging digital solutions and piloting retail-style formats. The Sysco Marketplace platform and Sysco to Go pilot program highlight its efforts to become a comprehensive food solutions provider.

Sysco’s ‘Recipe for Growth’ strategy, which focuses on digital transformation, supply-chain strength, customer-centric initiatives and innovation, appears fruitful. This roadmap is designed to steadily expand sales and earnings while maximizing shareholders’ value.

Sysco’s prudent acquisitions play a major role in enhancing its distribution network and customer base, alongside bolstering growth. Its recent acquisition, Ready Chef, has been performing well. In the fiscal second quarter, the company acquired Campbells Prime Meat, a major specialty meat business in Scotland. By integrating Campbells Prime Meat product offering with SYY’s broadline expertise, this acquisition offers a strategic platform for total team selling across the region. Other acquisitions include Edward Don & Company, BIX Produce and more.

The company is sharpening its operational excellence by cutting costs, simplifying processes and expanding distribution capacity to increase efficiency. Such efforts might help offset external pressures, including soft restaurant demand and inflationary headwinds. During the fourth quarter of fiscal 2025, restaurant foot traffic dipped 1% year over year, leading to a 0.3% dip in total case volume and 1.5% drop in local case volume within U.S. Foodservice.

Nevertheless, Sysco is working on several fronts to strengthen its leadership in the global food distribution and aid long-term growth. SYY aims to provide customer-oriented merchandising and marketing solutions. Aforesaid buyouts have also been boosting the company’s specialty offerings and expanding geographic reach.

SYY’s Price Performance, Valuation and Estimates

Sysco’s shares have gained 5.2% year to date against the industry’s 5.6% dip.

From a valuation standpoint, SYY trades at a forward price-to-earnings ratio of 17.42X compared with the industry’s average of 15.9X.

The Zacks Consensus Estimate for SYY’s fiscal 2026 and fiscal 2027 earnings per share (EPS) indicates year-over-year growth of 2% and 8.9%, respectively. The company’s EPS estimate for 2025 and 2026 has moved south in the past 30 days.

Sysco currently carries a Zacks Rank #3 (Hold).

Stocks to Consider in the Consumer Staples Space

Nomad Foods NOMD, which manufactures frozen foods, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

NOMD delivered a trailing four-quarter earnings surprise of 3.8%, on average. The Zacks Consensus Estimate for Nomad Foods’ current financial-year EPS indicates growth of 6.7% from the year-ago number. 

Mondelez International MDLZ, which is a leader in the snack food industry, currently carries a Zacks Rank #2 (Buy). 
MDLZ delivered a trailing four-quarter earnings surprise of 9%, on average.

The Zacks Consensus Estimate for MDLZ’s current financial-year sales indicates growth of 6.1% from the year-ago number. 

Ingredion Incorporated INGR, which is a provider of ingredient solutions specialized in nature-based sweeteners, starches and nutrition ingredients, currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for INGR’s current financial-year EPS is expected to rise 6.7% from the corresponding year-ago reported figure. INGR delivered a trailing four-quarter earnings surprise of 11.1%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research