Will Sysco's Expansion Efforts and Market Leadership Fuel Growth?

Sysco Corporation SYY is benefiting from its diverse portfolio, product innovations and strategic expansion. The company’s expanding presence in the food-away-from-home segment, highlighted by SYGMA growth and "Sysco To Go" pilot stores, positions it well for future demand shifts.

Sysco’s strategic acquisitions play a vital role in strengthening its distribution network, expanding its customer base and fueling 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.

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 deliver customer-focused merchandising and marketing solutions. Such acquisitions have further strengthened the company’s specialty offerings while broadening its geographic reach.

SYY’s Price Performance, Valuation and Estimates

Sysco’s shares have gained 6.9% year to date against the industry’s 8.2% drop.

From a valuation standpoint, SYY trades at a forward price-to-earnings ratio of 17.52X compared with the industry’s average of 13.57X.

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 fiscal 2026 and fiscal 2027 has been stable in the past 30 days.

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

Stocks to Consider in the Consumer Staples Space

The Chefs' Warehouse, Inc. CHEF distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for The Chefs' Warehouse’s current financial-year sales and earnings indicates growth of 6.6% and 19.1%, respectively, from the prior-year levels. CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.

Celsius Holdings, Inc. CELH, which is specialized in nutritional functional foods, beverages and dietary supplements, starches and nutrition ingredients, currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for Celsius’ current financial-year earnings is expected to rise 54.3% from the corresponding year-ago reported figure. CELH delivered a trailing four-quarter earnings surprise of 5.4%, on average.

Post Holdings POST, which is a consumer-packaged goods holding company, currently carries a Zacks Rank #2 (Buy).

POST delivered a trailing four-quarter earnings surprise of 21.4%, on average. 
The Zacks Consensus Estimate for Post Holdings’ current financial-year earnings indicates growth of 11% from the year-ago number. 

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

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