Why This Matters to Distributors: Growth is coming from local customers, not large national chains. Distributors that can win share with independent operators while managing rising costs are better positioned as demand improves unevenly across the market.
Sysco Corp. reported higher sales in its fiscal third quarter as demand from local restaurant customers improved, though profit declined as the company increased spending on sales and operations.
Sales for the quarter ended March 28, rose 4.7% to $20.5 billion from $19.6 billion a year earlier. Net earnings fell 15.2% to $340 million from $401 million.
Growth was driven by improving demand from independent and local customers. U.S. foodservice volume increased 2.3%, while local case volume rose 3.3%, the strongest quarterly growth rate in more than three years.
“Our U.S. local volumes grew 3.3%, the highest quarterly rate in over three years,” CEO Kevin Hourican said. “We are encouraged by the progress, results, and momentum across each of our business segments.”
In the company’s largest segment, U.S. Foodservice Operations, sales increased 3.1% to $14.2 billion, supported by gains in both local and national accounts.
International operations posted stronger growth, with sales rising 12.4% to $3.9 billion. On a constant currency basis, sales increased 5.2%.
Higher costs weighed on profit during the quarter. Operating expenses increased 10.1%, driven by higher incentive compensation, expanded sales headcount, and capacity investments.
For the first nine months of fiscal 2026, Sysco reported sales of $62.4 billion, up 3.6% from $60.2 billion a year earlier. Net earnings for the period declined 7.0% to $1.2 billion from $1.3 billion.
The company said it expects U.S. local volume growth to exceed 2.5% in the fourth quarter, supported by improving productivity in its core business.
Sysco is also moving forward with its planned acquisition of Jetro Restaurant Depot, a U.S. cash and carry foodservice distributor serving independent operators. The deal, announced after the quarter ended, is subject to regulatory approval and is expected to close by Sysco’s third quarter of fiscal 2027.
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