Sysco Corp. reported higher sales in its fiscal second quarter as order volumes from independent restaurants improved, even as rising operating costs weighed on profit.
The Houston-based foodservice distributor said sales for the 13 weeks ended Dec. 27, 2025, rose 3.0% to $20.76 billion, from $20.15 billion a year earlier.
Net earnings for the quarter declined 4.2% to $389 million, compared with $406 million in the same period last year.
For the first 26 weeks of fiscal 2026, Sysco reported sales of $41.91 billion, up 3.1% from $40.63 billion a year earlier. Net earnings for the first half totaled $866 million, down 3.3% from $896 million in the prior-year period.
The company pointed to improving order trends among local restaurant customers as a sign of strengthening demand in its core U.S. business. U.S. Foodservice case volume increased 0.8% in the quarter, while local case volume — a key measure of independent restaurant activity — rose 1.2%. Sysco said this marked its third consecutive quarter of sequential improvement in local case growth.
“Our performance was driven by increased local case growth,” CEO Kevin Hourican said in a statement. He said the company expects local case growth of at least 2.5% in the second half of the fiscal year.
Gross profit increased 3.9% to $3.79 billion, and gross margin edged up to 18.3% as Sysco adjusted pricing to offset higher product costs, particularly in meat and seafood.
Operating income declined 2.8% to $692 million, as operating expenses rose 5.5%, driven by added staffing and investments in distribution capacity.
In Sysco’s U.S. Foodservice segment, sales increased 2.4% to $14.4 billion. Operating income in that segment fell 1.7% to $820 million as expenses grew faster than revenue.
Sysco’s international food service operations posted stronger results. Sales in the segment rose 7.3% to $4.0 billion, and operating income climbed 23.2% to $117 million, reflecting higher volumes and improved margins.
During the first half of the fiscal year, Sysco generated $611 million in cash from operations and spent $198 million on capital expenditures. The company paid $518 million in dividends over the period.
Sysco operates 337 distribution centers in 10 countries and serves about 730,000 customer locations, including restaurants, healthcare facilities, and schools. The company reported more than $81 billion in sales for fiscal 2025.
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