Sysco Corporation Stock Tanks: Here’s Why Investors Are Panicking

Another day, another corporate bloodbath—Sysco just joined the club.

Earnings Miss Sparks Sell-Off

The food distribution giant got chewed up after posting weaker-than-expected Q2 numbers. Revenue growth? Anemic. Margins? Squeezed like a Sysco-brand tomato paste tube.

Supply Chain Bites Back

Logistics costs devoured profits—turns out diesel doesn’t pay for itself. Meanwhile, restaurant demand softened as consumers finally noticed those 30% menu price hikes.

Wall Street Plays Its Favorite Game: Overreaction

Analysts downgraded the stock faster than a Sysco truck hits 60mph. Because nothing says 'prudent investing' like panic-selling after a single quarter.

One thing's certain: today’s drop proves even 'essential' businesses aren’t immune to the market’s mood swings. Bon appétit, bulls.

Image source: Getty Images.

Sysco Q4 earnings

Sysco grew sales 3% year over year -- that's the good news. The bad news is that profit margins on those sales declined due to a goodwill impairment charge, cutting earnings by 13% in comparison to last year. Share buybacks helped mitigate the decline in earnings per share, but EPS still declined 11%, to $1.10 per share.

For the full fiscal year, sales also increased 3%, with net income falling 6% and earnings per share down 4% at $3.73. So while sales growth was pretty steady all year long, earnings took a turn for the worse in the year's final quarter.

Is Sysco stock a sell?

Sysco CEO Kevin Hourican said the company will keep on growing sales at at least 3% in fiscal 2026 -- and perhaps as much as 5%. Sales could reach $84 billion or $85 billion. Earnings won't grow quite as fast, but at least they will grow. Hourican is expecting 1% to 3% earnings improvement to somewhere between $4.50 and $4.60 per share.

That's less than the $4.70 per share that Wall Street was looking for. It probably pushes the stock's valuation up from just under 17 times earnings, to just over. With a 2.7% dividend yield, I'd want to see the company growing earnings in at least the midteens before buying.

Unfortunately, it doesn't look like Sysco's going to manage that. At least not this year.