SYY · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

SYSCO CORP · 2026-11-04 · Importance 24 · Surprise 14

Consolidated gross profit increased 3.8% to $4.051 billion in the first quarter of fiscal 2027, and gross margin increased 18 basis points to 18.63%. Management attributed the margin improvement to local case-volume growth, tariff benefits, customer fuel surcharges, strategic-sourcing savings, and increased Sysco brand penetration. U.S. Foodservice Operations gross margin rose 14 basis points to 19.24%, supported by stronger customer mix and Sysco brand performance. International Foodservice Operations gross margin rose 45 basis points to 21.28% (42 basis points higher on a constant-currency basis).

Key facts

Sysco gross profit increased 3.8% in the first quarter of fiscal 2027, driven by local case volume growth, tariff benefits, customer fuel surcharges, strategic sourcing savings, and increased Sysco brand penetration. source
Sysco's gross margins may decline if sales from locally managed customers do not grow at the same rate as sales from multi-unit customers. source
Significant or prolonged inflation, deflation, or economic uncertainty may affect Sysco's product costs and profitability, and Sysco is unable to predict inflation over the long term. source
Industry competition and the impact of group purchasing organizations may adversely affect Sysco's margins, customer retention, market share, growth rate, and profitability. source
Conditions beyond Sysco's control may interrupt supplies and increase product costs. source
Sysco gross margin increased 18 basis points in the first quarter of fiscal 2027, driven primarily by local case volume growth, tariff benefits, customer fuel surcharges, sourcing efficiencies, and increased Sysco brand penetration. source
U.S. Foodservice Operations gross margin was 19.24% in the first quarter of fiscal 2027, up 14 basis points from 19.10% in the first quarter of fiscal 2026, primarily due to stronger customer mix and improved Sysco brand performance. source