Sysco Corporation, the world's largest food distributor, has lowered its financial outlook for 2025 after a disappointing third quarter. The company is feeling the heat as restaurant traffic slows and operational hurdles mount.
What Happened?
Third Quarter sales rose just 1.1% to $19.6 billion, missing analyst expectations of $20.04 billion.
Adjusted earnings per share came in at $0.96, falling short of the expected $1.03.
Sysco now expects:
Sales growth of ~3% (previously 4–5%)
Earnings per share up ~1% (down from a 6–7% projection)
Why the Drop?
High food prices: Consumers are cutting back on dining out and choosing to eat at home instead.
Tariffs: U.S. tariffs are raising import costs, hurting both consumers and Sysco's margins.
Weather & wildfires: Disruptions in California are impacting the supply of fresh produce and meat.
Canadian slowdown: Tariff retaliation and trade issues have hurt Sysco’s operations in Canada (about 8% of 2024 sales).
What This Could Mean:
Pressure on Food Distributors: Sysco’s struggles could be a warning sign for others in the food supply chain—expect more companies to revise forecasts or rethink strategies.
Changing Consumer Habits: If more people keep eating at home, restaurants may see long-term dips in traffic, affecting everything from staffing to food demand.
Sysco’s Next Move: To stay competitive, Sysco may need to:
Streamline operations
Diversify product offerings (like meal kits or grocery retail partnerships)
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