Sysco shares tumbled 5.12% during Tuesday's intraday trading session, even as the food distributor reported fiscal fourth-quarter results that topped analyst expectations.

The company's adjusted earnings of $1.53 per share beat the consensus estimate of $1.51, while revenue rose 4.7% to $22.1 billion, slightly ahead of forecasts. Sysco also issued an upbeat fiscal 2027 outlook, projecting sales growth of 6% to 7% and adjusted EPS growth of 9% to 11%. However, investor sentiment soured on details beneath the headline numbers.

Gross margin contracted 17 basis points to 18.7%, driven by product cost inflation in meat and fresh produce categories. Adding to the unease, Sysco remains entangled in a multistate cyclosporiasis outbreak linked to contaminated iceberg lettuce from a supplier, which prompted a halt in distribution and a product recall in July. The combination of margin compression and food safety concerns overshadowed the company's otherwise solid quarterly performance, triggering the sharp intraday sell-off.