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Why Is Sysco (SYY) Up 1.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Sysco (SYY - Free Report) . Shares have added about 1.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sysco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sysco Beats on Q3 Earnings & Sales, Raises EPS View
Sysco posted strong third-quarter fiscal 2022 results, wherein both top and bottom lines increased year over year and cruised past the Zacks Consensus Estimate. The company’s performance surpassed management’s anticipation and led to a raised earnings per share view.
The company witnessed strong consumer and customer away-from-home demand in late February and March, as it snapped back from the Omicron impact. Further, the company continued to witness robust market share gains in the United States and internationally, reflecting strength in its Recipe for Growth plan. Sysco witnessed considerable volume gains. It also delivered increased gross profit per case, thanks to its efforts to counter product and fuel inflation. The company made solid improvements in operating expense leverage, including reduced snapback expenses.
This company’s adjusted earnings of 71 cents per share crushed the Zacks Consensus Estimate of 54 cents. The bottom line increased considerably from the year-ago period’s earnings of 22 cents per share.
The company reported sales of $16,902.1 million, which soared 42.9% year over year and beat the Zacks Consensus Estimate of $16,065 million. Foreign currency had an adverse impact of 0.7% on the top line.
Gross profit surged 42% to $3,013.4 million, while the gross margin contracted 12 basis points (bps) to 17.8%. Adjusted gross margin rose 5% to 18%. This year-over-year growth in gross profit was fueled by elevated volumes along with efficient inflation management. Foreign currency had a negative impact of 0.9% on gross profit. Adjusted operating income of $575.4 million grew $319.2 million from the year-ago period.
Segment Details
U.S. Foodservice Operations: In the reported quarter, segment sales jumped 43.6% to $12,006.2 million. Local case volumes within U.S. Broadline operations jumped 14.1% and total case volumes surged 18.8%. Both of these increases reflect organic improvements. Gross profit escalated by 38.9% to roughly $2,270 million and the gross margin fell 64 bps to 18.91%. The U.S. Broadline saw 15.8% product cost inflation mainly due to the poultry, fresh produce and dairy categories.
International Foodservice Operations: Segment sales soared 64.5% to $2,834.1 million in the quarter. Foreign-exchange fluctuations adversely impacted segment sales by 4.8%. On a constant-currency (cc) basis, sales advanced 69.3% to $2,917.8 million. Gross profit jumped 75.4% to $570.2 million and the gross margin expanded 125 bps to 20.12%. At cc, gross profit rose 81.6% to $590.6 million. Currency movements hurt the segment’s gross profit by 6.2%.
SYGMA’s sales advanced 13.5% to $1,794.8 million. Gross profit rose 10.3% to about $147.2 million, while the gross margin contracted 24 bps to 8.2%.
Other segment’s sales jumped 66.4% to $267.1 million.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $876.1 million, long-term debt of $10,608.8 million and total shareholders’ equity of $1,321.4 million. In the 39-week period ended Apr 2, 2022, the company generated cash flow from operations of $745.9 million and free cash flow amounted to $434.3 million.
Guidance
The robust third-quarter performance reflects solid demand as well as strong progress in the company’s transformation efforts. Sysco generated profitability despite the double-digit inflation as well as focused snap back and transformation investments. Management remains optimistic about its business and raised its adjusted earnings per share guidance for fiscal 2022. Sysco now expects earnings per share of $3.16-$3.26, up from the previous view of $3-$3.10.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Sysco has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Sysco has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Sysco is part of the Zacks Food - Miscellaneous industry. Over the past month, Post Holdings (POST - Free Report) , a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended March 2022 more than a month ago.
Post Holdings reported revenues of $1.41 billion in the last reported quarter, representing a year-over-year change of -5%. EPS of $0.24 for the same period compares with $0.29 a year ago.
Post Holdings is expected to post earnings of $0.58 per share for the current quarter, representing a year-over-year change of -37.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Post Holdings has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is Sysco (SYY) Up 1.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Sysco (SYY - Free Report) . Shares have added about 1.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sysco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sysco Beats on Q3 Earnings & Sales, Raises EPS View
Sysco posted strong third-quarter fiscal 2022 results, wherein both top and bottom lines increased year over year and cruised past the Zacks Consensus Estimate. The company’s performance surpassed management’s anticipation and led to a raised earnings per share view.
The company witnessed strong consumer and customer away-from-home demand in late February and March, as it snapped back from the Omicron impact. Further, the company continued to witness robust market share gains in the United States and internationally, reflecting strength in its Recipe for Growth plan. Sysco witnessed considerable volume gains. It also delivered increased gross profit per case, thanks to its efforts to counter product and fuel inflation. The company made solid improvements in operating expense leverage, including reduced snapback expenses.
This company’s adjusted earnings of 71 cents per share crushed the Zacks Consensus Estimate of 54 cents. The bottom line increased considerably from the year-ago period’s earnings of 22 cents per share.
The company reported sales of $16,902.1 million, which soared 42.9% year over year and beat the Zacks Consensus Estimate of $16,065 million. Foreign currency had an adverse impact of 0.7% on the top line.
Gross profit surged 42% to $3,013.4 million, while the gross margin contracted 12 basis points (bps) to 17.8%. Adjusted gross margin rose 5% to 18%. This year-over-year growth in gross profit was fueled by elevated volumes along with efficient inflation management. Foreign currency had a negative impact of 0.9% on gross profit. Adjusted operating income of $575.4 million grew $319.2 million from the year-ago period.
Segment Details
U.S. Foodservice Operations: In the reported quarter, segment sales jumped 43.6% to $12,006.2 million. Local case volumes within U.S. Broadline operations jumped 14.1% and total case volumes surged 18.8%. Both of these increases reflect organic improvements. Gross profit escalated by 38.9% to roughly $2,270 million and the gross margin fell 64 bps to 18.91%. The U.S. Broadline saw 15.8% product cost inflation mainly due to the poultry, fresh produce and dairy categories.
International Foodservice Operations: Segment sales soared 64.5% to $2,834.1 million in the quarter. Foreign-exchange fluctuations adversely impacted segment sales by 4.8%. On a constant-currency (cc) basis, sales advanced 69.3% to $2,917.8 million. Gross profit jumped 75.4% to $570.2 million and the gross margin expanded 125 bps to 20.12%. At cc, gross profit rose 81.6% to $590.6 million. Currency movements hurt the segment’s gross profit by 6.2%.
SYGMA’s sales advanced 13.5% to $1,794.8 million. Gross profit rose 10.3% to about $147.2 million, while the gross margin contracted 24 bps to 8.2%.
Other segment’s sales jumped 66.4% to $267.1 million.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $876.1 million, long-term debt of $10,608.8 million and total shareholders’ equity of $1,321.4 million. In the 39-week period ended Apr 2, 2022, the company generated cash flow from operations of $745.9 million and free cash flow amounted to $434.3 million.
Guidance
The robust third-quarter performance reflects solid demand as well as strong progress in the company’s transformation efforts. Sysco generated profitability despite the double-digit inflation as well as focused snap back and transformation investments. Management remains optimistic about its business and raised its adjusted earnings per share guidance for fiscal 2022. Sysco now expects earnings per share of $3.16-$3.26, up from the previous view of $3-$3.10.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Sysco has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Sysco has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Sysco is part of the Zacks Food - Miscellaneous industry. Over the past month, Post Holdings (POST - Free Report) , a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended March 2022 more than a month ago.
Post Holdings reported revenues of $1.41 billion in the last reported quarter, representing a year-over-year change of -5%. EPS of $0.24 for the same period compares with $0.29 a year ago.
Post Holdings is expected to post earnings of $0.58 per share for the current quarter, representing a year-over-year change of -37.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Post Holdings has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.