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Sysco Corp. (SYY) Beats Q4 Earnings; Misses on Sales

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Sysco Corp. (SYY - Free Report) markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry.

Sysco’s growth strategy remains strong and its efforts to accelerate sales and reduce costs are encouraging. The company also remains positive on the acquisition front. It is encouraging that it has delivered higher gross margins in the past one year, after witnessing declining gross margins since the last two fiscal years, despite deflationary pressure. However, Sysco is witnessing soft sales growth due to the unfavorable impact of food cost deflation. Currency headwinds also remain a concern for Sysco.

Investors should also note the recent earnings estimate revisions for SYY, as the consensus estimate has remained unchanged. However, the earnings surprise history was a decent one. SYY has delivered in-line earnings in two of the last four quarters, with positive surprise in the remaining two; thus delivering an average positive surprise of 6.65%.

Currently, SYY has a Zacks Rank #2 (Buy), but that could definitely change following Sysco’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: SYY’s earnings of 64 cents beat our consensus estimate of 60 cents. Investors should note that these figures take out stock option expenses.

Revenue: SYY’s revenues of $13.648 billion marginally lagged the consensus estimate of $13.708 billion.

Key Stats to Note: Sysco sales increased double-digits on a year-over-year basis. On an organic basis, it grew 2.2%. Gross margin performance continued to improve in the quarter.

Stock Price: Sysco shares grew around 5% in pre-market trading.

Check back later for our full write up on this SYY earnings report later!

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