We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sysco's (SYY) Q3 Earnings Top Estimates, Revenues Decline Y/Y
Read MoreHide Full Article
Sysco Corporation (SYY - Free Report) reported third-quarter fiscal 2021 results, wherein the top and bottom lines declined year over year and the former missed the Zacks Consensus Estimate. We note that the company has been bearing the brunt of coronavirus-led softness in food-away-from-home demand.
The company posted adjusted earnings of 22 cents per share, which surpassed the Zacks Consensus Estimate of 20 cents. However, the bottom line declined 51.1% from the year-ago period’s reported figure. The year-over-year deterioration can be attributed to reduced sales and margins.
Sysco Corporation Price, Consensus and EPS Surprise
The global food product maker and distributor reported sales of nearly $11,824.6 million, which fell 13.7% year over year and missed the Zacks Consensus Estimate of $12,183 million. Foreign currency had a favorable impact of 0.8% on the top line.
Gross profit in the quarter declined 17.2% to $2,122.7 million and the gross margin contracted 77 basis points (bps) to 18%. Foreign currency had a positive impact of 0.8% on gross profit. Adjusted operating income of $256.2 million slumped 32% year on year and the respective margin shrank 59 bps to 2.2%.
Segment Details
U.S. Foodservice Operations: During the reported quarter, segment sales declined 12.8% to $8,360.2 million. Local case volumes within U.S. Broadline operations fell 9.7% (including organic sales decline of 9.7%) and total case volumes dropped 14.1% (wherein organic sales declined 14.1%). Gross profit decreased 13.7% to $1,634.8 million, while gross margin contracted 22 bps to 19.6%. U.S. Broadline saw a 3.5% product cost inflation, mainly due to meat and poultry categories, as well as paper and disposables.
International Foodservice Operations: Segment sales plunged 31.3% to $1,723.1 million in the quarter. Foreign-exchange fluctuations positively impacted segment sales by 4.1%. On a constant-currency (cc) basis, sales fell 35.4% to $1,619.8 million. Gross profit fell 35.1% to $325.2 million and gross margin contracted 110 bps to 18.9%. At cc, gross profit declined 39.2% to $304.5 million. Currency movements aided the segment’s gross profit by 4.1%.
SYGMA sales advanced 15.9% to $1,580.7 million. Gross profit rose 12.3% to $133.5 million, whereas the gross margin contracted 30 bps to 8.4%.
Other segment sales tumbled 32.8% to $160.5 million.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $4,895.7 million, long-term debt of $11,741.1 million and total shareholders’ equity of $1,395.6 million. In the first 39 weeks of fiscal 2021, the company generated cash flow from operations of $1,479.8 million and free cash flow amounted to $1,247.9 million.
Sysco has made solid progress with its transformation plan and remains focused on catering to its customers. The company in its third-quarter earnings release stated that it is witnessing strong business recovery. The company is witnessing constantly improving demand patterns from its U.S. customers and is well placed to execute internationally, as markets reopen.
We note that this Zacks Rank #3 (Hold) stock has gained 9.1% in the past three months compared with the industry’s growth of 8.3%.
United Natural (UNFI - Free Report) has a Zacks Rank #2 and its bottom line outpaced the Zacks Consensus Estimate by 13.6% in the trailing four quarters, on average.
Pilgrims Pride (PPC - Free Report) has a Zacks Rank #2 and a long-term earnings growth rate of 27%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
Sysco's (SYY) Q3 Earnings Top Estimates, Revenues Decline Y/Y
Sysco Corporation (SYY - Free Report) reported third-quarter fiscal 2021 results, wherein the top and bottom lines declined year over year and the former missed the Zacks Consensus Estimate. We note that the company has been bearing the brunt of coronavirus-led softness in food-away-from-home demand.
The company posted adjusted earnings of 22 cents per share, which surpassed the Zacks Consensus Estimate of 20 cents. However, the bottom line declined 51.1% from the year-ago period’s reported figure. The year-over-year deterioration can be attributed to reduced sales and margins.
Sysco Corporation Price, Consensus and EPS Surprise
Sysco Corporation price-consensus-eps-surprise-chart | Sysco Corporation Quote
The global food product maker and distributor reported sales of nearly $11,824.6 million, which fell 13.7% year over year and missed the Zacks Consensus Estimate of $12,183 million. Foreign currency had a favorable impact of 0.8% on the top line.
Gross profit in the quarter declined 17.2% to $2,122.7 million and the gross margin contracted 77 basis points (bps) to 18%. Foreign currency had a positive impact of 0.8% on gross profit. Adjusted operating income of $256.2 million slumped 32% year on year and the respective margin shrank 59 bps to 2.2%.
Segment Details
U.S. Foodservice Operations: During the reported quarter, segment sales declined 12.8% to $8,360.2 million. Local case volumes within U.S. Broadline operations fell 9.7% (including organic sales decline of 9.7%) and total case volumes dropped 14.1% (wherein organic sales declined 14.1%). Gross profit decreased 13.7% to $1,634.8 million, while gross margin contracted 22 bps to 19.6%. U.S. Broadline saw a 3.5% product cost inflation, mainly due to meat and poultry categories, as well as paper and disposables.
International Foodservice Operations: Segment sales plunged 31.3% to $1,723.1 million in the quarter. Foreign-exchange fluctuations positively impacted segment sales by 4.1%. On a constant-currency (cc) basis, sales fell 35.4% to $1,619.8 million. Gross profit fell 35.1% to $325.2 million and gross margin contracted 110 bps to 18.9%. At cc, gross profit declined 39.2% to $304.5 million. Currency movements aided the segment’s gross profit by 4.1%.
SYGMA sales advanced 15.9% to $1,580.7 million. Gross profit rose 12.3% to $133.5 million, whereas the gross margin contracted 30 bps to 8.4%.
Other segment sales tumbled 32.8% to $160.5 million.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $4,895.7 million, long-term debt of $11,741.1 million and total shareholders’ equity of $1,395.6 million. In the first 39 weeks of fiscal 2021, the company generated cash flow from operations of $1,479.8 million and free cash flow amounted to $1,247.9 million.
Sysco has made solid progress with its transformation plan and remains focused on catering to its customers. The company in its third-quarter earnings release stated that it is witnessing strong business recovery. The company is witnessing constantly improving demand patterns from its U.S. customers and is well placed to execute internationally, as markets reopen.
We note that this Zacks Rank #3 (Hold) stock has gained 9.1% in the past three months compared with the industry’s growth of 8.3%.
Looking for Solid Food Stocks? Check These
J&J Snack Foods (JJSF - Free Report) currently carries a Zacks Rank #2 (Buy) and its bottom line outpaced the Zacks Consensus Estimate by a wide margin in the trailing four quarters, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United Natural (UNFI - Free Report) has a Zacks Rank #2 and its bottom line outpaced the Zacks Consensus Estimate by 13.6% in the trailing four quarters, on average.
Pilgrims Pride (PPC - Free Report) has a Zacks Rank #2 and a long-term earnings growth rate of 27%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>