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Sysco (SYY) Down 2.2% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Sysco (SYY - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sysco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Sysco Q4 Earnings & Revenues Top Estimates, View Raised
Syscodelivered stellar fourth-quarter fiscal 2021 results and raised its fiscal 2022 earnings guidance. Management now envisions earnings per share to come in the range of $3.33-$3.53. At its 2021 Investor Day, where Sysco unveiled Recipe for Growth, the company projected earnings per share of $3.23-$3.43 for fiscal 2022. On its fourth-quarter earnings release, management stated that its July sales were robust.
The company posted adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 57 cents. The bottom line compared favorably with the year-ago period’s loss of 29 cents per share. This year-over-year surge can be attributed to robust sales and margins.
The global food product maker and distributor reported sales of $16,136.9 million, which soared 82% year over year and beat the Zacks Consensus Estimate of $14,560 million. Sales growth was backed by business recovery, as several markets reopened and curbs were relaxed. Sales jumped 4.3% from the fourth quarter of fiscal 2019. Foreign currency had a favorable impact of 2.9% on the top line.
Gross profit in the quarter surged 86.2% to $2,915.8 million and the gross margin expanded 41 basis points (bps) to 18.1%. This year-over-year upside was fueled by elevated volumes as the pandemic-led limitations continue to be lifted. Foreign currency had a positive impact of 3.2% on gross profit. Adjusted operating income of $605.2 million grew $639.1 million from the year-ago period and the respective margin advanced 413 bps to 3.8%.
Segment Details
U.S. Foodservice Operations: During the reported quarter, segment sales significantly grew 88.4% to $11,518.9 million. Local case volumes within U.S. Broadline operations jumped 74.3% and total case volumes surged 71.4%. Both of these increases reflect organic improvements. Gross profit escalated a whopping 90% to $2,214.8 million and gross margin expanded 17 bps to 19.2%. U.S. Broadline saw a 10.2% product cost inflation, mainly due to meat and poultry categories, as well as paper and disposables.
International Foodservice Operations: Segment sales soared 83.4% to nearly $2,496 million in the quarter. Foreign-exchange fluctuations positively impacted segment sales by 18.1%. On a constant-currency (cc) basis, sales advanced 65.2% to $2,249 million. Gross profit jumped 88.6% to $496 million and gross margin increased 54 bps to 19.9%. At cc, gross profit rose 70.4% to $448.2 million. Currency movements aided the segment’s gross profit by 18.2%.
SYGMA sales advanced 45.3% to $1,873.4 million. Gross profit rose 39.5% to $159.7 million, while the gross margin contracted 35 bps to 8.52%.
Other segment sales more than doubled to $248.6 million, from $101.6 million reported in the year-ago period.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $3,007.1 million, long-term debt of $10,588.2 million and total shareholders’ equity of $1,552.9 million. In fiscal 2021, the company generated cash flow from operations of $1.9 billion and free cash flow amounted to $1.5 billion.
During the fiscal fourth quarter, Sysco continued to witness market share gains, courtesy of new customers. Further, the company progressed with its Recipe for Growth plan; raised its quarterly dividend; managed inflation efficiently; witnessed profit improvement in International operations, and saw better-than-expected sales and cash flow. The company noted that its Greco and Sons buyout is likely to conclude soon.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted 5.12% due to these changes.
VGM Scores
Currently, Sysco has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 downward for the stock, and the magnitude of these revisions looks promising. Notably, Sysco has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Sysco (SYY) Down 2.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Sysco (SYY - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sysco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Sysco Q4 Earnings & Revenues Top Estimates, View Raised
Syscodelivered stellar fourth-quarter fiscal 2021 results and raised its fiscal 2022 earnings guidance. Management now envisions earnings per share to come in the range of $3.33-$3.53. At its 2021 Investor Day, where Sysco unveiled Recipe for Growth, the company projected earnings per share of $3.23-$3.43 for fiscal 2022. On its fourth-quarter earnings release, management stated that its July sales were robust.
The company posted adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 57 cents. The bottom line compared favorably with the year-ago period’s loss of 29 cents per share. This year-over-year surge can be attributed to robust sales and margins.
The global food product maker and distributor reported sales of $16,136.9 million, which soared 82% year over year and beat the Zacks Consensus Estimate of $14,560 million. Sales growth was backed by business recovery, as several markets reopened and curbs were relaxed. Sales jumped 4.3% from the fourth quarter of fiscal 2019. Foreign currency had a favorable impact of 2.9% on the top line.
Gross profit in the quarter surged 86.2% to $2,915.8 million and the gross margin expanded 41 basis points (bps) to 18.1%. This year-over-year upside was fueled by elevated volumes as the pandemic-led limitations continue to be lifted. Foreign currency had a positive impact of 3.2% on gross profit. Adjusted operating income of $605.2 million grew $639.1 million from the year-ago period and the respective margin advanced 413 bps to 3.8%.
Segment Details
U.S. Foodservice Operations: During the reported quarter, segment sales significantly grew 88.4% to $11,518.9 million. Local case volumes within U.S. Broadline operations jumped 74.3% and total case volumes surged 71.4%. Both of these increases reflect organic improvements. Gross profit escalated a whopping 90% to $2,214.8 million and gross margin expanded 17 bps to 19.2%. U.S. Broadline saw a 10.2% product cost inflation, mainly due to meat and poultry categories, as well as paper and disposables.
International Foodservice Operations: Segment sales soared 83.4% to nearly $2,496 million in the quarter. Foreign-exchange fluctuations positively impacted segment sales by 18.1%. On a constant-currency (cc) basis, sales advanced 65.2% to $2,249 million. Gross profit jumped 88.6% to $496 million and gross margin increased 54 bps to 19.9%. At cc, gross profit rose 70.4% to $448.2 million. Currency movements aided the segment’s gross profit by 18.2%.
SYGMA sales advanced 45.3% to $1,873.4 million. Gross profit rose 39.5% to $159.7 million, while the gross margin contracted 35 bps to 8.52%.
Other segment sales more than doubled to $248.6 million, from $101.6 million reported in the year-ago period.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $3,007.1 million, long-term debt of $10,588.2 million and total shareholders’ equity of $1,552.9 million. In fiscal 2021, the company generated cash flow from operations of $1.9 billion and free cash flow amounted to $1.5 billion.
During the fiscal fourth quarter, Sysco continued to witness market share gains, courtesy of new customers. Further, the company progressed with its Recipe for Growth plan; raised its quarterly dividend; managed inflation efficiently; witnessed profit improvement in International operations, and saw better-than-expected sales and cash flow. The company noted that its Greco and Sons buyout is likely to conclude soon.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted 5.12% due to these changes.
VGM Scores
Currently, Sysco has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 downward for the stock, and the magnitude of these revisions looks promising. Notably, Sysco has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.