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Why Is Sysco (SYY) Down 7.3% 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 lost about 7.3% 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 catalysts.
Sysco posted fourth-quarter fiscal 2023 results, with the top and the bottom line increasing year over year and the latter beating the Zacks Consensus Estimate. The company saw impressive sales, continued market share gains and volume gains. Management has made notable progress in the Recipe for Growth plan and cost management.
Quarter in Detail
Sysco’s adjusted earnings of $1.34 per share surpassed the Zacks Consensus Estimate of $1.33. The bottom line rose 16.5% from the year-ago period figure.
The global food product maker and distributor reported sales of $19,728.2 million, which jumped 4.1% year over year but missed the Zacks Consensus Estimate of $19,853 million. Foreign currency had an adverse impact of 0.2% on the top line.
The gross profit jumped 7% to $3,685.2 million, and the gross margin expanded 51 basis points (bps) to 18.7%. This year-over-year growth in the gross profit was mainly driven by elevated volumes, efficient product cost inflation management and progress in the company’s partnership growth management efforts.
SYY witnessed product cost inflation of 2.1%, measured by the estimated change in product costs, mainly in the frozen and canned and dry categories.
Operating expenses rose 1.4% year over year due to cost inflation and increased volumes. These were somewhat offset by greater productivity.
The operating income of $969.4 million grew 26.5% from the year-ago period.
Segment Details
U.S. Foodservice Operations: In the reported quarter, the segment witnessed robust sales, overall share gains and higher profitability. Sales jumped 2.5% to $13,745.8 million. Local case volume within U.S.
Foodservice inched up 0.8%, while total case volume within U.S. Foodservice increased 2.3%.
International Foodservice Operations: The segment’s sales advanced 12.2% to $3,649.3 million in the quarter. However, foreign exchange fluctuations affected the segment’s sales by 1.4%. On a constant-currency (cc) basis, sales advanced 13.6%.
SYGMA’s sales inched up 1.4% to $2,004.1 million.
Meanwhile, the Other segment’s sales rose 3.9% to almost $329 million.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $745.2 million, long-term debt of almost $10,348 million and total shareholders’ equity of $2,008.6 million. For the year ended Jul 1, 2023, the company generated cash flow from operations of $2,867.6 million, and free cash flow amounted to $2,116.4 million.
During fiscal 2023, Sysco returned $1.5 billion to shareholders through share buybacks worth $500.1 million and dividends of $996 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.69% due to these changes.
VGM Scores
Currently, Sysco has a strong 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 A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 indicates a downward shift. It's no surprise Sysco has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Sysco (SYY) Down 7.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Sysco (SYY - Free Report) . Shares have lost about 7.3% 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 catalysts.
Sysco's Q4 Earnings Beat Estimates, Sales Advance Y/Y
Sysco posted fourth-quarter fiscal 2023 results, with the top and the bottom line increasing year over year and the latter beating the Zacks Consensus Estimate. The company saw impressive sales, continued market share gains and volume gains. Management has made notable progress in the Recipe for Growth plan and cost management.
Quarter in Detail
Sysco’s adjusted earnings of $1.34 per share surpassed the Zacks Consensus Estimate of $1.33. The bottom line rose 16.5% from the year-ago period figure.
The global food product maker and distributor reported sales of $19,728.2 million, which jumped 4.1% year over year but missed the Zacks Consensus Estimate of $19,853 million. Foreign currency had an adverse impact of 0.2% on the top line.
The gross profit jumped 7% to $3,685.2 million, and the gross margin expanded 51 basis points (bps) to 18.7%. This year-over-year growth in the gross profit was mainly driven by elevated volumes, efficient product cost inflation management and progress in the company’s partnership growth management efforts.
SYY witnessed product cost inflation of 2.1%, measured by the estimated change in product costs, mainly in the frozen and canned and dry categories.
Operating expenses rose 1.4% year over year due to cost inflation and increased volumes. These were somewhat offset by greater productivity.
The operating income of $969.4 million grew 26.5% from the year-ago period.
Segment Details
U.S. Foodservice Operations: In the reported quarter, the segment witnessed robust sales, overall share gains and higher profitability. Sales jumped 2.5% to $13,745.8 million. Local case volume within U.S.
Foodservice inched up 0.8%, while total case volume within U.S. Foodservice increased 2.3%.
International Foodservice Operations: The segment’s sales advanced 12.2% to $3,649.3 million in the quarter. However, foreign exchange fluctuations affected the segment’s sales by 1.4%. On a constant-currency (cc) basis, sales advanced 13.6%.
SYGMA’s sales inched up 1.4% to $2,004.1 million.
Meanwhile, the Other segment’s sales rose 3.9% to almost $329 million.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $745.2 million, long-term debt of almost $10,348 million and total shareholders’ equity of $2,008.6 million. For the year ended Jul 1, 2023, the company generated cash flow from operations of $2,867.6 million, and free cash flow amounted to $2,116.4 million.
During fiscal 2023, Sysco returned $1.5 billion to shareholders through share buybacks worth $500.1 million and dividends of $996 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.69% due to these changes.
VGM Scores
Currently, Sysco has a strong 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 A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 indicates a downward shift. It's no surprise Sysco has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.