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Sysco's (SYY) Recipe for Growth Keeps It Well-Placed for 2024
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Sysco Corporation (SYY - Free Report) has been experiencing positive outcomes from its Recipe for Growth strategy, which has been strengthening the company’s capacities across sales and the supply chain. This has been aiding the company amid cost inflation and soft industry trends.
Sysco witnessed slower overall industry market volume growth in the first quarter of fiscal 2024. Although Sysco’s size and scale advantages and strong balance sheet position it for growth in fiscal 2024, the company expects the market to grow at a lower rate than fiscal 2023.
That said, the extensive range of product offerings in both general and specialized categories, together with the proficiency of Sysco’s sales team, the strength of its supply chain and financial stability, position SYY well to achieve impressive outcomes in the short run and even more robust results in the long run. For fiscal 2024, management envisions sales to increase in the mid-single digits to roughly $80 billion. Adjusted earnings per share or EPS are expected to grow 5-10% to the $4.20-$4.40 band.
Image Source: Zacks Investment Research
Recipe for Growth on Track
The Recipe for Growth program encompasses five strategic priorities designed to propel the company's growth to 1.5 times the market rate by the end of FY24. These strategic pillars consist of elevating customer experience through digital tools, where the Sysco Shop platform and new pricing software have demonstrated effectiveness. Additionally, the company is dedicated to optimizing the supply chain for efficient and consistent customer service, leveraging improved delivery and omnichannel inventory management.
Sysco's focus extends to delivering customer-centric merchandising and marketing solutions to boost sales. The company is also emphasizing team-based selling, with a particular focus on key cuisines. Lastly, SYY is committed to developing new capacities, channels and segments while supporting investments through cost-saving initiatives. Sysco anticipates that the Recipe for Growth plan will drive top and bottom-line growth in fiscal 2024.
Acquisitions Boost Portfolio
Over the years, SYY has pursued numerous acquisitions as a strategy to expand its distribution network, increase its customer base and foster long-term growth. In October 2023, the company announced a significant acquisition deal with Edward Don & Company, aimed at bolstering Sysco's distribution network and expanding its offerings.
In the first quarter of fiscal 2024, Sysco successfully completed the acquisition of BIX Produce. This move is expected to strengthen its specialty produce business (FreshPoint), particularly by enhancing its geographical presence in untapped areas and enriching its specialty produce offerings.
In February 2022, the company finalized the acquisition of The Coastal Companies, an entity operating under Sysco's FreshPoint business. The company places particular emphasis on the rapidly growing and high-margin specialty space as a key priority. Moving on, Sysco previously acquired Greco and Sons in the first quarter of fiscal 2022. These acquisitions align seamlessly with Sysco's predominant Recipe for Growth strategy.
Wrapping Up
Sysco is a diversified company that covers every part of the food away from home market. The company’s operations are diversified across different customer types, product categories and geographies. Sysco caters to restaurants of all price-point spectrums and types.
It also caters to health care and education facilities alongside travel and recreation facilities in office buildings. The company’s diversified business and the strength of its Recipe for Growth keep it well-placed for 2024.
Shares of this Zacks Rank #3 (Hold) company have risen 7.8% in the past three months compared with the industry’s growth of 1%.
The Zacks Consensus Estimate for Kraft Heinz’s current financial-year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Celsius Holdings, Inc. (CELH - Free Report) , which develops, processes, markets, distributes and sells functional drinks and liquid supplements, holds a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 110.9%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 98.5% and 184.1%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29.4% from the year-ago reported figure.
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Sysco's (SYY) Recipe for Growth Keeps It Well-Placed for 2024
Sysco Corporation (SYY - Free Report) has been experiencing positive outcomes from its Recipe for Growth strategy, which has been strengthening the company’s capacities across sales and the supply chain. This has been aiding the company amid cost inflation and soft industry trends.
Sysco witnessed slower overall industry market volume growth in the first quarter of fiscal 2024. Although Sysco’s size and scale advantages and strong balance sheet position it for growth in fiscal 2024, the company expects the market to grow at a lower rate than fiscal 2023.
That said, the extensive range of product offerings in both general and specialized categories, together with the proficiency of Sysco’s sales team, the strength of its supply chain and financial stability, position SYY well to achieve impressive outcomes in the short run and even more robust results in the long run. For fiscal 2024, management envisions sales to increase in the mid-single digits to roughly $80 billion. Adjusted earnings per share or EPS are expected to grow 5-10% to the $4.20-$4.40 band.
Image Source: Zacks Investment Research
Recipe for Growth on Track
The Recipe for Growth program encompasses five strategic priorities designed to propel the company's growth to 1.5 times the market rate by the end of FY24. These strategic pillars consist of elevating customer experience through digital tools, where the Sysco Shop platform and new pricing software have demonstrated effectiveness. Additionally, the company is dedicated to optimizing the supply chain for efficient and consistent customer service, leveraging improved delivery and omnichannel inventory management.
Sysco's focus extends to delivering customer-centric merchandising and marketing solutions to boost sales. The company is also emphasizing team-based selling, with a particular focus on key cuisines. Lastly, SYY is committed to developing new capacities, channels and segments while supporting investments through cost-saving initiatives. Sysco anticipates that the Recipe for Growth plan will drive top and bottom-line growth in fiscal 2024.
Acquisitions Boost Portfolio
Over the years, SYY has pursued numerous acquisitions as a strategy to expand its distribution network, increase its customer base and foster long-term growth. In October 2023, the company announced a significant acquisition deal with Edward Don & Company, aimed at bolstering Sysco's distribution network and expanding its offerings.
In the first quarter of fiscal 2024, Sysco successfully completed the acquisition of BIX Produce. This move is expected to strengthen its specialty produce business (FreshPoint), particularly by enhancing its geographical presence in untapped areas and enriching its specialty produce offerings.
In February 2022, the company finalized the acquisition of The Coastal Companies, an entity operating under Sysco's FreshPoint business. The company places particular emphasis on the rapidly growing and high-margin specialty space as a key priority. Moving on, Sysco previously acquired Greco and Sons in the first quarter of fiscal 2022. These acquisitions align seamlessly with Sysco's predominant Recipe for Growth strategy.
Wrapping Up
Sysco is a diversified company that covers every part of the food away from home market. The company’s operations are diversified across different customer types, product categories and geographies. Sysco caters to restaurants of all price-point spectrums and types.
It also caters to health care and education facilities alongside travel and recreation facilities in office buildings. The company’s diversified business and the strength of its Recipe for Growth keep it well-placed for 2024.
Shares of this Zacks Rank #3 (Hold) company have risen 7.8% in the past three months compared with the industry’s growth of 1%.
3 Appetizing Picks
The Kraft Heinz Company (KHC - Free Report) , a food and beverage product company, currently carries a Zacks Rank #2 (Buy). KHC has a trailing four-quarter earnings surprise of 9.9%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Kraft Heinz’s current financial-year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Celsius Holdings, Inc. (CELH - Free Report) , which develops, processes, markets, distributes and sells functional drinks and liquid supplements, holds a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 110.9%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 98.5% and 184.1%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29.4% from the year-ago reported figure.