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Sysco Corporation

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Estimates are slightly increasing ahead of the company’s first quarter fiscal 2017 results. We note that Sysco has been consistently showing improvement in sales driven by acquisitions and volume growth. The recently acquired Brakes Group and Supplies on the Fly e-commerce platform is encouraging. Further, it seems that the company’s growth strategy is paying off and its efforts to boost sales and margins are bearing fruits. Sysco has delivered positive gross margins in the last five consecutive quarters, after consistently declining since the last two fiscal years. Activist investor Trian Fund Management also bolstered its stake in the company. However, Brexit uncertainties, currency headwinds and persistent food-cost deflation remain a concern.

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