We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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 (SYY) Up 2.9% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Sysco (SYY - Free Report) . Shares have added about 2.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sysco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Sysco's Q4 Loss Narrower Than Expected, Sales Down Y/Y
Sysco reported fourth-quarter fiscal 2020 results, wherein it posted an adjusted loss of 29 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 39 cents. However, the bottom line fell significantly from the year-ago period’s adjusted earnings of $1.10 per share. The year-over-year deterioration can be attributed to reduced sales and margins.
Sysco reported sales of $8,866.6 million, which slumped 42.7% year over year, thanks to the coronavirus outbreak. Nevertheless, the figure surpassed the Zacks Consensus Estimate of $8,188.2 million. Foreign currency headwinds had an adverse impact of about 0.3% on the top line.
Gross profit in the quarter declined 47.4% to $1,565.7 million and the gross margin contracted 159 basis points (bps) to 17.66%. Foreign currency headwinds had an adverse impact of about 0.3% on the gross profit. Adjusted operating loss was $33.9 million against adjusted operating income of roughly $818 million in the year-ago period.
Segment Details
U.S. Foodservice Operations: During the fourth quarter, segment sales declined 42.8% to $6,114.9 million. Local case volumes within U.S. Broadline operations fell 38.7% (including organic sales decline of 39.4%) and total case volumes dropped 41.5% (wherein organic sales declined 41.9%). Gross profit plunged 45.7% to $1,165.6 million, while gross margin contracted 102 bps to 19.06%. Food-cost inflation was almost flat in U.S. Broadline, as inflation in meat was countered by deflationary trends in frozen and poultry categories.
International Foodservice Operations: Segment sales declined 53.4% to $1,361.1 million in the fourth quarter. Foreign exchange fluctuations hurt segment sales by 1.5% during the quarter. On a constant-currency (cc) basis, sales fell 51.9% to $1,405.6 million. At cc, gross profit declined 56.4% to $270.9 million and gross margin fell 199 bps to 19.27%. Currency headwinds affected the segment’s gross profit by 1.3%.
SYGMA sales dropped 16.8% to $1,288.9 million. Other segment sales tumbled 66.8% to $101.6 million.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $6,059.4 million, long-term debt of $12,902.5 million and total shareholders’ equity of $1,158.6 million. During fiscal 2020, the company generated cash flow from operations of $1,618.7 million and free cash flow amounted to $927 million.
The company is making robust efforts to manage its business amid the pandemic. To this end, it is utilizing its sales team to boost additional businesses and prepare for the return of demand in the food-away-from-home channel. The company is also helping its restaurant partners to reshape business, as per the current environment, by offering solutions related to meal kits, contactless menus, curbside/takeout, along with safety and sanitation.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -40.35% 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 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Sysco (SYY) Up 2.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Sysco (SYY - Free Report) . Shares have added about 2.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sysco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Sysco's Q4 Loss Narrower Than Expected, Sales Down Y/Y
Sysco reported fourth-quarter fiscal 2020 results, wherein it posted an adjusted loss of 29 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 39 cents. However, the bottom line fell significantly from the year-ago period’s adjusted earnings of $1.10 per share. The year-over-year deterioration can be attributed to reduced sales and margins.
Sysco reported sales of $8,866.6 million, which slumped 42.7% year over year, thanks to the coronavirus outbreak. Nevertheless, the figure surpassed the Zacks Consensus Estimate of $8,188.2 million. Foreign currency headwinds had an adverse impact of about 0.3% on the top line.
Gross profit in the quarter declined 47.4% to $1,565.7 million and the gross margin contracted 159 basis points (bps) to 17.66%. Foreign currency headwinds had an adverse impact of about 0.3% on the gross profit. Adjusted operating loss was $33.9 million against adjusted operating income of roughly $818 million in the year-ago period.
Segment Details
U.S. Foodservice Operations: During the fourth quarter, segment sales declined 42.8% to $6,114.9 million. Local case volumes within U.S. Broadline operations fell 38.7% (including organic sales decline of 39.4%) and total case volumes dropped 41.5% (wherein organic sales declined 41.9%). Gross profit plunged 45.7% to $1,165.6 million, while gross margin contracted 102 bps to 19.06%. Food-cost inflation was almost flat in U.S. Broadline, as inflation in meat was countered by deflationary trends in frozen and poultry categories.
International Foodservice Operations: Segment sales declined 53.4% to $1,361.1 million in the fourth quarter. Foreign exchange fluctuations hurt segment sales by 1.5% during the quarter. On a constant-currency (cc) basis, sales fell 51.9% to $1,405.6 million. At cc, gross profit declined 56.4% to $270.9 million and gross margin fell 199 bps to 19.27%. Currency headwinds affected the segment’s gross profit by 1.3%.
SYGMA sales dropped 16.8% to $1,288.9 million. Other segment sales tumbled 66.8% to $101.6 million.
Other Updates
Sysco ended the quarter with cash and cash equivalents of $6,059.4 million, long-term debt of $12,902.5 million and total shareholders’ equity of $1,158.6 million. During fiscal 2020, the company generated cash flow from operations of $1,618.7 million and free cash flow amounted to $927 million.
The company is making robust efforts to manage its business amid the pandemic. To this end, it is utilizing its sales team to boost additional businesses and prepare for the return of demand in the food-away-from-home channel. The company is also helping its restaurant partners to reshape business, as per the current environment, by offering solutions related to meal kits, contactless menus, curbside/takeout, along with safety and sanitation.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -40.35% 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 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.