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Sysco's (SYY) Q2 Earnings & Sales Lag Estimates, Decline Y/Y
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Sysco Corporation (SYY - Free Report) reported second-quarter fiscal 2021 results, wherein, both top and bottom lines deteriorated year over year and missed the Zacks Consensus Estimate. We believe that the company’s performance continued to bear the brunt of the coronavirus mayhem.
The company posted adjusted earnings of 17 cents per share, which fell short of the Zacks Consensus Estimate of 35 cents. Moreover, the bottom line slumped 80% from the year-ago period figure. This year-over-year deterioration can be attributed to reduced sales and margins.
Sysco Corporation Price, Consensus and EPS Surprise
The global food product maker and distributor reported sales of nearly $11,559 million, which slid 23.1% year over year as well as missed the Zacks Consensus Estimate of $11,853 million. Foreign currency had a favorable impact of 0.4% on the top line.
Gross profit in the quarter declined 25.8% to $2,098.5 million and the gross margin contracted 67 basis points (bps) to 18.15%. Foreign currency had a positive impact of 0.4% on gross profit. Adjusted operating income of $234.1 million plummeted 62.7% year on year and the respective margin shrunk 215 bps to 2.03%.
Segment Details
U.S. Foodservice Operations: During the reported quarter, segment sales declined 23.9% to $7,924.1 million. Local case volumes within U.S. Broadline operations fell 19.7% (including organic sales decline of 19.7%) and total case volumes dropped 23.7% (wherein organic sales declined 23.7%). Gross profit decreased 23.9% to $1,559.3 million, while gross margin remained unchanged at 19.68%. U.S. Broadline saw a 1.6% product cost inflation, mainly due to dairy and poultry categories, as well as paper and disposables.
International Foodservice Operations: Segment sales plunged 31.9% to $1,967.8 million in the fiscal second quarter. Foreign-exchange fluctuations positively impacted segment sales by 1.8%. On a constant-currency (cc) basis, sales fell 33.8% to $1,914.4 million. At cc, gross profit declined 38.2% to $362.4 million and gross margin fell 135 bps to 18.93%. Currency movements aided the segment’s gross profit by 2%.
SYGMA sales grew 4.4% to $1,520.4 million. Gross profit rose 4.1% to $129.3 million, whereas the gross margin contracted 3 bps to 8.5%.
Other segment sales tumbled 44.8% to $146.6 million.
Other Updates
Sysco ended the fiscal second quarter with cash and cash equivalents of $5,767 million, long-term debt of $12,463.3 million and total shareholders’ equity of $1,426.8 million. In the first 26 weeks of fiscal 2021, Sysco generated cash flow from operations of $936.7 million and free cash flow amounted to $788.2 million.
Sysco remains on track with its business transformation as it navigates through the pandemic. The company is focused on enhancing services to customers, and efforts to differentiate itself from its competitors. It is gearing up to meet the anticipated demand increase and management stated that the company is well placed for a solid rebound. Sysco has been committed toward supporting the company’s customers amid the crisis, as part of which its Restaurants Rising program is worth noting.
We note that this Zacks Rank #3 (Hold) stock has gained 18.8% in the past three months compared with the industry’s growth of 5.4%.
Nomad Foods (NOMD - Free Report) holds a Zacks Rank of 2 and has a trailing four-quarter earnings surprise of 10.2%, on average.
Hain Celestial (HAIN - Free Report) sports a Zacks Rank #1 and has a trailing four-quarter earnings surprise of 24.6%, on average.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year. Free: See Our Top Stock and 4 Runners Up >>
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Sysco's (SYY) Q2 Earnings & Sales Lag Estimates, Decline Y/Y
Sysco Corporation (SYY - Free Report) reported second-quarter fiscal 2021 results, wherein, both top and bottom lines deteriorated year over year and missed the Zacks Consensus Estimate. We believe that the company’s performance continued to bear the brunt of the coronavirus mayhem.
The company posted adjusted earnings of 17 cents per share, which fell short of the Zacks Consensus Estimate of 35 cents. Moreover, the bottom line slumped 80% from the year-ago period figure. This year-over-year deterioration can be attributed to reduced sales and margins.
Sysco Corporation Price, Consensus and EPS Surprise
Sysco Corporation price-consensus-eps-surprise-chart | Sysco Corporation Quote
The global food product maker and distributor reported sales of nearly $11,559 million, which slid 23.1% year over year as well as missed the Zacks Consensus Estimate of $11,853 million. Foreign currency had a favorable impact of 0.4% on the top line.
Gross profit in the quarter declined 25.8% to $2,098.5 million and the gross margin contracted 67 basis points (bps) to 18.15%. Foreign currency had a positive impact of 0.4% on gross profit. Adjusted operating income of $234.1 million plummeted 62.7% year on year and the respective margin shrunk 215 bps to 2.03%.
Segment Details
U.S. Foodservice Operations: During the reported quarter, segment sales declined 23.9% to $7,924.1 million. Local case volumes within U.S. Broadline operations fell 19.7% (including organic sales decline of 19.7%) and total case volumes dropped 23.7% (wherein organic sales declined 23.7%). Gross profit decreased 23.9% to $1,559.3 million, while gross margin remained unchanged at 19.68%. U.S. Broadline saw a 1.6% product cost inflation, mainly due to dairy and poultry categories, as well as paper and disposables.
International Foodservice Operations: Segment sales plunged 31.9% to $1,967.8 million in the fiscal second quarter. Foreign-exchange fluctuations positively impacted segment sales by 1.8%. On a constant-currency (cc) basis, sales fell 33.8% to $1,914.4 million. At cc, gross profit declined 38.2% to $362.4 million and gross margin fell 135 bps to 18.93%. Currency movements aided the segment’s gross profit by 2%.
SYGMA sales grew 4.4% to $1,520.4 million. Gross profit rose 4.1% to $129.3 million, whereas the gross margin contracted 3 bps to 8.5%.
Other segment sales tumbled 44.8% to $146.6 million.
Other Updates
Sysco ended the fiscal second quarter with cash and cash equivalents of $5,767 million, long-term debt of $12,463.3 million and total shareholders’ equity of $1,426.8 million. In the first 26 weeks of fiscal 2021, Sysco generated cash flow from operations of $936.7 million and free cash flow amounted to $788.2 million.
Sysco remains on track with its business transformation as it navigates through the pandemic. The company is focused on enhancing services to customers, and efforts to differentiate itself from its competitors. It is gearing up to meet the anticipated demand increase and management stated that the company is well placed for a solid rebound. Sysco has been committed toward supporting the company’s customers amid the crisis, as part of which its Restaurants Rising program is worth noting.
We note that this Zacks Rank #3 (Hold) stock has gained 18.8% in the past three months compared with the industry’s growth of 5.4%.
Looking for Solid Food Stocks? Check These
Medifast (MED - Free Report) , which currently carries a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 20.2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nomad Foods (NOMD - Free Report) holds a Zacks Rank of 2 and has a trailing four-quarter earnings surprise of 10.2%, on average.
Hain Celestial (HAIN - Free Report) sports a Zacks Rank #1 and has a trailing four-quarter earnings surprise of 24.6%, on average.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>