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Factors to Watch Ahead of Sysco's (SYY) Q3 Earnings Release

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Sysco Corporation (SYY - Free Report) is likely to register a decline in the top and the bottom line when it releases third-quarter fiscal 2021 numbers on May 4. The Zacks Consensus Estimate for revenues is pegged at nearly $12.2 billion, which suggests a decline of 11.1% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for the bottom line has dropped a cent in the past 30 days to 20 cents per share, which indicates a slump of 55.6% from the year-ago quarter’s reported figure. Notably, Sysco has a trailing four-quarter earnings surprise of 7.3%, on average.

Sysco Corporation Price and EPS Surprise

 

Sysco Corporation Price and EPS Surprise

Sysco Corporation price-eps-surprise | Sysco Corporation Quote

 

Key Factors to Note

Sysco is bearing the brunt of coronavirus-related hurdles. In this regard, reduced volumes in the food-away-from-home channel have been a deterrent. Increased social distancing has been impacting the company’s restaurant, education and hospitality customer segments. Notably, the company’s International business has been battered hard due to tougher limitations in the countries where Sysco operates. Management, in its last earnings call, highlighted its operations in Europe, Latin America and Canada has been majorly hit by the pandemic-led shutdowns. Incidentally, the company had notified that it expects third-quarter fiscal 2021 results to be more challenging than initially expected. Apart from this, Sysco has been encountering product cost inflation in the U.S. Foodservice unit for a while now. Also, the company is persistently exposed to volatile currency movements owing to its international presence.

Nevertheless, Sysco is making robust efforts to manage business amid the pandemic. The company has been committed toward supporting its customers amid the crisis, as part of which its Restaurants Rising program is aiding. Apart from this, the company’s focus on transformation initiative bodes well. To this end, it has been committed toward becoming more digitally oriented.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Sysco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Sysco carries a Zacks Rank #3 and an Earnings ESP of +5.00%.

More Stocks With Favorable Combinations

Here are some other companies that you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat.

Medifast (MED - Free Report) currently has an Earnings ESP of +6.25% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tyson Foods, Inc. (TSN - Free Report) currently has an Earnings ESP of +16.03% and a Zacks Rank of 3.

The Estee Lauder Companies (EL - Free Report) currently has an Earnings ESP of +3.44% and carries a Zacks Rank #3.

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