SYSCO Corp Earnings Cheat Sheet: Fifth Straight Quarter of Shrinking Margins, but Profit Rises

The Cheat Sheet

S&P 500 component SYSCO Corporation reported net income above Wall Street’s expectations for the first quarter. Sysco, through its subsidiaries and divisions, is a distributor of food and related products.

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SYSCO Earnings Cheat Sheet for the First Quarter

Results: Net income for SYSCO Corporation rose to $302.7 million (51 cents per share) vs. $299.1 million (51 cents per share) in the same quarter a year earlier. This marks a rise of 1.2% from the year earlier quarter.

Revenue: Rose 8.6% to $10.59 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: SYY reported adjusted net income of 55 cents per share. By that measure, the company beat the mean estimate of 52 cents per share. Analysts were expecting revenue of $10.49 billion.

Quoting Management: “I am encouraged by our underlying business performance during the quarter as softening consumer sentiment contributed to ongoing challenges for the foodservice industry,” said Bill DeLaney, Sysco’s president and chief executive officer. “Our associates remain committed to supporting our customers by meeting and exceeding their expectations each and every day.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 0.4 percentage point to 18.4% from the year earlier quarter. Over that time, margins have contracted on average 0.4 percentage point per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 0.7% to $10.43 billion in the fourth quarter of the last fiscal year. The figure rose 9.1% in the third quarter of the last fiscal year from the year earlier and climbed 5.8% in the second quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after being in line with expectations in the fourth quarter of the last fiscal year with net income of 57 cents per share.

The increase in profit last quarter comes after net income fell in the previous quarter. In the fourth quarter of the last fiscal year, net income declined 0.4% to $336.3 million.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the second quarter is 45 cents per share, down from 47 cents ninety days ago. At $2.03 per share, the average estimate for the fiscal year has fallen from $2.09 ninety days ago.

Competitors to Watch: Nash-Finch Company , Spartan Stores, Inc. , United Natural Foods, Inc. , Synergy Brands, Inc. (SYBR), Core-Mark Holding Co., Inc. , AMCON Distributing Co. , G. Willi-Food Intl. Ltd. , ConAgra , Kraft , Kellogg and SUPERVALU INC.

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)


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