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Sysco (SYY) Lined Up for Q2 Earnings: Key Factors to Note

Sysco Corporation SYY is likely to witness a year-over-year rise in the top and the bottom line when it reports second-quarter fiscal 2022 earnings on Feb 8. The Zacks Consensus Estimate for revenues is pegged at $16,005 million, suggesting a rise of 38.7% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for earnings has increased by nearly 3% over the past 30 days to 69 cents per share, indicating a significant increase from 17 cents reported in the prior-year period. The marketer and distributor of food and related products has a trailing four-quarter negative earnings surprise of 4.8%, on average. Sysco delivered a negative earnings surprise of 2.4% in the last reported quarter.

Sysco Corporation Price, Consensus and EPS Surprise

Sysco Corporation Price, Consensus and EPS Surprise
Sysco Corporation Price, Consensus and EPS Surprise

Sysco Corporation price-consensus-eps-surprise-chart | Sysco Corporation Quote

Key Factors to Consider

Sysco is benefiting from improved food-away-from-home trends. The company’s focus on the Recipe for Growth plan also bodes well. This plan involves five strategic pillars that include enhancing customers’ experiences via digital tools. In this regard, the company’s Sysco Shop platform and the new pricing software are working well. Further, the company is focused on improving the supply chain to cater to customers efficiently and consistently with better delivery and omnichannel inventory management. Next, SYY aims at providing customer-oriented merchandising and marketing solutions to augment sales. The company also targets having team-based selling, with an emphasis on important cuisines. Finally, Sysco is focused on cultivating new capacities, channels and segments alongside sponsoring investments via cost-saving initiatives.

These upsides are likely to have aided the company in the quarter under review. Also, prudent buyouts have been working well for the company. During the first quarter of fiscal 2022, the company acquired Greco and Sons, which is likely to have contributed to Sysco’s performance in the to-be-reported quarter.

That said, the company has been encountering product cost inflation in the U.S. Foodservice unit for a while now. On its first-quarter earnings call, SYY stated that it was operating in a highly inflationary landscape. In the first quarter, the company’s gross margin was hurt by a high inflation rate, which escalated to nearly 13%. Management stated that it expects inflation to continue at a similar rate in the second quarter.

Additionally, during the first quarter, Sysco spent nearly $81 million as a snapback investment and transformation costs. Management, on its conference call, said that for the second quarter, it expects heavy snapback and transformation investments and expects these to be at least as much as the first-quarter level.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Sysco this time. 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, which is not the case here.

Sysco currently has a Zacks Rank #4 (Sell) and an Earnings ESP of +12.72%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Companies Likely to Post a Beat

Coty Inc. COTY has an Earnings ESP of +37.14% and a Zacks Rank #3. Coty is anticipated to register top-line growth when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for COTY’s quarterly revenues is pegged at $1.6 billion, indicating an improvement of 13.3% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Coty’s bottom line has remained unchanged in the past 30 days at 12 cents per share. However, the consensus estimate for earnings suggests a decline of 29.4% from the year-ago quarter’s reported figure. Coty delivered an earnings beat of 66.4%, on average, in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Service Corporation International SCI has an Earnings ESP of +17.39% and a Zacks Rank #3. Service Corporation is anticipated to register growth in the top line but a decline in the bottom line when it reports fourth-quarter 2021 results. The Zacks Consensus Estimate for quarterly revenues is pegged at about $1 billion, indicating a rise of 4.3% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Service Corporation’s bottom line has jumped 11.1% in the past 30 days to $1.00 per share. The consensus estimate suggests a drop of 11.5% from the year-ago quarter’s reported figure. SCI has delivered an earnings beat of 45.6%, on average, in the trailing four quarters.

Beyond Meat BYND has an Earnings ESP of +0.69% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for the bottom line has remained unchanged in the past 30 days at a loss of 73 cents per share, compared with a loss of 34 cents reported in the year-ago period.

Beyond Meat’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at roughly $104 million, suggesting a rise of 2% from the figure reported in the prior-year quarter. BYND delivered a negative earnings surprise of 77.3%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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