Shares of Sysco Corp. (SYY) reached a 52-week high of $41.16 on Dec 19, 2014 and eventually closed at $40.47. Shares of this global food products maker and distributor have been rising ever since the company delivered better-than-expected earnings and revenues in the first quarter of fiscal 2015 on Nov 3.
Solid First Quarter Fiscal 2015 Results
Sysco reported adjusted earnings of 52 cents in the first-quarter fiscal 2015, beating the Zacks Consensus Estimate of 50 cents by 4% and prior-year earnings by 6.1%, as an improvement in sales made up for the ongoing cost pressure.
Sysco's sales grew 6.2% on a year-over-year basis to $12.445 billion in the first quarter of fiscal 2015, driven by 2.3% volume growth (including acquisitions). Acquisitions contributed 0.6% to sales growth, while currency translation decreased sales by 0.5%.
The company stated that the improved performance was partly attributable to the business transformation initiatives, especially category management. First-quarter sales marginally beat the Zacks Consensus Estimate of $12.36 billion by 0.7%.
Gross profit improved 6% to $2.2 billion in the quarter, while adjusted operating income climbed 5.9% in the quarter to $509 million despite a 6% increase in adjusted operating expenses.
Amid the challenging macroeconomic environment, the company focuses on accelerating sales, reducing costs and mitigating the ongoing gross margin pressure. The company also expects to see gradual improvement in these areas through 2015.
Sysco has a Zacks Rank #3 (Hold).
Some better-ranked food companies in the industry include Aramark Holdings (ARMK), United Natural Foods, Inc. (UNFI) and The Hain Celestial Group Inc. (HAIN). While Aramark Holdings sports a Zacks Rank #1 (Strong Buy), Hain Celestial and United Natural hold a Zacks Rank #2 (Buy).
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