Shares of Sysco Corp (SYY) reached a 52-week high of $35.09 on Mar 25 and eventually closed at $35.02, reflecting a year-to-date return of 9.8%. The company beat its previous 52-week high of $33.88 attained on Mar 15.
Shares of this global food products maker and distributor have been riding high since it reported solid second quarter fiscal 2013 results on Feb 4. The company’s long-term estimated EPS growth rate is 7.47%. Average volume of shares traded over the last three months came in at approximately 3,963K.
Growth Drivers
The company’s strategy to grow through acquisitions and its efforts to reduce costs and improve efficiency drove Sysco shares to achieve a new high.
Sysco’s second quarter fiscal 2013 results outperformed the Zacks Consensus Estimate by 19.5%. Adjusted earnings of 49 cents also exceeded the prior-year quarter earnings by 4.3%, driven by solid top-line growth, gains from acquisitions, prudent expense management and moderating input cost environment.
In fact, Sysco has surpassed the Zacks Consensus Estimate in six out of the last eight quarters, missing it on one occasion and matching in one quarter, thus posting an average surprise of 7.9%.
Sysco's sales grew 5.4% on a year-over-year basis to $10.8 billion in the second quarter, driven by volume growth. Second quarter sales also beat the Zacks Consensus Estimate of $10.7 billion. Acquisitions and currency translation also impacted sales favorably. Higher sales also drove the company’s gross profit and adjusted operating profits despite higher adjusted operating expenses.
During the quarter, Sysco completed the acquisition of four independent foodservice companies, whose combined aggregate annual revenues amounted to $520 million in fiscal 2012. Sysco intends to achieve sales growth of 0.5% to 1% through its acquisitions over the long term.
Other Stocks to Consider
Sysco holds a Zacks Rank #4 (Sell). However, there are other favorable stocks in the retail and wholesale sector that are worth considering. These include Natural Grocers By Vitamin Cotta (NGVC) and Safeway Inc (SWY). Safeway holds a Zacks Rank #1 (Strong Buy), while Natural Grocers carries a Zacks Rank #2 (Buy).
NATURAL GROCERS (NGVC): Free Stock Analysis Report
SAFEWAY INC (SWY): Free Stock Analysis Report
SYSCO CORP (SYY): Free Stock Analysis Report
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