Sysco Corp. (SYY) markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry.
The company’s consistent improvement in sales driven by back to back acquisitions and volume growth has boosted earnings since the past few quarters. However, currency headwinds and declining gross margin remains a concern for Sysco. Nevertheless, Sysco’s growth strategy remains strong and its efforts to accelerate sales, reduce costs and mitigate the ongoing gross margin pressure are encouraging. Sysco is currently looking forward to the Federal Trade Commission approval for its long-pending acquisition of US Foods (which was announced in Dec 2013 for $8.2 billion).
Investors should also note the recent earnings estimate revisions for SYY, as the consensus estimate has been moving lower. Further, SYY has delivered positive earnings surprises in two of the last four quarters and in-line earnings in the remaining two; thus delivering an average surprise of 1.51%.
Currently, SYY has a Zacks Rank #3 (Hold), but that could definitely change following Sysco’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: SYY’s earnings of 40 cents missed our consensus estimate by 1 cent. Investors should note that these figures take out stock option expenses.
Revenue: SYY posted revenues of $11.7 billion. This also lags our consensus estimate of $11.990 billion.
Key Stats to Note: Sysco sales grew on a year-over-year basis but were weak with respect to the performance in the first half of the fiscal year 2015. Lower levels of inflation and significant currency headwinds led to the sluggishness.
Stock Price: In-active in pre-market trading.
Check back later for our full write up on this SYY earnings report later!
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