Sysco Reports Third Quarter Earnings, Robust Revenue Growth
- by Robert Schaulis
HOUSTON, TX – Sysco Corporation has announced its third quarter financial results. After surprising analysts with positive earnings for the last five quarters and completing the acquisition of the Brakes Group last year, the company met estimates and grew revenues.
“I am very pleased with our third quarter performance,” said Bill DeLaney, Sysco’s Chief Executive Officer, in a company release. “We saw solid operating income growth, driven by strong local case growth and effective expense management. We are making continued progress on our strategic multi-year initiatives, which provide a platform for ongoing value creation for our customers, associates, and shareholders. Going forward, we remain focused on growing our business in a disciplined, profitable manner and are confident in our ability to achieve our three-year plan financial objectives.”
Highlights of the report include:
- Sales increased 12.7% to $13.5 billion; excluding Brakes, sales increased 2.3% to $12.3 billion
- Gross profit increased 18.3% to $2.5 billion; gross margin increased 89 basis points to 18.74%; excluding Brakes, gross profit increased 4.3% to $2.2 billion and gross margin increased 34 basis points to 18.20%
- Operating income increased 15.5% to $436 million; adjusted operating income increased 14.3% to $500 million; excluding Brakes, adjusted operating income increased 13.6% to $497 million
- Earnings Per Share (EPS) increased $0.06 to $0.44; adjusted EPS increased $0.05 to $0.51; excluding Brakes, adjusted EPS increased $0.04 to $0.50
- The company saw growth in both its domestic and international foodservice operations during the period. Sales from U.S. foodservice operations reached $9.2 billion (up 2.2% from last year), and international sales totaled $2.5 billion—up significantly from $1.3 billion a year prior. Gross profit increased 4.0% to 1.8 billion for U.S. operations, and gross margin increased 35 basis points to 19.89%.
U.S. foodservice operations also involved the following:
- Operating expenses increased $25 million, or 2.2%, compared to the same period last year
- Adjusted operating expenses increased $26 million, or 2.3%, compared to the same period last year
- Operating income was $689 million, an increase of $46 million, or 7.1%, compared to the same period last year
- Adjusted operating income was $689 million, an increase of $45 million, or 7.0%, compared to the same period last year
The company noted that these changes were in large part the result improved business performance, improved working capital, and favorable year-over-year comparisons due to the US Foods termination payment last year, offset by higher cash taxes from deductions related to the US Foods settlement and a deferral from flood relief.