Sysco Corp (SYY, Financial), the largest US foodservice distributor with a 17% share of the $370 billion domestic market, has announced its financial results for the fourth quarter and fiscal year ended June 29, 2024. The company distributes approximately 500,000 food and nonfood products to various sectors, including restaurants, education, government buildings, travel, leisure, and healthcare facilities.
Quarterly Performance Overview
For the fourth quarter of fiscal year 2024, Sysco Corp (SYY, Financial) reported:
- Sales increased by 4.2% to $20.6 billion, slightly above the estimated revenue of $20.57 billion.
- Gross profit rose by 4.2% to $3.8 billion.
- Operating income increased by 1.2% to $977 million, with adjusted operating income up by 6.4% to $1.1 billion.
- EBITDA decreased by 7.7% to $1.2 billion, while adjusted EBITDA increased by 5.4% to $1.3 billion.
- EPS decreased by 14.6% to $1.23, missing the estimated earnings per share of $1.36. However, adjusted EPS increased by 3.7% to $1.39.
Annual Performance Overview
For the full fiscal year 2024, Sysco Corp (SYY, Financial) reported:
- Sales increased by 3.3% to $78.8 billion, aligning closely with the estimated revenue of $78.89 billion.
- Gross profit rose by 4.7% to $14.6 billion.
- Operating income increased by 5.4% to $3.2 billion, with adjusted operating income up by 8.4% to $3.5 billion.
- EBITDA increased by 12.7% to $4.0 billion, while adjusted EBITDA rose by 9.0% to $4.2 billion.
- EPS increased by 12.1% to $3.89, slightly below the estimated earnings per share of $4.02. Adjusted EPS increased by 7.5% to $4.31.
- Cash flow from operations increased by 4.2% to $3.0 billion, and free cash flow increased by 5.6% to $2.2 billion.
Segment Performance
U.S. Foodservice Operations: Sales for the fourth quarter increased by 4.9% to $14.4 billion, driven by higher volumes and effective margin management. Gross profit increased by 3.1% to $2.8 billion.
International Foodservice Operations: Sales for the fourth quarter increased by 3.8% to $3.8 billion. Gross profit increased by 8.7% to $787 million, with a gross margin increase of 93 basis points to 20.8%.
Financial Metrics and Analysis
Sysco Corp (SYY, Financial) demonstrated robust financial health with significant cash flow and strategic investments. The company's net debt to adjusted EBITDA improved to 2.7 times, within its target ratio. The company returned approximately $2.2 billion to shareholders through share repurchases and dividends.
| Financial Comparison | 13-Week Period Ended June 29, 2024 | Change | 52-Week Period Ended June 29, 2024 | Change |
|---|---|---|---|---|
| Sales | $20.6 billion | 4.2% | $78.8 billion | 3.3% |
| Gross Profit | $3.8 billion | 4.2% | $14.6 billion | 4.7% |
| Operating Income | $977 million | 1.2% | $3.2 billion | 5.4% |
| Net Earnings | $612 million | -16.5% | $2.0 billion | 10.5% |
| Diluted EPS | $1.23 | -14.6% | $3.89 | 12.1% |
Commentary and Outlook
"Sysco’s financial performance for the quarter and year included market share gains, strong profit growth, investments in the business, and robust annual cash flow. Our balanced efforts to grow top-line and manage margins enabled us to deliver solid bottom-line results. In addition, we rewarded our shareholders with share repurchases and dividends." - Kevin Hourican, Sysco’s Chair of the Board and Chief Executive Officer.
Sysco Corp (SYY, Financial) continues to focus on strategic initiatives and operational excellence to drive sustainable growth. The company's performance in the international segment, with a 19.4% increase in operating income, highlights its global expansion efforts.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Sysco Corp for further details.
