Sysco (SYY) Q3 Earnings & Sales Improve Y/Y, U.S. Volumes Up

Sysco Corporation (SYY - Free Report) reported third-quarter fiscal 2018 results, wherein both top and bottom lines grew year over year and the latter surpassed the Zacks Consensus Estimate for the fourth consecutive quarter. In fact, Sysco’s impressive past record has helped it jump 16.3% in a year, as against the industry’s decline of 15.4%.

Quarter in Detail

Adjusted earnings of 67 cents per share jumped 31.4% year over year and beat the Zacks Consensus Estimate of 64 cents. Including one-time items, earnings increased 43.2% to 63 cents per share. Earnings gained from reduced taxes.

Sysco Corporation Price, Consensus and EPS Surprise

 

Sysco Corporation Price, Consensus and EPS Surprise | Sysco Corporation Quote

This global food products maker and distributor’s sales of $14,349.5 million advanced 6.1% year over year. However, the figure fell short of the Zacks Consensus Estimate of $14,382 million.

Gross profit improved 5.6% to $2,675.6 million in the quarter, courtesy of higher sales. However, gross margin fell 9 basis points (bps) to 18.65%. Adjusted operating income rose 7.1% to $535.8 million, while the adjusted operating margin improved 3 bps to 3.73%.

Segment Details

U.S. Foodservice Operations

Segment sales advanced 5.1% to $9,704.5 million, where local case volume within U.S. Broadline operations climbed 2.6% (including organic sales growth of 1.8%) and total case volume ascended 2.4% (wherein organic sales inched higher by 1.7%). Gross profit expanded 4.1% to $1,911.7 million, while the gross margin contracted 19 bps to 19.7%. This can be attributed to food cost inflation in U.S. Broadline, particularly in produce, dairy and meat categories.

Adjusted operating expenses escalated 5.9% to $1,214.5 million, on account of higher selling and supply chain costs. Nonetheless, the adjusted operating income climbed 1.2% to $697.2 million.

International Foodservice Operations

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