Advertisement
New Zealand markets closed

  • NZX 50

    11,796.21
    -39.83 (-0.34%)
     

  • NZD/USD

    0.5881
    -0.0025 (-0.42%)
     

  • NZD/EUR

    0.5526
    -0.0019 (-0.34%)
     

  • ALL ORDS

    7,810.30
    -88.60 (-1.12%)
     

  • ASX 200

    7,559.80
    -82.30 (-1.08%)
     

  • OIL

    84.44
    +1.71 (+2.07%)
     

  • GOLD

    2,395.80
    -2.20 (-0.09%)
     

  • NASDAQ

    17,394.31
    -99.31 (-0.57%)
     

  • FTSE

    7,877.05
    +29.06 (+0.37%)
     

  • Dow Jones

    37,775.38
    +22.07 (+0.06%)
     

  • DAX

    17,837.40
    +67.38 (+0.38%)
     

  • Hang Seng

    16,147.95
    -237.92 (-1.45%)
     

  • NIKKEI 225

    37,133.13
    -946.57 (-2.49%)
     

  • NZD/JPY

    90.7260
    -0.5280 (-0.58%)
     

Sysco (SYY) Readies for Q4 Earnings: What's in the Cards?

Zacks Equity Research
·6-min read

Sysco Corporation SYY is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2022 earnings on Aug 9. The Zacks Consensus Estimate for quarterly revenues is pegged at $18,270 million, suggesting a rise of 13.2% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at $1.12 per share, indicating a 57.8% surge from the figure reported in the prior-year quarter. This marketer and distributor of food and related products has a trailing four-quarter earnings surprise of 9.1%, on average. SYY delivered an earnings surprise of 31.5% in the last reported quarter.

For fiscal 2022, the Zacks Consensus Estimate for revenues stands at almost $67 billion, suggesting growth of 32.5% from the year-ago period. The consensus mark for earnings is pegged at $3.23 currently compared with the $1.44 reported in fiscal 2021.

Sysco Corporation Price, Consensus and EPS Surprise

Sysco Corporation price-consensus-eps-surprise-chart | Sysco Corporation Quote

Key Trends

Sysco has been witnessing strong consumer and customer away-from-home demand. Further, the company has been seeing robust market share gains in the United States and internationally, reflecting strength in its Recipe for Growth plan, which involves five strategic pillars.

The five strategic pillars include enhancing customers’ experience via digital tools.  Further, the company is focused on improving the supply chain to cater to customers efficiently and consistently with better delivery and omnichannel inventory management. Next, Sysco aims at providing customer-oriented merchandising and marketing solutions to augment sales. The company also targets having team-based selling, with an emphasis on important cuisines. Finally, Sysco is focused on cultivating new capacities, channels and segments alongside sponsoring investments via cost-saving initiatives.

The contribution from acquisitions has also been working well for Sysco, which purchased The Coastal Companies in February 2022. Before this, Sysco acquired Greco and Sons in the first quarter of fiscal 2022. We note that these acquisitions go in tandem with Sysco’s Recipe for Growth.

That said, SYY has been encountering product cost inflation in the U.S. Foodservice unit for a while now. However, management is undertaking efforts to counter product and fuel inflation.

Factors to Note

Sysco made solid progress in the third quarter, and on its last earnings call, the company stated that it expects to see further growth in the fourth quarter. It expects fourth-quarter earnings per share (EPS) in the range of $1.05-$1.15 compared with the 71 cents delivered in the fourth quarter of fiscal 2021. Management’s optimism for the fourth quarter is based on the expectations of a continued market revival, market share gains, the efficient pass-through of higher costs and improved operating expenses (stemming from reduced snapback and productivity-related costs). However, the fourth quarter of fiscal 2021 included an extra week, which is likely to affect comparisons.

However, management remained optimistic about its business and raised its adjusted EPS guidance for fiscal 2022. Sysco now expects the EPS in the $3.16-$3.26 band in the fiscal, up from the earlier view of the $3-$3.10 band.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Sysco this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Sysco carries a Zacks Rank #2 and has an Earnings ESP of -1.66%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Celsius Holdings CELH currently has an Earnings ESP of +17.39% and a Zacks Rank #1. CELH is expected to register top and bottom-line growth when it reports second-quarter 2022 numbers. The Zacks Consensus Estimate for Celsius Holdings’ quarterly revenues is pegged at $149.8 million, which suggests growth of 130% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Celsius Holdings’ quarterly earnings has moved a penny up in the past 30 days to 8 cents per share, suggesting an improvement of 60% from the year-ago quarter’s tally. CELH delivered an earnings beat of 206.3%, on average, in the trailing four quarters.

Grocery Outlet GO currently has an Earnings ESP of +3.55% and a Zacks Rank #2. The company is likely to register a bottom-line improvement when it reports second-quarter 2022 numbers. The Zacks Consensus Estimate for the quarterly EPS of 24 cents suggests a marginal improvement from the 23 cents reported in the year-ago quarter.

Grocery Outlet's top line is expected to have risen year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $859.6 million, which indicates an improvement of 10.8% from the figure reported in the prior-year quarter. GO has a trailing four-quarter earnings surprise of 4.8%, on average.

Ollie's Bargain Outlet OLLI currently has an Earnings ESP of +6.06% and a Zacks Rank of 3. The company is likely to register a rise in the top line when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for OLLI’s quarterly revenues is pegged at $457.5 million, which suggests a jump of 10% from the figure reported in the prior-year quarter.

The consensus mark for Ollie's Bargain’s quarterly earnings has remained unchanged at 33 cents per share in the past 30 days. The consensus estimate for OLLI’s quarterly earnings suggests a decline of 36.5% from the year-ago quarter’s reported figure. Ollie's Bargain delivered a negative earnings surprise of 17.1%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Sysco Corporation (SYY) : Free Stock Analysis Report
 
Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
 
Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report
 
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.