By Sysco, the Houston-based foodservice distributor, is set to release its earnings report for the fiscal second quarter. Here are the key details you should know:
Profit Expectations
- Consensus: Analysts surveyed by FactSet predict a profit of $437.3 million for this quarter, compared to $141.2 million in the same period last year.
Earnings Forecast
- Adjusted Earnings: The forecast from 17 analysts surveyed by FactSet suggests adjusted earnings of 88 cents per share, excluding one-time items.
Revenue Projection
- Expected Sales: According to 14 polled analysts, Sysco is projected to record $19.3 billion in revenue for this quarter, up from $18.6 billion in the previous year’s quarter.
Key Factors to Monitor
Expansion of Sales Force
Sysco has recently expanded its independent sales force and is no longer capping commissions on new account generation and Sysco branded products. Analysts at Truist believe that this investment in the sales force will drive independent case growth.
Addressing Local Growth Challenges
Sysco has faced challenges in local growth, with a slowdown in volume for local cases during Q1 of the fiscal year. UBS analysts reported that Sysco is aware of this issue and taking steps to rectify it, as local sales are a top priority for the company. Investors will be keen to see a turnaround in Sysco’s local business performance.
Impact of Inflation
With expectations of inflation in the second quarter, Sysco aims to bounce back after a period of deflation in the food category. This recovery is expected to provide insulation for Sysco’s ability to meet its full-year earnings targets. UBS analysts suggest that investors closely watch if these expectations played out as anticipated.
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