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Sysco 8-K Report, Financial Results (Jan 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed January 30, 2024
Period End
January 30, 2024
Security
SYY
In the record · 2016–202610-K1210-Q328-K147

SYY filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 147 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’18Mar ’18
  2. Material agreement8-K · May ’20May ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Leadership change8-K · Nov ’26Nov ’26

01—Abstract

Summary

Summary of the 8-K filed January 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Sysco Corporation (NYSE: SYY) furnished a press release dated January 30, 2024 (Exhibit 99.1) reporting results for its second fiscal quarter of 2024, which ended December 30, 2023.

Sales rose 3.7% to $19.3 billiona, gross profit rose 4.9% to $3.5 billion, and operating income rose 9.2% to $700.0 million. Adjusted EPS increased 11.3% to $0.89, and GAAP diluted EPS was $0.82 versus $0.28 a year earlier. U.S. Foodservice case volume grew 3.4% and local case volume grew 2.9%.

Management described this as the fifth consecutive quarter of positive operating leverage. Cash flow improved materially. Cash flow from operations for the first 26 weeks was $855.9 millionb, an increase of $352.4 million, and free cash flow was $527.4 million, an increase of $308.2 million.

Sysco returned $705.5 millionc to shareholders in the first half through $199.9 million of share repurchases and $505.6 million of dividends. The company now expects to return approximately $2.25 billion to shareholders in fiscal 2024, with share repurchase expectations raised from $750 million to $1.25 billion.

Sysco reiterated its fiscal 2024 guidance of mid-single-digit sales growth to approximately $80 billiond and adjusted EPS of $4.20 to $4.40, which the filing describes as five to ten percent adjusted EPS growth. At quarter end, total debt was $12.11 billion, cash was $962.2 million, and the Net Debt to Adjusted EBITDA ratio was 2.75.

02—Key points

Key Highlights

  1. Total sales rose 3.7% to $19.3 billion for the 13 weeks ended December 30, 2023; gross profit rose 4.9% to $3.5 billion with gross margin up 21 basis points to 18.2%.
  2. Operating income rose 9.2% to $700.0 million; adjusted operating income rose 9.2% to $744.9 million.
  3. Diluted GAAP EPS was $0.82 versus $0.28 in the prior-year quarter; adjusted diluted EPS rose 11.3% to $0.89.
  4. U.S. Foodservice case volume grew 3.4% and local case volume grew 2.9%; International Foodservice sales rose 9.6% to $3.6 billion.
  5. First-half operating cash flow was $855.9 million (up $352.4 million) and free cash flow was $527.4 million (up $308.2 million).
  6. Shareholder returns expectation for fiscal 2024 raised to approximately $2.25 billion, with share repurchases now expected at $1.25 billion, up from $750 million.
  7. Fiscal 2024 guidance reaffirmed: mid-single-digit sales growth to approximately $80 billion and adjusted EPS of $4.20 to $4.40.

03—Questions

Frequently Asked Questions

  1. How did Sysco perform in the second quarter of fiscal 2024?

    Sales increased 3.7% to $19.3 billion, gross profit increased 4.9% to $3.5 billion, and operating income increased 9.2% to $700.0 million. Adjusted diluted EPS increased 11.3% to $0.89, and GAAP diluted EPS was $0.82 compared with $0.28 a year earlier.

  2. What is changing in Sysco's shareholder return plans?

    Sysco now expects to return approximately $2.25 billion to shareholders in fiscal 2024 through share repurchases and dividends. Share repurchase expectations were raised from $750 million to $1.25 billion. In the first 26 weeks, the company returned $705.5 million, including $199.9 million of repurchases and $505.6 million of dividends.

  3. Is Sysco maintaining its fiscal 2024 outlook?

    Yes. The company reaffirmed its fiscal 2024 guidance of mid-single-digit sales growth to approximately $80 billion and adjusted EPS of $4.20 to $4.40, which it describes as five to ten percent adjusted EPS growth.

  4. How strong is Sysco's cash generation and balance sheet?

    Operating cash flow for the first 26 weeks was $855.9 million, and free cash flow was $527.4 million. At quarter end, the company had cash of $962.2 million and total debt of $12.11 billion, and the Net Debt to Adjusted EBITDA ratio was 2.75.

  5. What drove the quarter's results?

    The filing attributes gross profit growth primarily to higher volumes, along with effective management of product cost inflation and the strategic sourcing initiative. Operating expenses rose 3.9%, driven by higher volumes and cost inflation, partly offset by improved productivity.

04—Continue

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