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

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed April 30, 2024
Period End
April 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 April 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Sysco Corporation (NYSE: SYY) furnished this Form 8-K on April 30, 2024 under Item 2.02 (Results of Operations and Financial Condition), attaching a press release announcing results for its third quarter of fiscal year 2024, which ended March 30, 2024.

The company reported 13-week sales up 2.7% to $19.4 billiona, gross profit up 5.2% to $3.6 billion, and GAAP operating income up 3.8% to $722.0 million. Adjusted operating income rose 8.4% to $799.3 million, and adjusted diluted EPS increased 6.7% to $0.96, while GAAP diluted EPS rose 1.2% to $0.85. U.S. Foodservice case volume grew 2.9%, though local case volume increased only 0.4%, which management said it is focused on improving.

Management also raised its fiscal 2024 cost-out target from $100 million to $120 millionb and reaffirmed fiscal 2024 guidance of five to ten percent adjusted EPS growth to $4.20 to $4.40. On capital allocation, Sysco returned approximately $753 million to shareholders in the quarter through $500 million of share repurchases and $253 million of dividends, and remains on target to return about $2.25 billion in fiscal 2024. Over the first 39 weeks, cash flow from operations was $1.4 billion, down $52.6 million year over year, and free cash flow was $863.7 million, down $115.9 million.

Balance sheet data shows total debt of $12.21 billionc and a net debt to adjusted EBITDA ratio of 2.81 as of March 30, 2024. Cash flow and balance sheet figures for the 39-week period also reflect $1.18 billion in acquisitions, net of cash acquired.

02—Key points

Key Highlights

  1. Third-quarter sales rose 2.7% to $19.4 billion, with gross profit up 5.2% to $3.6 billion and gross margin up 44 basis points to 18.6%.
  2. Adjusted operating income increased 8.4% to $799.3 million, while GAAP operating income increased 3.8% to $722.0 million.
  3. Adjusted diluted EPS rose 6.7% to $0.96; GAAP diluted EPS rose 1.2% to $0.85.
  4. U.S. Foodservice case volume grew 2.9%, but local case volume increased only 0.4%, which management said it is focused on improving.
  5. Cost-out targets for fiscal 2024 were raised from $100 million to $120 million, and fiscal 2024 adjusted EPS growth guidance of five to ten percent ($4.20 to $4.40) was reaffirmed.
  6. Sysco returned about $753 million to shareholders in the quarter and remains on target to return about $2.25 billion in fiscal 2024.
  7. Net debt to adjusted EBITDA was 2.81 as of March 30, 2024, with total debt of $12.21 billion.

03—Questions

Frequently Asked Questions

  1. How did Sysco perform in its fiscal 2024 third quarter?

    Sales increased 2.7% to $19.4 billion and gross profit increased 5.2% to $3.6 billion. GAAP operating income rose 3.8% to $722.0 million, and adjusted operating income rose 8.4% to $799.3 million. GAAP diluted EPS was $0.85, up 1.2%, and adjusted diluted EPS was $0.96, up 6.7%.

  2. What drove the difference between GAAP and adjusted results?

    Adjusted results exclude certain items, which primarily include acquisition-related costs, restructuring and severance costs, and transformational project costs. In the quarter, restructuring and transformational project costs were $28.5 million and acquisition-related costs were $48.7 million, both within operating expenses.

  3. What is management's outlook for fiscal 2024?

    Management said it remains confident in its fiscal 2024 guidance of five to ten percent adjusted EPS growth, to $4.20 to $4.40. It also raised its fiscal 2024 cost-out target to $120 million from $100 million and expects to return about $2.25 billion to shareholders.

  4. How are case volumes trending?

    U.S. Foodservice total case volume grew 2.9% in the quarter, while local case volume increased 0.4%. Management said lower restaurant traffic weighed on case volumes but improved sequentially during the quarter, and it is pursuing specific actions to improve local case volume.

  5. How much cash is Sysco returning to shareholders and how strong is its cash generation?

    In the quarter, Sysco returned about $753 million through $500 million of share repurchases and $253 million of dividends. Over the first 39 weeks, cash flow from operations was $1.4 billion, down $52.6 million, and free cash flow was $863.7 million, down $115.9 million from the prior-year period.

04—Continue

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