Sysco delivers robust Q4 results, raises FY22 guidance driven by accelerating sales

Houston-based Sysco Corp. (NYSE: SYY) on Aug. 10 announced financial results for its 14-week fourth fiscal quarter and its fiscal year, ended Jul. 3.

KEY POINTS Q4

• Sales trends improved as markets reopened; fourth-quarter sales increased 82% versus the same period in fiscal year 2020 and increased 4.3% versus the same period in fiscal year 2019;
• Gross profit increased 86.2% to $2.9 billion, and gross margin increased 41 basis points to 18.1%, compared with the same period last year;
• Operating income increased 207.2% to $569.7 million, and adjusted operating income increased to $605.2 million, compared with the same period last year;
• Earnings before interest, taxes, depreciation and amortization (“EBITDA”) increased to $778.6 million, and adjusted EBITDA increased to $781.1 million, compared with the same period last year.
• Earnings per share (“EPS”) increased to $0.29, compared with a loss per share of $1.22 in the same period last year; and adjusted EPS increased to $0.71, compared with a loss per share of $0.29 in the same period last year.

“Sysco’s fourth quarter results were strong, reflecting market share gains and industry demand that has continued to rebound earlier and stronger than expected,” said Kevin Hourican, Sysco’s president and chief executive. “While labor and product availability costs are pressuring our industry, we planned ahead to be well-positioned and manage through the demand increase resulting from these transitory pressures."

Currently, Sysco sees no signs of Delta variant impacting demand.

KEY POINTS FY 2021

• Sales decreased 3% to $51.3 billion versus fiscal year 2020 and decreased 14.7% versus fiscal year 2019;
• Gross profit decreased 5.5% to $9.4 billion, and gross margin decreased 48 basis points to 18.2%, as compared to the prior year;
• Operating income increased 91.8% to $1.4 billion, and adjusted¹ operating income decreased 14.7% to $1.5 billion, compared with the prior year;
• EBITDA increased 46.1% to $2.2 billion, and adjusted EBITDA decreased 9.1% to $2.2 billion, as compared to the prior year;
• EPS increased to $1.02 compared to $0.42 in the prior year; adjusted EPS decreased to $1.44 compared with $2.01 in the prior year;
• Cash flow from operations increased 17.6% to $1.9 billion, and free cash flow increased 61.0% to $1.5 billion, compared with the prior year; and
• The company exceeded its cash flow from operations guidance and reduced debt more than planned, totaling $3.4 billion in debt reduction during the year.

“We’re very pleased with our financial results in the fourth quarter, including particularly strong free cash flow performance,” said Aaron Alt, Sysco’s chief financial officer. “Strong sales that surpassed 2019 levels, combined with solid management of inflation and cost, are underpinning our confidence to raise our EPS guidance for fiscal year 2022 to $3.33 to $3.53.”