Sysco reports strong profit for fourth quarter and full fiscal year 2022

Sysco Corporation announced financial results for its 13-week fourth fiscal quarter and its 52-week fiscal year ending July 2, 2022.

Key highlights for the fourth quarter and full year of fiscal year 2022 include:

• Sysco growth outpaced the U.S. market by more than 1.3 times for the full year.
• Recipe For Growth advanced as planned.
• Volume growth for the quarter and year.
• Effective pass-through of rising product costs.
• Continued operating income recovery for the International segment.
• Profitable growth, strong fourth quarter results.

In fiscal year 2021, the fourth quarter included 14 weeks, and the year included 53 weeks. 

Kevin Hourican, Sysco’s president and chief executive officer, stated in the announcement, “Sysco generated another quarter of top-line and bottom-line improvements, topping off a strong year of financial performance, especially given the environmental conditions. This included growing more than 1.3 times the market for the year and exceeding fiscal 2019 operating income for the quarter by 6.4 percent. The strong financial performance was delivered while simultaneously investing in our Recipe For Growth strategy. We are delivering new commercial capabilities and accelerating growth in a way which will pay long-term returns for Sysco and our investors. I want to thank our associates around the world for their continued hard work and customer centricity.”

Key financial results for the fourth quarter of fiscal year 2022 include:

• Sales increased 17.5% versus the same period in fiscal year 2021 and, on a comparable 13-week basis, increased 26.5% to $19.0 billion. Sales increased 22.5% versus the same period in fiscal year 2019.
• U.S. Broadline volume decreased 2.1% versus the same period in fiscal year 2021 and, on a comparable 13-week basis, increased 5.4%. U.S. Broadline volume decreased 2.2% versus the same period in fiscal year 2019.
• Gross profit increased 18.1% to $3.4 billion, as compared to the same period last year, and increased 15.6%, as compared to the same period in fiscal year 2019.
• Operating income increased 34.6% to $766.7 million, and adjusted operating income increased to $876.8 million, as compared to the same period last year, while operating income increased 6.4% and adjusted1 operating income increased 7.2%, as compared to the same period in fiscal year 2019.
• Earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $971.7 million, and adjusted EBITDA increased to $1.0 billion, in each case as compared to the same period last year. On a comparable 13-week basis, EBITDA increased 34.4% and adjusted EBITDA increased 44.5%, in each case as compared to the same period last year. EBITDA increased 1.3% and adjusted EBITDA increased 8.7%, in each case as compared to the same period in fiscal year 2019.
• EPS increased to $0.99 compared to $0.29 in the same period last year. Adjusted EPS increased to $1.15 compared to $0.71 in the same period last year, and on a comparable 13-week basis, increased $0.49 or 74.2%. EPS decreased $0.04 and adjusted EPS increased $0.05, in each case as compared to the same period in fiscal year 2019.

Key financial results for fiscal year 2022 included:

• Sales increased 33.8% versus fiscal year 2021 and, on a comparable 52-week basis, increased 36.9% to $68.6 billion. Sales increased 14.2% versus fiscal year 2019.
• U.S. Broadline volume increased 15.4% versus fiscal year 2021 and, on a comparable 52-week basis, increased 17.9%. U.S. Broadline volume decreased 3.7% versus fiscal year 2019.
• Gross profit increased 31.7% to $12.3 billion, as compared to the prior year, and increased 8.0%, as compared to fiscal year 2019.
• Operating income increased 62.7% to $2.3 billion, and adjusted operating income increased to $2.6 billion, as compared to the prior year, while operating income increased 0.4%, and adjusted1 operating income decreased 3.7%, as compared to fiscal year 2019.
• EBITDA increased to $3.1 billion, and adjusted EBITDA increased to $3.3 billion, in each case as compared to the prior year. On a comparable 52-week basis, EBITDA increased 46.4% and adjusted EBITDA increased 58.5%, in each case as compared to the prior year. EBITDA increased 0.4% and adjusted EBITDA decreased 0.7%, in each case as compared to fiscal year 2019.
• EPS increased to $2.64 compared to $1.02 in the prior year. Adjusted EPS increased to $3.25 compared to $1.44 in the prior year and, on a comparable 52-week basis, increased $1.86, or 133.8%. EPS decreased $0.56, and adjusted EPS decreased $0.30, in each case as compared to fiscal year 2019.

“Sysco delivered strong financial results, growing volumes and sales, effectively managing double-digit inflation and improving profitability, all while also strengthening our balance sheet and returning $1.5 billion to our shareholders. We have many reasons to be upbeat about our business. While keeping a careful eye on macro-economic developments, we expect to grow adjusted EPS by 26% - 35%, or $4.09 - $4.394, for fiscal year 2023,” said Aaron Alt, Sysco’s chief financial officer, stated in the announcement.

Fourth-quarter fiscal year 2022 results

Total Sysco

Sales for the fourth quarter were $19.0 billion, an increase of 17.5% compared to the same period last year.

Gross profit increased 18.1% to $3.4 billion, gross margin increased 10 basis points to 18.2% and adjusted gross margin increased 33 basis points to 18.4%, compared in each case to the same period last year. The increase in gross profit for the fourth quarter was primarily driven by higher volumes and high rates of inflation that were effectively managed.

U.S. Foodservice operations

The U.S. Foodservice operations segment generated strong sales growth, overall share gains and increased profitability.

Sales for the fourth quarter were $13.4 billion, an increase of 16.4% compared to the same period last year. Local case volume within U.S. Broadline operations decreased 7.8% for the fourth quarter, while total case volume within U.S. Broadline operations decreased 2.1%, in each case as compared to the same period last year.

Gross profit increased 17.5% to $2.6 billion, and gross margin increased 17 basis points to 19.4%, compared in each case to the same period last year. Product cost inflation was 15.3% in U.S. Broadline, as measured by the estimated change in Sysco’s product costs, primarily in the dairy, poultry and fresh produce categories.

Fiscal year 2022 results

Total Sysco

Sales for fiscal year 2022 were $68.6 billion, an increase of 33.8% compared to the prior year.

Gross profit increased 31.7% to $12.3 billion, and gross margin decreased 29 basis points to 18.0%, compared in each case to the prior year. The increase in gross profit for the year was primarily driven by higher volumes and high rates of inflation that were effectively managed.

U.S. Foodservice operations

Sales for fiscal year 2022 were $48.5 billion, an increase of 35.8% compared to the prior year. Local case volume within U.S. Broadline operations increased 10.3% for fiscal year 2022, while total case volume within U.S. Broadline operations increased 15.4%, in each case as compared to the prior year. Both increases represent organic growth.

Gross profit increased 31.2% to $9.2 billion, and gross margin decreased 67 basis points to 19.0%, compared in each case to the prior year. Product cost inflation was 15.0% in U.S. Broadline, as measured by the estimated change in Sysco’s product costs, primarily in the poultry, meat and seafood categories.

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