Food Products Distributor Sysco Reports Mixed Q1 Earnings; Affirms FY24 Guidance

Sysco Corp SYY reported first-quarter FY24 sales growth of 2.6% year-on-year to $19.62 billion, missing the analyst consensus estimate of $19.73 billion.

U.S. Foodservice operations sales rose 0.9% Y/Y, and International Foodservice sales grew 12.2%.

Gross profit increased 4.6% Y/Y to $3.6 billion, and the gross margin expanded 35 basis points to 18.6%.

The operating margin remained expanded 20 basis points to 4.1%, and operating income for the quarter rose 9.1% to $803.6 million. Non-GAAP operating margin expanded 40 basis points to 4.4%.

Adjusted EBITDA increased 11.7% Y/Y to $1 billion in the quarter.

Adjusted EPS of $1.07 beat the analyst consensus of $1.04.

Sysco held $569.1 million in cash and equivalents as of October 1, 2023. Operating cash flow for the quarter totaled $87.2 million.

"Our positive momentum in the first quarter gives us confidence in reiterating our FY24 guidance of mid-single digit sales growth to approximately $80 billion and five to ten percent adjusted EPS growth to $4.20 to $4.40," said CFO Kenny Cheung.

Price Action: SYY shares are trading higher by 0.94% at $66.15 on the last check Tuesday.