Core Insights - Sysco Corporation (SYY) is currently trading at a discount compared to its historical and industry benchmarks, with a forward 12-month price-to-earnings ratio of 15.29, below its median level of 16.04 and the industry's average of 16.22, indicating potential undervaluation and an attractive opportunity for investors [1] - The company's Value Score of B suggests potential for long-term growth [1] Stock Performance - SYY shares have declined by 3% over the past three months, while the industry and S&P 500 index saw declines of 0.4% and 3.7%, respectively [4] - Currently trading at $74.04, SYY is 10% below its 52-week high of $82.23, presenting a compelling opportunity for value-focused investors [4] Strategic Initiatives - Sysco is enhancing efficiency through supply-chain optimization and cost-containment efforts, including a performance-based sales compensation model introduced on July 1, 2024, aimed at driving sales growth and new customer acquisitions [6] - The company is prioritizing innovation and tailored solutions for its diverse customer base, which supports long-term growth and profitability [7] Financial Performance - In the second quarter of fiscal 2025, U.S. Foodservice operations experienced a 4.1% sales increase, with total case volumes rising by 1.4%, while the International Foodservice segment posted a 3.6% sales increase [7] - Sysco's strategic acquisitions in Ireland and Great Britain have strengthened its specialty capabilities in produce and protein, enhancing its distribution network and customer reach [8] Challenges - Sysco faces inflationary pressures, with product cost inflation rising by 2.1% in the second quarter of fiscal 2025, driven by higher dairy and poultry prices [9] - A notable decline in restaurant traffic, which dropped by 2% in the fiscal second quarter, has affected local case volume within U.S. Foodservice, decreasing by 0.9% year over year [10]

Group 1 - Sysco Corporation's stock experienced a rally of over 3% recently, driven by technical factors rather than specific news [1] - The technical analysis team has identified Sysco as the Stock of the Day, indicating potential for continued upward movement [1][6] - The stock reversed off a support level around $70.00, which has historically been a strong support point [3] Group 2 - Long-term challenges for Sysco include concerns over tariffs and inflation, which have led to a significant drop in consumer confidence [2] - The consumer confidence index has fallen to a four-year low, with future expectations at their lowest in 12 years, potentially impacting Sysco's food service business [2] - Dining out is often one of the first expenses consumers cut during tough economic times, which could affect Sysco's main customer base of restaurants [2]

Core Insights - Sysco's recent Fiscal Q2 2025 earnings results will be analyzed alongside its historical fundamentals using the 9 Pillar Analysis [1] - The analysis will also cover Sysco's market position and potential investment opportunities based on its valuation [1] Financial Performance - The focus will be on Sysco's earnings results for Fiscal Q2 2025, highlighting key financial metrics and performance indicators [1] - Historical fundamentals will be evaluated to assess the company's long-term growth potential [1] Investment Perspective - The analysis is geared towards identifying undervalued companies with significant upside potential, particularly for long-term dividend investors [1] - The intention is to provide insights that could lead to investment opportunities in Sysco's shares [1]

Core Insights - Sysco Corporation has appointed Jennifer Kaplan Schott as Executive Vice President and Chief Legal Officer, effective April 1, 2025, to support its Recipe for Growth strategy [1][2]. Company Overview - Sysco is the global leader in foodservice distribution, serving various sectors including restaurants, healthcare, and educational facilities, with operations in over 10 countries and 340 distribution centers [4]. - The company generated sales exceeding $78 billion in fiscal year 2024, which ended on June 29, 2024 [4]. Leadership and Experience - Jennifer Schott brings over 25 years of legal experience, having previously served as Senior Vice President, General Counsel, and Secretary at Illinois Tool Works, a Fortune 300 company with a market capitalization of over $77 billion [2]. - Schott's prior roles include Deputy General Counsel at Caterpillar Inc. and various legal positions at Discover Financial Services, culminating in Vice President and Assistant General Counsel [2]. Responsibilities - In her new role at Sysco, Schott will advise executive leadership and the Board of Directors, overseeing teams responsible for Legal and Company Secretary, Ethics and Compliance, Communications, and Government Affairs [3].

Core Points - Sysco Corporation has recalled frozen supplemental shakes due to a Listeria monocytogenes outbreak and has halted purchases of other products supplied by Lyons Magnus from a specific facility [1][2] - The company is actively removing recalled items from its inventory and notifying affected customers while cooperating with relevant agencies [2] - Sysco emphasizes its commitment to food safety and quality assurance, stating that it continuously works with suppliers to meet rigorous safety standards [3][4] Company Overview - Sysco is a leading global foodservice distribution company, generating over $78 billion in sales for the fiscal year 2024, which ended on June 29, 2024 [5] - The company operates 340 distribution centers across more than 10 countries, serving approximately 730,000 customer locations with a workforce of 76,000 employees [5] - Sysco provides customized supply chain solutions and culinary support to help customers innovate and optimize their operations [6]

Core Points - Sysco Corporation will webcast its presentation at the CAGNY 2025 Conference on February 18, 2025, at 3:00 p.m. EST [1] - The company uses its investor relations website as the primary channel for public disclosure of key information [2] Company Overview - Sysco is the global leader in selling, marketing, and distributing food and related products to customers who prepare meals away from home, including restaurants, healthcare facilities, and educational institutions [3] - The company operates 340 distribution centers across over 10 countries, employing 76,000 colleagues and serving approximately 730,000 customer locations [3] - Sysco generated sales of more than $78 billion in fiscal year 2024, which ended on June 29, 2024 [3] Services and Offerings - As the world's largest food-away-from-home distributor, Sysco provides customized supply chain solutions, specialty product offerings, and culinary support to help customers innovate and optimize operations [4] - The company acts as a trusted business partner, offering an industry-leading portfolio that includes fresh produce, premium proteins, specialty products, sustainably focused items, equipment, supplies, and innovative culinary solutions [4]

Group 1 - Truist Securities analyst Jake Bartlett reiterated a Buy rating on Sysco Corp (SYY) shares and lowered the price forecast from $85 to $83 [1] - For the second quarter, adjusted EBITDA was $969 million, slightly below the analyst's estimate of $975 million and the consensus of $973 million, primarily due to operating costs [1] - Total sales reached $20.151 billion, close to the analyst's estimate of $20.218 billion and the consensus of $20.097 billion, while EPS of $0.93 exceeded both estimates of $0.92 [2] Group 2 - US Foodservice (USFS) case growth slowed to 1.4%, down from 2.7% in the first quarter, despite an improvement in restaurant traffic by approximately 200 basis points [2][3] - The analyst expects USFS case growth to improve due to macro tailwinds, enhanced sales team stability, and a stronger sales force [3] - Concerns have been raised about ongoing weakness in local case growth, which is critical for stock performance in the coming quarters [5] Group 3 - The analyst remains optimistic about Sysco's initiatives to boost sales and expand margins, which could drive accelerated EBITDA growth [4] - However, the company's relatively weak independent case growth compared to restaurant traffic trends limits expectations for significant stock upside [4] - The analyst anticipates a return to positive local case growth by the first half of 2026, aligning with investments in the sales force [6]

Financial Performance - Net earnings for the 13-week period ended December 28, 2024, were $406 million, compared to $415 million for the same period in 2023, reflecting a decrease of approximately 2.2%[58] - Basic earnings per share for the 13-week period ended December 28, 2024, were $0.83, slightly up from $0.82 in the prior year[58] - Comprehensive income for the second quarter of fiscal 2025 was $176 million, down from $552 million in fiscal 2024, indicating a decline of approximately 68%[59] - The total comprehensive income for the first 26 weeks of fiscal 2025 was $839 million, compared to $982 million for the same period in 2024, representing a decrease of about 14.5%[59] - Total operating income for Sysco was $712 million for the 13-week period ended Dec. 28, 2024, compared to $700 million for the same period in 2023, reflecting a growth of 1.7%[85] - Earnings before income taxes were $533 million for the 13-week period ended Dec. 28, 2024, compared to $545 million in the same period in 2023, indicating a decrease of 2.2%[85] Sales Performance - U.S. Foodservice Operations sales increased to $14,044 million for the 13-week period ended Dec. 28, 2024, compared to $13,494 million for the same period in 2023, representing a growth of 4.1%[85] - Total sales for Sysco reached $20,151 million for the 13-week period ended Dec. 28, 2024, up from $19,288 million in the prior year, marking an increase of 4.5%[85] - International Foodservice Operations reported sales of $3,728 million for the 13-week period ended Dec. 28, 2024, an increase from $3,597 million in the prior year, representing a growth of 3.6%[85] - SYGMA's sales increased to $2,116 million for the 13-week period ended Dec. 28, 2024, compared to $1,914 million in the same period last year, showing a growth of 10.6%[85] Shareholder Information - The weighted-average diluted shares outstanding for the 13-week period ended December 28, 2024, were 492,803,849, compared to 505,929,342 in the prior year[58] - Approximately 3,161,000 securities were excluded from the diluted earnings per share calculation for the second quarter of fiscal 2025 due to anti-dilutive effects[58] - In the first 26 weeks of fiscal 2025, the total share-based compensation cost recognized was $60 million, up from $53 million in the same period of fiscal 2024[75] - Sysco granted 466,716 performance share units (PSUs) in the first 26 weeks of fiscal 2025, with a weighted average grant-date fair value of $82.63[72] - The company expects to recognize $152 million of unrecognized compensation cost related to share-based compensation arrangements over a weighted-average period of 1.93 years[75] Other Comprehensive Income - Other comprehensive income (loss) for the 13-week period ended December 28, 2024, included a foreign currency translation adjustment of $(257) million[60] - The company reported a total other comprehensive income (loss) of $(222) million for the 13-week period ended December 28, 2024[60] - The total other comprehensive income for the 26-week period ended December 30, 2023, was $65 million, reflecting a significant improvement compared to the previous year[65] - The company experienced a foreign currency translation adjustment of $55 million for the 26-week period ended December 30, 2023[65] - As of December 28, 2024, the total accumulated other comprehensive loss was $1,396 million, an increase from $1,166 million as of September 28, 2024[67] Tax and Legal Matters - The effective tax rate for the first 26 weeks of fiscal 2025 was 23.8%, higher than the statutory tax rate of 21.0% due to state income taxes[76] - As of December 28, 2024, the gross amount of unrecognized tax benefits was $35 million, with related accrued interest of $13 million[78] - Sysco's legal proceedings are assessed as ranging from remote to reasonably possible, with management believing that the outcomes will not materially affect the company's financial position[82] Operating Expenses - Interest expense for Sysco was $160 million for the 13-week period ended Dec. 28, 2024, up from $150 million in the same period last year[85] - Sysco's Global Support Center incurred an operating loss of $240 million for the 13-week period ended Dec. 28, 2024, slightly improved from a loss of $247 million in the same period last year[85] Market Risks - There have been no significant changes to Sysco's market risks since June 29, 2024, which include interest rate risk, foreign currency exchange rate risk, fuel price risk, and investment risk[169]

Core Insights - Sysco Corporation reported strong second-quarter fiscal 2025 results, with both sales and earnings increasing year over year, surpassing the Zacks Consensus Estimate [1][4] Financial Performance - Adjusted earnings per share were 93 cents, in line with expectations, reflecting a 4.5% year-over-year increase [4] - Total sales reached $20,151 million, a 4.5% increase year over year, exceeding the consensus estimate of $20,102 million [4] - Gross profit rose 3.9% to $3.7 billion, although gross margin contracted by 11 basis points to 18.1% [5] - Operating income increased by 1.7% to $712 million, while adjusted operating income rose 5.1% to $783 million [6] Segment Performance - U.S. Foodservice Operations saw sales rise 4.1% to $14,044 million, with local case volumes down 0.9% [7] - International Foodservice Operations reported a 3.6% increase in sales to $3,728 million, with adjusted operating income growing 27.5% on a constant currency basis [8] - SYGMA's sales increased by 10.6% year over year, reaching $2,116 million [8] - The Other segment experienced a sales decline of 7.1% to $263 million [9] Future Outlook - Sysco reaffirmed its full-year guidance, expecting sales growth of 4-5% and adjusted EPS growth of 6-7% [3] - The company increased its share repurchase plan for the year to $1.25 billion from $1 billion [3] Financial Health - As of the end of the quarter, Sysco had cash and cash equivalents of $793 million and long-term debt of $11,393 million [11] - Cash flow from operations for the first 26 weeks of fiscal 2025 was $498 million, with free cash flow at $331 million [11] - Sysco returned $803 million to shareholders through share buybacks and dividends during the same period [12]

Core Insights - Sysco reported revenue of $20.15 billion for the quarter ended December 2024, reflecting a 4.5% increase year-over-year and a surprise of +0.24% over the Zacks Consensus Estimate of $20.1 billion [1] - The company's EPS for the quarter was $0.93, consistent with the consensus estimate, showing no EPS surprise [1] Financial Performance Metrics - International Foodservice Operations revenue was $3.73 billion, exceeding the average estimate of $3.64 billion, representing a +3.7% change year-over-year [4] - U.S. Foodservice Operations revenue reached $14.04 billion, slightly below the average estimate of $14.12 billion, with a year-over-year increase of +4.1% [4] - Other sales amounted to $263 million, falling short of the average estimate of $283.80 million, indicating a year-over-year decline of -7.2% [4] - SYGMA revenue was $2.12 billion, surpassing the average estimate of $2.03 billion, with a year-over-year growth of +10.6% [4] - SYGMA gross profit was reported at $163 million, exceeding the average estimate of $157.85 million [4] - Other gross profit was $65 million, below the average estimate of $73.22 million [4] - Operating income (GAAP) for SYGMA was $19 million, slightly below the average estimate of $19.48 million [4] - Operating income (GAAP) for Other was $4 million, significantly below the average estimate of $8.88 million [4] Stock Performance - Sysco shares returned +0.7% over the past month, compared to a +0.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]