Sysco(US:SYY) zacks.comยท2024-05-24 15:26Core Insights - Sysco Corporation (SYY) is thriving in the food-away-from-home industry, focusing on supply-chain productivity and cost containment to navigate a challenging customer environment in Q3 of fiscal 2024 [1][2]. Group 1: Operational Performance - Sysco has enhanced operational efficiency, resulting in strong bottom-line growth despite slow restaurant traffic and soft volumes in Q3 of fiscal 2024 [2]. - The company improved both gross profit and gross margin in Q3, effectively managing product cost fluctuations through strategic sourcing, disciplined pricing, and a higher mix of specialty products [3]. - Sysco achieved positive operating leverage for the sixth consecutive time, with gross profit expanding faster than operating expenses, leading to an increased cost-out goal of $120 million for fiscal 2024 [4]. Group 2: Market Trends - The food-away-from-home channel continues to capture market share from the grocery channel, a trend expected to persist for years, benefiting Sysco's diversified customer base across various sectors [5]. - Restaurant foot traffic has declined year-over-year, with January showing a high single-digit decrease, although there was some improvement in February and March [6]. - High restaurant menu prices and elevated labor costs are impacting foot traffic, posing challenges for the industry [7]. Group 3: Financial Outlook - For fiscal 2024, Sysco anticipates sales to increase to nearly $79 billion from $76.3 billion in fiscal 2023, with adjusted earnings per share expected to rise by 5-10% to the range of $4.20-$4.40 [9]. - Sysco's shares have increased by 3.3% over the past year, contrasting with a 5.6% decline in the industry [10].