Foodservice

Sysco Q1 2021 sales, earnings tumble but beat market expectations

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November 3, 2020

Sysco Corp. sales fell 23% from $15.3 billion to $11.8 billion in the first 2021 quarter ending Sept. 26 compared to the same period last year, according to an earnings release.

Earnings per share decreased 45 cents to 42 cents, while adjusted EPS decreased 64 cents to $34 cents.

Nevertheless, sales and profit beat Wall Street expectations with results improving throughout the quarter, according to MarketWatch. Adjusted earnings was above the FactSet consensus of 25 cents while sales surpassed FactSet consensus of $11.734 billion.

Shares rose 4.2% in premarket trading, trading at $59.13 against a 52-week range of $26-$85.97.

Operating income decreased 37.2% to $419.6 million, while adjusted operating income decreased 50.8% to $364.7 million.

"Although our first quarter 2021 results continue to be impacted by the pandemic, we are pleased with our overall expense management and our ability to produce positive free cash flow and a profitable quarter despite a 23% reduction in sales," Kevin Hourican, Sysco president and CEO, said in the release. "We saw improvement in the overall sales environment throughout the quarter and remain resolutely focused upon serving our customers. We are confident that Sysco's business transformation will accelerate profitable growth as we differentiate our business from our competition to better serve the evolving needs of our customers."

U.S. foodservice sales for the first quarter were $7.9 billion, a decrease of 25.7% compared to the same period last year. Local case volume within U.S. broadline operations decreased 21.6% for the first quarter, of which a decrease of 21.7% was organic, while total case volume within U.S. broadline operations decreased 25.8%, of which a decrease of 25.9% was organic.

Gross U.S. foodservice profit decreased 25.4% to $1.6 billion, and gross margin increased 7 basis points to 20.2% compared to the same period last year.

Operating income for U.S. foodservice was $588.4 million, a decrease of $205.2 million, or 25.9% compared to the same period last year. Adjusted operating income was $503.0 million, a decrease of $294.7 million, or 36.9% compared to the same period last year.

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