Sysco Corp [SYY] filed an SEC report on Monday, March 30th warning of lower sales and earnings.  Sysco has laid off workers and sharply reduced capital expenditure in addition to cancelling a share buyback program.  The company has drawn down an additional $1.6 billion in loans from a revolving credit line to strengthen liquidity.

Sysco can be regarded as a bellwether among distributors to the food service sector and has experienced a sharp decline in sales to universities and restaurants that have closed. Sysco and its competitors are accordingly attempting to develop new business with supermarket chains and retailers.

For the second quarter of fiscal 2020 ending December 28th 2019 Sysco earned $438 million on sales of $15 billion.  Corresponding values for the second quarter of fiscal 2019 were net earnings of $267 million on sales of $14.8 billion.  In both second quarters the company generated a gross margin of 18.7 percent over a trailing-12 month period and generated an operating margin of 4.6 percent and a profit margin of 3.0 percent.  The impact of COVID-19 on company share price is denoted by a 39.7 percent decline during the month of March to $41.50.