In a January 31^st release, Sysco Corp. (SYY) posted financial results for the second quarter of fiscal 2023. This Company can be regarded as a bellwether as the largest enterprise by sales in the distribution segment of the food industry. Along with competitors, US Foods and Aramark, all are subject to the risks of currency fluctuation, inflation in costs for products, labor and transport in a competitive environment emerging from still COVID restraints.

For the 2^nd Quarter of FY 2023 ending December 31^st 2022, net income was $141.2 million on revenue of $18,593 million.  Comparable figures for the 2^nd quarter of fiscal 2022 ending January 1^st 2022 were net income of $167.4 million on revenue of $16,320 million.  Diluted EPS fell 15 percent from $0.33 for the second quarter of fiscal 2022 to $0.28 for the most recent quarter deviating from consensus predictions. Comparing the second quarter of 2022 with 2023, revenue was up 13.9 percent, influenced by inflation, given that U.S. case growth in food service increased by 5.2 percent. Sysco brands represented 37.1 percent of sales. Gross margin increased from 17.7 percent to 18.0 percent.

In commenting on results Kevin Hourican, president and CEO stated, Sysco results this quarter included double-digit top-line and bottom-line growth, ongoing market share gains and continued advancement of our Recipe For Growth strategy. This includes improvements in our digital tools, supply chain investments, and sales and merchandising initiatives. We remain fully staffed, and we are resolute on continuing to drive profitable share gains and operating efficiency improvements in the second half of the year,”

Neil Russell, Interim Chief Financial Officer added “We achieved solid financial results for the second quarter, including strong top-line growth and expanded gross profit dollar growth. Sequential improvements in operating expense helped drive meaningful profit growth. We remain focused on exceeding our customers’ expectations, while continuing to manage costs”.

On December 31^st 2022 Sysco posted assets of $22,087 million (including $6,197 million in goodwill and intangibles) against long-term debt of $11,996 million. The Company had an intraday market capitalization of $39,150 million on February 3^rd. SYY trades with a forward P/E of 18.7 and has ranged over a 52-week period from $70.61 to $91.53 with a 50-day moving average of $80.18.  Twelve-month trailing operating margin was 3.4 percent and profit margin 1.9 percent.  Return on assets over the past twelve months attained 8.3 percent and the return on equity was 104.3 percent. At close of trading on January 30^th SYY was priced pre-release at $78.39 falling sharply after the January 31^st opening but finishing at $77.63 at the close on a rising market.