In an August 1^st release, Sysco Corp. (SYY) posted financial results for the 4^th quarter and fiscal 2023, beating bottom-line estimates. This Company can be regarded as a bellwether of the distribution segment of the food industry as the largest enterprise by sales. 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.

For the 4^th Quarter of FY 2023 ending July 1^st 2022, net income was $733.7 million on revenue of $19,728 million.  Comparable figures for the 4^th quarter of fiscal 2022 ending July 2^nd  were net income of $510.0 million on revenue of $18,957 million.  Diluted EPS rose 45.5 percent from $0.99 for the 4^th quarter of fiscal 2022 to $1.44 for the most recent quarter. Comparing the 4^th quarter of 2022 with 2023, revenue was up 4.1 percent, influenced by inflation and case count that was up 2.3 percent in the U.S. segment. Operating margin increased from 4.0 percent in Q4 2022 to 4.9 percent for the most recent quarter.

For the 4^th Quarter of 2023 U.S sales attained $13,746 million up 2.5 percent with a gross margin of 19.7 percent and an operating income of $1,057 million.  For the 4^th Quarter of 2023 International sales attained $3,649 million up 12.2 percent with a gross margin of 19.9 percent and an operating income of $146.5 million. 

For FY 2023 ending July 1^st 2022, net income was $1,770 million on revenue of $76,325 million with a diluted EPS of $3.47.  Comparable figures for fiscal 2022 ending July 2^nd 2022 were net income of $1,358 million on revenue of $68,636 million with a diluted EPS of $2.64. 

In commenting on results Kevin Hourican, president and CEO stated, Sysco delivered another quarter of solid sales, volume and market share gains. Our actions to improve efficiency continued in the fourth quarter with sequential improvements in supply chain productivity and additional cost outs, delivering meaningful operating expense leverage. We further advanced our competitive advantages as the global leader in food service distribution through advancements with our Recipe for Growth strategy. For the quarter and for the year, the Sysco team delivered another record period of operating income. Sysco’s strong profitability, size and scale advantages, and balance sheet health position our company for growth to continue into fiscal 2024 and beyond,”

Kenny Cheung, CFO of Sysco stated, “Our solid financial results included top-line and bottom-line growth, record free cash flow for the year, and achievement of our target net debt ratio, which improved to 2.5 times. Improved productivity drove operating expense leverage, resulting in strong bottom-line margin expansion. Looking ahead, we plan to drive continued capital allocation, we rewarded our shareholders by returning approximately $1.5 billion of cash during the year,”

On July 1^st 2022 Sysco posted assets of $22,821 million (including $5,505 million in goodwill and intangibles) against long-term debt of $11,936 million. The Company had an intraday market capitalization of $38,668 million on July 1^st. SYY trades with a forward P/E of 17.1 and has ranged over a 52-week period from $69.72 to $87.41 with a 50-day moving average of $73.21.  Twelve-month trailing operating margin was 4.0 percent and profit margin 2.1 percent.  Return on assets over the past twelve months attained 8.4 percent and the return on equity was 104.4 percent. At close of trading on Monday July 1^st SYY was priced pre-release at $76.34 rising briefly at the opening post-release on Tuesday August 1^st to $78.07 but finishing at $76.16 at the close.