Sysco earnings: what to look for from SYY

What happened

Sysco, the food distribution company, reports earnings Tuesday before the market opens. Last quarter it beat revenue expectations with $22.12 billion, up 4.7% from a year earlier, though it narrowly beat profit-per-share estimates and missed analysts' EBITDA estimates, which means earnings before interest, taxes, depreciation and amortization.

Confirmed

Global impact / market context

Sysco's results show whether food distributors are passing costs to restaurants and other buyers while keeping sales volumes. Last quarter's mixed outcome, with revenue beating but a key profitability measure missing, means investors will focus on whether profit per sale holds up as expected revenue growth of 4% is modest.

Analyst inference

Peers Hilton Grand Vacations and Hasbro posted strong revenue growth, beating estimates by wide margins, which suggests some consumer discretionary demand held up. Sysco has missed Wall Street's revenue estimates several times over two years, so its own delivery of the expected 4% growth will shape how investors judge the stock.

Analyst inference

What to watch

1. Watch whether reported revenue grows near the 4% analysts expect, and whether profit per share and EBITDA, which means earnings before interest, taxes, depreciation and amortization, meet estimates after last quarter's narrow profit-per-share beat and EBITDA miss. Confirmed
2. Watch whether cost pressures such as food, fuel and labor are squeezing profit per sale, and whether Sysco can pass those costs to restaurant and other customers without losing sales volume. Analyst inference
3. Watch whether a revenue miss, after repeated misses over two years, prompts analysts to lower future estimates, and whether management gives cautious guidance on demand from restaurants and other food buyers. Proposed

Evidence

• stockstory.org