Sysco Not Sizzling, Yet

A long history of quality operations can buy a company the benefit of the doubt, even when current earnings and growth are not all that exciting. Such was the case with food distribution giant Sysco (NYSE:SYY) for its fiscal fourth quarter. Results were not especially strong, but this is not a story about individual quarterly performance, and investors seem to be more interested in the long-term cash flow story. 

The Quarter That Was
Reported revenue was up 13.9% in the fiscal fourth quarter, but that is something of a mirage. A significant chunk of that "growth" came from a calendar effect tied to an extra week in the quarter. Stripping that out, growth falls to 5.8%. But wait - there is more. Favorable foreign currency moves added another 1.3% to the growth rate, and food cost inflation was about 2.2%. Consequently, volume growth, arguably the best indication of "real" growth, was on the order of 2.3% for the fourth quarter. 


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