Sysco Case Study Summary

Sysco Is Thriving With Smart Strategies
Summary:
• Sysco has posted strong earnings for its third quarter, exceeding both earnings and revenue estimates.
• The company’s business strategies are working, reversing historic lows.
• It is likely to extend these gains in the coming quarters; this makes it a good stock to hold.
Despite average revenue base growth of almost 4%, Sysco Corporation’s (SYY) earnings fell by 15%. Now however, following years of slow growth and even lower margins, Sysco has been reversing the trend, thanks largely to smart strategies focused on four key areas of its business. This four-pronged strategy consists of accelerating local case growth, improving gross margins, leveraging supply chain costs, and reducing administrative overhead.
The management’s focus on implementing these strategies has led it to write a new chapter in the history of
These include reducing its workforce by 1,200, lowering its adjusted cost per case in the field, and working to reduce administrative expenses. The company is also cutting back its U.S. broadline geographic markets from eight to six. Investors admire Sysco’s strategies and the impact they have made on the company’s financial performance. Since the start of this year, Sysco stock has soared by 18%, providing huge gains to shareholders across a very short-period of time. Sysco’s stock is now trading at its highest historical level, surging by 5% to $48.61 per share at the end of the last session.
The company’s share price shows more upside potential, beyond the recent rally. Sysco’s dividends appear stronger now, thanks to the company’s double-digit growth in earnings. Over the past nine months, the company generated operating cash flows of $1B with dividend payments standing at $523 million. The company’s cash flows are expected to expand further on the back of its growing profits.
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