SYSCO Corporation (NYSE:SYY) stock fell 1.95% (As on November 2, 11:28:17 AM UTC-4, Source: Google Finance) after the company posted mixed results for the first quarter of FY 23. The gross profit surged 17.4% to $3,488.9 million, and the gross margin expanded 18 basis points (bps) to 18.2%. This year-over-year growth in the gross profit was fueled by elevated volumes, efficient inflation management and progress in the company’s partnership growth management efforts. SYY witnessed product cost inflation of 9.7%, which was measured by estimated changes in product costs, mainly in the dairy and frozen categories. Foreign currency had a negative impact of 2.5% on the gross profit. The adjusted operating income of $770.3 million grew by $85.2 million from the year-ago period. As of the end of the quarter, the company had a cash balance of $437.7 million and approximately $10.8 billion of debt outstanding. During the first 13 weeks of fiscal 2023, Sysco returned $517.0 million to shareholders via $267.7 million of share repurchases and $249.3 million of dividends. Cash flow from operations was $158.6 million for the first 13 weeks of fiscal 2023, which was $47.8 million higher compared to the prior year period. Capital expenditures, net of proceeds from sales of plant and equipment, for the first 13 weeks of fiscal 2023 were $144.8 million. Free cash flow for the first 13 weeks of fiscal 2023 was $13.8 million.
SYY in the first quarter of FY 23 has reported the adjusted earnings per share of 97 cents, missing the analysts’ estimates for the adjusted earnings per share of 99 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 16.2 percent to $19.127 billion in the first quarter of FY 23, beating the analysts’ estimates for revenue of $18.63 billion.
Moreover, the U.S. Foodservice Operations segment sales for the first quarter were $13.6 billion, an increase of 17.2% compared to the same period last year. The International Foodservice Operations segment sales for the first quarter were $3.3 billion, an increase of 13.4% compared to the same period last year.
The company reiterated its adjusted earnings per share (EPS) guidance range of $4.09-$4.39 for fiscal 2023, suggesting 26-35% growth from the year-ago period. The company expects to return $1.5 billion to its stockholders in the fiscal. Sysco is progressing well with its Recipe for Growth plan and remains on track to grow 1.35 times the market in the year.