Sysco Corp. (NYSE:SYY)

Gross Profit Margin

The gross profit margin data, available from March 30, 2019, indicates a relatively stable trend around the 18-19% range. After peaking slightly above 19% in mid-2019, it exhibits a gradual decline through 2020 into early 2022, reaching lows near 17.92%, followed by a mild recovery. From mid-2022 onward, a modest upward trend is observed, culminating at approximately 18.53% by June 29, 2024. This suggests consistent cost management relative to sales over the periods analyzed, with minor fluctuations potentially reflecting changes in cost structure or pricing dynamics.

Operating Profit Margin

The operating profit margin displays more pronounced variability compared to gross margin. Initially increasing from March 2019 to June 2019, it declines sharply during the latter half of 2019 and throughout 2020, reaching a low near 0.35% around the end of 2020. A steady recovery trend begins in early 2021, with margins improving progressively to about 4.10% by early 2024. This pattern signifies operational challenges around 2019 and 2020, possibly due to increased operating expenses or external economic pressures, followed by improved operational efficiency or revenue growth in subsequent years.

Net Profit Margin

The net profit margin follows a similar trajectory to operating margin but with greater volatility and lower absolute values. After initial positive margins in early 2019, there is a significant dip into negative territory between late 2019 and early 2021, with the lowest point reaching approximately -0.74%. From 2021 onward, the net margin recovers consistently, stabilizing between roughly 2% and 2.7% through mid-2024. This indicates that profitability after all expenses and taxes was severely impacted during the 2019-2020 period, likely reflecting external disruptions or increased costs, but a return to sustainable profitability is evident in later periods.

Return on Equity (ROE)

The return on equity metric exhibits extreme fluctuations. High values above 65% were recorded through early 2019, followed by a dramatic decline to negative returns during 2020, with a nadir near -23.66%. From early 2021, ROE rebounds sharply, reaching peak values over 129% in late 2022, before slightly moderating to approximate levels near 105% by mid-2024. Such variability suggests substantial volatility in net income relative to shareholders’ equity, potentially influenced by atypical gains or losses, asset base changes, or financial leverage adjustments during the period analyzed.

Return on Assets (ROA)

The return on assets metric similarly demonstrates significant variation. ROA ranged from above 9% in early 2019 down to slight negative values around 2020, coinciding with the period of operating and net margin weaknesses. From 2021 onwards, ROA steadily improved, reaching around 8.4% by early 2024 before a minor decrease to 7.85% in mid-2024. This trend indicates temporary declines in asset profitability during challenging periods, followed by a recovery to levels consistent with earlier years, suggesting improved asset utilization and operational performance in recent periods.

Sales Trends

Sales figures demonstrate a general upward trajectory over the observed periods, with initial sales around 15.2 billion USD in late 2018, followed by fluctuations and a notable decline during mid-2020, reaching a low point of approximately 8.9 billion USD. Thereafter, a steady recovery and growth are evident, peaking above 20.5 billion USD by mid-2024. The mid-2020 drop likely corresponds to external market disruptions, with a subsequent rebound indicating successful recovery efforts.

Gross Profit Analysis

Gross profit values reflect similar patterning to sales, starting near 2.9 billion USD in late 2018 and dropping significantly to about 1.6 billion USD in mid-2020. Thereafter, gross profit rises steadily, surpassing previous highs and reaching nearly 3.8 billion USD by mid-2024. This growth suggests improved operational efficiencies or pricing power post the mid-2020 downturn.

Gross Profit Margin

The gross profit margin, reported as a percentage and starting from around 18.98% in late 2019, shows minor fluctuations but remains relatively stable between approximately 17.9% and 18.5% throughout the periods. Despite the volatility in sales and gross profit, the margin remains consistent, indicating stable cost management relative to revenue.

Insights

The data illustrate resilience and recovery after a significant decline in mid-2020, in both sales and gross profit. Stable gross profit margins suggest steady cost structure and pricing strategies. Overall, the company appears to have navigated challenges successfully, achieving growth beyond pre-downturn levels by mid-2024.

Operating Income Trends

The operating income exhibited considerable volatility throughout the observed periods. It initially fluctuated moderately between 452 million US$ and 721 million US$ from late 2018 to mid-2019. However, there was a sharp decline beginning in early 2020, reaching a significant low of -532 million US$ in the second quarter of 2020. After this period, operating income recovered steadily, surpassing previous highs by mid-2021 and reaching new peaks around 969 million US$ in early 2023. The latter periods demonstrated sustained operating income levels generally above 700 million US$, suggesting a recovery and strengthening after the downturn in early 2020.

Sales Performance

Sales showed a generally stable to slightly increasing trend over the time frame. The reported sales values fluctuated near 15,000 million US$ toward the end of 2018 and throughout 2019, before declining sharply in the first half of 2020, coinciding with the lowest operating income values. From the third quarter of 2020 onward, sales recovered strongly, rising to over 19,000 million US$ by mid-2022, with minor oscillations thereafter. Toward mid-2024, sales further increased to exceed 20,000 million US$, indicating overall growth despite the earlier downturn.

Operating Profit Margin Analysis

Operating profit margin data, available only from early 2019 onwards, reveals an initial increase from approximately 3.88% to around 4.09% by late 2019, reflecting improving operational efficiency. This margin sharply contracted during the first half of 2020, reaching lows near 0.35%, consistent with operating income losses and reduced sales during that period. Following the trough, profit margins improved consistently, stabilizing above 3.0% from early 2021 and gradually increasing to slightly above 4.0% in 2023 and into 2024. The improving margin trend coupled with increasing sales and operating income suggests a recovery phase with enhanced profitability and operational control.

Overall Insights

The financial data demonstrates a pronounced impact likely attributable to external disruptions around early 2020, resulting in significant declines in sales, operating income, and profit margins. The subsequent periods reveal a robust recovery trajectory, with key financial metrics not only returning to pre-disruption levels but generally improving beyond them. This recovery is evidenced by increased sales volumes, restored and growing operating income, and steadily improving profit margins, pointing to successful adaptation and operational effectiveness over the medium term.

Net Earnings (Loss)

Net earnings exhibit significant volatility over the observed quarters. Initially, from late 2018 through mid-2019, earnings increased steadily, peaking at 536 million USD. This was followed by a sharp decline in early 2020, with losses recorded at -3 million USD and -618 million USD, reflecting a challenging period. Subsequently, earnings rebounded from late 2020 onward, showing a recovery trend with some fluctuations but generally maintaining positive earnings exceeding 100 million USD in most quarters. The highest recent quarterly earnings reached 734 million USD in the third quarter of 2023, indicating a strong post-decline recovery phase.

Sales

Sales demonstrate a pattern of moderate fluctuations with an overall upward trend. Sales dropped from approximately 15,215 million USD in the third quarter of 2018 to a low point of 8,867 million USD in the second quarter of 2020, coinciding with the steep dip observed in net earnings, likely reflecting external economic pressures. Following this trough, sales steadily increased, reaching a peak of 20,556 million USD by the second quarter of 2024. This recovery and growth in sales suggest enhanced market conditions or effective sales strategies implemented after the mid-2020 period.

Net Profit Margin

The net profit margin, where available, indicates a recovery trajectory after a low point in 2020. Margins were around 2.79% to 3% during 2019 but dropped sharply to negative values in early 2020 (-0.74% and -0.56%). Starting from late 2020, the margin returned to positive territory and showed a gradual improvement, rising from approximately 1.02% to about 2.69% by early 2024. This improvement aligns with the observed increases in both net earnings and sales, pointing to enhanced operational efficiency or improved cost management in recent periods.

General Insights

The data reveals a pronounced impact on financial performance during early 2020, likely related to broader economic disruptions. The concurrent declines in earnings, sales, and profit margins during this timeframe emphasize the severity of that period. The subsequent recovery across all three metrics suggests effective adaptation and resilience by the company, with improved revenue generation and profitability continuing into 2024. Additionally, the fluctuations before and after this period highlight the cyclical nature of earnings and sales within the industry context.

The financial data reveals several notable trends across the observed periods.

Net Earnings (Loss)

Net earnings demonstrate considerable volatility over the quarters. Initially, earnings ranged from $267 million to $536 million until mid-2019, with a peak of $536 million in June 2019. A sharp decline followed in late 2019 and early 2020, with net earnings plunging to negative values, reaching a low of -$618 million in June 2020. From late 2020 onwards, net earnings recovered gradually and showed substantial growth, peaking around July 2023 at $734 million. Towards mid-2024, the figures remain solid, though slightly lower than the immediate prior peaks.

Shareholders’ Equity

Shareholders’ equity exhibits a fluctuating but generally declining pattern from Q3 2018 through mid-2020, dropping from $2.6 billion to around $1.16 billion. Following mid-2020, equity begins a measured recovery, increasing steadily into 2022, though it remains below the initial 2018 levels. Late 2022 to mid-2024 shows some variability, with equity values oscillating between $1.86 billion and approximately $2.4 billion but lacking a clear upward or downward long-term trend.

Return on Equity (ROE)

ROE data is only available starting in Q3 2019, revealing initially high returns exceeding 60%, peaking above 70% mid-2019. A pronounced decrease occurs from Q3 2019 through early 2020, even turning negative during quarters of elevated net losses, reflecting diminished profitability relative to equity. Subsequently, ROE dramatically improves post mid-2020, reaching exceptional levels exceeding 90%, and peaking over 105% by mid-2024. This suggests a strong return on shareholders’ equity during the recovery period, despite the equity base being lower or fluctuating.

Overall, the data indicates a period of significant financial stress during late 2019 and early 2020, likely due to extraordinary factors impacting earnings and equity. Recovery efforts are evident as both net earnings and ROE rebound markedly, demonstrating improved operational performance or efficiency. The elevated ROE in recent quarters, coupled with stabilizing earnings, suggests enhanced profitability relative to the equity base. However, the equity values have not fully returned to initial pre-period levels, indicating potential capital structure adjustments or retained earnings fluctuations over time.

The financial data reveals several notable trends in profitability, asset growth, and return on assets (ROA) over the analyzed periods.

Net Earnings (Loss)

Net earnings exhibit significant fluctuations throughout the periods. Initially, earnings were relatively high, peaking at 536 million US dollars in June 2019. However, there was a sharp decline beginning in March 2020, with net losses recorded in two consecutive quarters (-3 million in March 2020 and -618 million in June 2020), likely reflecting extraordinary circumstances during that timeframe. Subsequently, earnings recovered gradually, showing positive values through most of the following quarters, culminating in a peak of 734 million US dollars in July 2023. The trend suggests a strong rebound and subsequent growth after a period of volatility.

Total Assets

Total assets demonstrate a steady upward trend over the entire period. Starting from approximately 18.5 billion US dollars in September 2018, assets increased consistently, reaching just under 25 billion US dollars by June 2024. This growth reflects ongoing expansion or asset accumulation despite temporary profitability setbacks, indicating a solid asset base supporting operational activities.

Return on Assets (ROA)

ROA data, available from March 2019 onward, initially showed strong returns above 9% in early 2019 before declining sharply during mid-2020, coinciding with the net earnings losses. ROA fell as low as -1.5% in March 2020, turning negative in two consecutive quarters. Following this low point, ROA steadily increased, regaining positive momentum and rising consistently to levels above 8% by March 2024. This recovery mirrors the net earnings trend and indicates improving efficiency in asset utilization over time.

Overall, the data depicts a company undergoing a significant earnings disruption during 2020, accompanied by declining ROA, but maintaining asset growth. The recovery phase is marked by improved earnings, higher ROA, and sustained asset base expansion, suggesting resilience and effective management of resources post-adversity.