Sysco Corporation is the largest American food distribution service business with a massive 16% market share in a highly fragmented industry. Sysco distributes more than 400,000 products mainly to restaurants and healthcare facilities. Restaurants account for some 62% of the company’s revenues while healthcare makes up 9% of total revenues. Retail, travel and leisure establishments, and other clients account for the remainder of the revenues. The re-opening of the economy is an interesting theme in 2021 and Sysco Corporation could be one stock to play that theme.
Sysco Corporation Reports Q12021 Earnings In Early November 2020
Sysco Corporation reported its first-quarter 2021 earnings results in early November 2020. Revenues were down from $15.3 billion in the first quarter of 2020 to $11.7 billion. Earnings per share on a diluted basis were down from $0.87 per share in Q12020 to $0.42 per share in Q12021.
Sysco Corporation CEO Kevin Hourican said, “the rate of sales for the quarter was consistent with our internal projections for business recovery. We saw steady week-over-week improvement in sales at the beginning of the quarter and are leveling of the improvement as we exited the quarter. Our road to full recovery will be non-linear. We remain vigilant in the current environment as new restrictions on our customers in the second quarter are stalling the recovery at approximately minus 20% compared to the prior year, with potential for worsening results due to the additional COVID restrictions. Where restrictions had eased however, consumers are showing that they are ready to eat away from home.”
When we talk about the top food supplier and food distribution stocks, then Sysco Corporation is the first one that comes to mind. The second-largest player is US Foods Holding Corp and the third business on the list is Performance Food Group Company. Sysco Corporation has a market cap of well over $38 billion, US Foods has a market cap of over $7 billion while Performance Food Group has a market cap of $6.8 billion.