Sysco shares jumped on Tuesday as the foodservice giant posted a smaller-than-expected loss amid the coronavirus headwinds that have slammed its customers in the restaurant industry.
For the fourth quarter, Sysco lost $618.4 million, or $1.22 a share, compared with a profit of $535.8 million, or $1.03 a share, for the same period last year. The adjusted loss came in at 29 cents per share, beating analysts’ estimates by a cent.
Revenue fell 42.7% to $8.87 billion, below Wall Street’s forecast of $9.56 billion.
“While our fourth quarter and fiscal 2020 results were significantly impacted by the COVID-19 pandemic, we quickly responded by strengthening our balance sheet, adding new and different types of customers, and strategically committing resources to plan for the eventual return of demand.,” Sysco CEO Kevin Hourican said in a news release.
The company’s shares rose 2.5% to $61.61, continuing their recovery from the post-Covid slide that bottomed out at $31.24 in mid-March.
As Dow Jones reports, “The challenges Sysco faced in the [fourth] quarter reflect the dramatic changes the restaurant industry has faced amid the pandemic. The company also provides goods to outlets at hotels, educational institutions and other places where people weren’t permitted to gather because of the pandemic.”
In the U.S., Sysco’s foodservice sales fell 42.8% to $6.1 billion while overseas sales dipped 53.4% to $1.4 billion.
The company said it had been working with restaurants to mitigate the impact of the pandemic through meal kits, contactless menus, and curbside/takeout and had “successfully helped convert over 16,000 restaurants into food marketplaces.”
“We believe that restaurant operators who have partnered with Sysco are better equipped to improve their sales and profitability,” it said.
Gross profit decreased 45.7% to $1.2 billion in the fourth quarter while gross margin dipped 102 basis points to 19.1% as inflationary pressure in the meat category was offset by deflation in the poultry and frozen categories.
“We are confident that the transformational steps we are taking better position Sysco to meet the evolving needs of our customers and the marketplace as we emerge from this crisis,” Hourican said.