Sysco Corp. (NYSE:SYY)

Operating Income (Loss)

The operating income exhibited a decline from 3,193 million USD in 2019 to 2,003 million USD in 2020. This was followed by a recovery and increase over subsequent years, reaching 3,673 million USD in 2024. The initial decrease in 2020 may indicate challenges during that period, while the strong rebound suggests improved operational performance in later years.

Sales

Sales declined from 41,288 million USD in 2019 to 36,774 million USD in 2020, and further decreased to 35,725 million USD in 2021. However, a marked recovery began in 2022 with sales rising significantly to 48,521 million USD, continuing upward to 55,339 million USD by 2024. This trend indicates a swift recovery and expansion in revenue following the earlier downturn.

Segment Profit Margin

The segment profit margin decreased from 7.73% in 2019 to 5.45% in 2020, reflecting reduced profitability during that time. Thereafter, the margin improved to 6.88% in 2021 but slightly declined to 6.54% in 2022. From 2022 to 2024, the margin stabilized around 6.6%, showing modest fluctuations but maintaining a level below the 2019 peak.

Summary

The data exhibits a clear impact on financial performance beginning in 2020, with reductions in operating income, sales, and profit margin. Despite the initial downturn, there has been a consistent recovery in sales and operating income through 2024, reaching new highs beyond pre-2020 levels. Profit margins have partially recovered but remain somewhat below the peak seen in 2019. Overall, the segment shows resilience with strong growth trends following a period of adversity.

Sales Trends

Sales experienced a notable decline from 11,493 million USD in June 2019 to a low of 8,351 million USD in July 2021. This was followed by a substantial recovery, increasing to 11,787 million USD in July 2022, and continuing upward to reach 14,561 million USD by June 2024. The data indicates a strong rebound and growth phase after a period of contraction.

Operating Income (Loss) Trends

Operating income demonstrated significant volatility during the period. Initially, the segment posted a positive operating income of 125 million USD in June 2019. This shifted to operating losses of -371 million USD and -232 million USD in the subsequent two years (June 2020 and July 2021). From July 2022 onwards, there was a return to profitability with operating income rising to 102 million USD, then improving considerably to 375 million USD by June 2024. This pattern reflects a recovery from challenging conditions, culminating in strengthened profitability.

Segment Profit Margin Trends

The segment profit margin mirrored the fluctuations observed in operating income. Starting at 1.09% in June 2019, it declined sharply into negative territory, reaching -3.84% in June 2020 and -2.78% in July 2021. Subsequently, it returned to positive values, increasing to 0.87% in July 2022 and further improving to 2.58% by June 2024. This upward trend suggests an improvement in operational efficiency and cost management relative to sales over the latter years.

Overall Observations

The overall data reveal a period of difficulty for the segment between 2020 and 2021, characterized by reduced sales, operating losses, and negative profit margins. Following this, there has been a steady and significant recovery in sales volume and profitability through to mid-2024. This suggests effective measures were likely taken to reverse earlier declines, resulting in a stronger financial position and enhanced segment performance.

Over the analyzed periods, sales exhibited a generally increasing trend, starting at 6,244 million US dollars in mid-2019, then dipping to 5,556 million US dollars in mid-2020. From that point onward, sales recovered and grew steadily, reaching a peak of 7,843 million US dollars by mid-2023 before slightly declining to 7,768 million US dollars in mid-2024.

Operating income (loss) demonstrated greater volatility compared to sales. It began at 28 million US dollars in mid-2019, increased to 37 million in mid-2020, and further improved to 53 million by mid-2021. Notably, there was a sharp downturn in mid-2022, with operating income turning negative to a loss of 4 million US dollars. However, the segment rebounded strongly thereafter, achieving 57 million in mid-2023 and further increasing to 72 million US dollars in mid-2024, surpassing previous high points.

The segment profit margin percentage mirrored the patterns of operating income, with values starting low at 0.44% in mid-2019 and increasing to 0.66% in mid-2020 and 0.81% in mid-2021. The margin then contracted substantially into negative territory at -0.05% in mid-2022, indicating an unprofitable period. Subsequently, the margin recovered to 0.72% in mid-2023 and improved further to 0.93% in mid-2024, indicating improving profitability efficiency relative to sales.

Sales

Overall growth despite a temporary dip in mid-2020, peak reached in mid-2023, followed by a slight decrease in mid-2024.

Operating Income

Increasing trend with a notable loss in mid-2022; strong recovery and improvement through mid-2024 beyond earlier highs.

Segment Profit Margin

Fluctuated in line with operating income; dipped into negative in mid-2022 but showed marked improvement thereafter, indicating enhanced profitability.

In summary, the segment experienced a challenging period in mid-2022 marked by operating losses and negative profit margins despite rising sales. Post-2022, the segment demonstrated robust recovery in operational profitability and sustained revenue growth, resulting in improved profit margins and operating income in the most recent periods.

Operating Income (Loss)

The operating income for the segment shows a notable decline from 2019 to 2020, dropping from $3,193 million to $2,003 million. This was followed by a gradual recovery over the subsequent years, with operating income increasing to $2,457 million in 2021 and further to $3,173 million in 2022. The upward trend continued into 2023 and 2024, reaching $3,587 million and $3,673 million respectively, ultimately surpassing the pre-2020 level.

Assets

The segment's asset base demonstrated a steady increase throughout the period. Starting at $7,238 million in 2019, assets declined slightly in 2020 to $6,647 million, likely reflecting challenges during that year. From 2021 onward, assets expanded significantly each year, rising to $7,632 million in 2021, $9,541 million in 2022, $11,398 million in 2023, and peaking at $12,505 million in 2024, indicating continued investment or acquisition activities within the segment.

Segment Return on Assets (ROA)

The segment ROA decreased from 44.11% in 2019 to 30.13% in 2020, indicating a sharp decline in asset profitability, consistent with the drop in operating income and slight asset reduction. Although there was some recovery as ROA improved to 32.19% in 2021 and further to 33.25% in 2022, the ratio trended downward again in the last two periods, reaching 31.47% in 2023 and further declining to 29.37% in 2024. This downward trend suggests that despite growth in operating income and asset base, asset efficiency in generating income has diminished over recent years.

Operating Income (Loss)

The operating income exhibited significant volatility over the periods analyzed. Beginning with a positive figure of 125 million USD in mid-2019, there was a sharp decline to a loss of 371 million USD in mid-2020, followed by a reduced loss of 232 million USD in mid-2021. From mid-2022 onwards, the segment returned to profitability, recording positive operating incomes of 102 million, 313 million, and 375 million USD respectively. This indicates a recovery trend in operating income after the challenging period during 2020 and 2021.

Assets

Total assets in the segment show a generally increasing trend over the period. Assets grew steadily from 5,888 million USD in mid-2019 to 7,545 million USD by mid-2024. There was a slight decrease noted in mid-2022 compared to the previous year, but the overall trajectory remains upward, reflecting expansion or increased investment in the segment.

Segment Return on Assets (ROA)

The Segment ROA mirrored the fluctuations seen in operating income. It began at 2.13% in mid-2019 and dropped sharply into negative territory with -5.93% in mid-2020, improving somewhat to -3.43% in mid-2021. From mid-2022 forward, the ROA turned positive, improving progressively from 1.55% to 4.22% and then to 4.97% by mid-2024. This progression indicates an enhancement in the efficiency and profitability of the segment relative to its asset base following a period of negative returns.

Overall Insights

The data reflects a period of operational challenge in 2020 and 2021, likely connected to broader external factors impacting profitability. Despite these setbacks, the segment demonstrates a consistent recovery in profitability and asset utilization from 2022 to 2024. The growth in assets coupled with improved operating income and ROA suggests effective management responses and a strengthening business position in the latter years of the reporting period.

The data reflects the financial performance of the SYGMA reportable segment over a six-year period.

Operating Income (Loss)

The operating income displayed an overall upward trend from 2019 to 2024, starting at $28 million and increasing to $72 million by 2024. A notable decline occurred in 2022, with operating income turning negative at -$4 million, indicating a temporary loss. However, the segment recovered in subsequent years, achieving the highest values in 2023 and 2024 at $57 million and $72 million respectively.

Assets

Assets steadily increased year-over-year throughout the observed timeframe. Beginning at $625 million in 2019, assets grew consistently, reaching $923 million in 2024. This growth suggests ongoing investment or asset accumulation within the segment.

Segment Return on Assets (ROA)

ROA followed a pattern similar to operating income, with general improvement over the six years. It rose from 4.45% in 2019 to 7.80% in 2024, peaking in 2024. In 2022, ROA experienced a decline to -0.44%, corresponding to the period of operating loss, which indicates reduced efficiency or profitability of asset use during that year. After 2022, ROA rebounded strongly, nearing pre-decline levels and continuing to improve.

In summary, the segment exhibited resilience, recovering from a significant downturn in 2022 to demonstrate improved profitability and asset utilization by 2024. Both operating income and ROA indicate an overall positive growth trajectory, supported by steady asset expansion over the period.

The sales figures in the U.S. Foodservice Operations segment exhibit notable fluctuations over the analyzed periods. Initially, there is a decline from $41,288 million in 2019 to $35,725 million in 2021, followed by a significant recovery and growth through to 2024, reaching $55,339 million. This pattern suggests an initial contraction possibly affected by external factors, succeeded by a robust expansion phase.

Regarding assets, the values demonstrate a consistent upward trajectory throughout the entire period. Starting from $7,238 million in 2019, assets increase steadily year-over-year, reaching $12,505 million by 2024. This continuous growth in assets reflects ongoing investments or acquisitions contributing to the segment's capacity and operational scale.

The segment asset turnover ratio indicates how effectively the assets are being utilized to generate sales. This ratio decreases from 5.7 in 2019 to 4.43 in 2024, evidencing a decline in efficiency. Despite the overall increase in sales and asset base, the diminished ratio suggests that sales growth has not kept pace proportionally with asset growth, resulting in reduced asset productivity over time.

Sales Trend

Declined from 2019 to 2021; strong recovery and growth from 2022 to 2024.

Assets Trend

Consistent growth with substantial increases each year from 2019 through 2024.

Segment Asset Turnover Ratio

Gradual decline, indicating reduced efficiency in generating sales from assets.

In summary, the segment shows a pattern of initial sales contraction followed by significant growth, supported by increasing asset investment. However, the declining asset turnover ratio points to a potential reduction in operational efficiency, warranting further analysis into the causes of diminished asset utilization relative to sales performance.

Sales Trends

Sales in the International Foodservice Operations segment demonstrated significant fluctuations over the observed periods. Initially, there was a decline from $11,493 million in mid-2019 to a low of $8,351 million by mid-2021. Following this trough, sales experienced a strong recovery, increasing to $11,787 million in 2022 and continuing upward to reach $14,561 million by mid-2024. This reflects a rebound exceeding the pre-decline levels and marks a positive growth trajectory in recent years.

Assets Trends

Segment assets showed a generally upward trend throughout the period. Starting at $5,888 million in mid-2019, assets rose steadily, with minor fluctuations, reaching $7,545 million by mid-2024. This growth suggests ongoing investments and asset accumulation supporting the segment's operations, though the increase was more gradual relative to the volatility observed in sales figures.

Segment Asset Turnover

The segment asset turnover ratio, which measures sales generated per dollar of assets, declined sharply from 1.95 in 2019 to a low of 1.23 in 2021. This decrease coincides with the decline in sales and rise in assets, indicating lower efficiency in asset utilization during this period. Subsequently, asset turnover improved steadily, reaching 1.93 by mid-2024, nearly restoring the initial efficiency levels. This recovery aligns with the improvements seen in sales volumes.

Overall Insights

The segment experienced a significant downturn in sales and operational efficiency from 2019 through 2021, likely reflecting challenging market conditions or external disruptions. From 2022 onwards, there is clear evidence of recovery with both sales and asset turnover ratios trending upward, while assets continue to increase steadily. The improvement in asset turnover indicates enhanced effectiveness in using assets to generate revenue, suggesting management's successful response to prior challenges. The recent period's performance reveals robust growth and strengthening operational efficiency within the segment.

Sales Trend

Sales exhibited a decline from 6,244 million US dollars in June 2019 to 5,556 million in June 2020. Following this dip, sales demonstrated a steady upward trajectory, increasing to 6,499 million in July 2021 and further rising to a peak of 7,843 million in July 2023. However, the most recent period ending June 2024 showed a slight decrease to 7,768 million, indicating a minor downturn after several years of growth.

Assets Trend

Total assets showed consistent growth throughout the entire period. Starting at 625 million US dollars in June 2019, assets increased steadily each year, reaching 923 million by June 2024. This continuous asset growth reflects ongoing investment or accumulation of resources in the segment.

Segment Asset Turnover

The segment asset turnover ratio, which measures efficiency in using assets to generate sales, declined from 10.00 in June 2019 to a low of 8.11 in June 2020. It then slightly recovered in subsequent years to 8.55 in 2021 and 8.67 in 2022, followed by a more significant increase to 9.34 in 2023. Despite this recovery, the ratio fell again to 8.42 in June 2024, suggesting some variability in asset utilization efficiency over time.

Overall Insights

The data indicates that despite a sales setback in 2020 likely influenced by external factors, there was a resilience and strong recovery in sales performance through 2023. Asset growth has been steady, supporting expanded operations or investments. However, the asset turnover ratio's fluctuations imply that the segment's efficiency in leveraging assets to generate sales has experienced challenges and has not consistently improved in line with asset growth. The minor sales decline in the latest year, combined with a decreased asset turnover, could signify emerging operational or market pressures requiring further analysis.

Capital expenditures

The capital expenditures displayed notable fluctuations across the reported periods. Initially, there was a decline from $327 million in June 2019 to a low of $163 million in July 2021. This was followed by a substantial increase to $389 million in July 2023. In the most recent period ending June 2024, capital expenditures slightly decreased to $366 million but remained significantly higher than the levels observed in the intervening years.

Depreciation and amortization

Depreciation and amortization expenses showed a consistent upward trend throughout the examined periods. Starting at $342 million in June 2019, the expense increased steadily, reaching $499 million by June 2024. This pattern suggests ongoing investments in assets and a growing base of depreciable asset values.

Segment capital expenditures to depreciation ratio

The ratio of capital expenditures to depreciation exhibited variability in line with the fluctuations in capital spending. The ratio began at 0.96 in June 2019, indicating capital expenditures were almost equivalent to depreciation. It then decreased markedly to 0.45 in July 2021, reflecting reduced capital investments relative to asset depreciation. The ratio rebounded to 0.89 by July 2023 before declining again to 0.73 in June 2024, showing continued but less aggressive capital spending relative to depreciation levels.

Overall analysis

The data indicates a strategic period of reduced capital investments during 2020 and 2021, possibly reflecting caution or shifting priorities. This was followed by a significant ramp-up in capital expenditures in 2022 and 2023, correlating with the increasing depreciation expenses that suggest asset base growth. Despite the recent slight reduction in capital expenditures in 2024, the company maintained investments above the average levels observed in the middle years. The evolving ratio of capital expenditures to depreciation points to ongoing asset renewal and growth, though the pace of investment has moderated somewhat in the most recent period.

Capital Expenditures

Capital expenditures demonstrate a fluctuating pattern over the observed period. Starting at $250 million in June 2019, expenditures decreased consistently to a low of $152 million by July 2021. This decline was followed by a slight recovery in July 2022 to $155 million and then a further increase to $193 million in July 2023. The most recent data point in June 2024 shows a significant rise to $289 million, the highest value in the timeframe.

Depreciation and Amortization

The depreciation and amortization expense remained relatively stable with minor fluctuations. Beginning at $249 million in June 2019, the amount increased to $279 million in June 2020, followed by a decline to $238 million in July 2021. It maintained a stable level around $240 million in July 2022 and decreased to $218 million in July 2023. A moderate increase to $247 million is noted in June 2024, indicating some recovery in this measure.

Segment Capital Expenditures to Depreciation Ratio

The ratio of capital expenditures to depreciation reveals consistent variation aligned with the underlying financial figures. Starting at a ratio of 1 in June 2019, it declined steadily over the next two years reaching a low of 0.64 in July 2021. This period corresponds with declining capital expenditures and relatively stable depreciation. The ratio then rose modestly to 0.65 in July 2022 and further increased to 0.88 in July 2023. The most notable change appears in June 2024 with a sharp rise to 1.17, reflecting a significant increase in capital expenditures compared to depreciation.

Insights and Trends

Overall, the capital expenditures show cyclical variations with a recent surge in 2024, suggesting increased investment or asset acquisition activity. Depreciation remains comparatively steady, implying consistent asset aging or amortization patterns. The capital expenditures to depreciation ratio highlights shifting investment intensity relative to asset depreciation, with a trend toward increased investment in the latest period. This dynamic could indicate strategic expansion or modernization efforts within this segment.

The analysis of the capital expenditures and depreciation data for the SYGMA segment over the six-year period reveals notable trends in investment and asset utilization efficiency.

Capital Expenditures

Capital expenditures exhibited variability throughout the years, with a peak in 2019 at $36 million, followed by a decline in 2020 to $24 million. There was a partial recovery in 2021 and 2022, reaching $33 million and $35 million respectively, before trending downward again in 2023 and 2024 to $31 million and $21 million. This suggests a fluctuating investment pattern, with a notable reduction in the latest year under review.

Depreciation and Amortization

Depreciation and amortization expenses remained relatively stable, ranging narrowly between $31 million and $35 million throughout the period. A slight decrease is observed from 2019 to 2022, followed by a minor uptick in 2023 and 2024. This stability indicates consistent asset base aging and amortization scheduling without significant changes in asset composition or useful life estimations.

Segment Capital Expenditures to Depreciation Ratio

The ratio of capital expenditures to depreciation mirrors the investment and expense trends. It started slightly above parity at 1.03 in 2019, dropped considerably to 0.68 in 2020, then improved to above 1.0 in 2021 and 2022, indicating capital expenditure levels comparable to or exceeding depreciation. However, in 2023 and 2024, this ratio again declined to below 1.0, reaching the lowest point at 0.64 in 2024. This suggests that recent capital investments are not keeping pace with asset depreciation, potentially indicating a reduction in asset renewal or growth investments.

In summary, the SYGMA segment shows a pattern of fluctuating capital investment, with a recent downward trend that may affect future asset capacity or modernization. Depreciation levels remain stable, reflecting a steady amortization of existing assets. The declining ratio between capital expenditures and depreciation in recent years signals a possible phase of reduced reinvestment, which could impact the segment's operational capabilities if the trend continues.