Sysco (SYY)- Running Low on Provisions

More unusual movements in the company’s reserves

Sysco (SYY) is the largest distributor of food and related products to restaurants and other away-from-home dining institutions. We have followed this company for our institutional clients for decades and it seems its results never seem to be free of unusual accounting-related items impacting its results. In a January 2022 report we highlighted how unusual trends related to pandemic adjustments to its accounts receivable reserves were artificially benefitting results. We noticed in the recent fourth quarter press release that there was another unusual movement in the accounts receivable account which deserves investor attention.

SYY normally makes 90-95 cps in non-GAAP EPS per quarter and it often beats by 1-2 cps. It has even missed by 2 cps earlier this year. However, we have noticed that the company has several levels it pulls to pick up a few cents in non-GAAP EPS and these appear to be tapped out.

Let’s take a closer look below.

Note: The 10-K for the recently-ended fiscal year is not out yet and may shed some more light on recent results. We may update this later if we find more interesting items.