) is set to report fourth-quarter fiscal 2014 results before the
opening bell on Aug 11. Last quarter, this global food products
maker and distributor posted in-line results. Let's see how things
are shaping up prior to the announcement.
Factors to Consider
The company's growth strategy remains strong and its efforts to
reduce costs and improve efficiency are appealing. The company has
implemented several short-term steps and longer-term strategic
initiatives to accelerate sales and mitigate the ongoing gross
margin pressure. These initiatives are expected to yield results in
the fiscal fourth quarter. The company also expects more progress
over the next several months.
However, we cannot ignore the fact that the near-term fuel price
hike and rise in input costs have been hurting margins. The
company's results are also dampened by a sluggish macro-economic
scenario, which in turn leads to lower consumer spending. We
continue to expect macro-economic headwinds and input cost pressure
to hurt the upcoming quarter.
Our proven model does not conclusively show that Sysco is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
The ESP for Sysco is -8.16% as the Zacks Consensus Estimate of 49
cents is higher than the Most Accurate Estimate of 45 cents.
Zacks Rank #4 (Sell):
We caution against stocks with Zacks Rank #4 and #5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions.
Other Stocks to Consider
Other stocks in the consumer staples sector that have both a
positive earnings ESP and a favorable Zacks Rank are:
Pinnacle Foods Inc (
), with an Earnings ESP of +3.03% and a Zacks Rank #2 (Buy).
Supervalu Inc (
), with an Earnings ESP of +9.09% and a Zacks Rank #3 (Hold).
Inventure Foods Inc (
), with an Earnings ESP of +5.56% and a Zacks Rank #3.
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SUPERVALU INC (SVU): Free Stock Analysis Report
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SYSCO CORP (SYY): Free Stock Analysis Report
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