3 Reasons Sysco Stock Crashed 18.9% in February
Sysco Corporation (NYSE: SYY) stock tumbled 18.9% in February, according to data provided by S&P Global Market Intelligence. Sysco, a food company that sells, markets, and distributes food products and equipment and supplies primarily to the hospitality industry, suffered two blows last month: quarterly numbers that disappointed the market and the coronavirus threat to its prospects. A new CEO at the helm, who took office on Feb. 1, added to investors' jitters even as he's trying to make a major acquisition.
Sysco reported its second-quarter (quarter ended Dec. 28, 2019) numbers on Feb. 3. Sales increased 3.2% and operating income 4.2% year over year. However, Sysco's adjusted operating income (GAAP operating income excluding the impact of restructuring and acquisition-related costs) fell short of management's targets, compelling it to roll back its three-year guidance of adjusted operating income growth to $500 million to $525 million from $600 million, or 7% from the previously expected 8%.
Shareholders were, unsurprisingly, miffed, as Sysco is already experiencing pockets of weakness. Growth in international markets hasn't been easy. Brexit, for instance, has hurt Sysco's business in the U.K. even as the company is struggling to integrate its subsidiaries, Brakes France and Davigel, into Sysco France. The COVID-19 coronavirus outbreak has further fueled fears of a slowdown in the food industry as footfall at restaurants and any places of large gatherings is taking a hit.
Source Fool.com
