Financing

Earnings roundup: Sysco sees industry growth slowing, Marriott says vacation travel is back

Both companies say market conditions are complicated by the particulars.
Profits and revenues are up at Sysco and Marriott. | Photo: Shutterstock

Sysco sees industry growth slowing

Growth of the foodservice industry will slow during the coming year, with restaurants in the U.S. also spending less on supplies because of continuing moderation in food costs, distribution giant Sysco Corp. told Wall Street on Tuesday.

Executives suggested that the impact of both dynamics will be felt particularly strongly by domestic independent restaurants, which collectively ordered only 0.8% more cases of goods during the fourth quarter ended July 1 than they did a year earlier. The volume of goods hauled in total by the company to U.S. restaurants rose 2.3%, for a 2.5% revenue gain.

The officials projected that Sysco’s revenues will grow at a faster pace than operators’ sales in part because of new supply options like Sysco Your Way, a fill-in service launched during fiscal 2023. The on-demand program allows foodservice customers to place an order for a needed by 11:30 a.m. and receive it between 2 and 6 p.m. the same day, six days a week. It is currently available in 400 markets within five nations.

CEO Kevin Hourican also revealed that the company intends to cut $100 million in costs during fiscal 2024, and will factor return on invested capital into the model that determines corporate employees’ bonuses.

Overall, Sysco reported net income for Q4 of $733.7 million, a 43.9% leap from the prior year, on revenues of $19.7 billion, up 4.1%.

Marriott sees Americans vacationing more—but in foreign locales

Americans and Canadians are traveling for pleasure again, though with a marked preference for overseas destinations, particularly China, Marriott Corp. revealed in posting financial results for the second quarter.

Leisure bookings at Marriot properties in north America rose only 1% during the period, the lodging giant reported. But its Asian properties saw a 90% year-over-year jump in visits by pleasure travelers from the U.S. and Canada, according to management.

Marriott’s European leisure bookings rose 20%, the executives said.

Domestic properties enjoyed a significantly bigger jump in group bookings. Revenues from room bookings for conventions and other meetings increased 10% during Q2, with the rise accelerating a percentage point as the three-month period came to an end.

The return of single-traveler business bookings to pre-pandemic levels “remained slow,” said Anthony Capuano, CEO of Marriott International.

The company posted Q2 net income of $726 million, up 7% from the year earlier, on revenues of $6.08 billion, a rise of 14%.

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