Sysco says its business shows no signs of recession

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Sysco said it did not see any impact on its business from a potential recession. / Photo courtesy of Sysco.

At least one big company isn’t seeing signs of recession.

Large broad-based distributor Sysco said on Tuesday it did not see any impact on its business from a potential recession, calling the restaurant industry “resilient.”

“We have not seen recession concerns negatively impact our business results,” Chief Executive Kevin Hourican told analysts on Tuesday, according to financial services website Sentieo.

“Right now, the recession has no impact on our income statement,” he added.

But the company isn’t ignoring a potential recession either. “We are closely monitoring macroeconomic conditions for signs of a slowdown in business,” Hourican said.

He specifically called for the non-commercial sector, including universities and hospitals among others, to be likely to improve in the coming months. “We see continued strength as tailwinds in the non-commercial sector continue,” Hourican said.

Sysco’s sales rose 16.2% in the fiscal first quarter that ended in October. 1. Compared with the same period of last year. Profits rose 17.4% to $3.5 billion. Foodservice volumes in the U.S. increased 7.3% from a year earlier.

Sysco’s comments are notable because the company is a large supplier of food and other goods to restaurants and non-commercial suppliers. Given its sheer size, the Houston-based company will be one of the first to see signs of recession.

“We’re completely diverse,” Hourican said. “We cover every element of the food segment from the highest-end white tablecloth restaurants to QSR and everything in between. “Our numbers don’t see a broad trend change. “

Hourican’s comments don’t say a recession isn’t necessarily imminent. But they did provide at least some contrast to comments from McDonald’s executives who predicted a recession in the coming months.

Low-income diners have been changing their dining habits, shifting spending away from more expensive concepts to cheaper options like McDonald’s, some executives said. At the same time, Domino’s said consumers may refuse delivery given the overall cost.

As for Sysco, the broad distributor said it is preparing to take steps to reduce costs if the economy turns south. However, Hourican said the company will not lay off staff. The comments also indicated that the company blamed the early layoffs on staffing challenges in the current distribution industry.

“We’re not going to reduce people in the supply chain,” Hourican said. “We’re not going to reduce drivers, for example. The cost-cutting effort at the onset of COVID, as proven by COVID, was extreme because it led to a shortage of people that was extremely difficult for the industry to get out of. And we’re still digging.”

The company also believes that if the economy does turn south, it can boost its market share. “If the recession starts to affect overall strength, we have an opportunity to share,” Hourican said.

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