Overview
- Sysco, which reported results Tuesday, saw shares slip about 3% in early trading after posting sales of $20.5 billion that came in a touch below Wall Street estimates.
- Adjusted earnings were $0.94 per share in line with forecasts as U.S. local case volume rose 3.3%, the strongest quarterly pace in more than three years.
- Gross margin improved by 31 basis points to 18.6% on volume growth, sourcing gains, and pricing actions despite 2.8% product cost inflation led by dairy, meat, and seafood.
- Operating expenses increased 10.1% with $63 million in higher incentive compensation, which the company said reduced per-share profit growth even as volumes improved.
- Sysco now expects full-year adjusted EPS at the high end of $4.50 to $4.60 and is pursuing the planned purchase of Jetro Restaurant Depot, a 167-store cash-and-carry chain under regulatory review and reported by Reuters at $29 billion.