Sysco Profits Down, Stock Stumbles

Food-service and distribution company Sysco(SYY Quote) announced today that it lowered its expenses enough during its fiscal third quarter to stave off weaker sales and report earnings even with Wall Street's targets.

Sysco shares were trading lower Monday, changing hands at $22.96, down nearly 6%, on heavy volume.

In a pre-market release, Sysco reported a bottom-line profit of $226.2 million, or 38 cents a share, down from the year-earlier period's $240.9 million, or 40 cents a share. Sales fell 4.5% to $8.7 billion from $9.1 billion.

The company added that food-cost inflation during the quarter was 3.3%.

"Our third quarter results reflect the increasingly difficult market environment that has developed as our fiscal year has progressed," Sysco's CEO, Bill DeLaney, said in a statement.

Through layoffs and cuts in incentive pay, Sysco said it was able to reduce operating expenses by $85 million, or 6.5%, during the quarter, partially offset by increased bad-debt expense.