(Sysco earnings article updated with comments from CEO DeLaney.)
Sysco said early Monday its 2011 fiscal first quarter revenue increased 7.4% to $9.8 billion, topping Wall Street's expectations.
Quarterly profits slid 8.3% to $299.1 million, or 51 cents per share, shy of analysts' consensus call for earnings of $302 million.Investors voiced their disapproval, bidding Sysco shares 2.7% lower to close at $29.23 Monday. CEO Bill DeLaney called Sysco's sales growth "encouraging," and said its bottom-line miss was "largely due to a decline in gross profit margin and higher pension costs." "Case volume was higher across all regions in our Broadline and SYGMA segments and the year-over-year increase represented the strongest improvement since the second quarter of fiscal 2007," DeLaney said on a conference call with investors . "While the pace of the macroeconomic recovery remains sluggish and restaurant traffic patterns continue to be under pressure, recent data suggests the industry is slowly recovering," he added. The distributor of food and foodservice products attributed its revenue growth to the impact of food cost inflation and strong case volume growth. Food cost inflation was 3.3%, Sysco said, driven by nearly 10% inflation in the combined categories of meat, dairy and seafood. "While we typically are able to pass through modest levels of price inflation on a timely basis, it is more difficult in the short-term to pass through double digit price increases to our customers without negatively impacting their business," DeLaney said.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV