Sysco (SYY) Stock Declines on Revenue Miss

Sysco (SYY) stock is falling after the company reported revenue that fell short of estimates for the fiscal 2016 first quarter.
By Amanda Gomez ,

NEW YORK (TheStreet) -- Sysco Corp. (SYY) - Get Report stock is decreasing 2.18% to $40.35 in mid-morning trading on Monday after the company earlier today reported lower than expected revenue for the first quarter of 2016. Earnings per share were in line with analysts' estimates.

The company posted earnings of 52 cents per share on $12.56 billion in revenue for the quarter ended September 26, missing estimates of $12.58 billion.

Sales for the company's largest unit, the U.S broadline business, increased 0.6% year-over-year to $10 billion for the latest quarter.

"Our U.S. broadline operations delivered strong local case growth and excellent gross margin management in a challenging deflationary environment," CEO Bill DeLaney said in a statement.

"Our first quarter results demonstrate important early progress toward achieving our recently established three-year financial goals," DeLaney noted.

In September, Sysco laid out a plan to increase its annual operating income by at least $400 million, while targeting a 15% return on invested capital by fiscal 2018.

Separately, TheStreet Ratings team rates SYSCO CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate SYSCO CORP (SYY) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

You can view the full analysis from the report here: SYY

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