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Tasty Quarter at Sysco

The food supplier pushes growth back up to its expectations.
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Sysco (SYY) - Get Sysco Corporation Report beat second-quarter estimates as the food supplier posted 8.7% sales growth.

The Houston-based company made $204 million, or 33 cents a share, for the quarter ended Dec. 31, down from the year-ago $233 million, or 36 cents a share. Latest-quarter earnings were hit by a 4-cent charge for the cost of stock-based compensation. Excluding the charge, the company made 37 cents a share. Revenue rose to $7.97 billion from $7.33 billion a year earlier. Wall Street analysts were looking for a 36-cent profit on sales of $7.88 billion.

Gross profit margins increased 21 basis points in the quarter to 19.27% on improved customer mix. Marketing associate-served sales -- sales to Sysco's core business of independent restaurants -- were 53.3% of U.S. broadline sales in the quarter vs. 53.1% last year.

"I am very pleased with this quarter's sales growth of 8.7 percent, which is a return to Sysco's historical performance levels," said CEO Richard Schnieders. "The results were due to sound execution of our growth strategies, including Business Reviews, increased staffing in our key Customer Contact areas and the efforts of our marketing associates. Our strategic investments in these areas were validated by the growth they produced, and we will continue to invest in these areas for future growth. Our industry has endured a variety of challenges in the past several quarters, especially in terms of fuel costs and the effects of food cost inflation. By remaining focused on our long-term goals, we have executed on the basic building blocks of our business and positioned ourselves for future success.''

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