Sysco Reports First Quarter Double Digit Earnings Growth

HOUSTON, Nov. 07, 2016 (GLOBE NEWSWIRE) -- Sysco Corporation (NYSE:SYY) today announced financial results for its 13-week first fiscal quarter ended October 1, 2016.¹ These results reflect the performance of the newly acquired Brakes Group, which are incorporated for the first time.

First Quarter Fiscal 2017 Highlights
  • Sales increased 11.2% to $14.0 billion; excluding Brakes, sales increased 1.0% to $12.7 billion
  • Gross profit increased 20.3% to $2.7 billion; gross margin increased 146 basis points to 19.27%; excluding Brakes, gross profit increased 5.0% to $2.3 billion; gross margin increased 70 basis points to 18.52%
  • Operating income increased 14.9% to $567 million; adjusted operating income increased 23.8% to $627 million; excluding Brakes, adjusted operating income increased 15.3% to $584 million
  • Earnings Per Share (EPS) increased $0.17 to $0.58; adjusted EPS increased $0.15 to $0.67; excluding Brakes adjusted EPS increased $0.11 to $0.63

"I am pleased with our first quarter performance which built upon the favorable results we have achieved over the past several quarters," said Bill DeLaney, Sysco's chief executive officer. "We continued to focus on supporting the needs of our customers and achieved strong earnings growth through solid execution in a softening industry environment. We remain committed to achieving our three-year plan financial goals."

¹Financial comparisons presented in this release are compared to the same period in the prior year. Earnings Per Share (EPS) and Adjusted EPS are shown on a diluted basis unless otherwise specified.  Adjusted financial results exclude certain items, which primarily include restructuring and merger-related costs. A reconciliation of non-GAAP measures is included in this release.

New Segment Reporting Structure

Beginning in fiscal year 2017, as a result of completing our recent acquisition of the Brakes Group, Sysco will report results based on four operating segments: the two largest of which are U.S. Foodservice Operations and International Foodservice Operations. First Quarter Fiscal 2017 Results

U.S. Foodservice Operations

Sales for the first quarter were $9.5 billion, an increase of 0.8% compared to the same period last year. Gross profit increased 4.3% to $1.9 billion; gross margin increased 68 basis points to 20.18%. Operating expenses increased $20 million, or 1.8%, compared to the same period last year, due mainly to higher payroll expenses, which were driven by higher case volume. Adjusted operating expenses increased $21 million, or 1.8%, compared to the same period last year. Operating income was $745 million, an increase of $59 million, or 8.5%, compared to the same period last year. Adjusted operating income was $745 million, an increase of $58 million, or 8.4%, compared to the same period last year.

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