Sysco Profit Tops Expectations
02 February 2016 - 1:19AM
Dow Jones News
By Lisa Beilfuss
Sysco Corp. said profit rose more than expected in its latest
quarter, helped by an uptick in sales and a drop in merger-related
expenses.
Houston-based Sysco, the nation's largest distributor, by sales,
of food and other supplies to restaurants, hospitals and
cafeterias, last year dropped its $3.5 billion plan to buy rival
U.S. Foods Inc. after a federal judge effectively blocked the deal
on antitrust grounds. Expenses tied to the proposed deal weighed on
last year's results and were absent in the latest quarter.
In the wake of the deal's collapse, Sysco outlined a three-year
plan to improve its annual operating income by $400 million through
more stringent cost management and aggressive sales efforts, weeks
after adding activist investor Nelson Peltz to its board.
"We are on track to achieve our financial objectives for the
first year of our three-year plan," Chief Executive Bill DeLaney
said Monday.
Sysco saw sales inch higher in its most-recent period as case
volume grew, helping to offset the effects of food-cost deflation
and a hit from adverse foreign-exchange rates. In its domestic
operations, case volume increased 3.9%.
Gross profit margin improved to 17.7% from 17.3% a year
earlier.
Overall, the company reported a profit of $272.4 million, or 48
cents a share, up from $158 million, or 27 cents, a year earlier.
Excluding merger-related charges that affected the year-earlier
period, per-share earnings rose to 48 cents from 41 cents.
Revenue increased 0.6% to $12.15 billion. Analysts had projected
41 cents in adjusted per-share profit on $12.14 billion in revenue,
according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
February 01, 2016 09:04 ET (14:04 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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