Sysco Corporation (NYSE:SYY) reported quarterly earnings per share of 55 cents Monday, topping analyst consensus estimates of 52 cents per share. Revenues for the food service logistics company were markedly higher, $10.59 billion versus analyst estimates of $10.49 billion. Net earnings were $302.65 million, an increase of $3.58 million, or 1.2%, when compared to quarterly earnings from a year ago.
I am encouraged by our underlying business performance during the quarter as softening consumer sentiment contributed to ongoing challenges for the foodservice industry, said Bill DeLaney, Sysco's president and chief executive officer.
Sysco's earnings are a bellwether of the economic conditions surrounding food distribution and sales, and the company's profit-and-loss statement reflected various macroeconomic development that have affected other companies this year.
Most of the increase in revenue came from the higher prices the company charged consumers for the food items it delivers as part of its core business. Those increases were a response to a high rate of food price inflation, 7.3%, which also caused a significant rise in the costs to the company. Indeed, Sysco was not able to fully pass on those costs as gross margins fell to 18.40% from 18.93% a year ago.
Shares of Sysco were down 44 cents, or 1.58% to 27.36, during mid-morning trading in the New York Stock Exchange, underperforming a mostly-flat wider market.