Sysco Corp.’s fiscal second-quarter earnings fell 3.1 percent as higher costs masked the foodservice supplier’s stronger-than-expected sales growth.
Sysco, which derives most of its sales from the restaurant industry, has seen rising food and overhead costs hurt its bottom line of late. The company has also warned that competitive conditions remain at high levels among foodservice suppliers and it had to offer either discounts or other promotions to achieve some of its sales growth.
For the quarter ended Dec. 31, Sysco reported a profit of $250.1 million, or 43 cents a share, down from $258.2 million, or 44 cents, a year earlier. Excluding items such as business transformation and corporate-owned life insurance costs, earnings rose to 46 cents from 45 cents. Sales jumped 9.2 percent to $10.2 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of 44 cents on revenue of $10.1 billion.
Gross margin slipped to 18 percent from 18.8 percent as input costs jumped 10 percent.
Sysco said food-cost inflation, as measured by the estimated change in product costs, was 6.3 percent, up from 4.5 percent a year earlier but down from 7.3 percent in the prior quarter.