Sysco Earnings Beat Expectations

By Imani Moise 

Sysco Corp. said earnings rose more than expected in the most recent quarter, driven mostly by the acquisition of Brakes Group completed in July.

The food service company, which distributes to cafeterias and restaurants, said gross margin expanded to 19.11% from 17.75% during the second quarter.

Shares fell 3.5% to $50.68 during afternoon trading, though the stock is still up 5.6% over the past three months.

Sysco is one of the largest food and supplies distributors, and serves restaurants, hospitals and schools in the U.S.

After its plan to merge with rival US Foods Holding Corp. was foiled by antitrust regulators in 2015, Sysco turned to acquiring U.K.-based food distributor Brakes Group, sharply expanding the U.S. company's overseas footprint.

Sales for domestic food service operations declined 0.5% to $9.09 billion while international sales more than doubled to $2.63 billion.

Over all, Sysco reported a profit of $275.2 million, or 50 cents a share, up from $272.4 million, or 48 cents a share, a year earlier. On an adjusted basis, earnings were 58 cents a share. Revenue jumped 11% to $13.46 billion.

Analysts polled by Thomson Reuters had forecast earnings of 54 cents a share on $13.53 billion in revenue.

Write to Imani Moise at [e-mail]

(END) Dow Jones Newswires

February 06, 2017 13:50 ET (18:50 GMT)

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