Sysco (SYY 60.60, -0.58) has given up 1.0% despite beating second quarter expectations. This leaves the stock within 10.0% of its record high that was notched at the end of January.
The foodservice distributor reported above-consensus second quarter earnings of $0.78 per share on a 7.1% year-over-year increase in revenue to $14.41 billion, which was also ahead of estimates.
Gross profit grew 5.1% year-over-year to $1.90 billion, but gross margin declined 28 bps to 19.79% due to higher food costs. Food cost inflation in U.S. broadline operations hit 3.3%.
The company reported U.S. Broadline case growth of 3.5% while local case growth was reported at 4.8%.
Operating expenses increased 5.9% due to higher selling and transportation expenses.
The company's international business had a mixed showing with Canadian operations delivering improved results while European operations were impacted by the company's transition from calendar year to a fiscal year. International sales grew 9.3% year-over-year to $2.90 billion.