Sysco (SYY 55.27, -0.04) trades just below its flat line after reporting mixed results for the third quarter. Even with today's modest decline, the stock remains within two points of its record high ($57.07) that was notched in the middle of December.
The foodservice distributor reported below-consensus third quarter earnings of $0.51 per share on a 12.7% year-over-year increase in revenue to $13.52 billion, which was better than expected.
Excluding results of Brakes Group, sales grew 2.3% to $12.30 billion. Overall gross margin improved 89 basis points to 18.74% while operating margin, excluding Brakes, expanded 34 basis points to 18.20%.
Operating income grew 14.3% to $500 million while operating income, excluding Brakes, grew 13.6% to $497 million.
U.S. Foodservice sales grew 2.2% to $9.20 billion while operating income increased 7.0% year-over-year to $689 million. Local case volume grew 3.5% and segment gross margin increased 35 basis points to 19.89%.
International sales jumped 92.3% year-over-year to $2.50 billion while operating income grew 21.2% to $40 million. The Brakes Group acquisition was responsible for the bulk of the sales growth.