Sysco (SYY 54.81, -1.85) is lower by 3.3% despite reporting better than expected results. Today's decline comes after the stock hit a fresh all-time high on Friday.
The foodservice distributor reported above-consensus earnings of $0.74 per share on a 4.9% year-over-year increase in revenue to $14.65 billion, which also exceeded expectations.
Company-wide gross margin declined to 19.07% from 19.27% one year ago. Domestic gross profit grew 3.8% to $2.00 billion. U.S. Broadline food cost inflation was reported at 3.8%.
Domestic sales increased 3.9% year-over-year to $9.80 billion with local case volume within U.S. Broadline operations growing 2.8%. Total case volume increased 0.3%.
Domestic operating expenses grew 3.2% to $38.00 million due to higher transportation expenses and unusually low bad debt expense in the previous year. Operating income increased 4.8% year-over-year to $781.00 million. International sales increased 6.4% year-over-year to $2.90 billion.
International operating income fell 8.3% to $95.00 million. Canadian operations showed year-over-year growth thanks to solid local case growth and strong expense management. The European unit faced more challenges due to ongoing investment in the Brakes Group acquisition.
The company estimates that hurricanes in Texas and Florida reduced first quarter operating income by about $10.00 million.