HOUSTON, TX – Sysco’s earnings beat analyst expectations for the company’s second quarter of 2016, showing significant progress being made in its previously announced three-year plan.
Higher sales and a drop in merger-related expenses were some of the standout metrics in the company’s financial report. Revenue for the second quarter, ended December 26, 2015, increased 0.6% to $12.15 billion, while Reuters analysts had only projected $12.14 billion, according to MarketWatch. Sysco reported net earnings of $272.4 million, or 48 cents a share, up from $158 million, or 27 cents, a year earlier.
Sysco’s shares were up over 8% during after hours trading.
Sysco CEO Bill DeLaney said he was pleased with the quarter’s results.
“We achieved strong local case growth, while managing gross margins well and also containing operating expense growth," he said. "Through the first six-months of the year, we are on-track to achieve our financial objectives for the first year of our three-year plan.”
The foodservice giant announced details about its three-year plan last September, following its announcement that it would end its merger pursuit with US Foods. The plan calls for an improvement of its annual operating income by $400 million.
In addition, Sysco says that it hopes to achieve a 15% return on invested capital by accelerating local case growth, improving gross margins, leveraging its end-to-end supply chain, reducing administrative costs, and generating more than $1 billion in free cash flow per year, according to a press release.
Other highlights from Sysco’s Q2 2016 financial report include:
- Gross profit increased 3.4% to $2.2 billion; gross margin increased 50 basis points to 17.75%
- Adjusted operating income increased 10.2% to $437 million
- Adjusted Earnings Per Share (EPS), including a one-time $0.03 benefit from resolving certain tax contingencies, increased $0.07 to $0.48.
For more on Sysco’s financial performance in Q3 and beyond, stay tuned to AndNowUKnow.
