HOUSTON, TX – Sysco is making important progress towards achieving its previously laid out three-year financial plans, despite facing increased competition from other distributors.
The foodservice company said that its sales for the first quarter of 2016 increased 0.9% to $12.6 billion, just slightly beating expectations for three analysts surveyed by Zacks Investment Research.
“Our first quarter results demonstrate important early progress toward achieving our recently establish three-year financial goals,” said Bill DeLaney, Sysco’s President and CEO. “Specifically, our U.S. Broadline operations delivered strong local case growth and excellent gross margin management in a challenging deflationary environment.”
Sysco shares were down 1.31 percent to $40.71 at 1:03 PM EST.
Since its failed merger with US Foods, Sysco has made a number of efforts to move past this hurdle by implementing new capabilities and initiatives to create better value for its shareholders.
Nelson Peltz, Founding Partner and CEO of Trian Partners, was appointed to Sysco’s Board of Directors after his investment firm became the largest individual shareholder in the business with a 7.1 percent stake.
“Sysco is a leader in its business, and we believe it is undervalued and has tremendous long-term potential,” Peltz said.
Other highlights from this quarter include:
- Gross profit increased 2.3% to $2.2 billion; gross margin increased 23 basis points to 17.81%
- Adjusted operating income decreased 0.5% to $506 million
- Adjusted Earnings Per Share (EPS) was flat at $0.52
- Sales from acquisitions (completed within the last 12 months) increased sales by 0.4%, and the impact of changes in foreign exchange rates decreased sales by 2.0%
- Case volume for the company’s U.S. Broadline operations grew 3.4% during the quarter
- Local case growth within U.S. Broadline operations grew 2.0%
Stay tuned to AndNowUKnow as we continue to follow Sysco’s financial progress in the quarters to come.
