Sysco Q4 Adj Earnings Meet View, But Sales Top

(RTTNews) - Food-distribution giant Sysco Corp. (SYY) reported Monday a profit for the fourth quarter that declined ten percent from last year, despite sales growth, hurt by higher food costs and acquisition related costs. Adjusted earnings per share matched analysts' expectations, while quarterly sales topped their estimates.

"While business conditions remained challenging for our customers, we experienced improving trends in year-over-year sales and gross profit growth in the last four months of our fiscal year," President and CEO Bill DeLaney said.

The Houston, Texas-based company reported net earnings of $254.17 million or $0.43 per share for the fourth quarter, lower than $283.04 million or $0.47 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $0.50 per share, flat with last year. On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter grew 5.9 percent to $12.29 billion from $11.60 billion in the same quarter last year, and topped nine Wall Street analysts' consensus estimate of $12.14 billion.

Contributions from acquisitions in the last 12 months increased sales by 0.6 percent, while sales were decreased by 0.7 percent due to changes in foreign exchange rates.

Food cost inflation, as measured by the estimated change in Sysco's product costs, was 4.1 percent for the quarter, due to inflation in the meat, dairy and seafood categories.

Broadline sales for the quarter totaled $9.98 billion, higher than last year's sales of $9.43 billion, and sales at SYGMA grew to $1.60 billion from $1.52 billion in the year-ago quarter. Other segment sales totaled $791.09 million, up from $721.57 million in the prior-year quarter.

Case volume for the company's Broadline and SYGMA operations combined grew 2.2 percent during the quarter, including acquisitions, and increased about 2.1 percent, excluding acquisitions.

Operating income for the quarter decreased 7.7 percent to $425 million, while adjusted operating income increased 1.2 percent to $482 million from the year-ago quarter. Gross profit grew 4 percent to $2.16 billion from last year.

Total operating expenses increased 7.4 percent to $1.73 billion from $1.61 billion in the year-ago quarter.

"As we begin fiscal 2015, we are well positioned to further strengthen our customer relationships and look forward to completing our proposed merger with US Foods," DeLaney added.

SYY closed Friday's regular trading session at $36.27, unchanged on a volume of 4.50 million shares. In the past 52-week period, the stock has been trading in a range of $31.13 to $43.40.