Sysco Q4 Results Miss Estimates

(RTTNews) - Food-distribution giant Sysco Corp. (SYY) reported Monday a profit for the fourth quarter that declined nine percent from last year, despite sales growth, hurt by higher food costs and expenses. Adjusted earnings per share and quarterly revenues missed analysts' expectations.

The Houston, Texas-based company reported net earnings of $283.04 million or $0.47 per share for the fourth quarter, lower than $309.27 million or $0.53 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $0.50 per share, compared to last year's $0.55 per share.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.54 per share for the quarter. Analysts' estimates typically exclude special items.

Excluding impact of business transformation project costs, adjusting earnings underlying business was $0.59 per share, compared to last year's $0.63 per share.

Sales for the quarter grew 5.0 percent to $11.60 billion from $11.05 billion in the same quarter last year, but missed eight Wall Street analysts' consensus estimate of $11.62 billion by a whisker.

Contributions from acquisitions in the last 12 months increased sales by 2.1 percent, while sales were decreased by 0.1 percent due to changes in foreign exchange rates.

Food cost inflation, as measured by the estimated change in Sysco's product costs, was 2.0 percent for the quarter, due to inflation in the dairy and poultry categories.

Broadline sales for the quarter totaled $9.43 billion, higher than last year's sales of $8.93 billion, and sales at SYGMA grew to $1.52 billion from $1.50 billion in the year-ago quarter. Other segment sales totaled $721.57 million, up from $661.99 million in the prior-year quarter.

Case volume for the company's Broadline and SYGMA operations combined grew 3.0 percent during the quarter, including acquisitions, and increased about 0.8 percent, excluding acquisitions.

Operating income for the quarter decreased 10.8 percent to $460 million from the year-ago quarter, while adjusted operating income decreased 7.3 percent. Gross profit grew 1.2 percent to $2.0 billion from last year.

Total operating expenses increased 5.4 percent to $1.58 billion from $1.50 billion in the year-ago quarter.

"Fiscal year 2013 was a year of transition for Sysco where we made good progress on our multi-year business transformation initiatives. With that said, our financial results announced this morning fell short of our expectations as weak restaurant traffic continued to challenge many of our customers," President and CEO Bill DeLaney said in a statement.

For fiscal 2013, the company net earnings of $992.43 million or $1.67 per share, lower than $1.12 billion or $1.90 per share in the prior year. Excluding items, adjusted earnings for the year was $1.78 per share, compared to last year's $1.94 per share. Excluding the impact of business transformation project costs, adjusted earnings was $2.14 per share, compared to last year's $2.15 per share.

Sales for the full year grew 4.8 percent to $44.41 billion from $42.38 billion in the previous year.

Street was looking for full year earnings of $1.83 per share, on annual revenues of $44.46 billion.

"Looking forward to fiscal 2014, our earnings performance trends should gradually improve as we realize more of the benefits of our business transformation initiatives and further leverage the capabilities of both our strengthened senior management team and our 48,000 customer focused associates," DeLaney added.

SYY closed Friday's regular trading session at $35.01, up $0.16 on a volume of 4.38 million shares. In the past 52-week period, the stock has been trading in a range of $29.34 to $36.05.