Food supplier Sysco beats quarterly sales estimates on steady demand

Sysco

29/10/2024 13:12

Oct 29 (Reuters) - Food distributor Sysco Corp  SYY.N 
beat first-quarter revenue estimates on Tuesday, helped by
steady demand for its specialty seafood and fresh-cut meat
products, but missed profit expectations. 

WHY IS IT IMPORTANT?
    Sysco's quarterly sales numbers offer a bright spot at a
time when the broader U.S. restaurant industry is struggling
with weaker traffic due to strained household budgets and higher
menu prices. 
    However, the company has been facing pressure from the
still-elevated prices of packaged and fresh food products, even
as supply chain constraints and input costs ease from their
peaks.

CONTEXT
    Sysco supplies fresh meat, seafood and dairy products to a
wide client base that ranges from educational, healthcare to
recreational institutions.  
    The Texas-based company's efforts to help local restaurants
attract customers in the recent quarters, including providing
low-cost menu alternatives, gave it an edge over consumer staple
peers such as Hormel Foods  HRL.N  and Conagra Brands  CAG.N . 

KEY QUOTE
      "We remain on track to accelerate local volume growth and
margins in the second half of the year, with an improving
pipeline," said CEO Kevin Hourican.
    
BY THE NUMBERS
    The company's first-quarter net sales rose 4.4% to $20.48
billion from a year ago, topping analysts' average estimate of
$20.46 billion, according to data compiled by LSEG.
    Excluding items, Sysco earned $1.09 per share for the
quarter ended Sept. 28, compared with estimates of $1.13.  
    Its gross profit margin fell 27 basis points to 18.3% in the
first quarter.
    The company reiterated its 2025 forecasts, where it expects
full-year sales growth of 4% to 5% and adjusted EPS growth of 6%
to 7%.

 (Reporting by Aatrayee Chatterjee in Bengaluru; Editing by
Shreya Biswas)
 ((Aatrayee.Chatterjee@thomsonreuters.com))