Food supplier Sysco keeps full-year forecasts unchanged despite quarterly beat

Sysco

28/01/2025 14:39

Jan 28 (Reuters) - Packaged and fresh food supplier
Sysco  SYY.N  on Tuesday kept its full-year sales and profit
forecasts unchanged despite beating estimates for second-quarter
revenue, as a recovery in demand from restaurants remains
uneven. 
    
    WHY IT'S IMPORTANT     
    With prices of essentials staying high in the U.S., many
budget-conscious consumers are still choosing to eat meals at
home rather than dining out. 
    Sales in the company's food service business in the U.S.,
which caters to offices, amusement parks, casinos, bowling
alleys and movie theaters, rose 4.1% in the quarter ended Dec.
28 from a year ago, slower than the 4.6% year-on-year increase
in the prior quarter. 
    Higher costs of products such as dairy and poultry have also
pressured Sysco's quarterly margins, leading to a 11-basis-point
decrease to 18.1% in the second quarter.
      
    MARKET REACTION
        The company's shares fell 4% after the results were
published.
    
    CONTEXT  
    Sysco is a distributor of a range of food items from meats
and fresh produce to frozen foods and baked goods.
    The company is trying to source raw materials from suppliers
at lower prices and keep production costs in check, the results
of which it has said would reflect only in the second half of
the fiscal year.
    
    BY THE NUMBERS 
    Sysco reiterated its full-year forecasts for the second
time; it expects net sales to grow between 4% and 5% and
adjusted earnings per share to grow between 6% and 7%.
   The Houston-based company's second-quarter sales rose 4.5% to
$20.15 billion from a year ago. Analysts on average expected
$20.10 billion, according data compiled by LSEG.


 (Reporting by Aamir Sohail in Bengaluru; Editing by Sahal
Muhammed)
 ((Aamir.Sohail@thomsonreuters.com;))