Sysco Maintains Forecast Despite Uneven Restaurant Recovery
Key Points:
* Sysco retains full-year sales and profit forecasts.
* Restaurant demand recovery remains uneven.
* Food service sales increase by 4.1%, slower than the previous quarter.
* Rising product costs impact margins, leading to a decline of 11 basis points.
Analysis:
Sysco's quarterly results reflect a mixed recovery in the food service industry. Demand from restaurants has not fully rebounded, prompting cautious consumers to dine at home.
Food service sales in the U.S., catering to businesses and entertainment venues, grew by 4.1% year-over-year. However, this is slower than the previous quarter's 4.6% increase.
Higher costs for dairy and poultry have impacted Sysco's margins, reducing them to 18.1% in the second quarter.
Market Reaction:
Sysco's shares declined by 4% upon the release of the financial results.
Company Response:
Sysco continues to seek cost-saving measures by sourcing raw materials at lower prices and controlling production costs. The company anticipates these efforts to yield results in the second half of the fiscal year.
Financial Performance:
* Second-quarter sales rose 4.5% to $20.15 billion.
* Net sales growth estimate for the full year: 4-5%.
* Adjusted earnings per share growth estimate for the full year: 6-7%.