Sysco earnings beat Wall Street expectations
By Paul Takahashi, Houston Chronicle (TX)
February 4, 2019
Sysco, the nation's largest food distributor, on Monday reported better-than-expected earnings amid rising transportation costs caused by a national truck driver shortage.
The Houston-based company posted a $267.4 million profit, a decline of 5.9 percent from a year earlier, during its fiscal 2019 second quarter ending Dec. 29.
Sysco, which operates on an atypical fiscal calendar, reported adjusted earnings per share of 75 cents, beating Wall Street expectations of 73 cents. Although sales rose 2.5 percent to $14.8 billion from $14.4 billion, operating expenses rose at a higher rate: 6.9 percent to $2.3 billion, from $2.2 billion.
"We remain focused on exceeding our customers' expectations, while continuing to manage costs, and anticipate seeing additional benefit from our cost savings initiatives in the second half of this fiscal year," Chairman and CEO Tom Bené said in a statement.
Sysco in recent months said it has struggled to contain rising operating costs amid a shortage of commercial truck drivers. Sysco, like many of its competitors, has been forced to raise wages, pay overtime and dangle incentives to recruit and retain drivers in the tight labor market -- all of which have eaten into Sysco's bottom line.
In December, Sysco announced plans to lay off an undisclosed number of finance employees early this year...