Sysco Corp. (NYSE: SYY) shares rose sharply in trading today even as the company reported a drop in its fourth-quarter profit. SYY, which is engaged in distribution of food and related products to the foodservice industry, saw its cost increase in the fourth quarter.
SYYâ€™s bottom-line has been negatively impacted by rising food and overhead costs in the last few quarters. The company today said that it recorded food cost inflation of 3.3% in the fourth quarter. In the previous quarter, the company had recorded food cost inflation of 5.5%.
For the fourth quarter ended June 30, SYY reported a profit of $309.3 million, or $0.53 per share, compared to $336.3 million, or $0.57 per share reported for the same period in the previous year. Sales for the fourth quarter rose 5.9% to $11.04 billion.
Analysts surveyed by Thomson Reuters were expecting SYY to report fourth-quarter earnings of $0.54 per share and revenue of $11.04 billion.
SYYâ€™s gross margin for the quarter was 18.2%, down from 18.7% reported for the same period in the previous year. Operating expenses for the fourth quarter climbed 7.4%.
For fiscal year 2012, SYY reported sales of $42.4 billion, representing an increase of 7.8% over fiscal 2011. Operating income for the fiscal year 2012 was $1.9 billion. Adjusted operating income for the fourth quarter was $2.1 billion, up 3% over fiscal 2011.
CEO Bill DeLaney said that market conditions remained challenging throughout the year due to increasing product costs and an uneven economic recovery; however, the company successfully supported its customers and grew its share of market.
DeLaney noted that SYY is making meaningful progress on its business transformation initiatives and believe the benefits will both improve the companyâ€™s financial performance over time and further enhance the companyâ€™s leadership position in the industry.
At last check, SYY shares were up 4.51% to $30.14 on above average volume of 9.23 million.
Year-to-date, the stock gained 2.76%, compared to a gain of 11.76% for the S&P 500.