Sysco Corp. (SYY) reported a 17.2% jump in earnings for the first quarter helped by lower income taxes as well as higher sales from the US Foodservice segment. However, the results missed analysts’ expectations. Following this, the stock fell over 9% in the early trade.
Net income climbed 17.2% to $431 million and earnings jumped 17.4% to $0.81 per share. Non-GAAP earnings soared 22.4% to $0.91 per share.
Sales rose 3.9% to $15.2 billion helped by a 5.6% growth in the US Foodservice Operations sales. Sales from International Foodservice Operations rose 0.6% as foreign exchange negatively impacted sales by 0.4%. Sales from Sygma declined 1.2% while other sales increased 6.2%.
Local case volume within U.S. Broadline operations increased 5.2%, of which 3.7% was organic, while total case volume within U.S. Broadline operations grew 5.7%, of which 4.3% was organic.
Sysco continues to see expense challenges in the warehouse and transportation areas of its supply chain, which the company anticipates will persist. The company remains focused on the execution of its strategic priorities, which it believes will serve as the roadmap for additional growth and value creation.
Cash flow from operations was $271.1 million for the first quarter, which was $188.4 million higher compared to the prior year period. Free cash flow was $170.7 million, which was $222.4 million higher compared to the prior year.
Capital expenditures, net of proceeds from sales of plant and equipment, totaled $100.5 million, which was $34.1 million lower compared to the prior year period.
Shares of Sysco opened lower on Monday. The stock has risen over 6% in the year so far and over 14% in the past year.