Food distributor Sysco Corp beat first-quarter revenue estimates in the US on Tuesday, helped by steady demand, but missed profit expectations.
Sysco’s quarterly sales numbers – thanks to its specialty seafood and fresh-cut meat products – offered a bright spot to US businesses.
The estimates came at a time when the US restaurant industry is struggling with weaker traffic due to strained household budgets and higher menu prices.
Yet despite positive revenue, the company has been facing pressure from the still-elevated prices of packaged and fresh food products, even as supply chain constraints and input costs ease from their peaks.
Sysco supplies fresh meat, seafood and dairy products to a wide client base that ranges from educational and healthcare to recreational institutions.
The Texas-based company’s efforts to help local restaurants attract customers in recent quarters – including providing low-cost menu alternatives – gave it an edge over consumer staple peers such as Hormel Foods and Conagra Brands.
Speaking about the results, CEO of Sysco Kevin Hourican said, “We remain on track to accelerate local volume growth and margins in the second half of the year, with an improving pipeline.”
The company’s first-quarter net sales rose 4.4% to $20.48 billion from a year ago, topping analysts’ average estimate of $20.46 billion, according to data compiled by the London Stock Exchange Group.
Excluding items, Sysco earned $1.09 per share for the quarter ending 28 September, compared with estimates of $1.13.
Its gross profit margin fell 27 basis points to 18.3% in the first quarter.
The company reiterated its 2025 forecasts, where it expects full-year sales growth of 4% to 5% and adjusted EPS growth of 6% to 7%.
Read More: Sysco Ireland And ABP Launch Regenerative Farming Project
