Food-distribution giant Sysco Corp. (SYY) reported Monday a 13% year-over-year increase in profit for the second quarter as the decline in quarterly revenues were more than offset by lower costs. Earnings per share for the quarter rose 12.5% and topped Wall Street expectations by three cents.
Sysco operates in the distribution of food and related products and services to restaurants, nursing homes, hospitals, hotels, motels, schools, colleges, cruise ships, sports parks and summer camps.
In a statement, chief executive officer, Bill DeLaney said, "I am encouraged by our operating performance this quarter. While the business environment remains challenging, deflation pressures appear to be moderating from highs we saw early in the quarter and case volume trends continue to improve."
Second Quarter Results
The Houston, Texas-based company reported net earnings of $268.35 million or $0.45 per share for the second quarter, up about 13% from $237.65 million or $0.40 per share in the prior-year quarter.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.
The company noted that the results for the latest quarter benefited from a $0.01 per share impact from the change in the value of corporate owned life insurance or COLI, while the year-ago quarter results were negatively impacted by $0.05 per share due to the same value change.
Sales for the quarter decreased 3.1% to $8.87 billion from $9.15 billion in the same quarter last year, but topped seven Wall Street analysts' consensus estimate of $8.83 billion by a whisker.
However, sales from acquisitions positively impacted sales by 0.6% and changes in foreign exchange rates increased sales by 1.2%. Food cost inflation, as estimated by the change in Sysco's cost of goods, was 3.5% for the quarter.
Segmental Details
Broadline sales for the second quarter totaled $7.08 billion, lower than last year's sales of $7.21 billion, and sales at SYGMA declined to $1.16 billion from $1.23 billion in the year-ago quarter. Other segment sales totaled $752.67 million, down from $831.06 million in the prior-year quarter.
Other Metrics
Operating income for the second quarter rose 9.6% to $462.35 million from $421.86 million in the year-ago quarter, while as a percentage of sales, operating margin was 5.2%.
Gross profit for the quarter was $1.69 billion, down from $1.75 billion in the prior-year quarter, while total operating expenses declined 7.2% to $1.23 billion from $1.33 billion in the year-ago quarter.
Capital expenditures for the quarter totaled $138 million, as the company invested in facility replacements and expansions, technology, and additions and replacements to fleet. The company ended the second quarter with cash and cash equivalents of $647.61 million, compared to $373.07 million at end of the prior-year quarter.
Half-Yearly Highlights
For the first six months, Sysco reported net earnings of $594.55 billion or $1.00 per share, about 16% higher than $514.47 billion or $0.86 per share in the prior-year period.
Sales for the year-to-date period decreased 5.7% to $17.95 billion from $19.03 billion in the same period last year.
Outlook
Looking ahead to fiscal 2010, the company continues to project capital expenditures in the range of $600 million to $650 million.
Stock Quote
In Monday's regular trading session, SYY is trading at $28.80, up $0.81 or 2.89% on a volume of 21,350 shares. In the past 52-week period, the stock has been trading in a range of $19.39 to $29.48.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.