Sysco (NYSE:SYY) reported a 5.3% decline in first-quarter profit and weaker-than-expected sales on Monday, weighed down by severance charges related to its multi-year overhaul and higher expenses.
The Houston-based food distributor posted net earnings of $287 million, or 49 cents a share, compared with a year-earlier profit of $302.6 million, or 51 cents.
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Excluding one-time items, Sysco said it earned 58 cents, topping average analyst estimates of 50 cents in a Thomson Reuters poll.
Sysco attributed the earnings beat to “solid sales growth” and improving expense management.
“Volume gains drove our top line growth as food cost inflation moderated from the historically high levels experienced in recent quarters," Sysco CEO Bill DeLaney said in a statement.
Revenue for the three months ended Sept. 29 climbed 4.7% to $11.1 billion from $10.6 billion a year ago, narrowly missing the Street’s view of $11.14 billion.
The company, which works closely with restaurants and universities, has struggled to overcome rising food costs and broader expenses but continues to undergo a lengthy revamp in an effort to improve profitability.
Shares of Sysco slumped more than 2.5% to $30.54 on Monday.