Shares of Sysco (NYSE:SYY) soared to a 52-week high on Monday after the food-service giant revealed a stronger-than-expected 4% improvement in third-quarter profit, as higher sales more than offset rising inflation.
The company, which distributes meats, dairies and other foods to restaurants, college cafeterias and healthcare facilities, has been struggling to deal with increasing costs of commodities. Investors on Monday applauded its latest beat.
Revenue for the three months ended April 2 was $9.8 billion, up 9.1% from $8.9 billion a year ago, beating the Street’s view of $9.48 billion.
“We are pleased with our improved performance in the third quarter as both sales and earnings grew over the prior year,” Sysco CEO Bill DeLaney said in a statement. “Particularly encouraging is our case volume growth in the midst of ongoing product inflation and a sluggish economic recovery.”
Higher prices and case volume growth helped lift revenues, partially offset by food cost inflation, particularly in the meat, seafood and canned and dry categories that lifted operating expenses 10.6% to $132 million.
The Houston-based food distributor posted net earnings of $258.5 million, or 44 cents a share, compared with $247.6 million, or 42 cent a share, in the same quarter last year, beating the Street’s view of 41 cents.