Shares of food distribution giant Sysco Corporation (SYY) tumbled over 5% in pre-market trading on Tuesday after the company's fiscal second-quarter earnings and guidance failed to excite investors.

For the quarter ended December 28, 2024, Sysco reported earnings of $0.82 per share, unchanged from the year-ago period and in line with analysts' estimates. Adjusted earnings of $0.93 per share grew 4.5% year-over-year but missed expectations by a penny.

Total sales rose 4.5% to $20.15 billion, driven by a 1.4% increase in U.S. foodservice volume and beating estimates of $20.10 billion. Gross profit increased 3.9% to $3.7 billion, but gross margin contracted 11 basis points to 18.1% due to product cost inflation of 2.1%, primarily in the dairy and poultry categories.

Operating income grew 1.7% to $712 million, while adjusted operating income rose 5.1% to $783 million. However, operating expenses climbed 4.4%, outpacing sales growth and weighing on profitability.

Looking ahead, Sysco reiterated its fiscal 2025 guidance, expecting sales growth of 4-5% and adjusted earnings per share growth of 6-7%. The outlook fell short of analysts' expectations, with the consensus forecasting earnings of $4.56 per share for the year.