Sysco Corporation (SYY), the leading food distributor in the U.S., saw its shares tumble 5.1% in pre-market trading on Tuesday, following the release of its fiscal second-quarter results and reiteration of its full-year guidance.
The Houston-based company reported earnings per share (EPS) of $0.82, unchanged from the year-ago period and in line with analysts' estimates. Adjusted EPS of $0.93 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.
Despite the top-line growth, Sysco's operating expenses climbed 4.4%, outpacing sales growth and weighing on profitability. The company cited increased volumes, cost inflation, and higher business investments as factors behind the rise in operating expenses. As a result, operating income grew a modest 1.7% to $712 million, and adjusted operating income increased 5.1% to $783 million.
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