(Reuters) – Food distributor Sysco fell short of third-quarter sales expectations on Tuesday as demand took a hit from consumers scaling back discretionary spending.
Shares of the Texas-based company were down 2.3% in premarket trading.
Inflation in food and fuel costs have been discouraging cost-conscious consumers from dining out and food-away-from-home purchases.
Although supply chain constraints and input costs have eased slightly, elevated costs for products like fresh meat, seafood and dairy are still evident.
The company’s quarterly net sales rose 2.7% year-over-year to $19.38 billion, missing LSEG estimates of $19.73 billion.
Founded in 1969, the food distributor’s varied product categories and wide client base – from education and travel to healthcare and recreation – have helped cushion it against changing consumer trends and rising costs.
Its gross margins for the quarter ended March 30 rose 44 basis points to 18.6%.
Excluding items, Sysco earned 96 cents per share, above analysts’ average estimates of 95 cents, according to LSEG data.
(Reporting by Annett Mary Manoj in Bengaluru; Editing by Devika Syamnath)
Comments