Sysco’s Third-Quarter Profit Declines on Higher Fuel Expenses

Sysco Corp., North America’s largest distributor of food to restaurants, said fiscal third-quarter profit fell 14 percent on higher fuel and stock options expenses.

Net income dropped to $188.5 million, or 30 cents a share, from $218.2 million, or 34 cents, Houston-based Sysco said today in a statement. Revenue climbed 9.4 percent to $8.14 billion.

Sysco’s expenses for trucking and packaging are climbing as fuel prices increase. Chief Executive Officer Richard Schnieders is trying to counter that by adding more sales people and conducting business reviews of customers to boost revenue.

“Rising year-over-year gasoline costs may cause consumers to pull back on casual-dining visits,” New York-based Buckingham Research analyst Mark Kalinowski wrote in an April 28 note. He downgraded the stock to “neutral” from “accumulate.” Those costs “can lead to Sysco’s main customer base — mom-and-pop restaurants — buying less product from Sysco for a while.”

Bloomberg