HOUSTON (AP) — Sysco Corp.'s net income rose 1.2 percent in its fiscal first quarter as it passed along sharply higher food costs amid soft consumer spending.
The company, which sells food to restaurants, hotels and other food establishments, has seen business slow as consumers visited fewer restaurants in the down economy.
Sysco has also faced higher costs for food, which like many food-related businesses, it has passed along to its customers. The company also struggled with higher costs for payroll, fuel and some business transformation investments that curbed its profits this quarter.
Sysco, based in Houston, reported Monday that it earned $302.7 million, or 51 cents per share, for the period that ended Oct. 1. That's up from $299 million, or 51 cents per share, in the same quarter last year. The number of diluted shares outstanding rose to 593.4 million from 591.1 million.
After adjusting for some special costs during the period, the company earned 55 cents per share in the most recent quarter.
Sysco's revenue increased nearly 9 percent to $10.59 billion helped by a 7.3 percent increase in prices. The company said the costs for nearly all food ingredients rose, with particularly marked gains in dairy, meat and canned and dry products. Food cost inflation was 3.3 percent in the prior year period and 5.9 percent in the fiscal fourth quarter.
Analysts surveyed by FactSet anticipated the company would earn 52 cents per share on revenue of $10.43 billion.
Shares of the company fell 41 cents to $27.39 in midday trading.
