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The food industry is mighty competitive, but it does provide opportunity for growth. Sysco Corp (NYSE: SYY) is a company that’s been doing pretty well, always on the upward path as this graph of its 10-year growth posted on CNBC shows:
Its recent fourth quarter results show that its profit, volumes and revenue all witnessed a further rise. The food distribution and marketing company beat expectations, which made the shares rise 4.4% in premarket trading at the beginning of this week, rising to $54.50.
The company’s domestic case volume witnessed a 10.2% rise, with local and smaller restaurants contributing to a 10.3% rise in sales volume. Acquisitions completed by the company in the past 12 months contributed to the increased sales by 1.2%.
Competition for the company has now primarily come from smaller scale wholesale stores and specialty distributors. The company earned $215.7 million for the quarter, which translates to 38 cents per share. This is a rise from $73 million from the previous year, 12 cents per share. Adjusted earnings rose from 52 cents to 64 cents per share excluding other items such as restructuring costs, though analysts had only projected 61 cents in terms of adjusted earnings per share on revenue of $13.68 billion. Revenue actually witnessed a 10% rise to $13.7 billion. Gross margin witnessed an improvement from 17.90% to 18.34%.
Sysco experienced food deflation of 1.2%. The meat and dairy deflation was partially balanced by inflation felt in the other categories.
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