Sysco trimmed its sales outlook for the year to factor in what it called a lower inflation environment for the industry.
The updated guidance came as continued softness in restaurant foot traffic, higher-than-expected fuel costs and lower-than-expected U.S. food cost inflation weighed on the company's third-quarter results, with sales coming in shy of Wall Street's expectations.
Despite those pressures, Sysco said it continues to prioritize efforts to cut back on costs with artificial intelligence technology, among other focus areas.
"Our company specific initiatives kept us focused on the elements of performance within our control within a choppy operating environment," Chief Financial Officer Brandon Sewell said.
The stock fell 4.5% to $78.05 in premarket trading.
The food distributor now expects full-year sales growth to land at the lower end of its previously forecast range of 6% to 7%. The company continues to guide for adjusted earnings per share growth of 9% to 11% for the year.
Sysco's fiscal first-quarter profit was $526 million, or $1.09 a share, compared with $476 million, or 99 cents a share, a year earlier.
Adjusted earnings per share were $1.19, in line with analyst estimates, according to FactSet.
Revenue rose 2.8% to $21.7 billion, compared with analyst estimates of $22.02 billion.
In Sysco's U.S. foodservice business, sales rose 2.4%. Internationally, sales were up 5.1%.
Comments