Sysco’s stock surges after profit and sales fall but beat expectations

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Shares of Sysco Corp. shot up 4.2% in premarket trading Tuesday, after the seller and distributor of food products to restaurants and other businesses reported fiscal first-quarter profit and sales that fell from last year as the COVID-19 pandemic weighed on its foodservice business, but still beat Wall Street expectations with results improving throughout the quarter. Net income for the quarter to Sept. 26 fell to $216.9 million, or 42 cents a share, from $453.8 million, or 87 cents a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share declined to 34 cents from 98 cents, but was above the FactSet consensus of 25 cents. Sales dropped 23.0% to $11.78 billion, just above the FactSet consensus of $11.734 billion. U.S. foodservice sales fell 25.7% to $7.9 billion, and international foodservice sales declined 25.7% to $2.2 billion. “Although our first quarter 2021 results continue to be impacted by the pandemic, we are pleased with our overall expense management and our ability to produce positive free cash flow and a profitable quarter despite a 23% reduction in sales,” said Chief Executive Kevin Hourican. The stock has tumbled 33.3% year to date through Monday, while the S&P 500 has gained 2.5%.
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