Sysco Corp. reported fiscal fourth-quarter and full-year adjusted net earnings and EPS on Aug. 13 that beat analyst expectations, while the U.S. food distributor said inflation on certain goods continues to squeeze its gross margins.
The Houston-based company reported adjusted EPS of 94 cents in the fiscal fourth quarter, an increase of 30.6% over the previous year and above mean consensus estimate for normalized EPS of 93 cents, according to S&P Global Market Intelligence.
For fiscal 2018, adjusted EPS was 26.6% higher than 2017 at $3.14, beating the S&P Global Market Intelligence mean consensus estimate for normalized EPS of $3.02.
On a non-GAAP basis, net earnings for the 13 weeks ended June 30 came in at $497.9 million, a 28.2% increase over the same quarter in 2017. The S&P Global Market Intelligence mean consensus estimate for net income excluding exceptions was $491.5 million. Excluded costs include restructuring, acquisition-related costs, loss on debt extinguishment, tax benefits from a retirement plan contribution, the impact of repatriating certain international earnings and certain impacts of tax law changes, the company said.
Sysco reported $1.66 billion in adjusted net earnings for fiscal 2018, a 22.1% increase over the prior year. The figure beat the mean consensus estimate of $1.60 billion in net income excluding exceptions, according to S&P Global Market Intelligence.
Sales in the fourth quarter rose 6.2% to $15.32 billion, while full-year sales increased 6.1% over the prior year to $58.73 billion.
Meanwhile, rising wholesale costs impacted the company's gross margin.
Sysco said its fourth-quarter gross margin in the U.S. dropped 18 basis points over the year earlier to 20.05%, driven by inflation in prices for dairy, frozen potatoes and vegetables, and paper and disposables categories.