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Sysco FY'18 Q2 adjusted net income beats Street expectations

Food distributor Sysco Corp. on Feb. 5 reported that net income for its fiscal second quarter increased 8.9% year over year, beating analysts' expectations.

Net earnings on a non-GAAP basis in the 13 weeks to Dec. 30, 2017, rose to $347.1 million from $318.8 million in the same period a year earlier, outpacing the S&P Capital IQ mean consensus of analysts' estimates for net income excluding expenditures of $338.9 million. On an adjusted basis, EPS totaled 66 cents, beating the S&P Capital IQ estimate for normalized EPS of 65 cents.

Those figures did not include the impact of several one-time items, including a charge of $115 million related to changes to the U.S. tax code signed into law by President Donald Trump in December 2017, the company said in a statement.

"We remain confident in our ability to deliver on our full-year fiscal 2018 financial targets," CEO Tom Bené was quoted as saying.

On a GAAP basis, which includes the impact of those charges, net earnings for the quarter rose 3.3% year over year to $284.1 million from $275.2 million for the year-ago period but below the S&P Capital IQ consensus estimate for net income on a GAAP basis of $324.1 million, with three analysts reporting.

EPS on a GAAP basis was 54 cents, missing the S&P Capital IQ consensus estimate of 62 cents with four analysts reporting.

Sales for the fiscal second quarter totaled $14.41 billion, 7.1% higher than the $13.46 billion the company reported for the year-ago quarter. The S&P Capital IQ consensus estimate for sales was $14.15 billion.

The Houston-based company's gross margin during the quarter was 18.73%, 38 basis points lower than in the year-ago quarter.

In the U.S., Sysco's gross margin fell 28 basis points over the year-ago period to 19.79%. Price increases for meat, dairy and produce contributed to the slimmer margin, the company said.