Shares of Sysco Corp. SYY, +1.47% sank 7.2% in premarket trading Tuesday, after the food products distributor reported fiscal second-quarter profit that came up short of expectations, as the COVID environment led to higher-than-anticipated operating costs. Net income for the quarter to Jan. 1 more than doubled to $164.4 million, or 33 cents a share, from $67.3 million, or 13 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share came to 57 cents, below the FactSet consensus of 70 cents. Sales rose 41.2% to $16.32 billion, above the FactSet consensus of $15.89 billion, but cost of sales increased 41.9% to $13.43 billion as gross margin declined to 17.7% from 18.2%. “The omicron variant is currently impacting our customers, affecting their top-line and hours of operations,” said Chief Executive Kevin Hourican. “At Sysco, the COVID impact is felt in our operations productivity performance with higher than normal cost to serve.” The stock has slipped 0.6% over the past three months through Monday, while the S&P 500 SPX, -0.37% has lost 4.6%.
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