Shares of Sysco Corp., the biggest North American distributor of food to restaurants, fell the most in more than five months after second-quarter earnings trailed analysts’ estimates. The Houston-based company said rising food costs were squeezing profit margins.
Sysco dropped 4 percent to $29.67 at 3:18 p.m. in New York trading after reporting fiscal second-quarter earnings of 43 cents a share, missing the 44-cent estimate in a Bloomberg analyst survey. Earlier the shares fell 5.7 percent, the biggest intraday drop since Aug. 15.
Chief Executive Officer Bill DeLaney said prices for meat and canned, dry and frozen food products during the period “remained at historically high levels.” Food-cost inflation was 6.3 percent, up from 4.5 percent a year earlier.
“We are currently developing several key strategic initiatives that will better position Sysco to profitably grow our market share in the years to come,” Delaney said. The company is undergoing a transformation that includes business- managment software implementation, he said.
Net income fell 3.2 percent to $250 million from a year earlier. Sales rose 9.2 percent to $10.2 billion, topping the average estimate of $10.04 billion.
Charley Wilson, a Sysco spokesman, didn’t immediately respond to a phone call and e-mail seeking comment.
© Copyright 2012 Bloomberg News. All rights reserved.