HOUSTON ( February 1, 2010 - Business Week)—Food supplier Sysco Corp. said Monday fiscal second-quarter profit rose 13 percent as cost cuts help offset lower revenue.
The company's revenue has been hindered by lower food prices, but the supplier of food to restaurants and other food-service operations said that appears to be moderating.
Profit for the three months ending Dec. 26 rose to $268.3 million, or 45 cents per share, from $237.7 million, or 40 cents per share last year.
Revenue fell 3 percent to $8.87 billion from $9.15 billion last year.
Analysts polled by Thomson Reuters, on average, predicted earnings of 42 cents per share on revenue of $8.83 billion.
"While the business environment remains challenging, deflation pressures appear to be moderating from highs we saw early in the quarter and case volume trends continue to improve," CEO Bill DeLaney said.
Food cost deflation hurts the company's ability to raise its selling prices to offset weak demand. To make up for that, the company has cut costs through job cuts and lower incentive pay, and results benefited from lower payroll expenses.