Sysco Reports Sales, Earning Increases for 1Q FY 2007

Sales increased 8.3 % to $8.7 billion from $8 billion in last year's first quarter, the distributorship stated.

Earnings, before the cumulative effect of accounting changes took place, increased 14.8% to $228.8 million compared to $199.2 million in the same period last year, Sysco reported.

Richard J. Schnieders, chairman, ceo and president, commented, "Our company continued to gain market share by growing sales at a faster pace than the industry. In addition, we leveraged our operating expenses during the quarter and generated sound earnings growth and cash flow. Our growth initiatives, including business reviews and increasing the number of our customer contact professionals, remain competitive advantages and continue to produce positive results. This was a very positive quarter and we believe it sets the foundation for the remainder of fiscal 2007."

As for sales growth, the company said non-comparable acquisitions (less than 12 months) contributed 1% to the first quarter's sales growth. Food cost inflation, as measured by the change in Sysco's cost of goods, was 2.4%. During the first quarter more than 11,000 business reviews were performed at Sysco's U.S. broadline operations, which the company said in previous statements greatly contribute to driving sales. The distributorship said sales to customers that participated in the review process continued to increase, on average, in the mid-teens range. Sysco's staff of customer contact professionals - marketing associates, district and regional sales reps, and business development reps - increased by approximately 1% during the first quarter.

Gross profit margins increased 15 basis points in the first quarter to 19.25% compared to 19.10% in last year's first quarter, including a 20 basis point benefit due to the impact of EITF 04-13


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