Food distributor Sysco Corp missed Wall Street expectations for quarterly sales on Tuesday, as inflation-hit consumers restrict discretionary spending on products such as custom cuts of meat and seafood.
Surging inflation has begun to eat into consumers' disposable income, forcing shoppers to prioritise spending on necessities, making little room for demand for non-essential items.
Supply Chain Constraints
Even with supply chain constraints easing, Sysco is still grappling with cost pressures tied to raw materials like meat, dairy and seafood.
While higher costs have pressured several companies including soft drink giants Coca-Cola Co and PepsiCo to raise product prices, volatile and price-sensitive demand for food away from home products restricts Sysco from raising prices.
Shares of the Texas-based company rose 2.2% in pre-market trading on Sysco's profit beat.
Excluding items, it earned $1.34 per share, ahead of analysts' estimates of $1.33 per share.
The company's net sales rose to $19.73 billion in the fourth quarter ended 1 July, from $18.96 billion a year ago, but still fell short of estimates of $19.99 billion, according to IBES data from Refinitiv.
Closer to home, in January 2022, Sysco Ireland announced that Mark Lee had been appointed CEO, following a handover period with outgoing CEO Peter Jackson, who had been appointed as the new CEO of Sysco in Great Britain, effective January 1 2022.
Lee joined Sysco Ireland in December 2018 as commercial director, responsible for sales, marketing, and customer engagement.
Read More: Sysco Ireland Appoints Mark Lee As CEO