UPDATE 1-Sysco Q4 revenue falls on weak demand

lunes 10 de agosto de 2009 20:23 CEST

* Q4 revenue falls 7 percent to $9.09 bln vs est $9.20 bln

* Q4 EPS $0.53 vs est $0.49 * Shares up slightly

BANGALORE Aug 10 (Reuters) - Food distributor Sysco Corp (SYY.N: Cotización) posted lower revenue for the third straight quarter on weak demand, but its profit came in ahead of market expectations, aided by cost-cutting efforts and gains related to company-owned insurance.

In the early weeks of fiscal 2010, the company has recorded "modest levels of deflation" -- as measured by the change in Sysco's cost of goods -- after more than two years of about 6 percent annualized inflation, Chief Executive Bill DeLaney said on a conference call with analysts.

Sysco had passed on the rising costs to its customers, partially offsetting the decline in volumes the past few quarters. However, as food costs decrease, the company's ability to raise prices is constrained by a tough promotional environment.

DeLaney said sales comparisons will be particularly challenging early in 2010 due to last year's sales growth, which was fueled by prices increases.

The company has been cutting costs by reducing headcount to offset weak demand from its restaurant and other food-service outlet customers.

Chief Operating Officer Kenneth Spitler said the company's headcount fell about 6 percent from the year-ago period, and bonuses and commissions were "down substantially."