UPDATE 2-Sysco Q3 tops Street; says food cost deflation easing

* Q3 EPS $0.42 vs est $0.40

* Q3 sales $8.95 bln vs est $8.75 bln

* Shares down slightly
(Recasts; adds details, updates share movement)

May 3 (BestGrowthStock) – Food distributor Sysco Corp (SYY.N: )
posted better-than-expected quarterly results, helped by easing
sequential food cost deflation.

Sysco shares, which touched a 19-month high of $31.98
Monday on the New York Stock Exchange, later pared some gains
to trade at $30.85. “The underlying business environment
appears to be improving, as evidenced by both the case volume
growth and easing of deflation that we realized as the quarter
progressed,” Chief Executive Bill DeLaney said in a statement.

Deflation, as measured by the estimated change in Sysco’s
product costs, was 0.8 percent for the quarter, improving from
3.5 percent in its second quarter.

Easing of food cost deflation helps the company, which
distributes food products and services to restaurants,
hospitals, hotels, schools and colleges, as it increases its
ability to raise the prices of its products.

For the third quarter ended March 27, the company posted
net income of $247.6 million, or 42 cents a share, compared
with $226.2 million, or 38 cents a share a year ago.

Sales rose 2.4 percent to $8.95 billion.

Analysts on average were expecting earnings of 40 cents a
share, before special items, on revenue of $8.75 billion,
according to Thomson Reuters I/B/E/S.

The company also said its headcount was 2.6 percent lower
year-over-year at the end of its third quarter.

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(Reporting by Mihir Dalal in Bangalore; Editing by Anne
Pallivathuckal, Don Sebastian)

UPDATE 2-Sysco Q3 tops Street; says food cost deflation easing