Sysco (NYSE:SYY) the Texas based food producer and distributor was trading over 1.5% higher today after announcing 1% higher fourth quarter fiscal 2015 revenues.
Sysco said it saw revenue of US$12.4 billion with a 6% higher adjusted operating profit of US$509 million and related earnings per share of 52 cents, higher than the analyst consensus of 51. But, revenue expectations of US$12.7 billion were not met.
For the 2015 financial year, revenues increased 5% to US$48.7 billion, while adjusted earnings per share increased 5% to US$1.84 and cash flow from operations was US$1.6 billion.
"I am pleased with our results for fiscal 2015 and particularly encouraged by our performance in the fourth quarter," said Sysco’s president and chief executive officer Bill DeLaney.
Sysco focused on making strategic cost cuts while also adopting several value-added commercial initiatives said the company in a statement.
Moreover, “our expense management improved in the fourth quarter and contributed to our six percent growth in adjusted operating income. Looking forward, we remain highly focused on supporting the success of our customers, profitably growing our business and improving our return on invested capital. As previously announced, we plan to repurchase an incremental $3 billion in Sysco shares over the next two years, including $1.5 billion through an accelerated share repurchase in Fiscal 2016. We will also continue to further evaluate opportunities to optimize our capital structure," said DeLaney.
In June, Sysco abandoned its proposed takeover of its US rival Foods for US$3.5 billion. A federal judge advised the company to freeze the transaction due to the need for further investigations.
CEO DeLaney said that following the court decision, the group had considered it in the interests of its shareholders to move on. The move added to operating expenses to the tune of US$300 million.
The food retailer also announced a buyback program of US$3 billion of stock over two years, representing about 13% of the outstanding shares. It will be financed by the issuance of new debt and operating cash flow.
Sysco had announced its intent to acquire US Foods in December 2013. The groups are respectively number one and two in their sector in the United States and the only ones present on the entire territory.