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Sysco reports 5.1% quarterly sales drop, cuts a third of workforce due to coronavirus

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May 6, 2020

Sysco Corp., the nation's largest foodservice distributor, reported sales for the third quarter were $9.6 billion, a decrease of 5.1% compared to the same period last year, according to a press release. Local case volume within U.S. broadline operations decreased 4.1%, of which a decrease of 5.2% was organic, while total case volume within U.S. broadline operations decreased 5.2%, of which a decrease of 5.8% was organic.

Gross profit decreased 5.7% to $1.9 billion, and gross margin dropped11 basis points to 19.8%, compared to the same period last year. Food cost inflation was 1.3% in U.S. broadline, as measured by the estimated change in Sysco's product costs, primarily in the dairy and meat categories.

Operating expenses increased $123.6 million, or 9.9%, compared to the same period last year. Adjusted operating expenses increased $17.9 million, or 1.4%, compared to the same period last year.

Operating income was $528 million, a decrease of $237.4 million, or 31.0%, compared to the same period last year. Adjusted operating income was $636.7 million, a decrease of $131.7 million, or 17.1%, compared to the same period last year.

The company also said it laid off about a third of its 69,000 employees and cut more than $500 million in expenses in response to the coronavirus pandemic, according to a Houston Chronicle report.

For an update on how the coronavirus pandemic is affecting convenience services, click here.