Sysco Corporation announced financial results for its fourth quarter and fiscal year ended June 27, 2015. Sales for Q4 were $12.4 billion, an increase of 0.9% compared to the same period last year.
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Food cost inflation was flat, as measured by the estimated change in Sysco's product costs, with modest inflation in the meat, poultry and frozen categories, offset by modest deflation in the dairy, produce and seafood categories.
In addition, sales from acquisitions (completed within the last 12 months) increased sales by 0.4%, and the impact of changes in foreign exchange rates decreased sales by 1.4%.
Case volume for the company's Broadline operations grew 3.6% during the quarter, and approximately 3.2% excluding acquisitions. Case volume for Broadline and SYGMA operations combined grew 2.2% and approximately 1.9% excluding acquisitions.
Gross profit was $2.2 billion, an increase of 3% compared to the same period last year. Gross margin increased 35 basis points to 17.9%.
Adjusted operating expenses increased $36 million, or 2.2%, compared to the same period last year, due mainly to higher payroll expenses which were driven by higher case volume and incentive accruals.
Adjusted operating income was $509 million, an increase of $28 million, or 5.8%, compared to the same period last year.
Adjusted interest expense was $36 million, an increase of $8 million compared to the same period last year. Adjusted net earnings were $309 million, an increase of $17 million, or 5.7%, compared to the same period last year. Adjusted diluted EPS was $0.52, which was 6.1% higher compared to the same period last year.
Operating expenses increased $368 million, or 21%, compared to the same period last year, primarily due to $313 million in merger termination expenses.
Operating income was $121 million, a decrease of $304 million, or 72%, compared to the same period last year. Interest expense was $77 million, including the impact of $41 million in debt financing costs related to the merger with US Foods. Net earnings were $73 million, a decrease of $181 million, or 71%, compared to the same period last year.
Diluted EPS was $0.12, which was 72% lower compared to the same period last year.
Sales for fiscal 2015 were $48.7 billion, an increase of 4.7% compared to the same period last year. Food cost inflation was 3.7%, as measured by the estimated change in Sysco's product costs, driven mainly by inflation in the meat, dairy and poultry categories.
In addition, sales from acquisitions (completed within the last 12 months) contributed 0.6% to sales, and the impact of changes in foreign exchange rates decreased sales by 1%.
Case volume for the company's Broadline operations grew 3.1%, and approximately 2.8% excluding acquisitions. Broadline and SYGMA operations combined grew 2.6%, and approximately 2.4% excluding acquisitions.
Gross profit was $8.6 billion, an increase of 4.5% compared to the same period last year. Gross margin was flat at 17.6%.
Adjusted operating expenses increased $312 million, or 4.8%, compared to the same period last year, due mainly to higher payroll expenses which were driven by higher case volume and incentive accruals.
Adjusted operating income was $1.8 billion, an increase of $58 million, or 3.4%, compared to the same period last year.
Adjusted interest expense was $116 million and was flat compared to the same period last year.
Adjusted net earnings were $1.1 billion, an increase of $66 million, or 6.4%, compared to the same period last year. Adjusted diluted EPS was $1.84, which was 5.1% higher compared to the same period last year.
Operating expenses increased $728 million, or 11%, compared to the same period last year, primarily due to an increase in in adjusted operating expenses noted above as well as a $416 million increase in certain items that primarily related to merger integration planning and termination expenses.Operating income was $1.2 billion, a decrease of $358 million, or 23%, compared to the same period last year.
Interest expense was $255 million, including the impact of $138 million in merger financing costs. Net earnings were $687 million, a decrease of $245 million, or 26%, compared to the same period last year. Diluted EPS was $1.15, which was 27% lower compared to the same period last year. ■