Sysco Still On Simmer

From an operational standpoint, the restaurant industry seems to be on the road to recovery. Companies like McDonald's (NYSE: MCD), Yum! Brands (NYSE: YUM) and Chipotle Mexican Grill (NYSE: CMG) are all seeing better traffic and lofty stock prices. The question, though, is whether food supply giant Sysco (NYSE: SYY) gets to share in the happy feelings.

A Dog's Breakfast In The First Quarter
Sysco's fiscal first quarter report does not really seem good enough for a company whose stock is near a 52-week high. Revenue rose more than 7% to $9.8 billion, and it did beat the consensus estimate, but the quality of the beat may be a worry to some. Food cost inflation was 3.3% in the quarter, and acquisitions and forex chipped in another 1.1% of the revenue growth. Volume growth, then, was on the order of 3% - not bad, but probably not enough to really get investors or analysts excited. 


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