It's a little scary when even some of the most efficient operators have difficulties cutting their costs enough to keep growing. That would seem to be the case today with Sysco (NYSE:SYY). It seems odd to read analysts criticizing Sysco's cost structure, but the reality is that growth has become more challenging for this proven dividend champion.
Costs Chewing into Profits
Sysco posted revenue growth of over 9%, but that number is a little misleading. Two-thirds of the company's growth was a byproduct of food cost inflation and actual case volume growth was more on the order of 3% with real organic growth closer to 2%. (For related reading, see What You Should Know About Inflation.)
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