(Reuters) - Sysco Corp (NYSE:SYY) missed market expectations for quarterly sales on Tuesday, hurt by softer demand for the food distributor's products as budget-consious consumers cut back on discretionary items.
Surging inflation eating into household budgets continues to restrain consumer spending on non-essential items like custom cuts of meat and high-quality seafood.
Consumer-facing companies have raised product prices multiple times over the past year in a bid to shield their margins from spiraling costs but volatile and price-sensitive demand for its food-away-from-home products restricts Sysco to undertake price increases.
Sysco's net sales rose 2.6% to $19.6 billion in the first quarter ended Sept. 30, missing analysts' estimates of $19.73 billion, according to LSEG data.
The world's largest broadline food distributor reiterated its full-year 2024 outlook for adjusted profit per share between $4.20 and $4.40 and mid-single digit sales growth to about $80 billion.
Earlier this month, the company announced plans to acquire Edward Don & Co - a Chicago-based distributor of foodservice equipment, supplies and disposables - to create a specialty equipment and supplies platform.
Excluding items, Sysco earned $1.07 per share, topping analysts' average expectation of $1.04.