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Foodservice distributor Sysco Corp. (NYSE: SYY), Houston, TX, reported sales for the first quarter ended Oct. 2, 2010, were $9.8 billion, an increase of 7.4 percent from the first quarter of fiscal 2010. Profit increased 8.3 percent to $299 million.
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Food cost inflation, as measured by the estimated change in Sysco's product costs, was 3.3 percent, driven by nearly 10 percent inflation in the combined categories of meat, dairy and seafood. In addition, sales from acquisitions (within the last 12 months) increased sales by 0.6 percent, and the impact of changes in foreign exchange rates for the first quarter increased sales by 0.5 percent.
"I am pleased with the volume growth and productivity improvements our operating companies produced during the quarter," said Bill DeLaney, Sysco's president and CEO. "While our overall sales increase and operating expense management were encouraging, we missed our goal for operating income growth, largely due to a decline in gross profit margin and higher pension costs. Our entire leadership team is focused on effectively leveraging sales growth as the fiscal year progresses."