Sysco Corporation F4Q09 (Qtr End 06/27/2009) Earnings Call Transcript

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2009-08-10 11:15:54.0

Tags: Call Transcript, Quarter, Earnings, Morgan Stanley, Currency & Foreign Exchange, Finance, Seeking Alpha, Sysco Corp.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Your first question comes from Mark Wiltamuth - Morgan Stanley.

Mark Wiltamuth - Morgan Stanley

I wanted to get a little more update on the operating environment heading into the first quarter here. If you look at the Navtrak trends, they were certainly worse for July than what we saw in the June quarter. Just talk about maybe the contrast between how the change you’re doing versus your street accounts.

William J. DeLaney III

Good morning, Mark. This is Bill. I’ll let Ken jump into this as well. I would say to you that in terms of what we’re seeing, just on pure volume, if you look at cases which we don’t specifically disclose the rate of decline in cases is about what it’s been the last quarter or so. It certainly didn’t pick up in July but I can tell you that it’s gotten a whole lot worse in terms of volume. But we are fighting the deflation more so now than we were in the fourth quarter, so in terms of top line there is more pressure there. Ken?

Kenneth F. Spitler

Yes, that’s about right. We’re seeing that things are, I guess calming down a bit. Probably as best as I can say it a little more optimistic at this point than I have been in the last few months.

Mark Wiltamuth - Morgan Stanley

And maybe just to dovetail onto that, how do you think about the sustainability of the controlling the operating expenses throughout the year? Obviously halfway through the year you’ve still got an opportunity, but the second half you’ll start lapping some of the controls you’ve put in for 2009.

Kenneth F. Spitler

Yes, we’ve still got room to keep maintaining that and our business in a lot of ways is a one-to-one ratio based on the cases crossing the docks. You know there reaches a point where that doesn’t become practical, but we haven’t reached that yet.

Operator

Your next question comes from Simeon Gutman - Canaccord Adams.

Simeon Gutman - Canaccord Adams

Sales in the quarter were down about 6.5% and gross profit dollars were down a little bit worse, north of 7. And I think that spread was consistent with the third quarter. Can you just talk about what’s happening there? Is it just the less inflation and are there some mixed changes that are exacerbating it?

 

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