Pallas Foods parent misses profit target

Top US food distributor Sysco reported a lower-than-expected quarterly profit, hurt by higher costs and a strong dollar, a day before hearing begins on the Federal Trade Commission's motion to block the company's acquisition of rival US Foods.

Sysco, parent of Ireland Pallas Foods, said higher prices of meat, dairy and poultry products, expenses related to the proposed US Foods acquisition and higher payroll costs drove up its expenses in the third quarter.

Sysco’s operating expenses rose 4 per cent to $1.73 billion in the quarter due to higher payroll costs. Interest expenses more than doubled to $69.6 million, including costs related to the planned US Foods acquisition.

The FTC has moved to block the $3.5 billion deal, announced in December 2013, citing antitrust concerns.

Sysco said last month it had filed against the FTC’s motion and that the regulator had erred in its analysis of the US food distribution market. A hearing on the FTC’s motion is scheduled to begin in the district of Columbia, Sysco said. The company’s net income fell to $177 million in the quarter ended March 28th from $180.9 million a year earlier. – (Reuters)