A JP Morgan analyst downgraded SYY from "overweight" to "neutral," citing slowing inflation and continued poor performance in the restaurant sector. This performance is expected to slow SYY's growth through 2009.
Although faced with a 7% rise in food costs and an increase in pension costs, Sysco announced a better than expected earnings of 40 cents per share.
Sysco management increased the company's dividend by 9% to $.24/share, sending shares higher.
Sysco raised prices to match the rise of commodity prices resulting in increased profits, but consumer confidence continues to decline which has strained industry growth.
