Ahead of the Bell: Sysco to report fiscal 3Q results

NEW YORK—Ongoing concerns about consumer spending and the health of the restaurant industry may draw extra attention to Sysco Corp. on Monday, when the food distributor releases fiscal third-quarter results.

Goldman Sachs analyst John Heinbockel said the operating environment for restaurants, Sysco's primary customer base, remains challenged, although forthcoming tax rebate checks may provide a lift.

Heinbockel, who has a "Neutral" rating on the stock, said shares have been trading lower on concerns related to whether softening consumer spending is affecting casual dining and upper-end restaurants.

"Its customer base has been adversely impacted by housing issues, record high gasoline prices, the highest level of food inflation in 20 years, and a resurgent supermarket sector that is offering value-oriented alternatives to dining out," Heinbockel wrote in a client note.

"It is very difficult to make a strong case, either long or short, for the shares at this time," he added.

Analysts expect earnings of 39 cents per share and sales of $9.21 billion, according to Thomson Financial.

Last quarter, Sysco posted a 7 percent rise in profit because of strong sales in its broadline division, its largest unit.

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