Sysco Corp ( SYY ) shares are trading lower after the company reported third-quarter FY24 sales growth of 2.7% year-on-year to $19.38 billion, missing the analyst consensus estimate of $19.74 billion.

U.S. Foodservice operations sales rose 3.4% Y/Y, and International Foodservice sales grew 4.5%.

Gross profit increased 5.2% Y/Y to $3.6 billion, and the gross margin expanded 44 basis points to 18.6%.

The operating margin expanded 4 basis points to 3.7%, and operating income for the quarter rose 3.8% to $722 million. Non-GAAP operating margin expanded 22 basis points to 4.1%.

Adjusted EBITDA increased 8.5% Y/Y to $976.6 million in the quarter. Adjusted EPS of $0.96 beat the analyst consensus estimate of $0.95.

Sysco ( SYY ) held $598.3 million in cash and equivalents as of March 30. Operating cash flow for nine months totaled $1.4 billion, with a free cash flow of $863.7 million.

The company returned approximately $753 million of capital to shareholders via $500 million of share repurchases and $253 million of dividends in the quarter.

Sysco ( SYY ) also announced that its board has appointed President and Chief Executive Officer Kevin Hourican to Chair of the Board of Directors. Edward D. Shirley has stepped down from his position as Chairman of the Board due to personal health reasons.

Effectively immediately, Hourican will serve as Chair of the Board and Chief Executive Officer.

“Lower traffic to restaurants year over year negatively impacted case volumes, but sequentially improved during the quarter. We converted the negative traffic at restaurants into sales and case growth at Sysco ( SYY ) by taking market share, profitably,” said Hourican.

Outlook: Sysco ( SYY ) said it remains confident in its FY24 guidance of five to ten percent adjusted EPS growth to $4.20-$4.40 versus an estimate of $4.32.

Price Action: SYY shares are trading lower by 2.82% at $75.04 at the last check Tuesday.