Sysco CEO Kevin Hourican Discusses Jetro Acquisition and Fuel Costs with Jim Cramer

Sysco Corporation, a major foodservice distributor, announced its acquisition of Jetro Restaurant Depot earlier this year. The deal expands Sysco's market presence in the wholesale food distribution sector. Jetro operates as a cash-and-carry membership warehouse for independent restaurants and businesses.

CEO Kevin Hourican joined CNBC host Jim Cramer on the 'Mad Money' program to address the acquisition. Hourican explained that the purchase integrates Jetro's network of over 50 locations across the United States. This move targets smaller operators who previously relied on Jetro's model.

Rising fuel costs emerged as a key operational challenge in the interview. Hourican noted that increased diesel prices affect transportation expenses for Sysco's delivery fleet. The company serves more than 730,000 customer locations nationwide, making fuel efficiency critical to profitability.

Sysco has implemented strategies to mitigate these costs, including route optimization and alternative fuel vehicles. Hourican discussed how inflation in energy prices impacts the broader food distribution industry. Competitors face similar pressures amid global supply chain disruptions.

The acquisition of Jetro positions Sysco to capture a larger share of the independent restaurant market. Jetro's customer base includes ethnic grocers and small-scale foodservice providers. Integration efforts are underway to combine supply chains without disrupting service.

Looking ahead, Hourican addressed potential regulatory reviews of the deal. The acquisition requires approvals from antitrust authorities. Sysco anticipates closing the transaction in the coming months, pending these clearances.

The interview highlighted Sysco's fiscal performance amid economic headwinds. 5% from the prior year. Fuel costs contributed to a 2% rise in operating expenses.