WASHINGTON, D.C. - The much-awaited trial between the FTC and Sysco/US Foods began yesterday, and it appears that a key factor of the outcome might be heavily-weighted on what a marketplace is to U.S. District Judge Amit Mehta.

According to the Wall Street Journal’s legal affairs reporter in the Washington bureau, Brent Kendall, Judge Mehta zeroed in on how he would factor in wholesale cash-and-carry stores with differentiating modes of food supply distribution, calling this “where the rubber meets the road.” To read Brent's entire article, click here. 

With both sides arguing strongly about whether or not the merger would corner the foodservice market, it’s anticipated that the hearings could proceed for up to seven days.

Sysco also released its report for its third quarter financials the same day that the judge heard opening arguments. According to the financial report, the company experienced a boost in sales and gross profit, but decreases in operating and adjusted operating income.

"Sales growth, while solid for the quarter at 4 percent, did moderate from our trends in the first half of the fiscal year primarily due to lower levels of inflation and a greater unfavorable impact from foreign exchange translation,” Bill DeLaney, Sysco's President and Chief Executive Officer, said in the release. “Adjusted earnings per share increased 5 percent and was in line with our expectations, as we continued to focus on providing great service to our customers, managed our gross profit growth reasonably well, and benefitted from a favorable tax rate.”

Third quarter fiscal highlights for 2015 included:

• Sales increased 4.2% to $11.7 billion.
• Gross profit increased 3.1% to $2.1 billion; gross margin decreased 17 basis points to 17.52%.
• Adjusted operating income decreased 2.7% to $377 million.
• Operating income decreased 1.6% to $327 million.
• Adjusted diluted earnings per share (EPS) increased 5.3% to $0.40.
• Diluted EPS decreased 3.2% to $0.30.

DeLaney also added that the company’s expense management performance trends improved modestly from earlier in the year, and will continue to be an area of intense management focus moving forward to the next quarter and planning its process for the fiscal 2016 year.

To read more from Brent Kendall's article on the Sysco trial, click here.