) to hold from buy.
Analyst Andrew Wolf says he downgraded due to a larger-than-expected miss of the Street's 45 cents expectation. He says the miss resulted from soft sales that have persisted into the current period. He notes the expense ratio contracted 34 basis points year over year, which was below his estimate of a 55-basis-point contraction, and was mainly due to the lack of sales leverage.
Wolf remains bullish on the long-term outlook for the food distributor, however, with fiscal 2005 off to a slow start, he expects below-trend earnings per share to persist for at least the first-half of the current fiscal year. He cut the $1.60 fiscal 2005 (June) earnings per share estimate to $1.55, and cut the $1.88 fiscal 2006 earnings per share estimate to $1.83.