Sysco Corp (SYY) got off to a solid start in its new fiscal year, reporting first quarter EPS of $1.07 vs. $0.97, which was $.03 ahead of expectations, while revenue growth of 2.6% was slightly below. Growth was concentrated in international operations, which was up 12.2%, while US sales rose only 0.9%. Margins widened on the higher sales volumes, the company’s efforts to manage product cost inflation, and outsourcing initiatives. Operating income increased 9.1%.

The company reiterated its guidance for mid-single digit sales growth this fiscal year, and EPS of $4.20 to $4.40 a share. Thanks to the company’s ongoing share buyback program, I think the earnings estimate is realistic.

The stock is moving higher today, as it continues its bounce of lows that were driven by an overreaction to the impact obesity drugs may have on the food service business. At around 15X this year’s EPS estimates, the stock is still very cheap by historical standards — and I think SYY will continue to rally.