SYY
DefensiveSysco
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Market Data
Financials
XBRL · SEC EDGAR2008–2025(18yr)| Metric | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $37.5B | $36.9B | $37.2B | $39.3B | $42.4B | $44.4B | $46.5B | $48.7B | $50.4B | $55.4B | $58.7B | $60.1B | $52.9B | $51.3B | $68.6B | $76.3B | $78.8B | $81.4B | +3.2% |
| Gross Profit | $7.2B | $7.0B | $7.1B | $7.3B | $7.7B | $7.9B | $8.2B | $8.6B | $9.0B | $10.6B | $11.1B | $11.4B | $9.9B | $9.4B | $12.3B | $14.0B | $14.6B | $15.0B | +2.5% |
| Gross Margin | 19.2% | 19.1% | 19.1% | 18.6% | 18.1% | 17.7% | 17.6% | 17.6% | 17.9% | 19.1% | 18.9% | 19.0% | 18.7% | 18.2% | 18.0% | 18.3% | 18.5% | 18.4% | -0.1pp |
| Operating Income | $1.9B | $1.9B | $2.0B | $1.9B | $1.9B | $1.7B | $1.6B | $1.2B | $1.9B | $2.1B | $2.3B | $2.3B | $749.5M | $1.4B | $2.3B | $3.0B | $3.2B | $3.1B | -3.6% |
| Operating Margin | 5.0% | 5.1% | 5.3% | 4.9% | 4.5% | 3.7% | 3.4% | 2.5% | 3.7% | 3.7% | 4.0% | 3.9% | 1.4% | 2.8% | 3.4% | 4.0% | 4.1% | 3.8% | -0.3pp |
| Net Income | $1.1B | $1.1B | $1.2B | $1.2B | $1.1B | $992.4M | $931.5M | $686.8M | $949.6M | $1.1B | $1.4B | $1.7B | $215.5M | $524.2M | $1.4B | $1.8B | $2.0B | $1.8B | -6.5% |
| Net Margin | 2.9% | 2.9% | 3.2% | 2.9% | 2.6% | 2.2% | 2.0% | 1.4% | 1.9% | 2.1% | 2.4% | 2.8% | 0.4% | 1.0% | 2.0% | 2.3% | 2.5% | 2.2% | -0.2pp |
| Free Cash Flow | $1.1B | $1.1B | $290.8M | $455.1M | $619.7M | — | — | $1.0B | $1.4B | $1.5B | $1.5B | $1.7B | $898.3M | $1.4B | $1.2B | $2.1B | $2.2B | $1.6B | -25.6% |
| FCF Margin | 2.8% | 3.0% | 0.8% | 1.2% | 1.5% | — | — | 2.1% | 2.8% | 2.7% | 2.5% | 2.9% | 1.7% | 2.8% | 1.7% | 2.7% | 2.7% | 2.0% | -0.8pp |
| EPS (Diluted) | $1.81 | $1.77 | $1.99 | $1.96 | $1.90 | $1.67 | $1.58 | $1.15 | $1.64 | $2.08 | $2.70 | $3.20 | $0.42 | $1.02 | $2.64 | $3.47 | $3.89 | $3.73 | -4.1% |
1. THE BIG PICTURE
Sysco is the undisputed heavyweight of food distribution, yet its $81.7 billion revenue engine is currently struggling to generate earnings growth. While Sysco successfully grew sales by 3.0% in the most recent quarter, net earnings fell by 4.2%, revealing a business where the costs of labor, fuel, and debt are currently rising faster than the prices it charges restaurants and hospitals (8-K).
2. WHERE THE RISKS HIT HARDEST
Sysco’s "service reliability," which it cites as a core competitive advantage, is increasingly threatened by a persistent shortage of warehouse workers and drivers (10-K Item 1). This labor crunch forces Sysco to implement aggressive retention bonuses and overtime pay, which directly erodes its narrow 2.0% net margin (XBRL). Furthermore, the "geographical footprint" Sysco relies on to mitigate regional economic downturns is compromised by its $13.3 billion debt load. With $1.75 billion in maturities due within twelve months, any regional weakness that hampers cash flow could significantly increase interest expenses during refinancing (Risks).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a disconnect between Sysco’s market dominance and its recent efficiency. Despite being the largest player in the sector, Sysco’s 1.4% Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin ranks only 4th among its peer group, trailing significantly behind ADM’s 7.1% (Peer Benchmarking). While TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth stands at 3.2%, the most recent quarter showed a slight deceleration to 3.0%. This cooling is largely structural; management notes that food cost deflation can lead to lower absolute gross profit dollars because Sysco often charges a percentage fee per case (Risks). Sentiment remains cautious, with short interest sitting at 3.7% of the float, suggesting some investors are betting that margin compression will persist despite the 1.2% growth in local case volume (8-K).
4. IS IT WORTH IT AT THIS PRICE?
At a forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 16.7x, Sysco trades at a 13% premium to the peer median of 14.8x. The market is currently pricing in a long-term growth rate of approximately 1.8% (CAPM analysis). This appears to be a low bar for a company that has historically grown revenue at a 3.2% clip, but the premium is difficult to defend when compared to peers like Bunge (BG), which is growing faster (+32.4%) at a lower multiple (12.0x). For Sysco’s current price to be justified, Sysco must prove it can translate its "building momentum" in local case growth into actual margin expansion (8-K). If growth were to accelerate to a GDP-pace of 2.5%, the justified multiple could rise to 19.0x, but the current 9.8x net leverage ratio (Net Debt/FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) acts as a valuation ceiling that makes the stock sensitive to any earnings miss.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if local case volume growth falls below the 2.5% target in the second half of the fiscal year, as this is the primary driver of management's optimistic EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric guidance.
- Constructive if the acquisition of specialty suppliers like Fairfax Meadow leads to a measurable expansion in gross margins toward the 23% levels seen by peers like Kroger.
- Cautious if interest coverage tightens further as Sysco attempts to refinance its $1.75 billion in near-term debt.
6. BOTTOM LINE
Structural Advantage: Massive economies of scale in procurement and a specialized sales force that provides high-touch ancillary services to a fragmented customer base.
Bottom Line: Sysco is a defensive market leader currently hampered by high debt and labor inflation, making its valuation premium vulnerable until it can prove that volume growth will lead to profit growth.
1. Top 5 Material Risks
- Food Cost Volatility: Sysco operates in a low-margin industry where it cannot always pass on product cost inflation to customers. Conversely, during periods of deflation, Sysco’s pricing model—often based on a percentage margin or fee per case—can lead to lower absolute gross profit dollars.
- Labor Shortages and Costs: Sysco relies on recruiting and retaining warehouse workers and drivers. Shortages force Sysco to implement hiring, referral, and retention bonus programs, while wage inflation and increased overtime requirements directly reduce profitability.
- Macroeconomic Sensitivity: Sysco’s results are susceptible to regional and global economic trends. Factors such as fuel cost inflation, reduced consumer discretionary spending, and the inability of customers to access credit can depress demand and disrupt Sysco's ability to collect funds.
- Competitive Margin Pressure: The foodservice distribution industry is fragmented and highly competitive. Increased pressure from non-traditional sources, such as online wholesalers and club stores, combined with the influence of group purchasing organizations (GPOs), threatens to erode margins and market share.
- Fuel Price Exposure: Sysco requires significant quantities of fuel for its delivery fleet. While it uses fuel hedging arrangements, these may not be effective, and significant decreases in fuel prices could leave Sysco paying above-market costs for diesel.
2. Company-Specific Risks
- Customer Mix Shift: Sysco faces a risk that sales to multi-unit customers (which generally carry lower margins than locally managed customers) will grow faster than sales to locally managed customers, potentially leading to a decline in overall operating margins.
- Cybersecurity Vulnerabilities: Sysco relies on technology for order generation, truck routing, and warehouse management. A material cybersecurity incident, such as the one identified in March 2023, could lead to business disruption, loss of revenue, and significant remediation costs.
- Acquisition Integration: Historically, Sysco has grown through acquisitions. Failure to integrate these businesses effectively or realize anticipated synergies can strain administrative resources and negatively impact earnings per share.
- Pension Obligations: Sysco faces potential financial strain from multiemployer defined benefit pension plans, with an estimated aggregate withdrawal liability of as much as $150 million as of August 5, 2025.
3. Regulatory/Legal Risks
- Tax Law Changes: Sysco is subject to global tax reforms, including the OECD’s Pillar Two global minimum tax. Changes in tax laws or the resolution of tax disputes could materially affect Sysco's effective tax rate, net income, and cash flows.
- Environmental Compliance: Sysco operates ammonia-based refrigeration systems and fuel storage tanks that are subject to strict environmental regulations. Non-compliance or the need to remediate soil and groundwater contamination could result in substantial fines, penalties, or third-party claims.
- Data Privacy Regulations: Sysco must comply with evolving global data privacy laws, including the GDPR in Europe and the CCPA/CPRA in California. Failure to comply with these stringent requirements regarding the handling of personal data can result in substantial fines and litigation.
- Product Liability: If products distributed by Sysco are alleged to cause injury, illness, or death, Sysco faces potential product liability claims and the costs of product recalls, which may not be fully covered by insurance or supplier indemnification.
4. Financial Impact Map
Food Cost Volatility → Results of Operations → Inability to pass on costs in a timely manner adversely affects profitability. Labor Shortages and Costs → Earnings → Increased wage inflation and retention bonuses materially reduce profitability. Indebtedness → Liquidity and Interest Expense → $13.3 billion in total debt limits flexibility and increases vulnerability to adverse economic developments. Customer Mix Shift → Gross and Operating Margins → Higher dependence on lower-margin multi-unit customers could lead to margin erosion. Multiemployer Pension Plans → Financial Condition and Cash Flows → Estimated $150 million withdrawal liability could increase future funding requirements.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-Q | Jan 2026 | Dec 2025 |
| 8-K | Jan 2026 | — |
| 14A | Oct 2025 | — |
| 10-K | Aug 2025 | Jun 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Sysco to Acquire Jetro for $21.6B Cash and 91.5M Shares
- ▸Acquisition price includes $21.6B in cash
- ▸Transaction includes 91.5 million Sysco shares issued to Jetro shareholders
- ▸Jetro operates as a wholesale supplier for restaurant businesses
- ▸Sysco stock price volatility noted following deal announcement
- ▸Sysco currently trades at 15x earnings with a 3% dividend yield
Sysco to Acquire Restaurant Depot for $29.1 Billion in Transformative Deal
- ▸Proposed acquisition of Restaurant Depot valued at $29.1 billion
- ▸Sysco shares declined following acquisition announcement
- ▸UBS analysts characterize deal as positive long-term strategic move
- ▸Transaction represents significant expansion of Sysco's wholesale food distribution footprint
Sysco Q2 Revenue $20.76B +3% YoY, EPS Guidance Raised to High End of Range
- ▸Q2 revenue $20.76B, +3% YoY, in line with analyst expectations
- ▸USFS local case volume +1.2% in the quarter
- ▸FY adjusted EPS guidance raised to high end of $4.50–$4.60 range
- ▸Projecting at least 2.5% local case growth in fiscal 2H
- ▸Stock down 4.5% since earnings report
Sysco to Acquire Jetro Restaurant Depot for $29 Billion in Cash and Stock
- ▸Acquiring Jetro Restaurant Depot for $29 billion total consideration
- ▸Funding includes $21 billion in new debt and $1 billion in cash
- ▸Jetro shareholders to receive $21.6 billion cash and 91.5 million SYY shares
- ▸Jetro shareholders to hold approximately 16% stake in combined company
- ▸Citi lowers SYY price target to $72 from $88 citing execution risks
Sysco to Acquire Jetro Restaurant Depot for $29.1B in Cash and Equity Deal
- ▸Acquiring Jetro Restaurant Depot for $29.1 billion
- ▸Jetro generated $16B revenue and $2.1B EBITDA in 2025
- ▸Projected EPS accretion: mid-to-high single digits year one, low-to-mid teens year two
- ▸Targeting $250 million in annualized cost synergies within three years
- ▸Suspending share buybacks to prioritize debt reduction and deleveraging
Sysco Shares Drop 16% on $29.1B Jetro Acquisition and Citi Downgrade
- ▸Acquiring Jetro Restaurant Depot for $29.1B
- ▸Taking on $21B in new debt to fund acquisition
- ▸Leverage expected to reach 4.5x at closing
- ▸Share repurchase program suspended to prioritize de-leveraging
- ▸Citi cut price target to $72 from $88 citing execution risk
Sysco to acquire Jetro Restaurant Depot in $29 billion cash and stock transaction
- ▸Acquisition value $29 billion
- ▸Jetro operates wholesale cash-and-carry foodservice for independent restaurants
- ▸Expands Sysco's footprint in independent restaurant and small business segments
- ▸Transaction structure includes cash and stock components
- ▸Deal represents significant consolidation in foodservice distribution market
Sysco to acquire Jetro Restaurant Depot for $29.1B in largest deal ever
- ▸Acquisition value $29.1 billion including debt
- ▸Largest transaction in Sysco's corporate history
- ▸Provides entry into cash-and-carry wholesale market
- ▸Expands footprint in restaurant supply distribution
- ▸Transaction announced March 30
Sysco to acquire Restaurant Depot for $29.1 billion in cash and stock
- ▸Acquisition valued at $29.1 billion enterprise value
- ▸Consideration includes $21.6 billion cash and 91.5 million Sysco shares
- ▸Deal targets high-margin cash-and-carry wholesale restaurant segment
- ▸Boards of both companies approved transaction
- ▸Sysco shares fell 13% following deal announcement
Sysco to acquire Jetro for $29.1B, shares drop 14% on leverage concerns
- ▸Acquiring Jetro Restaurant Depot for $29.1B including debt
- ▸Transaction includes $21.6B cash and 91.5M Sysco shares
- ▸Jetro generated $16B revenue and $2.1B EBITDA last year
- ▸Sysco pausing share buybacks to prioritize debt deleveraging
- ▸Jetro shareholders to own approximately 16% of combined company