Item 1. Financial Statements

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Item 1. Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In millions, except for share data)


	Mar. 29, 2025		Jun. 29, 2024
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	1,527	$	696
Accounts receivable, less allowances of $114 and $54	5,465		5,324
Inventories	4,893		4,678

Prepaid expenses and other current assets	375		323

Income tax receivable	22		22
Total current assets	12,282		11,043
Plant and equipment at cost, less accumulated depreciation	5,719		5,497
Other long-term assets
Goodwill	5,199		5,153
Intangibles, less amortization	1,100		1,188

Deferred income taxes	456		445
Operating lease right-of-use assets, net	1,096		923
Other assets	495		668
Total other long-term assets	8,346		8,377
Total assets	$	26,347	$	24,917

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities

Accounts payable	$	6,183	$	6,290
Accrued expenses	2,147		2,226
Accrued income taxes	40		131
Current operating lease liabilities	133		125
Current maturities of long-term debt	1,232		469
Total current liabilities	9,735		9,241
Long-term liabilities
Long-term debt	12,234		11,513
Deferred income taxes	342		345
Long-term operating lease liabilities	1,010		838
Other long-term liabilities	1,081		1,089
Total long-term liabilities	14,667		13,785

Noncontrolling interest	23		31
Shareholders’ equity
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none	—		—
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares	765		765
Paid-in capital	1,963		1,908
Retained earnings	12,792		12,260
Accumulated other comprehensive loss	(1,255)		(1,339)
Treasury stock at cost, 280,429,662 and 273,416,685 shares	(12,343)		(11,734)
Total shareholders’ equity	1,922		1,860
Total liabilities and shareholders’ equity	$	26,347	$	24,917

Note: The June 29, 2024 balance sheet has been derived from the audited financial statements at that date.

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)

(In millions, except for share and per share data)


	13-Week Period Ended				39-Week Period Ended
	Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024
Sales	$	19,598	$	19,380	$	60,232	$	58,288
Cost of sales	16,017		15,771		49,249		47,518
Gross profit	3,581		3,609		10,983		10,770
Operating expenses	2,900		2,887		8,783		8,544
Operating income	681		722		2,200		2,226
Interest expense	149		158		469		442
Other expense (income), net	9		10		32		23
Earnings before income taxes	523		554		1,699		1,761
Income taxes	122		129		402		418
Net earnings	$	401	$	425	$	1,297	$	1,343

Net earnings:
Basic earnings per share	$	0.82	$	0.85	$	2.65	$	2.67
Diluted earnings per share	0.82		0.85		2.64		2.66

Average shares outstanding	487,519,382		499,642,505		490,080,591		503,027,209
Diluted shares outstanding	489,331,460		501,921,446		491,973,759		504,973,406

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In millions)


	13-Week Period Ended				39-Week Period Ended
	Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024
Net earnings	$	401	$	425	$	1,297	$	1,343
Other comprehensive income (loss):
Foreign currency translation adjustment	136		(67)		49		(12)
Items presented net of tax:

Amortization of cash flow hedges	1		2		4		7
Change in net investment hedges	(6)		7		(3)		(10)
Change in cash flow hedges	3		13		(5)		19
Change in excluded components of fair value hedge	—		—		(2)		—



Amortization of actuarial loss	5		5		15		15


Net actuarial gain and other adjustments arising in current year	—		—		23		1
Change in marketable securities	2		(1)		3		2
Total other comprehensive income (loss)	141		(41)		84		22
Comprehensive income	$	542	$	384	$	1,381	$	1,365

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (Unaudited)

(In millions, except for share data)

Quarter to Date


									Accumulated Other Comprehensive Loss
	Common Stock			Paid-in Capital		Retained Earnings					Treasury Stock
	Shares	Amount						Shares			Amounts		Totals
Balance as of December 28, 2024	765,174,900	$	765	$	1,965	$	12,649		$	(1,396)		275,706,546		$	(11,969)	$	2,014
Net earnings						401										401












Other comprehensive income (loss)									141							141
Dividends declared ($0.51 per common share)						(246)										(246)
Treasury stock purchases												5,468,937		(400)		(400)

Share-based compensation awards				(2)								(745,821)		26		24
Adjustments to redeemable non-controlling interest						(12)										(12)
Balance as of March 29, 2025	765,174,900	$	765	$	1,963	$	12,792		$	(1,255)		280,429,662		$	(12,343)	$	1,922

									Accumulated Other Comprehensive Loss
	Common Stock			Paid-in Capital		Retained Earnings					Treasury Stock
	Shares	Amount						Shares			Amounts		Totals
Balance as of December 30, 2023	765,174,900	$	765	$	1,877	$	11,724		$	(1,190)		261,472,819		$	(10,772)	$	2,404
Net earnings						425										425








Other comprehensive income (loss)									(41)							(41)
Dividends declared ($0.50 per common share)						(250)										(250)

Treasury stock purchases				(51)								6,026,110		(449)		(500)
Share-based compensation awards				21								(1,248,841)		42		63
Balance as of March 30, 2024	765,174,900	$	765	$	1,847	$	11,899		$	(1,231)		266,250,088		$	(11,179)	$	2,101

See Notes to Consolidated Financial Statements

Year to Date


									Accumulated Other Comprehensive Loss
	Common Stock			Paid-in Capital		Retained Earnings					Treasury Stock
	Shares	Amount						Shares			Amounts		Totals
Balance as of June 29, 2024	765,174,900	$	765	$	1,908	$	12,260		$	(1,339)		273,416,685		$	(11,734)	$	1,860
Net earnings						1,297										1,297












Other comprehensive income (loss)									84							84
Dividends declared ($1.53 per common share)						(749)										(749)
Treasury stock purchases												9,418,578		(700)		(700)

Share-based compensation awards				55								(2,405,601)		91		146
Adjustments to redeemable non-controlling interest						(16)										(16)
Balance as of March 29, 2025	765,174,900	$	765	$	1,963	$	12,792		$	(1,255)		280,429,662		$	(12,343)	$	1,922

									Accumulated Other Comprehensive Loss
	Common Stock			Paid-in Capital		Retained Earnings					Treasury Stock
	Shares	Amount						Shares			Amounts		Totals
Balance as of July 1, 2023	765,174,900	$	765	$	1,815	$	11,311		$	(1,253)		260,062,834		$	(10,629)	$	2,009
Net earnings						1,343										1,343








Other comprehensive income (loss)									22							22
Dividends declared ($1.50 per common share)						(755)										(755)
Treasury stock purchases				(51)								8,888,777		(649)		(700)

Share-based compensation awards				83								(2,701,523)		99		182
Balance as of March 30, 2024	765,174,900	$	765	$	1,847	$	11,899		$	(1,231)		266,250,088		$	(11,179)	$	2,101

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED CASH FLOWS (Unaudited)

(In millions)


	39-Week Period Ended
	Mar. 29, 2025		Mar. 30, 2024
Cash flows from operating activities:
Net earnings	$	1,297	$	1,343
Adjustments to reconcile net earnings to cash provided by operating activities:

Share-based compensation expense	74		77
Depreciation and amortization	709		647
Operating lease asset amortization	102		92
Amortization of debt issuance and other debt-related costs	11		14

Deferred income taxes	(27)		(25)
Provision for losses on receivables	72		43


Other non-cash items	(84)		(2)
Additional changes in certain assets and liabilities, net of effect of businesses acquired:
Increase in receivables	(228)		(325)
Increase in inventories	(214)		(126)
(Increase) decrease in prepaid expenses and other current assets	(11)		23
Decrease in accounts payable	(128)		(282)
(Decrease) increase in accrued expenses	(98)		29
Decrease in operating lease liabilities	(132)		(103)
Decrease in accrued income taxes	(91)		(68)
Decrease in other assets	16		25
Increase in other long-term liabilities	49		11

Net cash provided by operating activities	1,317		1,373
Cash flows from investing activities:
Additions to plant and equipment	(532)		(530)
Proceeds from sales of plant and equipment	169		21
Acquisition of businesses, net of cash acquired	(40)		(1,181)

Purchase of marketable securities	(25)		(12)
Proceeds from sales of marketable securities	24		—
Other investing activities	12		1

Net cash used for investing activities	(392)		(1,701)
Cash flows from financing activities:
Bank and commercial paper (repayments) borrowings, net	(33)		525
Other debt borrowings including senior notes	1,254		1,261
Other debt repayments including senior notes	(143)		(339)






Proceeds from stock option exercises	96		103

Stock repurchases	(700)		(700)
Dividends paid	(752)		(758)

Other financing activities	(21)		(32)
Net cash (used for) provided by financing activities	(299)		60
Effect of exchange rates on cash, cash equivalents and restricted cash	(7)		(5)
Net increase (decrease) in cash, cash equivalents and restricted cash	619		(273)
Cash, cash equivalents and restricted cash at beginning of period	945		966
Cash, cash equivalents and restricted cash at end of period	$	1,564	$	693
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	453	$	376
Income taxes, net of refunds (1)	510		510


(1)			Cash paid for income taxes, net for the 39 weeks ended March 29, 2025 includes $190 million of cash paid for the purchase of federal tax credits.

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Sysco,” or the “company” as used in this Form 10-Q refer to Sysco Corporation together with its consolidated subsidiaries and divisions.

1. BASIS OF PRESENTATION

The consolidated financial statements have been prepared by the company, without an audit. The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income, changes in consolidated shareholders’ equity and consolidated cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, cash flows and changes in shareholders’ equity for all periods presented have been made.

These financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2024. Certain footnote disclosures included in annual financial statements prepared in accordance with generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to applicable rules and regulations for interim financial statements.

Supplemental Balance Sheet Information

Supplier Financing Programs

We have agreements with third parties to provide supplier finance programs which facilitate participating suppliers’ ability to finance payment obligations from the company with designated third-party financial institutions. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the company prior to their scheduled due dates at a discounted price to participating financial institutions. Obligations of the company that have been confirmed as valid require payment by Sysco upon the due date of the obligation.

Our outstanding payment obligations that suppliers financed to participating financial institutions, which are included in accounts payable on the consolidated balance sheets, are as follows:


	Mar. 29, 2025		Jun. 29, 2024
	(In millions)
Financed payment obligations	$	91	$	102

Accounts Receivable, Less Allowances

We utilize arrangements to sell portions of our trade accounts receivable to third-party financial institutions on a non-recourse basis in exchange for cash. The arrangements meet the requirements for the receivables transferred to be accounted for as sales and are accounted for as a reduction in trade receivables. Proceeds from the sales are reported net of negotiated discount and are recorded as a reduction to accounts receivable outstanding in the company’s consolidated balance sheets and as cash flows from operating activities in the company’s consolidated statements of cash flows. Accounts receivable sold under these arrangements were $1.9 billion and $1.2 billion for the third quarter of fiscal 2025 and 2024, respectively, and $6.0 billion and $3.6 billion for the first 39 weeks of fiscal 2025 and 2024, respectively.

In certain instances, Sysco has continuing involvement subsequent to the transfer, limited to providing certain servicing and collection actions on behalf of the purchasers of the designated trade receivables. The outstanding aggregate principal amount of receivables that has been derecognized and remain outstanding was $172 million and $173 million at March 29, 2025 and June 29, 2024, respectively. We continue to service the receivables post-transfer on a non-recourse basis with no participating interest.

Supplemental Cash Flow Information

The following table sets forth our reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the consolidated statement of cash flows:


	Mar. 29, 2025		Mar. 30, 2024
	(In millions)
Cash and cash equivalents	$	1,527	$	598
Restricted cash (1)	37		95
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	1,564	$	693


(1)			Restricted cash primarily represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. Restricted cash is located within other assets in each consolidated balance sheet.

The following table sets forth our non-cash investing and financing activities:


	Mar. 29, 2025		Mar. 30, 2024
	(In millions)
Non-cash investing and financing activities:
Plant and equipment acquired through financing programs	$	272	$	288
Assets obtained in exchange for finance lease obligations	55		88

Business Combinations

On November 27, 2023, Sysco consummated its acquisition of Edward Don & Company (Edward Don) through a merger between Edward Don and a wholly owned subsidiary of Sysco Corporation, in which Sysco acquired 100% of the members’ equity of the acquiree for cash consideration of $965 million. Edward Don is a leading distributor of foodservice equipment, supplies and disposables and has a robust supply chain that is expected to enable cost effective distribution of restaurant equipment and supplies across the Sysco network. The acquisition has allowed Sysco to add strategic capabilities and diversified offerings to complement its existing business and creates a specialty equipment and supplies platform that provides better selection and service to customers.

During the second quarter of fiscal 2025, we completed the determination of the fair value of the assets acquired and liabilities assumed. We recorded certain measurement period adjustments during fiscal 2024 and 2025, none of which were individually or in aggregate material to our financial statements.

2. NEW ACCOUNTING STANDARDS

Recent Accounting Guidance Not Yet Adopted

Segment Reporting

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, (our fiscal 2025), and interim periods for our fiscal years beginning after December 15, 2024, (our first quarter of fiscal 2026), and should be applied on a retrospective basis to all periods presented. Early adoption is permitted. We are currently evaluating the effect of adopting ASU 2023-07 on our disclosures.

Income Taxes

In December 2023, the FASB issued 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures to enhance income tax information primarily through changes in the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, (our fiscal 2026), on a prospective basis. Early adoption is permitted. We are currently evaluating the effect of adopting ASU 2023-09 on our disclosures.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses included within commonly presented income statement captions. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, (our fiscal 2028), and interim reporting periods for our fiscal years beginning after December 15, 2027, (our first quarter of fiscal 2029). Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. We are currently evaluating the effect of adopting ASU 2024-03 on our disclosures.

3. REVENUE

We recognize revenues when our performance obligations are satisfied in an amount that reflects the consideration Sysco expects to be entitled to receive in exchange for those goods and services. Customer receivables, which are included in accounts receivable, less allowances in the consolidated balance sheet, were $5.2 billion and $5.0 billion as of March 29, 2025 and June 29, 2024, respectively.

The following tables present our sales disaggregated by reportable segment and sales mix for the company’s principal product categories for the periods presented:


	13-Week Period Ended Mar. 29, 2025
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In millions)
Principal Product Categories
Fresh and frozen meats	$	2,590	$	531	$	579	$	—	$	3,700
Canned and dry products	2,574		669		253		—		3,496
Frozen fruits, vegetables, bakery and other	1,989		663		329		—		2,981
Dairy products	1,597		406		143		—		2,146
Poultry	1,366		261		284		—		1,911
Fresh produce	1,239		257		74		—		1,570
Paper and disposables	993		123		195		12		1,323
Beverage products	367		176		150		19		712
Seafood	536		96		48		—		680
Equipment and smallwares	271		44		7		120		442
Other (1)	278		231		22		106		637
Total Sales	$	13,800	$	3,457	$	2,084	$	257	$	19,598


(1)			Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies.


	13-Week Period Ended Mar. 30, 2024
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In millions)
Principal Product Categories
Canned and dry products	$	2,684	$	785	$	225	$	—	$	3,694
Fresh and frozen meats	2,461		483		509		—		3,453
Frozen fruits, vegetables, bakery and other	2,007		665		311		—		2,983
Dairy products	1,416		392		136		—		1,944
Poultry	1,323		259		250		—		1,832

Fresh produce	1,362		268		69		—		1,699
Paper and disposables	1,011		126		183		13		1,333


Seafood	545		97		52		—		694
Beverage products	351		166		143		20		680

Equipment and smallwares	283		43		6		121		453

Other (1)	264		210		20		121		615
Total Sales	$	13,707	$	3,494	$	1,904	$	275	$	19,380


(1)			Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies.


	39-Week Period Ended Mar. 29, 2025
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In millions)
Principal Product Categories
Fresh and frozen meats	$	7,846	$	1,620	$	1,687	$	—	$	11,153
Canned and dry products	7,847		2,300		750		—		10,897
Frozen fruits, vegetables, bakery and other	6,063		2,068		1,015		—		9,146
Dairy products	4,794		1,249		420		—		6,463
Poultry	4,316		836		870		—		6,022

Fresh produce	3,915		823		220		—		4,958
Paper and disposables	3,048		392		597		38		4,075
Beverage products	1,113		545		461		60		2,179
Seafood	1,584		313		119		—		2,016
Equipment and smallwares	847		150		42		363		1,402
Other (1)	833		682		65		341		1,921

Total Sales	$	42,206	$	10,978	$	6,246	$	802	$	60,232


(1)			Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies.


	39-Week Period Ended Mar. 30, 2024
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In millions)
Principal Product Categories
Canned and dry products	$	7,970	$	2,417	$	687	$	—	$	11,074
Fresh and frozen meats	7,604		1,506		1,494		—		10,604
Frozen fruits, vegetables, bakery and other	6,032		2,020		932		—		8,984
Dairy products	4,319		1,194		419		—		5,932
Poultry	4,025		836		784		—		5,645

Fresh produce	4,032		808		205		—		5,045
Paper and disposables	2,976		449		557		43		4,025
Seafood	1,630		332		140		—		2,102
Beverage products	1,050		500		428		66		2,044

Equipment and smallwares	530		144		18		361		1,053

Other (1)	757		567		60		396		1,780
Total Sales	$	40,925	$	10,773	$	5,724	$	866	$	58,288


(1)			Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies.

4. FAIR VALUE MEASUREMENTS

Sysco’s policy is to invest only in high-quality investments. The fair values of our cash deposits and money market funds included in cash equivalents are valued using inputs that are considered a Level 1 measurement. Other cash equivalents, such as time deposits and highly liquid instruments with original maturities of three months or less, are valued using inputs that are considered a Level 2 measurement. The fair value of our marketable securities is measured using inputs that are considered a Level 2 measurement, as they rely on quoted prices in markets that are not actively traded or observable inputs over the full term of the asset. The location and the fair value of the company’s marketable securities in the consolidated balance sheet are disclosed in Note 5, “Marketable Securities.” The fair value of our derivative instruments is measured using inputs that are considered a Level 2 measurement, as they are not actively traded and are valued using pricing models that use observable market quotations. The location and the fair values of derivative assets and liabilities designated as hedges in the consolidated balance sheet are disclosed in Note 6, “Derivative Financial Instruments.”

The following tables present our assets measured at fair value on a recurring basis as of March 29, 2025 and June 29, 2024:


	Assets Measured at Fair Value as of Mar. 29, 2025
	Level 1		Level 2		Level 3		Total
	(In millions)
Assets:
Cash equivalents
Cash and cash equivalents	$	1,098	$	—	$	—	$	1,098

Other assets (1)	37		—		—		37







Total assets at fair value	$	1,135	$	—	$	—	$	1,135


(1)			Represents restricted cash balance recorded within other assets in the consolidated balance sheet.


	Assets Measured at Fair Value as of Jun. 29, 2024
	Level 1		Level 2		Level 3		Total
	(In millions)
Assets:
Cash equivalents
Cash and cash equivalents	$	269	$	—	$	—	$	269



Other assets (1)	249		—		—		249

Total assets at fair value	$	518	$	—	$	—	$	518


(1)			Represents restricted cash balance recorded within other assets in the consolidated balance sheet.

The carrying values of accounts receivable and accounts payable approximated their respective fair values due to their short-term maturities. The fair value of our total debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the company for new debt with the same maturities as existing debt and is considered a Level 2 measurement. The fair value of total debt was approximately $13.0 billion as of March 29, 2025 and $11.4 billion as of June 29, 2024, while the carrying value was $13.5 billion as of March 29, 2025 and $12.0 billion as of June 29, 2024.

5. MARKETABLE SECURITIES

Sysco invests a portion of the assets held by its wholly owned captive insurance subsidiary in a restricted investment portfolio of marketable fixed income securities, which have been classified and accounted for as available-for-sale. We include fixed income securities maturing in less than 12 months within prepaid expenses and other current assets. Fixed income securities maturing in more than 12 months are included within other assets in the accompanying consolidated balance sheets. We record the amounts at fair market value, which is determined using quoted market prices at the end of the reporting period.

Unrealized gains and any portion of a security’s unrealized loss attributable to non-credit losses are recorded in accumulated other comprehensive loss. There were no significant credit losses recognized in the first 39 weeks of fiscal 2025.

The following table presents our available-for-sale marketable securities as of March 29, 2025 and June 29, 2024:


	Mar. 29, 2025
	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
	(In millions)
Fixed income securities:
Corporate bonds	$	103	$	—	$	(2)	$	101	$	15	$	86
Government bonds	29		—		(1)		28		—		28
Total marketable securities	$	132	$	—	$	(3)	$	129	$	15	$	114

	Jun. 29, 2024
	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
	(In millions)
Fixed income securities:
Corporate bonds	$	98	$	—	$	(4)	$	94	$	24	$	70
Government bonds	34		—		(2)		32		—		32
Total marketable securities	$	132	$	—	$	(6)	$	126	$	24	$	102

As of March 29, 2025, the balance of available-for-sale securities by contractual maturity is shown in the following table. Within the table, maturities of fixed income securities have been allocated based upon timing of estimated cash flows. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.


	Mar. 29, 2025
	(In millions)
Due in one year or less	$	15
Due after one year through five years	75
Due after five years	39

Total	$	129

There were no significant realized gains or losses in marketable securities in the first 39 weeks of fiscal 2025.

6. DERIVATIVE FINANCIAL INSTRUMENTS

Sysco uses derivative financial instruments to enact hedging strategies for risk mitigation purposes; however, we do not use derivative financial instruments for trading or speculative purposes. Hedging strategies are used to manage interest rate risk, foreign currency risk and fuel price risk.

Hedging of interest rate risk

Sysco manages its debt portfolio with interest rate swaps from time to time to achieve an overall desired position of fixed and floating rates. In the third quarter of fiscal 2025, we entered into receive-fixed, pay-floating swap agreements to trade the fixed interest rate on $550 million of 5.40% senior notes with variable rates. The interest rate swap agreements are designated as fair value hedges. Changes in the fair value of the hedge and the carrying value of the hedged item attributable to changes in the benchmark interest rates being hedged are recognized in interest expense.

Hedging of foreign currency risk

Sysco’s operations in Europe have inventory purchases denominated in currencies other than their functional currency, such as the euro, U.S. dollar, British pound sterling, Polish zloty and Danish krone. These inventory purchases give rise to foreign currency exposure between the functional currency of each entity and these currencies. The company enters into foreign currency forward swap contracts to sell the applicable entity’s functional currency and buy currencies matching the inventory purchase, which operate as cash flow hedges of the company’s foreign currency-denominated inventory purchases.

Sysco has cross-currency swaps and foreign currency forwards designated as fair value hedges for the purpose of hedging foreign currency risk associated with changes in spot rates on foreign denominated intercompany loans and intercompany payables. Sysco has elected to exclude the changes in fair value of the forward points from the assessments of hedge effectiveness. Gains or losses from fair value hedges impact the same category on the consolidated statements of income as the item being hedged, including the earnings impact of the excluded components. Unrealized gains or losses on components excluded from hedge effectiveness are recorded as a component of accumulated other comprehensive income (loss) and recognized into earnings over the life of the hedged instrument. Except for the excluded components, changes in the fair value of the hedge are offset against changes in the fair value of the hedged assets or liabilities through earnings.

Sysco also has cross-currency swaps that hedge the foreign currency exposure of our net investment in certain foreign operations. These cross-currency swaps are designated as net investment hedges with gains and losses recognized within accumulated other comprehensive income (loss). In the third quarter of fiscal 2025, we entered into cross-currency swaps to hedge the foreign currency exposure of the net investment in our Canadian operations.

Hedging of fuel price risk

Sysco uses fuel commodity swap contracts to hedge against the risk of the change in the price of diesel fuel on anticipated future purchases. These swaps have been designated as cash flow hedges.

None of our hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of March 29, 2025 are presented below:


Maturity Date of the Hedging Instrument	Currency / Unit of Measure	Notional Value
		(In millions)
Hedging of interest rate risk

January 2034	U.S. Dollar	500
March 2035	U.S. Dollar	550

Hedging of foreign currency risk
Various (March 2025 to August 2025)	Swedish Krona	329
Various (May 2025 to October 2025)	British Pound Sterling	27




April 2025	Canadian Dollar	180
June 2025	Canadian Dollar	137
January 2029	Euro	470

September 2030	Euro	670

September 2030	Canadian Dollar	998

Hedging of fuel risk
Various (March 2025 to October 2026)	Gallons	75

The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheets as of March 29, 2025 and June 29, 2024 are as follows:


		Derivative Fair Value
	Balance Sheet location	Mar. 29, 2025		Jun. 29, 2024
		(In millions)
Fair Value Hedges:


Interest rate swaps	Other assets	$	22	$	6
Interest rate swaps	Accrued expenses	—		1

Cross currency swaps	Prepaid expenses and other current assets	—		2
Cross currency swaps	Accrued expenses	9		3

Foreign currency forwards	Prepaid expenses and other current assets	2		—


Cash Flow Hedges:
Fuel swaps	Prepaid expenses and other current assets	$	—	$	1


Foreign currency forwards	Accrued expenses	1		—

Fuel swaps	Accrued expenses	8		2
Fuel swaps	Other assets	—		1
Fuel swaps	Other long-term liabilities	1		—

Net Investment Hedges:
Cross currency swaps	Prepaid expenses and other current assets	$	18	$	4
Cross currency swaps	Other assets	20		—
Cross currency swaps	Accrued expenses	4		—
Cross currency swaps	Other long-term liabilities	43		10

Gains or losses recognized in the consolidated results of operations for cash flow hedging relationships are not significant for each of the periods presented. The location and amount of gains or losses recognized in the consolidated results of operations for fair value hedging relationships for each of the periods, presented on a pretax basis, are as follows:


	13-Week Period Ended				39-Week Period Ended
	Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024
	(In millions)
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value hedges are recorded	$	158	$	168	$	501	$	464
Gain or (loss) on fair value hedging relationships:
Interest rate swaps:
Hedged items	$	(35)	$	8	$	(41)	$	(23)
Derivatives designated as hedging instruments	24		(11)		16		11
Cross currency swaps and foreign currency forwards:
Hedged items	$	(1)	$	3	$	1	$	3
Derivatives designated as hedging instruments	1		(3)		(1)		(3)

The gains and losses on the fair value hedging relationships associated with the hedged items as disclosed in the table above consist of the following components for each of the periods presented:


	13-Week Period Ended				39-Week Period Ended
	Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024
	(In millions)
Interest expense	$	(10)	$	(7)	$	(25)	$	(10)
Increase (decrease) in fair value of debt	25		(15)		16		12
Foreign currency gain (loss)	(1)		3		1		3
Hedged items	$	(36)	$	11	$	(40)	$	(19)

The location and effect of cash flow, net investment, and excluded components of fair value hedges on the consolidated statements of comprehensive income for the 13-week periods ended March 29, 2025 and March 30, 2024, presented on a pretax basis, are as follows:


	13-Week Period Ended Mar. 29, 2025
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In millions)			(In millions)
Derivatives in cash flow hedging relationships:
Fuel swaps	$	4	Operating expense	$	1




Derivatives in net investment hedging relationships:
Cross currency contracts	$	(8)	N/A	$	—







	13-Week Period Ended Mar. 30, 2024
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In millions)			(In millions)
Derivatives in cash flow hedging relationships:
Fuel swaps	$	14	Operating expense	$	—
Foreign currency contracts	1		Cost of sales / Other expense (income)	—

Total	$	15		$	—

Derivatives in net investment hedging relationships:
Cross currency contracts	$	9	N/A	$	—

The location and effect of cash flow, net investment, and excluded components of fair value hedges on the consolidated statements of comprehensive income for the 39-week periods ended March 29, 2025 and March 30, 2024, presented on a pretax basis, are as follows:


	39-Week Period Ended Mar. 29, 2025
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In millions)			(In millions)
Derivatives in cash flow hedging relationships:
Fuel swaps	$	(8)	Operating expense	$	6
Foreign currency contracts	(1)		Cost of sales / Other expense (income)	—

Total	$	(9)		$	6

Derivatives in net investment hedging relationships:
Cross currency contracts	$	(4)	N/A	$	—




Derivatives in fair value hedging relationships:
Change in excluded component of fair value hedge	$	(2)	Other expense (income)	$	—

	39-Week Period Ended Mar. 30, 2024
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In millions)			(In millions)
Derivatives in cash flow hedging relationships:
Fuel swaps	$	24	Operating expense	$	3
Foreign currency contracts	—		Cost of sales / Other expense (income)	—

Total	$	24		$	3

Derivatives in net investment hedging relationships:
Cross currency contracts	$	(13)	N/A	$	—

The location and carrying amount of hedged liabilities in the consolidated balance sheet as of March 29, 2025 are as follows:


	Mar. 29, 2025
	Carrying Amount of Hedged Assets (Liabilities)		Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
	(In millions)
Balance sheet location:

Long-term debt	$	(1,060)	$	22

The carrying amount of hedged liabilities in the consolidated balance sheet as of June 29, 2024 is $498 million.

7. DEBT

Sysco has a long-term revolving credit facility that includes aggregate commitments of the lenders thereunder of $3.0 billion, with an option to increase such commitments to $4.0 billion. As of March 29, 2025, there were no borrowings outstanding under this facility.

We have a U.S. commercial paper program allowing the company to issue short-term unsecured notes in an aggregate amount not to exceed $3.0 billion. Any outstanding amounts are classified within long-term debt, as the program is supported by the long-term revolving credit facility. As of March 29, 2025, there were no commercial paper issuances outstanding under this program. We also have a commercial paper program in Europe with borrowings not to exceed €250 million. As of March 29, 2025, there were €155 million (the equivalent of $169 million) in commercial paper issuances outstanding under this program.

On February 25, 2025, Sysco issued senior notes (the Notes) totaling $1.25 billion. Details of the Notes are as follows:


Maturity Date	Par Value (In millions)		Coupon Rate		Pricing (percentage of par)
September 23, 2030 (the 2030 Notes)	$	700	5.10	%	99.975	%
March 23, 2035 (the 2035 Notes)	550		5.40		99.924

The Notes initially are fully and unconditionally guaranteed by Sysco’s direct and indirect wholly owned subsidiaries that guarantee Sysco’s other senior notes issued under the indenture governing the Notes or any of Sysco’s other indebtedness. Interest on the Notes will be paid semi-annually in arrears on March 23 and September 23, beginning on September 23, 2025. At Sysco’s option, any or all of the Notes may be redeemed, in whole or in part, at any time prior to maturity. If we elect to redeem (i) the 2030 Notes before the date that is one month prior to the maturity date, or (ii) the 2035 Notes before the date that is three months prior to the maturity date, Sysco will pay an amount equal to the greater of 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest or the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed that would be due if such senior notes matured on the applicable date described above. If we elect to redeem a series of Notes on or after the applicable date described in the preceding sentence, Sysco will pay an amount equal to 100% of the principal amount of the Notes to be redeemed. Sysco will pay accrued and unpaid interest on the Notes redeemed to the redemption date.

The total carrying value of our debt was $13.5 billion as of March 29, 2025 and $12.0 billion as of June 29, 2024. The increase in the carrying value of our debt during the 39-week period ended March 29, 2025 was due to the issuance of senior notes and new leases in support of plant and equipment.

Information regarding the guarantors of our registered debt securities is contained in the section captioned Guarantor Summarized Financial Information in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this Form 10-Q.

8. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:


	13-Week Period Ended				39-Week Period Ended
	Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024
	(In millions, except for share and per share data)				(In millions, except for share and per share data)
Numerator:
Net earnings	$	401	$	425	$	1,297	$	1,343
Denominator:
Weighted-average basic shares outstanding	487,519,382		499,642,505		490,080,591		503,027,209
Dilutive effect of share-based awards	1,812,078		2,278,941		1,893,168		1,946,197
Weighted-average diluted shares outstanding	489,331,460		501,921,446		491,973,759		504,973,406
Basic earnings per share	$	0.82	$	0.85	$	2.65	$	2.67
Diluted earnings per share	$	0.82	$	0.85	$	2.64	$	2.66

The number of securities that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was approximately 4,667,000 and 1,938,000 for the third quarter of fiscal 2025 and 2024, respectively, and approximately 3,722,000 and 4,792,000 for the first 39 weeks of fiscal 2025 and 2024, respectively.

9. OTHER COMPREHENSIVE INCOME

Comprehensive income is net earnings plus certain other items that are recorded directly to shareholders’ equity, such as foreign currency translation adjustment, amounts related to certain hedging arrangements, amounts related to pension and other postretirement plans and changes in marketable securities. Comprehensive income was $542 million and $384 million for the third quarter of fiscal 2025 and fiscal 2024, respectively. Comprehensive income was $1.4 billion and $1.4 billion for the first 39 weeks of fiscal 2025 and 2024, respectively.

A summary of the components of other comprehensive income (loss) and the related tax effects for each of the periods presented is as follows:


		13-Week Period Ended Mar. 29, 2025
	Location of Expense (Income) Recognized in Net Earnings	Before Tax Amount		Tax		Net of Tax Amount
		(In millions)
Foreign currency translation:

Foreign currency translation adjustment	N/A	$	136	$	—	$	136

Hedging instruments:
Other comprehensive income (loss) before reclassification adjustments:

Change in cash flow hedges	Operating expenses	4		1		3
Change in net investment hedges	N/A	(8)		(2)		(6)

Total other comprehensive income before reclassification adjustments		(4)		(1)		(3)
Reclassification adjustments:
Amortization of cash flow hedges	Interest expense	1		—		1
Pension and other postretirement benefit plans:




Reclassification adjustments:

Amortization of actuarial loss, net	Other expense (income), net	7		2		5
Total reclassification adjustments		7		2		5
Marketable securities:
Change in marketable securities	Other expense (income), net	2		—		2
Total other comprehensive income (loss)		$	142	$	1	$	141


		13-Week Period Ended Mar. 30, 2024
	Location of Expense (Income) Recognized in Net Earnings	Before Tax Amount		Tax		Net of Tax Amount
		(In millions)
Foreign currency translation:
Foreign currency translation adjustment	N/A	$	(67)	$	—	$	(67)
Hedging instruments:
Other comprehensive income before reclassification adjustments:

Change in cash flow hedges	Operating expenses	15		2		13
Change in net investment hedges	N/A	9		2		7

Total other comprehensive (loss) before reclassification adjustments		24		4		20
Reclassification adjustments:
Amortization of cash flow hedges	Interest expense	3		1		2
Pension and other postretirement benefit plans:




Reclassification adjustments:

Amortization of actuarial loss, net	Other expense (income), net	7		2		5

Total reclassification adjustments		7		2		5
Marketable securities:
Change in marketable securities	Other expense (income), net	(1)		—		(1)
Total other comprehensive income (loss)		$	(34)	$	7	$	(41)


		39-Week Period Ended Mar. 29, 2025
	Location of Expense (Income) Recognized in Net Earnings	Before Tax Amount		Tax		Net of Tax Amount
		(In millions)
Foreign currency translation:

Foreign currency translation adjustment	N/A	$	49	$	—	$	49

Hedging instruments:
Other comprehensive income (loss) before reclassification adjustments:
Change in excluded component of fair value hedge	Other expense (income), net	(2)		—		(2)
Change in cash flow hedges	Operating expenses	(9)		(4)		(5)
Change in net investment hedges	N/A	(4)		(1)		(3)
Total other comprehensive (loss) before reclassification adjustments		(15)		(5)		(10)

Reclassification adjustments:
Amortization of cash flow hedges	Interest expense	5		1		4
Pension and other postretirement benefit plans:
Other comprehensive income before reclassification adjustments:
Net actuarial gain arising in the current year		31		8		23


Reclassification adjustments:

Amortization of actuarial loss, net	Other expense (income), net	21		6		15
Total reclassification adjustments		21		6		15




Marketable securities:
Change in marketable securities	Other expense (income), net	3		—		3
Total other comprehensive income (loss)		$	94	$	10	$	84


		39-Week Period Ended Mar. 30, 2024
	Location of Expense (Income) Recognized in Net Earnings	Before Tax Amount		Tax		Net of Tax Amount
		(In millions)
Foreign currency translation:

Foreign currency translation adjustment	N/A	$	(12)	$	—	$	(12)
Hedging instruments:
Other comprehensive (loss) before reclassification adjustments:

Change in cash flow hedges	Operating expenses	24		5		19
Change in net investment hedges	N/A	(13)		(3)		(10)
Total other comprehensive (loss) before reclassification adjustments		11		2		9

Reclassification adjustments:
Amortization of cash flow hedges	Interest expense	9		2		7
Pension and other postretirement benefit plans:
Other comprehensive income before reclassification adjustments:
Net actuarial gain arising in the current year		1		—		1


Reclassification adjustments:

Amortization of actuarial loss, net	Other expense (income), net	20		5		15
Total reclassification adjustments		20		5		15




Marketable securities:
Change in marketable securities	Other expense (income), net	3		1		2
Total other comprehensive income		$	32	$	10	$	22

The following tables provide a summary of the changes in accumulated other comprehensive (loss) income for the periods presented:


	13-Week Period Ended Mar. 29, 2025
	Foreign Currency Translation		Hedging, net of tax		Pension and Other Postretirement Benefit Plans, net of tax		Marketable Securities, net of tax		Total
	(In millions)
Balance as of Dec. 28, 2024	$	(494)	$	(14)	$	(884)	$	(4)	$	(1,396)
Equity adjustment from foreign currency translation	136		—		—		—		136

Amortization of cash flow hedges	—		1		—		—		1
Change in net investment hedges	—		(6)		—		—		(6)
Change in cash flow hedges	—		3		—		—		3


Amortization of unrecognized net actuarial losses	—		—		5		—		5





Change in marketable securities	—		—		—		2		2
Balance as of Mar. 29, 2025	$	(358)	$	(16)	$	(879)	$	(2)	$	(1,255)


	13-Week Period Ended Mar. 30, 2024
	Foreign Currency Translation		Hedging, net of tax		Pension and Other Postretirement Benefit Plans, net of tax		Marketable Securities, net of tax		Total
	(In millions)
Balance as of Dec. 30, 2023	$	(319)	$	(38)	$	(829)	$	(4)	$	(1,190)
Equity adjustment from foreign currency translation	(67)		—		—		—		(67)
Amortization of cash flow hedges	—		2		—		—		2
Change in net investment hedges	—		7		—		—		7
Change in cash flow hedges	—		13		—		—		13

Amortization of unrecognized net actuarial losses	—		—		5		—		5



Change in marketable securities	—		—		—		(1)		(1)
Balance as of Mar. 30, 2024	$	(386)	$	(16)	$	(824)	$	(5)	$	(1,231)



	39-Week Period Ended Mar. 29, 2025
	Foreign Currency Translation		Hedging, net of tax		Pension and Other Postretirement Benefit Plans, net of tax		Marketable Securities, net of tax		Total
	(In millions)
Balance as of Jun. 29, 2024	$	(407)	$	(10)	$	(917)	$	(5)	$	(1,339)
Equity adjustment from foreign currency translation	49		—		—		—		49

Amortization of cash flow hedges	—		4		—		—		4
Change in net investment hedges	—		(3)		—		—		(3)
Change in cash flow hedges	—		(5)		—		—		(5)
Change in excluded component of fair value hedge	—		(2)		—		—		(2)

Amortization of unrecognized net actuarial losses	—		—		15		—		15


Net actuarial loss arising in the current year	—		—		23		—		23


Change in marketable securities	—		—		—		3		3
Balance as of Mar. 29, 2025	$	(358)	$	(16)	$	(879)	$	(2)	$	(1,255)


	39-Week Period Ended Mar. 30, 2024
	Foreign Currency Translation		Hedging, net of tax		Pension and Other Postretirement Benefit Plans, net of tax		Marketable Securities, net of tax		Total
	(In millions)
Balance as of Jul. 1, 2023	$	(374)	$	(32)	$	(840)	$	(7)	$	(1,253)
Equity adjustment from foreign currency translation	(12)		—		—		—		(12)
Amortization of cash flow hedges	—		7		—		—		7
Change in net investment hedges	—		(10)		—		—		(10)
Change in cash flow hedges	—		19		—		—		19

Amortization of unrecognized net actuarial losses	—		—		15		—		15


Net actuarial gain arising in the current year	—		—		1		—		1
Change in marketable securities	—		—		—		2		2
Balance as of Mar. 30, 2024	$	(386)	$	(16)	$	(824)	$	(5)	$	(1,231)

10. SHARE-BASED COMPENSATION

Sysco provides compensation benefits to employees under several share-based payment arrangements, including various long-term employee stock incentive plans and the 2015 Employee Stock Purchase Plan (ESPP).

Stock Incentive Plans

In the first 39 weeks of fiscal 2025, options to purchase 740,630 shares were granted to employees. The fair value of each option award is estimated as of the date of grant using a Black-Scholes option pricing model. The weighted average grant-date fair value per option granted during the first 39 weeks of fiscal 2025 was $18.48.

In the first 39 weeks of fiscal 2025, employees were granted 494,034 performance share units (PSUs). Based on the jurisdiction in which the employee resides, some of these PSUs were granted with forfeitable dividend equivalents. The fair value of each PSU award granted with a dividend equivalent is based on the company’s stock price as of the date of grant. For

PSUs granted without dividend equivalents, the fair value is reduced by the present value of expected dividends during the vesting period. The weighted average grant-date fair value per PSU granted during the first 39 weeks of fiscal 2025 was $82.50. The PSUs will convert into shares of Sysco’s common stock at the end of the three-year performance period based on actual performance targets achieved, as well as the market-based return of Sysco’s common stock relative to that of each company within the S&P 500 index.

In the first 39 weeks of fiscal 2025, employees were granted 374,197 restricted stock units. The weighted average grant-date fair value per restricted stock unit granted during the first 39 weeks of fiscal 2025 was $75.85.

Employee Stock Purchase Plan

Plan participants purchased 812,258 shares of common stock under the ESPP during the first 39 weeks of fiscal 2025. The weighted average fair value per employee stock purchase right issued pursuant to the ESPP was $11.49 during the first 39 weeks of fiscal 2025. The fair value of each stock purchase right is estimated as the difference between the stock price at the date of issuance and the employee purchase price.

All Share-Based Payment Arrangements

The total share-based compensation cost that has been recognized in results of operations was $74 million and $77 million for the first 39 weeks of fiscal 2025 and fiscal 2024, respectively.

As of March 29, 2025, there was a total of $110 million of unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of 1.83 years.

11. INCOME TAXES

Effective Tax Rate

The effective tax rates for the third quarter and first 39 weeks of fiscal 2025 were 23.3% and 23.6%, respectively, which are higher than the company’s 21.0% statutory tax rate primarily as a result of state income taxes, partially offset by a foreign income tax benefit and equity-based compensation excess tax benefits.

The effective tax rates for the third quarter and first 39 weeks of fiscal 2024 were 23.3% and 23.7%, respectively, which are higher than the company’s statutory tax rate primarily as a result of state income taxes, partially offset by a foreign income tax benefit and equity-based compensation excess tax benefits.

Uncertain Tax Positions

As of March 29, 2025, the gross amount of unrecognized tax benefit and related accrued interest was $35 million and $14 million, respectively. It is reasonably possible the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions of the company will increase or decrease in the next 12 months. At this time, an estimate of the range of the reasonably possible change cannot be made.

During the third quarter of fiscal 2023, Sysco received a Statutory Notice of Deficiency from the Internal Revenue Service, mainly related to foreign tax credits generated in fiscal 2018 from repatriated earnings primarily from our Canadian operations. In the fourth quarter of fiscal 2023, the company filed suit in the U.S. Tax Court challenging the validity of certain tax regulations related to the one-time transition tax on unrepatriated foreign earnings, which were enacted as part of the Tax Cuts and Jobs Act of 2017 (TCJA). The lawsuit seeks to have the court invalidate these regulations, which would affirm the company’s position regarding its foreign tax credits. Sysco has previously recorded a benefit of $131 million attributable to its interpretation of the TCJA and the Internal Revenue Code. If we are ultimately unsuccessful in defending our position, we may be required to reverse all, or some portion, of the benefit previously recorded.

Other

On October 8, 2021, the Organization for Economic Co-operation and Development (OECD) announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, which provides for a two-pillar solution to address tax challenges arising from the digitalization of the economy. Pillar One expands a country’s authority to tax profits from companies that make sales into their country but do not have a physical location in the country. Pillar Two includes an agreement on international tax reform, including rules to ensure that large corporations pay a minimum rate of corporate income tax. On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. Pillar Two became effective for Sysco at the beginning of fiscal 2025.

The determination of our provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. Our provision for income taxes reflects income earned and taxed in the various U.S. federal and state, as well as foreign jurisdictions. Tax law changes, increases or decreases in permanent book versus tax basis differences, accruals or adjustments of accruals for unrecognized tax benefits or valuation allowances, and our change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.

12. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Sysco is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss for these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When probable and reasonably estimable, the losses have been accrued. Although the final results of legal proceedings cannot be predicted with certainty, based on estimates of the range of potential losses associated with these matters, management does not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the company.

13. BUSINESS SEGMENT INFORMATION

Sysco distributes food and related products to restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. Our primary operations are located in North America and Europe. Under the accounting provisions related to disclosures about segments of an enterprise, we have aggregated certain operating segments into three reportable segments. “Other” financial information is attributable to our other operating segments that do not meet the quantitative disclosure thresholds.

U.S. Foodservice Operations – primarily includes (a) our U.S. Broadline operations, which distribute a full line of food products, including custom-cut meat, seafood, produce, specialty Italian, specialty imports and a wide variety of non-food products and (b) our U.S. Specialty operations, which include our FreshPoint fresh produce distribution business, our Specialty Meats and Seafood Group specialty protein operations, our growing Italian Specialty platform anchored by Greco and Sons, Inc., our Edward Don restaurant equipment and supplies distribution business, our Asian specialty distribution company and a number of other small specialty businesses that are not material to our operations;
International Foodservice Operations – includes operations outside of the U.S., which distribute a full line of food products and a wide variety of non-food products. The Americas primarily consists of operations in Canada, Bahamas, Costa Rica and Panama, as well as our export operations that distribute to international customers. Our European operations primarily consist of operations in the United Kingdom, France, Ireland and Sweden;
SYGMA – our U.S. customized distribution operations serving quick-service chain restaurant customer locations; and
Other – primarily our hotel supply operations, Guest Worldwide.

The accounting policies for the segments are the same as those disclosed by Sysco for its consolidated financial statements. Our Global Support Center expenses generally include all expenses of the corporate office and Sysco’s shared service operations. Collectively, our Global Support Center provides numerous centralized services to our operating sites and performs support activities for employees, suppliers and customers. These services include customer and vendor contract administration, finance, legal, information technology, risk management and insurance, sales and marketing, merchandising, inbound logistics, human resources, and strategy. Expenses for the Global Support Center primarily consist of payroll costs for

employees assigned to these operations, including severance, if any, all U.S. share-based compensation costs, and certain information technology, self-insurance, and depreciation expenses.

The following tables set forth certain financial information for Sysco’s reportable business segments:


	13-Week Period Ended				39-Week Period Ended
	Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024
Sales:	(In millions)				(In millions)
U.S. Foodservice Operations	$	13,800	$	13,707	$	42,206	$	40,925
International Foodservice Operations	3,457		3,494		10,978		10,773
SYGMA	2,084		1,904		6,246		5,724
Other	257		275		802		866
Total	$	19,598	$	19,380	$	60,232	$	58,288

	13-Week Period Ended				39-Week Period Ended
	Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024
Operating income (loss):	(In millions)				(In millions)
U.S. Foodservice Operations	$	754	$	852	$	2,496	$	2,632
International Foodservice Operations	96		84		292		260
SYGMA	17		17		54		46
Other	(3)		6		9		27
Total segments	864		959		2,851		2,965
Global Support Center	(183)		(237)		(651)		(739)
Total operating income	681		722		2,200		2,226
Interest expense	149		158		469		442
Other expense (income), net	9		10		32		23
Earnings before income taxes	$	523	$	554	$	1,699	$	1,761

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