Sysco

Sysco is the largest foodservice distributor in the world. It buys food and non-food products from thousands of suppliers and delivers them to about 670,000 customer locations from 333 distribution facilities. Restaurants give about 59% of sales; hospitals, schools, government, hotels and other customers give the rest. US Foodservice gives about 70% of sales, International about 19% and SYGMA, which serves restaurant chains, about 10%.

Sysco makes money from a small margin on a very large volume, and it earns more on local, independent restaurants and on its own Sysco Brand products than on national chains. Sales in the fiscal year to June 27, 2026 were $84.6 billion, and operating income was $3.1 billion. Sysco has agreed to buy Jetro Restaurant Depot, which runs 166 cash and carry warehouse stores for independent restaurants in 35 states.

The market prices Sysco lower because of the size and the debt of the Jetro Restaurant Depot purchase. Sysco will pay $21.6 billion in cash and 91.5 million shares, a total value of about $29.1 billion. It will borrow about $21 billion, and it paused its share buybacks until it reduces debt. S&P and Fitch have a negative outlook on Sysco's BBB rating, and Moody's has its Baa2 rating under review.

The Federal Trade Commission asked for more information on the deal on May 27, 2026, which can delay it. Investors also doubt that a distributor with a small margin can run large warehouse stores well. For the gap to close, four things must be true. The FTC must clear the deal, and the deal must close by the third quarter of Sysco's fiscal year 2027, that is, by about March 2027.

Sysco must keep its fiscal 2027 outlook of 6% to 7% sales growth and 9% to 11% adjusted EPS growth, with about 2.5% local case growth in the US. After closing, it must reach the $250 million of yearly cost savings in three years and reduce net leverage by at least 1.0 times within 24 months. The first test is the Q1 report on November 3, 2026. If the deal closes on time and leverage falls on plan, the gap can close over the next four to eight quarters.

The main risk is that the FTC blocks the deal or forces Sysco to sell stores.

1. Nov 3, 2026Pending

   Q1 fiscal 2027 results: local volume and deal timingUS local case growth near 2.5%, a kept fiscal 2027 outlook and no new delay of the deal pass; a lower outlook or a later closing date fails.
2. Q1 2027 · est.Pending

   FTC decision and closing of Jetro Restaurant DepotClearance without large store sales and closing by about March 2027 pass; an FTC suit or large forced sales fail.
3. 2028 · est.Pending

   Net leverage down by 1.0 times after closingNet leverage at least 1.0 times lower within 24 months after closing and stable investment-grade ratings pass; a rating cut fails.

Every passed and failed checkpoint across all picks

Sysco funds itself with unsecured senior notes guaranteed by its US Broadline subsidiaries, commercial paper and a $3.0 billion revolving credit facility. At June 27, 2026, debt was $13.5 billion, including finance leases. Read more

• The FTC has asked for more information on the Jetro Restaurant Depot deal. The FTC or a state can try to block it or ask Sysco to sell assets. If the deal does not close, Sysco must redeem most of the new notes and pay fees for nothing.
• The deal adds about $21 billion of debt. S&P and Fitch have a negative outlook on Sysco's BBB rating, and Moody's has the Baa2 rating under review. Sysco paused share buybacks. If profit grows slower than planned, debt falls slower and a rating cut can raise interest costs.
• Sysco has never run cash and carry warehouse stores. The planned $250 million of yearly savings and the plan to open more than 125 new stores over at least 20 years depend on a good integration of a business with its own culture and systems.
• Restaurants give about 59% of sales. If consumers eat out less, local restaurant volume, which gives Sysco its best margins, can fall. US local case volume fell 1.4% in fiscal year 2025 before it grew again in fiscal year 2026.
• Sysco has an interim CFO, Brandon Sewell. A change in the finance team during a large integration adds execution risk.

• October 13, 2026Sysco said that it will report Q1 results for fiscal year 2027 on November 3, 2026.
• October 6, 2026Sysco closed the sale of $10.75 billion of senior notes, $3.9 billion of US dollar junior subordinated notes and 1.0 billion euros of junior subordinated notes to pay for Jetro Restaurant Depot. If the deal does not close, Sysco must redeem most of these notes. It also sold C$1.5 billion of senior notes on September 25, 2026.
• September 16, 2026Sysco sold 12.3 million new shares at $81.00 per share, for net proceeds of about $967 million, to pay part of the cash price of Jetro Restaurant Depot.