# Sysco Corporation (SYY) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-28  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/SYY/thesis · /stocks/SYY/memo

## Financial Snapshot

---
source: coverage-next-full
step: 04
ticker: SYY
generated: 2026-05-28
---

### Step 04 — Financial Snapshot & Quality: Sysco

#### Key Findings

- **Statement quality is good.** Ernst & Young is the long-tenured auditor; no recent qualifications, restatements, or critical audit matters of concern. No material weakness disclosed in FY25 10-K [S1].
- **Earnings quality:** CFO/Net Income ratio averaged ~1.4x over FY21–25 — clean conversion, no aggressive accruals [S2].
- **Working capital intensity** is the natural friction: receivables ($5.5B), inventory ($5.1B), payables ($6.5B) at FY25 — net WC ~$4.1B funded mainly by payables [S2].
- **Adversarial sweep:** No active short reports, no pending material litigation beyond ordinary course, no SEC enforcement actions, no SOX material weaknesses, no accounting investigations. **One major regulatory event:** Restaurant Depot antitrust review at FTC is the most material adversarial input [S3][S4].
- **Audit + governance posture:** strong — typical of a 56-year-dividend-aristocrat large-cap.

#### Implications for Thesis and Valuation

Financial quality issues are NOT a thesis risk. The risk vectors are entirely strategic and regulatory:
1. Restaurant Depot antitrust outcome (binary)
2. Restaurant Depot integration execution (multi-year)
3. GLP-1 demand shift (multi-year)
4. Standalone margin compression continuing (multi-quarter)

A clean financial-quality file means analysts can trust the reported numbers and focus modeling effort on forecasting, not on adjustment overlays. Adjusted vs. GAAP gap is modest (~$0.20 of EPS in FY26 Q3) — mostly transformation/restructuring costs that are real but recurring at lower levels.

#### Objective

Assess the quality of reported financials and run the adversarial research sweep — short reports, lawsuits, investigations, restatements, governance issues.

#### Narrative Analysis

**Auditor and audit history.** Ernst & Young has audited Sysco for decades. No reportable disagreements, no critical audit matter language suggesting elevated estimation risk, no SOX 404 material weakness. FY25 10-K signed clean [S1].

**Earnings quality indicators.**

| Metric | FY21 | FY22 | FY23 | FY24 | FY25 | TTM |
|--------|------|------|------|------|------|-----|
| CFO / Net Income | 3.6x* | 1.3x | 1.6x | 1.5x | 1.4x | 1.4x* |
| Accruals / Revenue | low | low | low | low | low | low |
| CapEx / D&A | 0.6x | 0.7x | 0.9x | 0.8x | 0.8x | 0.9x* |
| Effective tax rate | 10.4%* | 22.2% | 22.5% | 23.8% | 24.3% | 23.6% |

*FY21 CFO/NI distorted by pandemic-year loss carryforwards and equity raise. FY22–25 normalized; conversion clean. Effective tax rate normalized at ~23–24%, consistent with US federal+state mix.

**Receivables and inventory trends.**

| Metric | FY22 | FY23 | FY24 | FY25 | TTM |
|--------|------|------|------|------|-----|
| Receivables ($B) | 4.88 | 5.10 | 5.35 | 5.51 | 5.78 |
| DSO (days) | 26.0 | 24.4 | 24.7 | 24.7 | 25.2 |
| Inventory ($B) | 4.44 | 4.48 | 4.68 | 5.05 | 5.29 |
| Days Inventory | 28.7 | 26.2 | 26.6 | 27.7 | 28.3 |
| Payables ($B) | 5.75 | 6.03 | 6.29 | 6.51 | 6.39 |
| Days Payable | 37.3 | 35.3 | 35.7 | 35.8 | 34.3 |
| **Cash Conversion Cycle (days)** | **17.4** | **15.3** | **15.6** | **16.6** | **19.2** |

[S2]

CCC has crept up ~2 days TTM, mainly from rising inventory (related to Greco / Edward Don integration plus higher-margin specialty stocking). Receivables aging is stable. Payables marginally compressed in TTM — could reflect Greco's faster-pay vendor terms.

**Non-recurring items in FY25 + TTM:**

- Greco / BIX / Edward Don integration costs: ~$80M FY25 (in SG&A)
- Cyber + IT transformation spend: ~$120M FY25 (some capitalized, some expensed)
- Restructuring of European footprint: ~$30M FY25
- Net non-recurring impact on op income: ~$200M = ~25 bps of margin

If these were truly one-off, adjusted op margin FY25 ≈ 4.05%. Sysco's "adjusted" framework reports adjusted op income of ~$3.6B (4.4% margin) for FY25. The gap with GAAP is ~$500M, mainly amortization of acquired intangibles (~$200M) + restructuring + integration. **The adjusted figures are reasonable and conventional**.

#### Adversarial Research Sweep

**Short reports / activist campaigns:**
- No notable short-seller reports on SYY in 2024–2026.
- No 13D activist filings.
- Sysco's institutional structure (89% inst-owned, top-3 index holders Vanguard/BlackRock/State Street = 27%) is not activist-friendly.

**Litigation:**
- Ordinary-course product liability, premises liability, employment matters disclosed in 10-K. No material amounts.
- No food-safety class action of material scale pending.
- 2024 California PFAS case (industry-wide, not Sysco-specific) — Sysco named as defendant in some claims; expected immaterial.

**Regulatory:**
- **The Big One:** FTC review of the **$29.1B Restaurant Depot acquisition** (announced 2026-03-30, expected review through CY26-27). 2015 precedent: FTC blocked Sysco/US Foods $3.5B deal in federal court — same agency, same target type, structurally similar concern (loss of competitive constraint on Sysco) [S4]. Independent Restaurant Coalition publicly urging FTC to block.
- DOJ Antitrust Division also has jurisdiction theoretically; primary review will be FTC.
- FDA Food Safety Modernization Act compliance ongoing; no material citation.
- DOT trucking compliance (HOS, ELD): ongoing; no recent material citation.

**Cyber:**
- Sysco disclosed a 2023 ransomware-related incident; resolved with limited customer impact. No material lingering financial impact through FY25.

**SOX / accounting controls:**
- No material weakness disclosed in FY25 10-K.
- Auditor change: none in 5+ years.
- CFO change: voluntary, no accounting issue cited [S5].

**M&A integration risk:**
- Greco integration: largely complete.
- Edward Don integration: complete.
- BIX (Latin America) integration: ongoing.
- Restaurant Depot integration: not yet started (pending close).

**Net adversarial assessment:** Clean from short/activist/restatement angles. Main risk is Restaurant Depot regulatory and integration execution.

#### Statement-Quality Adjustments (None Recommended)

Sysco's financials do not require analyst overlays for FY25 or TTM. Adjusted operating income from management is well-disclosed and matches investor expectations. No reverse-engineering needed.

#### Evidence and Sources

- 10-K FY25 audit report and notes [S1]
- StockAnalysis income/BS/CF aggregates [S2]
- Restaurant Depot antitrust analysis [S4]
- CFO transition disclosure [S5]
- Insider transactions summary [S6]

#### Assumption Register Updates

No new assumptions; A2 (FY26 adj EPS $4.55–4.60), A7 (adj op margin 4.2–4.5%) reaffirmed.

#### Tables and Calculations

##### Earnings Quality Scorecard

| Metric | FY25 Value | Read |
|--------|--------------|------|
| CFO / NI | 1.4x | Healthy conversion |
| Effective tax rate | 24.3% | Normal US |
| Accruals (non-cash) / NI | ~0.5x | Modest, mostly D&A |
| CapEx / D&A | 0.8x | Mature ratio, slight under-investment but transformation-funded via opex |
| Days WC (CCC) | 16.6 | Tight |

##### Adversarial Sweep Summary

| Vector | Status |
|--------|--------|
| Short report / activist | None active |
| Material litigation | None active |
| SEC enforcement | None |
| Restatements / material weakness | None |
| Auditor change | None |
| **FTC review (Restaurant Depot)** | **ACTIVE — material binary** |
| Cyber incidents | One in 2023, resolved |
| CFO change | Voluntary, March 2026 |

#### Open Questions and Data Gaps

- Without earnings call transcripts, management's color on Restaurant Depot regulatory engagement is degraded. Trade-press readouts from CAGNY 2026 and the deal-day investor call are the substitute; that is qualitatively adequate but not granular.
- Greco North America acquired-asset useful-life amortization profile not detailed publicly.

#### Next-Step Dependencies

Step 05 will run the quarterly momentum decomposition and produce `SYY_KPI.md`. Step 06 will deep-dive the balance sheet (especially debt maturities and dilution mechanics under Restaurant Depot). Step 07 will inventory the M&A history and grade each deal.

#### Source Index

| Source Tag | Document or URL | Section / Page / Slide | Date | Notes |
|------------|----------------|----------------------|------|-------|
| [S1] | FY25 10-K (audit + notes) | EDGAR 0000096021-25-000099; `SYY_financials/sec_filings/10K_FY2025_summary.md` | 2025-08-22 | E&Y unqualified; no MWs |
| [S2] | StockAnalysis BS + CF + ratios | `SYY_financials/other/stockanalysis_summary.md` | 2026-05-28 | Conversion + DSO/DIO/DPO |
| [S3] | Filing inventory | `SYY_financials/sec_filings/filing_inventory.md` | 2026-05-28 | No restatement 8-Ks |
| [S4] | Mogin Law antitrust analysis | https://moginlawllp.com/syscos-29b-bid-for-restaurant-depot-raises-old-and-new-antitrust-questions/ | 2026-05-28 | FTC precedent (2015 USFD) |
| [S5] | CFO transition press | GlobeNewswire 2026-03-05 | 2026-03-05 | Voluntary, no acct issue |
| [S6] | Insider transactions summary | `SYY_financials/proxy/insider_transactions.md` | 2026-05-28 | Neutral pattern |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/SYY/fundamental

## Navigation

- Overview: /stocks/SYY
- Financials (this page): /stocks/SYY/financials
- Thesis: /stocks/SYY/thesis
- Investment Memo: /stocks/SYY/memo
- Coverage universe: /stocks