AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat31
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Sourcing and supply-chain improvements show useful operating capabilities. Purchasing cooperatives, geographic cost advantages for smaller distributors and lower-cost channels prevent establishing protected comparative cost superiority.
durability · 1/4 · Low entry barriers and very low switching costs make the position fragile despite management's stated service and product advantages. No sustained comparative cost gap or exclusive asset is demonstrated.
customer dependency · 0/4 · The filing directly establishes very low switching costs, rapid supplier changes and numerous alternatives. Long-standing relationships do not override these disclosed limits on customer dependence.
erosion resilience · 2/4 · Reported sourcing gains and an estimated U.S. share increase from about 17% to 18% support competitive resilience, with market-share estimates subject to differing annual denominators. Lower-cost competition and operating expenses growing faster than sales show meaningful limits; the results do not establish durable protection.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Historical partial fuel-cost pass-through demonstrates actual cost recovery. Improved U.S. gross margins and reported management of product costs support some pricing effectiveness, but sourcing and mix also contributed. Customer price sensitivity limits the inference of discretionary pricing power.
retention · 2/4 · Long-standing customer relationships and disclosed local case-volume growth support continued demand indirectly. This is not a measured retention rate: growth may include new business and acquisitions, while very low switching costs and terminable agreements weaken retention protection.
margin resilience · 2/4 · U.S. gross-margin improvement and sourcing gains show resilience at the product level. Consolidated fiscal 2026 operating expenses rose 5.6% against 3.9% sales growth, leaving GAAP operating income up only 0.2%. Investment and acquisition costs contributed, so this is mixed resilience rather than proof of realized pricing failure.
contractual freedom · 1/4 · Some customer agreements permit either party to terminate on written notice, enabling customer renegotiation and reassignment of business. Historical surcharges show some ability to alter charges, but the disclosed contractual position provides weak protection for maintaining favorable terms; detailed reset provisions are missing.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 3.36
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 0.41
Financial strength27
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 14.65
- netDebtEbitGrade
- 24.20
- interestCoverageGrade
- 26.70
- currentRatioGrade
- 42.15
- Debt / FCF (x)
- 6.97
- Net debt / operating income (x)
- 3.79
- Current ratio (x)
- 1.28
- cashInterestPaid
- 670.00
- cashInterestCoverage
- 3.94
Capital allocation98
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 23.41
- 3-year average dilution (%)
- -1.89
- 3-year average SBC / revenue (%)
- 0.13
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash flow increased to $2.638 billion while capital expenditure declined to $700 million, and repurchases were suspended for the proposed acquisition. These actions demonstrate cash generation and prioritization. The approximately $29.1 billion acquisition commitment includes substantial cash and share consideration, with regulatory uncertainty and no completed return outcome, limiting confidence in overall capital discipline.
incentive alignment · 3/4 · Actual completed PSU outcomes demonstrate performance sensitivity: EPS growth, ROIC and revenue measures produced a 42.28% payout after a negative TSR modifier. Disclosed ownership requirements further support alignment, although some executives are still within the compliance period. This assessment relies on existing arrangements and realized payouts, not future award vesting.
execution · 2/4 · Sourcing improvements, supply-chain efficiencies and annual adjusted operating-income performance above target demonstrate execution. However, GAAP earnings declined, operating costs outgrew sales and multiyear incentive performance fell materially short of target. Execution is assessed from operating results and disclosed target outcomes, not management's celebratory characterizations.
governance · 3/4 · Existing single-class voting, annual director elections, majority voting, stockholder meeting and consent rights, and defined lead-independent-director powers provide substantial governance safeguards. The chair and CEO roles are combined, and disclosed structures alone do not prove exceptional oversight effectiveness.
Evidence
Although our purchasing volume can provide benefits when dealing with suppliers, suppliers may not be able to provide the foodservice products and supplies that we need due to conditions outside of their control.
Business and operational risks / purchasing-volume benefits · Filed 21/08/2026
Gross profit dollars increased in the third quarter and first 39 weeks of fiscal 2026 as compared to the third quarter and first 39 weeks of fiscal 2025, primarily as a result of improvements in our strategic sourcing initiatives, stronger volume performance from local customers and improving mix from Sysco Brand penetration rates, and the effective management of product cost fluctuations.
MD&A / gross-profit drivers and strategic sourcing · Filed 29/04/2026
These increases were driven by continued improvements in the efficiency and performance of SYGMA’s supply chain operations.
MD&A / SYGMA supply-chain efficiency improvements · Filed 21/08/2026
The improvement in the third quarter and first 39 weeks of fiscal 2026 is attributable to improvements in our strategic sourcing initiatives, favorable changes in customer mix, and the effective management of product cost fluctuations.
MD&A / U.S. Foodservice gross-margin improvement drivers · Filed 29/04/2026
Local and regional companies often align themselves with other smaller distributors through purchasing cooperatives and marketing groups, with the goal of enhancing their geographic reach, private label offerings, overall purchasing power, cost efficiencies and ability to meet customer distribution requirements.
Competition risks / purchasing cooperatives and marketing groups · Filed 21/08/2026
These suppliers may also rely on local presence as a source of competitive advantage, and they may have lower costs and other competitive advantages due to geographic proximity.
Competition risks / local presence and geographic cost advantages · Filed 21/08/2026
Furthermore, barriers to entry by new competitors, or geographic or product line expansion by existing competitors, are low.
Competition risks / low barriers to entry and expansion · Filed 21/08/2026
Additionally, increased competition from non-traditional sources (such as club stores and commercial wholesale outlets with lower cost structures), online direct food wholesalers, cash and carry operations, and competitors that are utilizing technology, including artificial intelligence and machine learning technologies, have served to further increase pressure on the industry’s profit margins.
Competition risks / alternative channels and industry margin pressure · Filed 21/08/2026
Since switching costs are very low, customers can make supplier and channel changes very quickly.
Business / competition and very low switching costs · Filed 21/08/2026
2025) Sales (GAAP) 84,553 81,370 78,844 3,183 3.9 Cost of sales (GAAP) 68,914 66,401 64,236 2,513 3.8 Operating expenses (GAAP) 12,544 11,881 11,406 663 5.6 Impact of restructuring and transformational project costs(1) (287) (183) (120) (104) (56.8) Impact of acquisition-related costs(2) (232) (160) (159) (72) (45.0) Impact of goodwill impairment — (92) — 92 NM Operating expenses adjusted for Certain Items (Non-GAAP) 12,025 11,446 11,127 579 5.1 Operating income (GAAP) 3,095 3,088 3,202 7 0.2 Impact of restructuring and transformational project costs(1) 287 183 120 104 56.8 Impact of acquisition-related costs(2) 232 160 159 72 45.0 Impact of goodwill impairment — 92 — (92) NM Operating income adjusted for Certain Items (Non-GAAP) 3,614 3,523 3,481 91 2.6 Interest expense (GAAP) 717 635 607 82 12.9 Impact of bridge loan amortization(3) (30) — — (30) NM Interest expense adjusted for Certain Items (Non-GAAP) 687 635 607 52 8.2 Other expense (GAAP) 102 38 30 64 NM Impact of deal contingent rate lock transactions(3) (54) — — (54) NM Other expense adjusted for Certain Items (Non-GAAP) 48 38 30 10 26.3 Net earnings (GAAP) 1,757 1,828 1,955 (71) (3.9) Impact of restructuring and transformational project costs(1) 287 183 120 104 56.8 Impact of acquisition-related costs(2) 232 160 159 72 45.0 Impact of goodwill impairment — 92 — (92) NM Impact of bridge loan amortization(3) 30 — — 30 NM Impact of deal contingent rate lock transactions(3) 54 — — 54 NM Tax impact of restructuring and transformational project costs(4) (69) (42) (29) (27) (64.3) Tax impact of acquisition-related costs(4) (56) (37) (38) (19) (51.4) Tax impact of goodwill impairment(4) — (10) — 10 NM Tax impact of bridge loan amortization(4) (7) — — (7) NM Tax impact of deal contingent rate lock transactions(4) (13) — — (13) NM Impact of other non-routine tax adjustments — 10 — (10) NM Net earnings adjusted for Certain Items (Non-GAAP) 2,215 2,184 2,167 31 1.4% 82 SYSCO CORPORATION // 2026 Proxy Statement ANNEX I - NON-GAAP RECONCILIATIONS Adjusted Operating Income and Adjusted Earnings Per Share Non-GAAP Reconciliations (Letter from Chair of the Board & CEO and Lead Independent Director, Business Highlights, and Compensation Discussion and Analysis) (Dollars in Millions, Except for Share and Per Share Data) 2026 ($) 2025 ($) 2024 ($) Period Change ($)(2026 vs.
Annex I / fiscal 2024–2026 GAAP and adjusted operating results · Filed 01/10/2026
We have long-standing relationships and agreements with a number of our customers.
Customer relationship risks / existing long-standing relationships and agreements · Filed 21/08/2026
Some of our customer agreements are terminable upon written notice by either us or the customer, which provides some customers with the opportunity to renegotiate their contracts with us on less favorable terms or to award more business to our competitors.
Customer relationship risks / agreements terminable upon written notice · Filed 21/08/2026
Although we have been able to pass along a portion of increased fuel costs to our customers in the past through, among other things, our fuel surcharge program, we may not be able to do so in the future.
Fuel-cost risks / historical partial pass-through through fuel surcharges · Filed 28/08/2024
Foodservice Operations, which was an increase of 38 basis points compared to gross margin of 18.86% in the third quarter of fiscal 2025, and an increase of 12 basis points compared to a gross margin of 18.96% in the first 39 weeks of fiscal 2025.
MD&A / U.S. Foodservice gross-margin changes · Filed 29/04/2026
Finally, demand for food-away-from-home products is volatile and price sensitive, imposing limits on our customers’ ability to absorb cost increases.
Competition risks / customer price sensitivity and cost absorption · Filed 21/08/2026
Local case volumes increased approximately 4.3% in fiscal 2026, as compared to fiscal 2025.
MD&A / International Foodservice local case-volume growth · Filed 21/08/2026
2026 2025 Change in Dollars % Change (In millions) Net cash provided by operating activities (GAAP) $ 2,638 $ 2,510 $ 128 5.1 % Additions to plant and equipment (700) (906) 206 22.7 Proceeds from sales of plant and equipment 176 214 (38) (17.8) Free Cash Flow (Non-GAAP) $ 2,114 $ 1,818 $ 296 16.3 % Financing Activities Equity Transactions Proceeds from exercises of share-based compensation awards were $137 million and $110 million in fiscal 2026 and fiscal 2025, respectively.
Liquidity and capital resources / operating cash flow, capital expenditure and free-cash-flow reconciliation · Filed 21/08/2026
In connection with the Proposed Transaction, we have suspended the repurchase of additional shares for the remainder of fiscal 2026.
Financing activities / share-repurchase suspension for proposed acquisition · Filed 29/04/2026
Sysco has agreed to pay approximately $29.1 billion to JRD shareholders, comprising of approximately $21.6 billion
Subsequent events / agreed acquisition consideration · Filed 29/04/2026
in cash, subject to customary adjustments, and 91.5 million shares of Sysco common stock.
Subsequent events / cash and share components of acquisition consideration · Filed 29/04/2026
Performance Measures Weight (%) Results Weighted Payout Adjusted Earnings Per Share Growth 37.50% 67.26% 25.22% Return on Invested Capital 37.50% 30.33% 11.38% Revenue Growth 25.00% 67.53% 16.88% Achievement Before TSR Modifier 53.48% TSR Modifier -11.20% Net Achievement 42.28% 46 SYSCO CORPORATION // 2026 Proxy Statement COMPENSATION DISCUSSION AND ANALYSIS Fiscal Year 2027 Executive Compensation FISCAL YEAR 2027 EXECUTIVE COMPENSATION Annual Incentive Plan The CLD Committee approved the AIP targets and performance metrics for the NEOs.
Compensation discussion / realized fiscal 2024 PSU performance and payout · Filed 01/10/2026
The performance measures for the fiscal year 2024 PSU awards included: •Adjusted Earnings Per Share Growth (37.5%): Achievement of targeted incremental growth in Sysco’s earnings per share; •Return on Invested Capital (37.5%): Achievement of targeted return on invested capital; and •Revenue Growth (25%): Achievement of targeted revenue growth, as measured by total sales.
Compensation discussion / fiscal 2024 PSU performance measures · Filed 01/10/2026
Position Minimum Ownership Requirement (Multiple of base salary) CEO 7x Executive Vice Presidents 4x Senior Vice Presidents 2x As of the record date, September 16, 2026, all NEOs either exceeded the ownership requirements or remained on track to achieve compliance within the five-year timeframe.
Executive compensation governance / ownership requirements and September 16, 2026 compliance status · Filed 01/10/2026
SYSCO CORPORATION // 2026 Proxy Statement 9 PROXY STATEMENT SUMMARY Item 2 Advisory Vote to Approve Executive Compensation Governance Profile Board Composition Lead Independent Director 15-year limit on director tenure Annual Board and Committee self-evaluations Periodic 360-degree individual director performance evaluations Annual election of all directors Limits to additional public company boards on which a non-employee director and employee director can sit Regular executive sessions of independent directors Members of the Audit Committee may not serve on more than two other public company audit committees Corporate Governance Proxy access Stockholder right to call a special meeting Stock ownership requirements for all directors and executives Single class of voting stock Regular engagement with stockholders Majority voting standard Written consent Item 2 Advisory Vote to Approve Executive Compensation The Board recommends a vote FOR this proposal.
Proxy statement summary / existing governance profile · Filed 01/10/2026
Robust Lead Independent Director Responsibilities: •Presides at all meetings of the Board at which the Chair of the Board is not present, including executive sessions of the independent directors; •Consults with the independent directors and serves as the primary liaison between the independent directors and the Chair of the Board and CEO; •Provides guidance and coaching to the Chair of the Board and CEO; •Ensures effective communication among Board members; •Establishes the agenda for, calls and presides at each meeting of the independent directors as necessary or desirable; •Consults with the Chair of the Board and CEO on the board agenda and ensures there is adequate time allotted for key topics; •Approves materials sent to the Board; •Evaluates, in collaboration with the CLD Committee, the performance of the Chair of the Board and CEO relative to any corporate goals and objectives established by the CLD Committee; •Leads the Board’s annual self-assessment; •Retains outside advisors and consultants to report directly to the Board; •Maintains free and open communication with the management of the Company; and •Participates in stockholder outreach.
Board leadership / lead independent director responsibilities · Filed 01/10/2026
Financial Measures(1) Weight Threshold Target Maximum Results Percentage of Target Operating Income Growth(2) $3.336 $3.593 $3.664 $3.613 127.73% Sales Revenue Growth $81.370 $84.625 $86.252 $84.553 98.90% (1)Measured in billions of dollars.
Compensation discussion / actual annual financial performance against targets · Filed 01/10/2026
The Transactions are expected to close by the third quarter of Sysco’s fiscal 2027, subject to the satisfaction of customary closing conditions, including regulatory clearance under the Hart-Scott-Rodino Act.
Acquisitions / expected closing and conditions for pending transaction · Filed 21/08/2026
On May 27, 2026, Sysco and Jetro Restaurant Depot each received a request for additional information and documentary material, often referred to as a “second request,” from the FTC under the HSR Act.
Transaction risks / FTC second request received May 27, 2026 · Filed 21/08/2026
We believe our competitive advantages include our sales consultants; our diversified product base, which includes quality-assured Sysco brand products; our service reliability; the ancillary services we provide to our customers, such as business reviews and menu analysis; and our multi-regional presence in North America and Europe.
Business / management's stated competitive advantages · Filed 21/08/2026
Customers can choose from many broadline foodservice distributors; specialty distributors that focus on specific categories such as produce, meat or seafood; other wholesale channels; club stores; cash and carry stores; grocery stores; and numerous online retailers.
Business / available competing distribution channels · Filed 21/08/2026
We estimate that we serve about 18% of an approximately $377 billion annual foodservice market in the U.S., as estimated by Technomic, Inc., for calendar year 2025.
Business / estimated U.S. market share · Filed 21/08/2026
We estimate that we serve about 17% of an approximately $370 billion annual foodservice market in the U.S., as estimated by Technomic, Inc., for calendar year 2024.
Business / prior estimated U.S. market share · Filed 22/08/2025
