Hey there! Are you curious about Sysco's financial health, specifically how much debt they're carrying? You've come to the right place! Understanding a company's debt levels is crucial for anyone looking to invest, analyze, or simply understand the financial landscape of a major player like Sysco. Let's dive in and demystify Sysco's debt, step by step.
Understanding Sysco's Debt: A Comprehensive Guide
Sysco Corporation (NYSE: SYY) is a global leader in foodservice distribution, supplying a vast array of products to restaurants, healthcare facilities, schools, and many other establishments. As such a large and complex operation, understanding its financial structure, including its debt, is vital.
Step 1: What Exactly Are We Looking For? Defining "Debt" in the Corporate World
Before we get into the numbers, let's clarify what we mean by "debt." In the context of a company like Sysco, "debt" typically refers to borrowed money that the company is obligated to repay. This can be broken down into several categories:
Total Debt: This is the overall sum of all current and non-current debts. It's the big picture number that many analysts look at initially.
Long-Term Debt: This refers to obligations that are due more than one year from the date of the balance sheet. Think of bonds, long-term loans, and capital lease obligations. This is often a significant portion of a large company's debt.
Current Debt/Short-Term Debt: These are obligations due within one year. This could include short-term loans, the current portion of long-term debt, and accounts payable (money owed to suppliers).
Net Debt: This is a more refined metric, calculated by taking total debt and subtracting cash and cash equivalents. It gives a clearer picture of a company's actual debt burden once readily available cash is factored in.
Step 2: Locating the Latest Debt Figures
To find out how much debt Sysco has, we need to look at their most recent financial reports. Publicly traded companies like Sysco file these reports with regulatory bodies like the U.S. Securities and Exchange Commission (SEC). Financial news websites and investor relations pages also compile this data.
Recent Data Points (as of late 2024/early 2025 filings):
Sysco's total debt for the latest quarter ending December 28, 2024, was reported at approximately $13.692 billion.
For the quarter ending March 31, 2025, Sysco's total debt was stated as approximately $13.5 billion.
Looking at fiscal year 2024 (which ended June 29, 2024), Sysco's total debt was around $12.946 billion.
These figures can fluctuate quarter-to-quarter due to various financial activities, including new borrowings, debt repayments, and changes in operational cash flow.
Step 3: Analyzing the Trends – Is Sysco's Debt Increasing or Decreasing?
Understanding the absolute number is just one piece of the puzzle. It's equally important to see how Sysco's debt has trended over time.
Historical Snapshot of Total Debt (Fiscal Years Ending June):
2020: $15.078 billion (peak in the last 5 years)
2021: $11.82 billion (a significant decrease of -21.6%)
2022: $11.392 billion (-3.6%)
2023: $11.166 billion (-2.0%, hitting a 5-year low)
2024: $12.946 billion (an increase of +15.9%)
From this, we can observe that Sysco significantly reduced its debt post-2020, likely in response to the economic shifts and uncertainties. However, there was an increase in debt in fiscal year 2024.
Step 4: Delving Deeper – Net Debt and Debt Ratios
While total debt provides a headline figure, financial analysts often use other metrics to assess the true burden of a company's debt.
Net Debt: As of March 2025, Sysco had approximately $13.5 billion in debt and approximately $1.53 billion in cash. This means its net debt was around $11.9 billion. This is a more realistic view of the debt burden, as cash can be used to offset immediate obligations.
Debt-to-Equity Ratio: This ratio compares a company's total debt to its shareholders' equity, indicating how much debt the company is using to finance its assets relative to the value of shareholders' equity.
For the quarter ending March 31, 2025, Sysco's debt/equity ratio was 6.37.
For fiscal year 2024, the average debt/equity ratio was 5.75.
A higher debt-to-equity ratio generally indicates higher financial leverage and potentially higher risk, but what's "healthy" can vary significantly by industry. Sysco's ratio has fluctuated, peaking in 2020 (11.13) and then decreasing before a recent uptick.
Net Debt to Adjusted EBITDA: Sysco has a target net leverage ratio, and for fiscal year 2024, it improved to 2.7 times, which was within their target ratio. This metric is important because it shows how many years of adjusted earnings (before interest, taxes, depreciation, and amortization) it would take to pay off the net debt. Sysco's debt being 2.7 times its EBITDA, and its EBIT covering interest expense 5.5 times, suggests that while the debt levels are significant, they are generally considered manageable.
Step 5: Understanding Sysco's Debt Management Strategy and Credit Ratings
Sysco's management actively manages its debt to maintain financial flexibility and ensure continued access to capital markets.
Strategic Approach: Sysco aims for a balanced capital allocation strategy, which includes investing for growth, maintaining a strong balance sheet, preserving its investment-grade credit rating, and returning value to shareholders.
Investment Grade Rating: Sysco consistently maintains an investment-grade credit rating from major agencies like S&P Global Ratings and Fitch Ratings. As of July 2025, S&P Global Ratings affirmed Sysco at "BBB" with a stable outlook, and Fitch Ratings also affirmed Sysco EU II at "BBB" with a stable outlook. An investment-grade rating is crucial because it signals to investors that the company is a relatively low-risk borrower, which typically translates to lower borrowing costs.
Planned Debt Reduction: In previous years, Sysco had committed to reducing its indebtedness. For instance, in 2021, they announced plans to reduce indebtedness by at least $1.5 billion in FY21 and FY22. This demonstrates a proactive approach to debt management.
Step 6: Factors Influencing Sysco's Debt Levels
Several factors can influence how much debt a company like Sysco takes on:
Acquisitions: Large acquisitions often require significant capital, which can be financed through debt. Sysco has historically engaged in strategic acquisitions to expand its market reach and product offerings.
Capital Expenditures (CapEx): Investments in new facilities, fleet upgrades, and technology infrastructure can be substantial and may require debt financing.
Economic Conditions: During economic downturns, companies might borrow to shore up liquidity or to bridge gaps in revenue. Conversely, in growth periods, they might borrow to fund expansion opportunities.
Dividend Payments and Share Repurchases: While not directly increasing debt, these activities represent a use of cash that could otherwise be used for debt reduction. Sysco has a history of consistent dividend increases and has authorized share repurchase programs.
Interest Rates: The prevailing interest rate environment can influence a company's willingness and ability to take on new debt. Lower rates make borrowing more attractive.
Conclusion
Sysco, as a global leader in its industry, manages a substantial amount of debt. As of its latest filings in late 2024/early 2025, its total debt hovers around $13.5 billion to $13.7 billion, with a net debt of approximately $11.9 billion. While these are significant figures, the analysis of its debt ratios (like Net Debt to Adjusted EBITDA) and its consistent investment-grade credit ratings suggest that Sysco's debt is generally well-managed and within a healthy range for a company of its size and industry. Investors and stakeholders should continue to monitor Sysco's financial reports for the most up-to-date information on its debt profile and management strategies.
10 Related FAQ Questions
How to ascertain a company's total debt?
To ascertain a company's total debt, you should primarily consult its latest financial statements, specifically the balance sheet, which is usually found in their quarterly (10-Q) and annual (10-K) reports filed with the SEC. Many financial news websites and investor portals also summarize this data.
How to interpret the debt-to-equity ratio?
The debt-to-equity (D/E) ratio shows how much debt a company uses to finance its assets relative to the value of its shareholders' equity. A higher ratio (e.g., above 2.0) often indicates a greater reliance on debt, which can imply higher financial risk. A lower ratio suggests less debt relative to equity, typically indicating a more conservative financial structure. However, the ideal ratio varies significantly by industry.
How to calculate net debt?
Net debt is calculated by subtracting a company's cash and cash equivalents from its total debt. The formula is: Net Debt = Total Debt - Cash & Cash Equivalents.
How to find Sysco's credit rating?
Sysco's credit ratings can be found on the websites of major credit rating agencies like S&P Global Ratings, Moody's, and Fitch Ratings. Sysco's investor relations website also often provides this information.
How to understand if a company's debt is too high?
Determining if a company's debt is "too high" involves comparing its debt levels to industry averages, analyzing its ability to generate cash flow to service that debt (e.g., through metrics like debt-to-EBITDA or interest coverage ratio), and considering its credit rating and future growth prospects. There's no single universal "too high" number, as it depends on the company and its operating environment.
How to track Sysco's future debt changes?
To track Sysco's future debt changes, regularly review their quarterly and annual financial reports (10-Q and 10-K filings with the SEC), read their investor relations news releases, and follow reputable financial news outlets that cover the company.
How to assess a company's liquidity in relation to its debt?
Assessing liquidity involves looking at current assets versus current liabilities (current ratio, quick ratio) and the company's ability to generate cash from operations. A strong liquidity position indicates that a company can meet its short-term debt obligations without difficulty.
How to differentiate between current and long-term debt?
Current debt (or short-term debt) represents obligations that are due to be repaid within one year from the balance sheet date.
Long-term debt refers to obligations that are due to be repaid more than one year from the balance sheet date.
How to find out what type of debt Sysco has (e.g., bonds, loans)?
Detailed breakdowns of Sysco's debt structure (e.g., specific bond issuances, loan agreements) are typically provided in the notes to their financial statements within their 10-K and 10-Q filings with the SEC.
How to see how Sysco's debt compares to competitors?
To compare Sysco's debt to competitors, you would gather the same debt metrics (total debt, net debt, debt-to-equity, debt-to-EBITDA) for other companies in the foodservice distribution or broader consumer staples sector (e.g., US Foods Holding Corp, Performance Food Group Co) and analyze them side-by-side. Financial data platforms often offer tools for peer group comparison.
