(Mark One) | |||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (IRS employer identification number) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
☑ | Accelerated Filer | ☐ | |||||||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | |||||||||
(Do not check if a smaller reporting company) | Emerging growth company |
PART I – FINANCIAL INFORMATION | Page No. | |||||||
PART II – OTHER INFORMATION | ||||||||
Oct. 1, 2022 | Jul. 2, 2022 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, less allowances of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Income tax receivable | |||||||||||
Total current assets | |||||||||||
Plant and equipment at cost, less accumulated depreciation | |||||||||||
Other long-term assets | |||||||||||
Goodwill | |||||||||||
Intangibles, less amortization | |||||||||||
Deferred income taxes | |||||||||||
Operating lease right-of-use assets, net | |||||||||||
Other assets | |||||||||||
Total other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Accrued income taxes | |||||||||||
Current operating lease liabilities | |||||||||||
Current maturities of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred income taxes | |||||||||||
Long-term operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Noncontrolling interest | |||||||||||
Shareholders’ equity | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
Paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock at cost, | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
13-Week Period Ended | |||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | ||||||||||
Sales | $ | $ | |||||||||
Cost of sales | |||||||||||
Gross profit | |||||||||||
Operating expenses | |||||||||||
Operating income | |||||||||||
Interest expense | |||||||||||
Other expense (income), net | ( | ||||||||||
Earnings before income taxes | |||||||||||
Income taxes | |||||||||||
Net earnings | $ | $ | |||||||||
Net earnings: | |||||||||||
Basic earnings per share | $ | $ | |||||||||
Diluted earnings per share | |||||||||||
Average shares outstanding | |||||||||||
Diluted shares outstanding |
13-Week Period Ended | |||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | ||||||||||
Net earnings | $ | $ | |||||||||
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||
Items presented net of tax: | |||||||||||
Amortization of cash flow hedges | |||||||||||
Change in net investment hedges | |||||||||||
Change in cash flow hedges | ( | ( | |||||||||
Amortization of prior service cost | |||||||||||
Amortization of actuarial loss | |||||||||||
Change in marketable securities | ( | ( | |||||||||
Total other comprehensive loss | ( | ( | |||||||||
Comprehensive income | $ | $ | |||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-in Capital | Retained Earnings | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amounts | Totals | |||||||||||||||||||||||||||||||||||||||||||
Balance as of July 2, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of cash flow hedges, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Change in cash flow hedges, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Change in net investment hedges, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Change in marketable securities, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Treasury stock purchases | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation awards | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance as of October 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-in Capital | Retained Earnings | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amounts | Totals | |||||||||||||||||||||||||||||||||||||||||||
Balance as of July 3, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of cash flow hedges, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Change in cash flow hedges, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Change in net investment hedges, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Change in marketable securities, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation awards | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Balance as of October 2, 2021 | $ | $ | $ | $ | ( | $ | ( | $ |
13-Week Period Ended | |||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings | $ | $ | |||||||||
Adjustments to reconcile net earnings to cash provided by operating activities: | |||||||||||
Share-based compensation expense | |||||||||||
Depreciation and amortization | |||||||||||
Operating lease asset amortization | |||||||||||
Amortization of debt issuance and other debt-related costs | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Provision for losses on receivables | |||||||||||
Other non-cash items | ( | ||||||||||
Additional changes in certain assets and liabilities, net of effect of businesses acquired: | |||||||||||
Increase in receivables | ( | ( | |||||||||
Increase in inventories | ( | ( | |||||||||
Increase in prepaid expenses and other current assets | ( | ( | |||||||||
Increase in accounts payable | |||||||||||
Decrease in accrued expenses | ( | ( | |||||||||
Decrease in operating lease liabilities | ( | ( | |||||||||
Increase in accrued income taxes | |||||||||||
Decrease (increase) in other assets | ( | ||||||||||
(Decrease) increase in other long-term liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Additions to plant and equipment | ( | ( | |||||||||
Proceeds from sales of plant and equipment | |||||||||||
Acquisition of businesses, net of cash acquired | ( | ( | |||||||||
Purchase of marketable securities | ( | ( | |||||||||
Proceeds from sales of marketable securities | |||||||||||
Other investing activities | |||||||||||
Net cash used for investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Bank and commercial paper borrowings, net | |||||||||||
Other debt borrowings including senior notes | |||||||||||
Other debt repayments including senior notes | ( | ( | |||||||||
Proceeds from stock option exercises | |||||||||||
Stock repurchases | ( | ||||||||||
Dividends paid | ( | ( | |||||||||
Other financing activities | ( | ( | |||||||||
Net cash used for financing activities | ( | ( | |||||||||
Effect of exchange rates on cash, cash equivalents and restricted cash | ( | ( | |||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes, net of refunds |
Oct. 1, 2022 | Oct. 2, 2021 | ||||||||||
(In thousands) | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash (1) | |||||||||||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ | $ |
(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. |
13-Week Period Ended Oct. 1, 2022 | ||||||||||||||||||||||||||||||||
US Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Principal Product Categories | ||||||||||||||||||||||||||||||||
Canned and dry products | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Fresh and frozen meats | ||||||||||||||||||||||||||||||||
Frozen fruits, vegetables, bakery and other | ||||||||||||||||||||||||||||||||
Poultry | ||||||||||||||||||||||||||||||||
Dairy products | ||||||||||||||||||||||||||||||||
Fresh produce | ||||||||||||||||||||||||||||||||
Paper and disposables | ||||||||||||||||||||||||||||||||
Seafood | ||||||||||||||||||||||||||||||||
Beverage products | ||||||||||||||||||||||||||||||||
Other (1) | ||||||||||||||||||||||||||||||||
Total Sales | $ | $ | $ | $ | $ |
(1) | Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment, and other janitorial products, medical supplies and smallwares. |
13-Week Period Ended Oct. 2, 2021 | ||||||||||||||||||||||||||||||||
US Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Principal Product Categories | ||||||||||||||||||||||||||||||||
Fresh and frozen meats | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Canned and dry products | ||||||||||||||||||||||||||||||||
Frozen fruits, vegetables, bakery and other | ||||||||||||||||||||||||||||||||
Poultry | ||||||||||||||||||||||||||||||||
Dairy products | ||||||||||||||||||||||||||||||||
Fresh produce | ||||||||||||||||||||||||||||||||
Paper and disposables | ||||||||||||||||||||||||||||||||
Seafood | ||||||||||||||||||||||||||||||||
Beverage products | ||||||||||||||||||||||||||||||||
Other (1) | ||||||||||||||||||||||||||||||||
Total Sales | $ | $ | $ | $ | $ |
(1) | Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment, and other janitorial products, medical supplies and smallwares. |
Assets Measured at Fair Value as of Oct. 1, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Other assets (1) | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
(1) | Represents restricted cash balance recorded within other assets in the consolidated balance sheet. |
Assets Measured at Fair Value as of Jul. 2, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Other assets (1) | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
(1) | Represents restricted cash balance recorded within other assets in the consolidated balance sheet. |
Oct. 1, 2022 | |||||||||||||||||||||||||||||||||||
Amortized Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Short-Term Marketable Securities | Long-Term Marketable Securities | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||||||||||||
Corporate bonds | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Government bonds | ( | ||||||||||||||||||||||||||||||||||
Total marketable securities | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Jul. 2, 2022 | |||||||||||||||||||||||||||||||||||
Amortized Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Short-Term Marketable Securities | Long-Term Marketable Securities | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||||||||||||
Corporate bonds | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Government bonds | ( | ||||||||||||||||||||||||||||||||||
Total marketable securities | $ | $ | $ | ( | $ | $ | $ |
Oct. 1, 2022 | |||||
(In thousands) | |||||
Due in one year or less | $ | ||||
Due after one year through five years | |||||
Due after five years through ten years | |||||
Total | $ |
Maturity Date of the Hedging Instrument | Currency / Unit of Measure | Notional Value | ||||||||||||
(In millions) | ||||||||||||||
Hedging of interest rate risk | ||||||||||||||
June 2023 | Euro | |||||||||||||
Hedging of foreign currency risk | ||||||||||||||
Various (October 2022 to January 2023) | Swedish Krona | |||||||||||||
Various (October 2022 to December 2022) | British Pound Sterling | |||||||||||||
June 2023 | Euro | |||||||||||||
Hedging of fuel risk | ||||||||||||||
Various October 2022 to December 2024) | Gallons |
Derivative Fair Value | |||||||||||||||||
Balance Sheet location | Oct. 1, 2022 | Jul. 2, 2022 | |||||||||||||||
(In thousands) | |||||||||||||||||
Fair Value Hedges: | |||||||||||||||||
Interest rate swaps | Other current liabilities | $ | $ | ||||||||||||||
Cash Flow Hedges: | |||||||||||||||||
Fuel swaps | Other current assets | $ | $ | ||||||||||||||
Foreign currency forwards | Other current assets | ||||||||||||||||
Fuel swaps | Other assets | ||||||||||||||||
Fuel swaps | Other current liabilities | ||||||||||||||||
Fuel swaps | Other long-term liabilities | ||||||||||||||||
13-Week Period Ended | ||||||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | |||||||||||||
(In thousands) | ||||||||||||||
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 | $ | $ | ||||||||||||
Gain or (loss) on fair value hedging relationships: | ||||||||||||||
Interest rate swaps: | ||||||||||||||
Hedged items | $ | $ | ( | |||||||||||
Derivatives designated as hedging instruments | ( | ( | ||||||||||||
13-Week Period Ended | ||||||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | |||||||||||||
(In thousands) | ||||||||||||||
Interest expense | $ | ( | $ | ( | ||||||||||
Decrease in fair value of debt | ( | ( | ||||||||||||
Hedged items | $ | $ | ( |
13-Week Period Ended Oct. 1, 2022 | |||||||||||||||||
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 thousands) | (In thousands) | ||||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Fuel swaps | $ | ( | Operating expense | $ | |||||||||||||
Foreign currency contracts | Cost of sales / Other income | ||||||||||||||||
Total | $ | ( | $ | ||||||||||||||
Derivatives in net investment hedging relationships: | |||||||||||||||||
Foreign denominated debt | $ | N/A | $ | ||||||||||||||
Total | $ | $ | |||||||||||||||
13-Week Period Ended Oct. 2, 2021 | |||||||||||||||||
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 thousands) | (In thousands) | ||||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Fuel swaps | $ | ( | Operating expense | $ | |||||||||||||
Foreign currency contracts | ( | Cost of sales / Other income | |||||||||||||||
Total | $ | ( | $ | ||||||||||||||
Derivatives in net investment hedging relationships: | |||||||||||||||||
Foreign denominated debt | $ | N/A | $ | ||||||||||||||
Total | $ | $ |
Oct. 1, 2022 | |||||||||||
Carrying Amount of Hedged Assets (Liabilities) | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | ||||||||||
(In thousands) | |||||||||||
Balance sheet location: | |||||||||||
Current maturities of long-term debt | $ | ( | $ | ||||||||
Jul. 2, 2022 | |||||||||||
Carrying Amount of Hedged Assets (Liabilities) | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | ||||||||||
(In thousands) | |||||||||||
Balance sheet location: | |||||||||||
Current maturities of long-term debt | $ | ( | $ | ||||||||
13-Week Period Ended | |||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | ||||||||||
(In thousands, except for share and per share data) | |||||||||||
Numerator: | |||||||||||
Net earnings | $ | $ | |||||||||
Denominator: | |||||||||||
Weighted-average basic shares outstanding | |||||||||||
Dilutive effect of share-based awards | |||||||||||
Weighted-average diluted shares outstanding | |||||||||||
Basic earnings per share | $ | $ | |||||||||
Diluted earnings per share | $ | $ |
13-Week Period Ended Oct. 1, 2022 | |||||||||||||||||||||||
Location of Expense (Income) Recognized in Net Earnings | Before Tax Amount | Tax | Net of Tax Amount | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||||||||||
Reclassification adjustments: | |||||||||||||||||||||||
Amortization of prior service cost | Other expense, net | $ | $ | $ | |||||||||||||||||||
Amortization of actuarial loss, net | Other expense, net | ||||||||||||||||||||||
Total reclassification adjustments | |||||||||||||||||||||||
Foreign currency translation: | |||||||||||||||||||||||
Foreign currency translation adjustment | N/A | ( | ( | ||||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||
Change in marketable securities (1) | N/A | ( | ( | ( | |||||||||||||||||||
Hedging instruments: | |||||||||||||||||||||||
Other comprehensive income (loss) before reclassification adjustments: | |||||||||||||||||||||||
Change in cash flow hedge | Operating expenses (2) | ( | ( | ( | |||||||||||||||||||
Change in net investment hedge | N/A | ||||||||||||||||||||||
Total other comprehensive income before reclassification adjustments | ( | ( | ( | ||||||||||||||||||||
Reclassification adjustments: | |||||||||||||||||||||||
Amortization of cash flow hedges | Interest expense | ||||||||||||||||||||||
Total other comprehensive income (loss) | $ | ( | $ | $ | ( |
(1) | Realized gains or losses on marketable securities are presented within other (income) expense, net in the consolidated results of operations; however, there were no significant gains or losses realized in the first quarter of fiscal 2023. | ||||
(2) | Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges. |
13-Week Period Ended Oct. 2, 2021 | |||||||||||||||||||||||
Location of Expense (Income) Recognized in Net Earnings | Before Tax Amount | Tax | Net of Tax Amount | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||||||||||
Reclassification adjustments: | |||||||||||||||||||||||
Amortization of prior service cost | Other expense, net | $ | $ | $ | |||||||||||||||||||
Amortization of actuarial loss, net | Other expense, net | ||||||||||||||||||||||
Total reclassification adjustments | |||||||||||||||||||||||
Foreign currency translation: | |||||||||||||||||||||||
Foreign currency translation adjustment | N/A | ( | ( | ||||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||
Change in marketable securities (1) | N/A | ( | ( | ( | |||||||||||||||||||
Hedging instruments: | |||||||||||||||||||||||
Other comprehensive income (loss) before reclassification adjustments: | |||||||||||||||||||||||
Change in cash flow hedges | Operating expenses (2) | ( | ( | ( | |||||||||||||||||||
Change in net investment hedges | N/A | ||||||||||||||||||||||
Total other comprehensive income before reclassification adjustments | |||||||||||||||||||||||
Reclassification adjustments: | |||||||||||||||||||||||
Amortization of cash flow hedges | Interest expense | ||||||||||||||||||||||
Total other comprehensive income | $ | ( | $ | $ | ( |
(1) | Realized gains or losses on marketable securities are presented within other (income) expense, net in the consolidated results of operations; however, there were no significant gains or losses realized in the first quarter of fiscal 2022. | ||||
(2) | Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges. |
13-Week Period Ended Oct. 1, 2022 | |||||||||||||||||||||||||||||
Pension and Other Postretirement Benefit Plans, net of tax | Foreign Currency Translation | Hedging, net of tax | Marketable Securities, net of tax | Total | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Balance as of Jul. 2, 2022 | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||
Equity adjustment from foreign currency translation | — | ( | — | — | ( | ||||||||||||||||||||||||
Amortization of cash flow hedges | — | — | — | ||||||||||||||||||||||||||
Change in net investment hedges | — | — | — | ||||||||||||||||||||||||||
Change in cash flow hedge | — | — | ( | — | ( | ||||||||||||||||||||||||
Amortization of unrecognized prior service cost | — | — | — | ||||||||||||||||||||||||||
Amortization of unrecognized net actuarial losses | — | — | — | ||||||||||||||||||||||||||
Change in marketable securities | — | — | — | ( | ( | ||||||||||||||||||||||||
Balance as of Oct. 1, 2022 | $ | ( | $ | ( | $ | $ | ( | $ | ( |
13-Week Period Ended Oct. 2, 2021 | |||||||||||||||||||||||||||||
Pension and Other Postretirement Benefit Plans, net of tax | Foreign Currency Translation | Hedging, net of tax | Marketable Securities | Total | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Balance as of Jul. 3, 2021 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
Equity adjustment from foreign currency translation | — | ( | — | — | ( | ||||||||||||||||||||||||
Amortization of cash flow hedges | — | — | — | ||||||||||||||||||||||||||
Change in net investment hedges | — | — | — | ||||||||||||||||||||||||||
Change in cash flow hedge | — | — | ( | — | ( | ||||||||||||||||||||||||
Amortization of unrecognized prior service cost | — | — | — | ||||||||||||||||||||||||||
Amortization of unrecognized net actuarial losses | — | — | — | ||||||||||||||||||||||||||
Change in marketable securities | — | — | — | ( | ( | ||||||||||||||||||||||||
Balance as of Oct. 2, 2021 | $ | ( | $ | ( | $ | ( | $ | $ | ( |
13-Week Period Ended | |||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | ||||||||||
Sales: | (In thousands) | ||||||||||
U.S. Foodservice Operations | $ | $ | |||||||||
International Foodservice Operations | |||||||||||
SYGMA | |||||||||||
Other | |||||||||||
Total | $ | $ | |||||||||
13-Week Period Ended | |||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | ||||||||||
Operating income (loss): | (In thousands) | ||||||||||
U.S. Foodservice Operations | $ | $ | |||||||||
International Foodservice Operations | |||||||||||
SYGMA | ( | ||||||||||
Other | |||||||||||
Total segments | |||||||||||
Global Support Center | ( | ( | |||||||||
Total operating income | |||||||||||
Interest expense | |||||||||||
Other expense (income), net | ( | ||||||||||
Earnings before income taxes | $ | $ |
13-Week Period Ended | |||||||||||
Oct. 1, 2022 | Oct. 2, 2021 | ||||||||||
Sales | 100.0 | % | 100.0 | % | |||||||
Cost of sales | 81.8 | 81.9 | |||||||||
Gross profit | 18.2 | 18.1 | |||||||||
Operating expenses | 14.4 | 14.2 | |||||||||
Operating income | 3.8 | 3.8 | |||||||||
Interest expense | 0.6 | 0.8 | |||||||||
Other (income) expense, net | 0.1 | — | |||||||||
Earnings before income taxes | 3.1 | 3.1 | |||||||||
Income taxes | 0.7 | 0.8 | |||||||||
Net earnings | 2.4 | % | 2.3 | % |
13-Week Period Ended | |||||
Oct. 1, 2022 | |||||
Sales | 16.2 | % | |||
Cost of sales | 16.0 | ||||
Gross profit | 17.4 | ||||
Operating expenses | 17.7 | ||||
Operating income | 16.3 | ||||
Interest expense | (3.2) | ||||
Other (income) expense, net (1) | (569.9) | ||||
Earnings before income taxes | 17.4 | ||||
Income taxes | 0.5 | ||||
Net earnings | 23.2 | % | |||
Basic earnings per share | 24.3 | % | |||
Diluted earnings per share | 24.7 | ||||
Average shares outstanding | (1.0) | ||||
Diluted shares outstanding | (1.0) |
(1) | Other (income) expense, net was expense of $15.3 million and income of $3.3 million in the first quarter of fiscal 2023 and fiscal 2022, respectively. | ||||
13-Week Period Ended Oct. 1, 2022 | |||||||||||||||||||||||||||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center | Consolidated Totals | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Sales | $ | 13,602,482 | $ | 3,283,735 | $ | 1,933,457 | $ | 307,156 | $ | — | $ | 19,126,830 | |||||||||||||||||||||||
Sales increase | 17.2 | % | 13.4 | % | 13.5 | % | 20.8 | % | 16.2 | % | |||||||||||||||||||||||||
Percentage of total | 71.1 | % | 17.2 | % | 10.1 | % | 1.6 | % | 100.0 | % | |||||||||||||||||||||||||
Operating income (loss) | $ | 903,828 | $ | 87,208 | $ | 5,471 | $ | 11,538 | $ | (273,712) | $ | 734,333 | |||||||||||||||||||||||
Operating income (loss) increase | 13.3 | % | 137.8 | % | NM | 78.7 | % | 32.5 | % | 16.3 | % | ||||||||||||||||||||||||
Percentage of total segments | 89.7 | % | 8.7 | % | 0.5 | % | 1.1 | % | 100.0 | % | |||||||||||||||||||||||||
Operating income as a percentage of sales | 6.6 | % | 2.7 | % | 0.3 | % | 3.8 | % | 3.8 | % |
13-Week Period Ended Oct. 2, 2021 | |||||||||||||||||||||||||||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Global Support Center | Consolidated Totals | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Sales | $ | 11,602,963 | $ | 2,895,247 | $ | 1,704,033 | $ | 254,303 | $ | — | $ | 16,456,546 | |||||||||||||||||||||||
Percentage of total | 70.5 | % | 17.6 | % | 10.4 | % | 1.5 | % | 100.0 | % | |||||||||||||||||||||||||
Operating income (loss) | $ | 797,523 | $ | 36,676 | $ | (2,447) | $ | 6,456 | $ | (206,526) | $ | 631,682 | |||||||||||||||||||||||
Percentage of total segments | 95.1 | % | 4.4 | % | (0.3) | % | 0.8 | % | 100.0 | % | |||||||||||||||||||||||||
Operating income (loss) as a percentage of sales | 6.9 | % | 1.3 | % | (0.1) | % | 2.5 | % | 3.8 | % |
13-Week Period Ended Oct. 1, 2022 | 13-Week Period Ended Oct. 2, 2021 | Change in Dollars | % Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Sales | $ | 13,602,482 | $ | 11,602,963 | $ | 1,999,519 | 17.2 | % | |||||||||||||||
Gross profit | 2,612,343 | 2,185,154 | 427,189 | 19.5 | |||||||||||||||||||
Operating expenses | 1,708,515 | 1,387,631 | 320,884 | 23.1 | |||||||||||||||||||
Operating income | $ | 903,828 | $ | 797,523 | $ | 106,305 | 13.3 | % | |||||||||||||||
Gross profit | $ | 2,612,343 | $ | 2,185,154 | $ | 427,189 | 19.5 | % | |||||||||||||||
Adjusted operating expenses (Non-GAAP) | 1,698,570 | 1,389,394 | 309,176 | 22.3 | |||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 913,773 | $ | 795,760 | $ | 118,013 | 14.8 | % | |||||||||||||||
Increase (Decrease) | |||||||||||
13-Week Period | |||||||||||
(Dollars in millions) | |||||||||||
Cause of change | Percentage | Dollars | |||||||||
Case volume (1) | 6.2 | % | $ | 714.1 | |||||||
Inflation | 9.8 | 1,137.1 | |||||||||
Other (2) | 1.2 | 148.3 | |||||||||
Total change in sales | 17.2 | % | $ | 1,999.5 | |||||||
(1) | Case volumes increased 7.3% compared to the first quarter of fiscal 2022. This volume increase resulted in a 6.2% increase in the dollar value of sales compared to the first quarter of fiscal 2022. | ||||
(2) | Case volume reflects our broadline and specialty businesses, with the exception of our specialty meats business, which measures its volume in pounds. Any impact in volumes from these specialty meats operations is included within “Other.” |
13-Week Period Ended Oct. 1, 2022 | 13-Week Period Ended Oct. 2, 2021 | Change in Dollars | % Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Sales | $ | 3,283,735 | $ | 2,895,247 | $ | 388,488 | 13.4 | % | |||||||||||||||
Gross profit | 649,265 | 589,134 | 60,131 | 10.2 | |||||||||||||||||||
Operating expenses | 562,057 | 552,458 | 9,599 | 1.7 | |||||||||||||||||||
Operating income | $ | 87,208 | $ | 36,676 | $ | 50,532 | 137.8 | % | |||||||||||||||
Gross profit | $ | 649,265 | $ | 589,134 | $ | 60,131 | 10.2 | % | |||||||||||||||
Adjusted operating expenses (Non-GAAP) | 542,136 | 525,017 | 17,119 | 3.3 | |||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 107,129 | $ | 64,117 | $ | 43,012 | 67.1 | % | |||||||||||||||
Sales on a constant currency basis (Non-GAAP) | $ | 3,599,186 | $ | 2,895,247 | $ | 703,939 | 24.3 | % | |||||||||||||||
Gross profit on a constant currency basis (Non-GAAP) | 721,025 | 589,134 | 131,891 | 22.4 | |||||||||||||||||||
Adjusted operating expenses on a constant currency basis (Non-GAAP) | 606,843 | 525,017 | 81,826 | 15.6 | |||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 114,182 | $ | 64,117 | $ | 50,065 | 78.1 | % | |||||||||||||||
Increase (Decrease) | |||||||||||
13-Week Period | |||||||||||
(Dollars in millions) | |||||||||||
Cause of change | Percentage | Dollars | |||||||||
Inflation | 14.5 | % | $ | 418.5 | |||||||
Foreign currency | (10.9) | (315.5) | |||||||||
Other (1) | 9.8 | 285.5 | |||||||||
Total change in sales | 13.4 | % | $ | 388.5 | |||||||
(1) | The impact of volumes as a component of sales growth from international operations are included within “Other.” Volume in our foreign operations includes volume metrics that differ from country to country and cannot be aggregated on a consistent, comparable basis. |
Our discussion of our results includes certain non-GAAP financial measures, such as EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than free cash flow and EBITDA, any non-GAAP financial measures will be denoted as adjusted measures to remove the impact of: (1) restructuring and transformational project costs consisting of: (a) restructuring charges, (b) expenses associated with our various transformation initiatives and (c) facility closure and severance charges; (2) acquisition-related costs consisting of: (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions; and (3) the reduction of bad debt expense previously recognized in fiscal 2020 due to the impact of the COVID-19 pandemic on the collectability of our pre-pandemic trade receivable balances. Our results for fiscal 2023 were also impacted by adjustments to a product return allowance related to COVID-related personal protection equipment inventory. Our results for fiscal 2022 were also impacted by an increase in reserves for uncertain tax positions. | ||
The results of our foreign operations can be impacted due to changes in exchange rates applicable in converting local currencies to U.S. dollars. We measure our total Sysco and our International Foodservice Operations results on a constant currency basis. Constant currency operating results are calculated by translating current-period local currency operating results with the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period. | ||
Management believes that adjusting its operating expenses, operating income, net earnings and diluted earnings per share to remove these Certain Items and presenting its International Foodservice Operations results on a constant currency basis, provides an important perspective with respect to our underlying business trends and results and provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company’s underlying operations and (2) facilitates comparisons on a year-over-year basis. | ||
Sysco has a history of growth through acquisitions and excludes from its non-GAAP financial measures the impact of acquisition-related intangible amortization, acquisition costs and due-diligence costs for those acquisitions. We believe this approach significantly enhances the comparability of Sysco’s results for fiscal 2023 and fiscal 2022. | ||
Set forth below is a reconciliation of sales, operating expenses, operating income, net earnings and diluted earnings per share to adjusted results for these measures for the periods presented. Individual components of diluted earnings per share may not add up to the total presented due to rounding. Adjusted diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. |
13-Week Period Ended Oct. 1, 2022 | 13-Week Period Ended Oct. 2, 2021 | Change in Dollars | % Change | ||||||||||||||||||||
Sales (GAAP) | $ | 19,126,830 | $ | 16,456,546 | $ | 2,670,284 | 16.2 | % | |||||||||||||||
Impact of currency fluctuations (1) | 319,162 | — | 319,162 | 2.0 | |||||||||||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 19,445,992 | $ | 16,456,546 | $ | 2,989,446 | 18.2 | % | |||||||||||||||
Cost of sales (GAAP) | $ | 15,637,975 | $ | 13,484,838 | $ | 2,153,137 | 16.0 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) | 2,571 | — | 2,571 | — | |||||||||||||||||||
Cost of sales adjusted for Certain Items (Non-GAAP) | $ | 15,640,546 | $ | 13,484,838 | $ | 2,155,708 | 16.0 | % | |||||||||||||||
Gross profit (GAAP) | $ | 3,488,855 | $ | 2,971,708 | $ | 517,147 | 17.4 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) | (2,571) | — | (2,571) | (0.1) | |||||||||||||||||||
Comparable gross profit adjusted for Certain Items (Non-GAAP) | 3,486,284 | 2,971,708 | 514,576 | 17.3 | |||||||||||||||||||
Impact of currency fluctuations (1) | 73,035 | — | 73,035 | 2.5 | |||||||||||||||||||
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 3,559,319 | $ | 2,971,708 | $ | 587,611 | 19.8 | % | |||||||||||||||
Gross margin (GAAP) | 18.24 | % | 18.06 | % | 18 bps | ||||||||||||||||||
Impact of inventory valuation adjustment (2) | (0.01) | % | — | % | -1 bps | ||||||||||||||||||
Comparable gross margin adjusted for Certain Items (Non-GAAP) | 18.23 | % | 18.06 | % | 17 bps | ||||||||||||||||||
Impact of currency fluctuations (1) | 0.07 | — | 7 bps | ||||||||||||||||||||
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 18.30 | % | 18.06 | % | 24 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 2,754,522 | $ | 2,340,026 | $ | 414,496 | 17.7 | % | |||||||||||||||
Impact of restructuring and transformational project costs (3) | (11,645) | (24,511) | 12,866 | 52.5 | |||||||||||||||||||
Impact of acquisition-related costs (4) | (29,454) | (35,926) | 6,472 | 18.0 | |||||||||||||||||||
Impact of bad debt reserve adjustments (5) | 2,592 | 7,061 | (4,469) | (63.3) | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 2,716,015 | 2,286,650 | 429,365 | 18.8 | |||||||||||||||||||
Impact of currency fluctuations (1) | 70,695 | — | 70,695 | 3.1 | |||||||||||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 2,786,710 | $ | 2,286,650 | $ | 500,060 | 21.9 | % | |||||||||||||||
Operating expense as a percentage of sales (GAAP) | 14.40 | % | 14.22 | % | 18 bps | ||||||||||||||||||
Impact of certain item adjustments | (0.20) | % | (0.32) | % | 12 bps | ||||||||||||||||||
Adjusted operating expense as a percentage of sales (Non-GAAP) | 14.20 | % | 13.90 | % | 30 bps | ||||||||||||||||||
Operating income (GAAP) | $ | 734,333 | $ | 631,682 | $ | 102,651 | 16.3 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) | (2,571) | — | (2,571) | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (3) | 11,645 | 24,511 | (12,866) | (52.5) | |||||||||||||||||||
Impact of acquisition-related costs (4) | 29,454 | 35,926 | (6,472) | (18.0) | |||||||||||||||||||
Impact of bad debt reserve adjustments (5) | (2,592) | (7,061) | 4,469 | 63.3 | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | 770,269 | 685,058 | 85,211 | 12.4 | |||||||||||||||||||
Impact of currency fluctuations (1) | 2,340 | — | 2,340 | 0.4 | |||||||||||||||||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 772,609 | $ | 685,058 | $ | 87,551 | 12.8 | % | |||||||||||||||
Operating margin (GAAP) | 3.84 | % | 3.84 | % | 0 bps |
13-Week Period Ended Oct. 1, 2022 | 13-Week Period Ended Oct. 2, 2021 | Change in Dollars | % Change | ||||||||||||||||||||
Operating margin adjusted for Certain Items (Non-GAAP) | 4.03 | % | 4.16 | % | -13 bps | ||||||||||||||||||
Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP) | 3.97 | % | 4.16 | % | -19 bps | ||||||||||||||||||
Net earnings (GAAP) | $ | 465,568 | $ | 378,013 | $ | 87,555 | 23.2 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) | (2,571) | — | (2,571) | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (3) | 11,645 | 24,511 | (12,866) | (52.5) | |||||||||||||||||||
Impact of acquisition-related costs (4) | 29,454 | 35,926 | (6,472) | (18.0) | |||||||||||||||||||
Impact of bad debt reserve adjustments (5) | (2,592) | (7,061) | 4,469 | 63.3 | |||||||||||||||||||
Tax impact of inventory valuation adjustment (6) | 637 | — | 637 | NM | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (6) | (2,884) | (6,186) | 3,302 | 53.4 | |||||||||||||||||||
Tax impact of acquisition-related costs (6) | (7,295) | (9,066) | 1,771 | 19.5 | |||||||||||||||||||
Tax impact of bad debt reserves adjustments (6) | 642 | 1,782 | (1,140) | (64.0) | |||||||||||||||||||
Impact of adjustments to uncertain tax positions | — | 12,000 | (12,000) | NM | |||||||||||||||||||
Net earnings adjusted for Certain Items (Non-GAAP) | $ | 492,604 | $ | 429,919 | $ | 62,685 | 14.6 | % | |||||||||||||||
Diluted earnings per share (GAAP) | $ | 0.91 | $ | 0.73 | $ | 0.18 | 24.7 | % | |||||||||||||||
Impact of inventory valuation adjustment (2) | (0.01) | — | (0.01) | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (3) | 0.02 | 0.05 | (0.03) | (60.0) | |||||||||||||||||||
Impact of acquisition-related costs (4) | 0.06 | 0.07 | (0.01) | (14.3) | |||||||||||||||||||
Impact of bad debt reserve adjustments (5) | (0.01) | (0.01) | — | — | |||||||||||||||||||
Tax impact of restructuring and transformational project costs (6) | (0.01) | (0.01) | — | — | |||||||||||||||||||
Tax impact of acquisition-related costs (6) | (0.01) | (0.02) | 0.01 | 50.0 | |||||||||||||||||||
Impact of adjustments to uncertain tax positions | — | 0.02 | (0.02) | NM | |||||||||||||||||||
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (7) | $ | 0.97 | $ | 0.83 | $ | 0.14 | 16.9 | % | |||||||||||||||
(1) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results. | ||||
(2) | Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. | ||||
(3) | Fiscal 2023 includes $4 million related to restructuring, severance, and facility closure charges and $8 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2022 includes $16 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy and $8 million related to restructuring charges. | ||||
(4) | Fiscal 2023 includes $26 million of intangible amortization expense and $4 million in acquisition and due diligence costs. Fiscal 2022 includes $22 million of intangible amortization expense and $14 million in acquisition and due diligence costs, which are primarily included in Global Support Center expenses. | ||||
(5) | Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. | ||||
(6) | The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. | ||||
(7) | Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. | ||||
NM represents that the percentage change is not meaningful. |
13-Week Period Ended Oct. 1, 2022 | 13-Week Period Ended Oct. 2, 2021 | Change in Dollars | %/bps Change | ||||||||||||||||||||
U.S. FOODSERVICE OPERATIONS | |||||||||||||||||||||||
Operating expenses (GAAP) | $ | 1,708,515 | $ | 1,387,631 | $ | 320,884 | 23.1 | % | |||||||||||||||
Impact of restructuring and transformational project costs | 48 | (3) | 51 | NM | |||||||||||||||||||
Impact of acquisition-related costs (1) | (12,585) | (4,654) | (7,931) | NM | |||||||||||||||||||
Impact of bad debt reserve adjustments (2) | 2,592 | 6,420 | (3,828) | (59.6) | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 1,698,570 | $ | 1,389,394 | $ | 309,176 | 22.3 | % | |||||||||||||||
Operating income (GAAP) | $ | 903,828 | $ | 797,523 | $ | 106,305 | 13.3 | % | |||||||||||||||
Impact of restructuring and transformational project costs | (48) | 3 | (51) | NM | |||||||||||||||||||
Impact of acquisition-related costs (1) | 12,585 | 4,654 | 7,931 | NM | |||||||||||||||||||
Impact of bad debt reserve adjustments (2) | (2,592) | (6,420) | 3,828 | 59.6 | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 913,773 | $ | 795,760 | $ | 118,013 | 14.8 | % | |||||||||||||||
INTERNATIONAL FOODSERVICE OPERATIONS | |||||||||||||||||||||||
Sales (GAAP) | $ | 3,283,735 | $ | 2,895,247 | $ | 388,488 | 13.4 | % | |||||||||||||||
Impact of currency fluctuations (3) | 315,451 | — | 315,451 | 10.9 | |||||||||||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 3,599,186 | $ | 2,895,247 | $ | 703,939 | 24.3 | % | |||||||||||||||
Gross profit (GAAP) | $ | 649,265 | $ | 589,134 | $ | 60,131 | 10.2 | % | |||||||||||||||
Impact of currency fluctuations (3) | 71,760 | — | 71,760 | 12.2 | |||||||||||||||||||
Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 721,025 | $ | 589,134 | $ | 131,891 | 22.4 | % | |||||||||||||||
Gross margin (GAAP) | 19.77 | % | 20.35 | % | -58 bps | ||||||||||||||||||
Impact of currency fluctuations (3) | 0.26 | — | 26 bps | ||||||||||||||||||||
Comparable gross margin using a constant currency basis (Non-GAAP) | 20.03 | % | 20.35 | % | -32 bps | ||||||||||||||||||
Operating expenses (GAAP) | $ | 562,057 | $ | 552,458 | $ | 9,599 | 1.7 | % | |||||||||||||||
Impact of restructuring and transformational project costs (4) | (3,907) | (9,426) | 5,519 | 58.6 | |||||||||||||||||||
Impact of acquisition-related costs (5) | (16,014) | (18,656) | 2,642 | 14.2 | |||||||||||||||||||
Impact of bad debt reserve adjustments (2) | — | 641 | (641) | NM | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 542,136 | 525,017 | 17,119 | 3.3 | |||||||||||||||||||
Impact of currency fluctuations (3) | 64,707 | — | 64,707 | 12.3 | |||||||||||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 606,843 | $ | 525,017 | $ | 81,826 | 15.6 | % | |||||||||||||||
Operating income (GAAP) | $ | 87,208 | $ | 36,676 | $ | 50,532 | NM | ||||||||||||||||
Impact of restructuring and transformational project costs (4) | 3,907 | 9,426 | (5,519) | (58.6) | |||||||||||||||||||
Impact of acquisition-related costs (5) | 16,014 | 18,656 | (2,642) | (14.2) | |||||||||||||||||||
Impact of bad debt reserve adjustments (2) | — | (641) | 641 | NM | |||||||||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | 107,129 | 64,117 | 43,012 | 67.1 | |||||||||||||||||||
Impact of currency fluctuations (3) | 7,053 | — | 7,053 | 11.0 | |||||||||||||||||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 114,182 | $ | 64,117 | $ | 50,065 | 78.1 | % | |||||||||||||||
SYGMA | |||||||||||||||||||||||
Operating expenses (GAAP) | $ | 148,422 | $ | 140,604 | $ | 7,818 | 5.6 | % | |||||||||||||||
Operating (loss) income (GAAP) | 5,471 | (2,447) | 7,918 | NM | |||||||||||||||||||
OTHER | |||||||||||||||||||||||
Operating expenses (GAAP) | $ | 69,300 | $ | 52,565 | $ | 16,735 | 31.8 | % | |||||||||||||||
Operating income (GAAP) | 11,538 | 6,456 | 5,082 | 78.7 | |||||||||||||||||||
13-Week Period Ended Oct. 1, 2022 | 13-Week Period Ended Oct. 2, 2021 | Change in Dollars | %/bps Change | ||||||||||||||||||||
GLOBAL SUPPORT CENTER | |||||||||||||||||||||||
Gross (loss) profit (GAAP) | $ | (7,484) | $ | 242 | $ | (7,726) | NM | ||||||||||||||||
Impact of inventory valuation adjustment (6) | (2,571) | — | (2,571) | NM | |||||||||||||||||||
Comparable gross profit (loss) adjusted for Certain Items (Non-GAAP) | $ | (10,055) | $ | 242 | $ | (10,297) | NM | ||||||||||||||||
Operating expenses (GAAP) | $ | 266,228 | $ | 206,768 | $ | 59,460 | 28.8 | % | |||||||||||||||
Impact of restructuring and transformational project costs (7) | (7,786) | (15,082) | 7,296 | 48.4 | |||||||||||||||||||
Impact of acquisition-related costs (8) | (855) | (12,616) | 11,761 | 93.2 | |||||||||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 257,587 | $ | 179,070 | $ | 78,517 | 43.8 | % | |||||||||||||||
Operating loss (GAAP) | $ | (273,712) | $ | (206,526) | $ | (67,186) | (32.5) | % | |||||||||||||||
Impact of inventory valuation adjustment (6) | (2,571) | — | (2,571) | NM | |||||||||||||||||||
Impact of restructuring and transformational project costs (7) | 7,786 | 15,082 | (7,296) | (48.4) | |||||||||||||||||||
Impact of acquisition-related costs (8) | 855 | 12,616 | (11,761) | (93.2) | |||||||||||||||||||
Operating loss adjusted for Certain Items (Non-GAAP) | $ | (267,642) | $ | (178,828) | $ | (88,814) | (49.7) | % | |||||||||||||||
(1) | Fiscal 2023 and fiscal 2022 include intangible amortization expense and acquisition costs. | ||||
(2) | Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. | ||||
(3) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. | ||||
(4) | Includes restructuring and facility closure costs primarily in Europe. | ||||
(5) | Represents intangible amortization expense. | ||||
(6) | Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. | ||||
(7) | Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy. | ||||
(8) | Represents due diligence costs. | ||||
NM represents that the percentage change is not meaningful. |
13-Week Period Ended Oct. 1, 2022 | 13-Week Period Ended Oct. 2, 2021 | Change in Dollars | % Change | ||||||||||||||||||||
Net earnings (GAAP) | $ | 465,568 | $ | 378,013 | $ | 87,555 | 23.2 | % | |||||||||||||||
Interest (GAAP) | 124,150 | 128,214 | (4,064) | (3.2) | |||||||||||||||||||
Income taxes (GAAP) | 129,334 | 128,707 | 627 | 0.5 | |||||||||||||||||||
Depreciation and amortization (GAAP) | 188,924 | 186,466 | 2,458 | 1.3 | |||||||||||||||||||
EBITDA (Non-GAAP) | $ | 907,976 | $ | 821,400 | $ | 86,576 | 10.5 | % | |||||||||||||||
Certain Item adjustments: | |||||||||||||||||||||||
Impact of inventory valuation adjustment (1) | $ | (2,571) | $ | — | $ | (2,571) | NM | ||||||||||||||||
Impact of restructuring and transformational project costs (2) | 10,509 | 24,247 | (13,738) | (56.7) | |||||||||||||||||||
Impact of acquisition-related costs (3) | 3,546 | 14,221 | (10,675) | (75.1) | |||||||||||||||||||
Impact of bad debt reserve adjustments (4) | (2,592) | (7,061) | 4,469 | 63.3 | |||||||||||||||||||
EBITDA adjusted for Certain Items (Non-GAAP) (5) | $ | 916,868 | $ | 852,807 | $ | 64,061 | 7.5 | % |
(1) | Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. | ||||
(2) | Fiscal 2023 and fiscal 2022 include charges related to restructuring, severance, and facility closures, as well as various transformation initiative costs, primarily consisting of changes to our business technology strategy, excluding charges related to accelerated depreciation. | ||||
(3) | Fiscal 2023 and fiscal 2022 include acquisition and due diligence costs. | ||||
(4) | Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. | ||||
(5) | In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $3 million and $2 million or non-cash stock compensation expense of $27 million and $29 million in fiscal 2023 and fiscal 2022, respectively. | ||||
NM represents that the percentage change is not meaningful. |
13-Week Period Ended Oct. 1, 2022 | 13-Week Period Ended Oct. 2, 2021 | ||||||||||
Source of cash (use of cash) | (In thousands) | ||||||||||
Net cash provided by operating activities (GAAP) | $ | 158,606 | $ | 110,812 | |||||||
Additions to plant and equipment | (167,260) | (85,019) | |||||||||
Proceeds from sales of plant and equipment | 22,448 | 5,627 | |||||||||
Free Cash Flow (Non-GAAP) (1) | $ | 13,794 | $ | 31,420 | |||||||
Acquisition of businesses, net of cash acquired | $ | (32,651) | $ | (714,010) | |||||||
Debt borrowings (repayments), net | 137,959 | (10,048) | |||||||||
Stock repurchases | (267,727) | — | |||||||||
Dividends paid | (249,294) | (240,561) | |||||||||
(1) | Free cash flow should not be used as a substitute for the most comparable GAAP measure in assessing the company’s liquidity for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” contained in our fiscal 2022 Form 10-K for discussions regarding this non-GAAP performance metric. |
Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet | Oct. 1, 2022 | Jul. 2, 2022 | ||||||||||||
(In thousands) | ||||||||||||||
ASSETS | ||||||||||||||
Receivables due from non-obligor subsidiaries | $ | 218,392 | $ | 264,378 | ||||||||||
Current assets | 5,714,872 | 5,658,972 | ||||||||||||
Total current assets | $ | 5,933,264 | $ | 5,923,350 | ||||||||||
Notes receivable from non-obligor subsidiaries | $ | 91,138 | $ | 91,067 | ||||||||||
Other noncurrent assets | 3,969,771 | 3,910,951 | ||||||||||||
Total noncurrent assets | $ | 4,060,909 | $ | 4,002,018 | ||||||||||
LIABILITIES | ||||||||||||||
Payables due to non-obligor subsidiaries | $ | 60,283 | $ | 62,441 | ||||||||||
Other current liabilities | 2,826,594 | 2,765,756 | ||||||||||||
Total current liabilities | $ | 2,886,877 | $ | 2,828,197 | ||||||||||
Notes payable to non-obligor subsidiaries | $ | 272,099 | $ | 315,753 | ||||||||||
Long-term debt | 9,718,645 | 9,501,842 | ||||||||||||
Other noncurrent liabilities | 1,206,767 | 1,190,177 | ||||||||||||
Total noncurrent liabilities | $ | 11,197,511 | $ | 11,007,772 |
Combined Parent and Guarantor Subsidiaries Summarized Results of Operations | 13-Week Period Ended Oct. 1, 2022 | |||||||
(In thousands) | ||||||||
Sales | $ | 12,200,611 | ||||||
Gross profit | 2,216,571 | |||||||
Operating income | 630,507 | |||||||
Interest expense from non-obligor subsidiaries | 5,588 | |||||||
Net earnings | 375,655 |
ISSUER PURCHASES OF EQUITY SECURITIES | |||||||||||||||||||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||||||||||||
Month #1 | |||||||||||||||||||||||
July 3 - July 30 | 3,099,268 | $ | 86.37 | 267,680,804 | — | ||||||||||||||||||
Month #2 | |||||||||||||||||||||||
July 31 - Aug 27 | 4,638 | 86.18 | 399,720 | — | |||||||||||||||||||
Month #3 | |||||||||||||||||||||||
Aug 28 - October 1 | 1,191 | 83.89 | 99,913 | — | |||||||||||||||||||
Totals | 3,105,097 | $ | 86.37 | 268,180,437 | — |
(1) | The total number of shares purchased includes 0, 4,638 and 1,191 shares tendered by individuals in connection with stock option exercises in Month #1, Month #2 and Month #3, respectively. | ||||
(2) | See the discussion in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Equity Transactions” for additional information regarding Sysco’s share repurchase program. |
3.1 | — | |||||||
3.2 | — | |||||||
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3.4 | — | |||||||
10.1# | — | |||||||
10.2# | — | |||||||
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22.1 | — | |||||||
31.1# | — | |||||||
31.2# | — | |||||||
32.1# | — | |||||||
32.2# | — | |||||||
101.SCH# | — | Inline XBRL Taxonomy Extension Schema Document | ||||||
101.CAL# | — | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||||
101.DEF# | — | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||||
101.LAB# | — | Inline XBRL Taxonomy Extension Labels Linkbase Document | ||||||
101.PRE# | — | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||||
104 | — | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Sysco Corporation | ||||||||
(Registrant) | ||||||||
Date: November 1, 2022 | By: | /s/ KEVIN P. HOURICAN | ||||||
Kevin P. Hourican | ||||||||
President and Chief Executive Officer | ||||||||
Date: November 1, 2022 | By: | /s/ AARON E. ALT | ||||||
Aaron E. Alt | ||||||||
Executive Vice President and | ||||||||
Chief Financial Officer | ||||||||
Date: November 1, 2022 | By: | /s/ SCOTT B. STONE | ||||||
Scott B. Stone | ||||||||
Vice President of Financial Reporting | ||||||||
and Interim Chief Accounting Officer |
AMENDED AND RESTATED COMMERCIAL PAPER DEALER AGREEMENT 4(a)(2) PROGRAM | ||
between | ||
SYSCO CORPORATION, as Issuer | ||
and | ||
[ ], as Dealer | ||
Concerning Notes to be issued pursuant to an Issuing and Paying Agency Agreement dated as of [ ] between the Issuer and [ ], as Issuing and Paying Agent | ||
Dated as of | ||
[ ] |
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13 |
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16 |
SYSCO CORPORATION, as Issuer | ||||||||
By: | ||||||||
Name: | Israel Owodunni | |||||||
Title: | Vice President and Treasurer |
17 |
[ ], as Dealer | |||||
By: | |||||
Name: | |||||
Title: | Authorized Signatory |
18 |
19 |
20 |
21 |
22 |
23 |
24 |
25 |
Money Market Yield = | D x 360 | x 100 | ||||||
360 - (D x M) |
26 |
27 |
Bond Equivalent Yield = | D x N | X 100 | ||||||
360 - (D x M) |
28 |
29 |
30 |
31 |
32 |
If to Company at: | |||||
Sysco Corporation 1390 Enclave Parkway Houston, TX 77077 | |||||
Attention: | Treasury Department | ||||
Telephone No.: | (281) 584-1711 |
If to Agent at: | |||||
U.S. Bank Trust Company, National Association 100 Wall Street, Suite 600 New York, NY 10005 | |||||
Attention: | Global Corporate Trust – IPA Administration | ||||
Telephone No.: | (212) 951-8508 | ||||
SYSCO CORPORATION | ||||||||
/s/Israel Owodunni | ||||||||
Authorized Officer’s Signature | ||||||||
Name: | Israel Owodunni | |||||||
Title: | Vice President and Treasurer | |||||||
Date: | September 2, 2022 |
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION | ||||||||
/s/Michelle Lee | ||||||||
Authorized Officer’s Signature Name: Michelle Lee | ||||||||
Title: | Vice President | |||||||
Date: | September 2, 2022 |
DB1/ 115058264.3 |
Event | Following Grant Date and prior to Vesting Date | ||||
Employment with the Employer terminates because of Disability (as defined in Section 16, below). | •The Award will continue to vest as if active employment continued for the entire vesting period. | ||||
Employment with the Employer terminates as a result of a Retirement in Good Standing (as defined in Section 16, below). | •The Award shall: •continue to vest as if active employment continued for the entire vesting period if employment terminates as a result of a Retirement in Good Standing on or after the first Vesting Date. •be forfeited in its entirety if employment terminates as a result of Retirement in Good Standing prior to the first Vesting Date. | ||||
Employment with the Employer terminates because of death. | •All unvested RSUs subject to the Award shall immediately vest. | ||||
Employment with the Employer involuntarily terminates, for reasons other than for Cause and meets the requirements of a Change in Control Termination (as defined in Section 16, below). | •The Award shall be treated as described in Section 4.2(h)(ii) of the Plan, with immediate vesting. | ||||
Military leave or other leave to the extent required by applicable law | •For this purpose, employment is deemed to continue during the vesting period. | ||||
Unpaid leave of absence pursuant to published Company policy of 12 months or less (other than leaves described above) 1 | •The Award will continue to vest as if active employment continued for the entire vesting period. |
Performance Period | July 3, 2022 to June 28, 2025 | ||||
Performance Certification Date | The date of the first Compensation and Leadership Development Committee meeting following the completion of final financial statements for the Performance Period. | ||||
Payment Date | As soon as administratively possible following the Performance Certification Date, currently anticipated to be September 1, 2025, but no later than September 30, 2025. |
DB1/ 115394981.1 |
Event | Following commencement of Performance Period and prior to the end of the Performance Period | ||||
Employment with the Employer terminates because of Disability (as defined in Section 15, below). | •The Grantee shall be entitled to earn a number of PSUs subject to the Award as if active employment continued for the entire Performance Period, taking into account the actual performance of the Company for the Performance Period. •After the Performance Criteria are certified, shares of Stock equal to the number of PSUs earned will be issued on the Payment Date. | ||||
Employment with the Employer terminates as a result of a Retirement in Good Standing (as defined in Section 15, below). | •If the Grantee incurs a Retirement in Good Standing before the end of the first fiscal year of the Company since the start of the Performance Period, the Award is forfeited. •If the Grantee incurs a Retirement in Good Standing on or after the complete fiscal year of the Company from start of the Performance Period, such recipient shall be entitled to retain a prorated number of PSUs subject to the Award if such PSUs have been earned. The PSUs will be prorated based on the number of complete calendar months of employment during the Performance Period through the date of termination of employment. •After the Performance Criteria are certified, shares of Stock equal to the pro-rated number of PSUs earned will be issued on the Payment Date. | ||||
Employment with the Employer terminates because of death. | •The Grantee’s estate shall be paid a cash amount equal to the value of the Target Award. The value shall be determined based on the closing price of the Stock on the date of the Grantee’s death and shall be paid within 75 days after the Grantee’s death. | ||||
Employment with the Employer involuntarily terminates, for reasons other than for Cause and meets the requirements of a Change in Control Termination (as defined in Section 15, below). | •Award shall be treated as described in Section 4.2(h)(ii) of the Plan, with immediate vesting and performance-criteria deemed to have been met at Target performance levels. | ||||
Military leave or other leave to the extent required by applicable law | •For this purpose, employment is deemed to continue during the Performance Period. •After the Performance Criteria are certified, shares of Stock equal to the number of PSUs earned will be issued on the Payment Date. | ||||
Unpaid leave of absence pursuant to published Company policy of 12 months or less (other than leaves described above) 1 | •If less than a complete fiscal year of the Company has passed since the start of the Performance Period before the commencement of such an unpaid leave, the Grantee shall be entitled to retain a prorated number of PSUs subject to the Award. The PSUs earned with respect to such a Grantee will be prorated based on the number of complete calendar months of active employment during the Performance Period, divided by 36. •After the Performance Criteria are certified, the shares of Stock equal to the pro-rated number of PSUs earned will be issued on the Payment Date. |
Performance (Payout %) | Threshold (50%) | Target (100%) | Maximum (200%) | ||||||||
FY23 | |||||||||||
FY24 | [Redacted] | [Redacted] | [Redacted] | ||||||||
FY25 |
Performance (Payout %) | Threshold (50%) | Target (100%) | Maximum (200%) | ||||||||
FY23 | |||||||||||
FY24 | [Redacted] | [Redacted] | [Redacted] | ||||||||
FY25 |
TSR Percentile Rank versus S&P 500 | Payout Modifier applied to PSU payout | ||||
≥ 75th | 25% | ||||
50th to 55th | 0 | ||||
≤ 25th | -25% |
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Jul. 02, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 74,002 | $ 70,790 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized (in shares) | 1,500,000 | 1,500,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 765,174,900 | 765,174,900 |
Treasury stock (in shares) | 258,414,989 | 256,531,543 |
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Income Statement [Abstract] | ||
Sales | $ 19,126,830 | $ 16,456,546 |
Cost of sales | 15,637,975 | 13,484,838 |
Gross profit | 3,488,855 | 2,971,708 |
Operating expenses | 2,754,522 | 2,340,026 |
Operating income | 734,333 | 631,682 |
Interest expense | 124,150 | 128,214 |
Other expense (income), net | 15,281 | (3,252) |
Earnings before income taxes | 594,902 | 506,720 |
Income taxes | 129,334 | 128,707 |
Net earnings | $ 465,568 | $ 378,013 |
Net earnings: | ||
Basic earnings per share (in dollars per share) | $ 0.92 | $ 0.74 |
Diluted earnings per share (in dollars per share) | $ 0.91 | $ 0.73 |
Average shares outstanding (in shares) | 507,578,576 | 512,516,067 |
Diluted shares outstanding (in shares) | 510,383,149 | 515,782,928 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 465,568 | $ 378,013 |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustment | (232,182) | (87,194) |
Items presented net of tax: | ||
Amortization of cash flow hedges | 2,155 | 2,155 |
Change in net investment hedges | 23,509 | 10,165 |
Change in cash flow hedges | (26,390) | (429) |
Amortization of prior service cost | 74 | 74 |
Amortization of actuarial loss | 6,891 | 6,367 |
Change in marketable securities | (3,328) | (311) |
Total other comprehensive loss | (229,271) | (69,173) |
Comprehensive income | $ 236,297 | $ 308,840 |
CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per common share (in dollars per share) | $ 0.49 | $ 0.47 |
BASIS OF PRESENTATION |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION The consolidated financial statements have been prepared by the company, without audit. The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income (loss), 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 (loss), 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 July 2, 2022. 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 Cash Flow Information The following table sets forth the company’s 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:
|
NEW ACCOUNTING STANDARDS |
3 Months Ended |
---|---|
Oct. 01, 2022 | |
Accounting Policies [Abstract] | |
New Accounting Standards | NEW ACCOUNTING STANDARDS Liabilities – Supplier Financing Programs In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-04, Liabilities—Supplier Finance Programs, Subtopic 405-50, that requires entities to disclose in the annual financial statements the key terms of supplier finance programs they use in connection with the purchase of goods and services, along with information about their obligations under these programs, including a rollforward of those obligations. Additionally, the guidance requires disclosure of the outstanding amount of the obligations as of the end of each interim period. The guidance does not affect the recognition, measurement, or financial statement presentation of supplier finance program obligations. The guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2022, which is the first quarter of fiscal 2024 for Sysco, except for the rollforward requirement, which is effective annually for fiscal years beginning after December 15, 2023, which is fiscal year 2025 for Sysco. Early adoption is permitted. The guidance requires retrospective application to all periods in which a balance sheet is presented, except for the rollforward requirement, which will be applied prospectively. The company is currently reviewing the provisions of the new standard.
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REVENUE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE The company recognizes revenues when its 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 $4.9 billion and $4.6 billion as of October 1, 2022 and July 2, 2022, respectively. Sysco has certain customer contracts in which upfront monies are paid to its customers. These payments have become industry practice and are not related to financing of the customer’s business. They are not associated with any distinct good or service to be received from the customer and, therefore, are treated as a reduction of transaction prices. All upfront payments are capitalized in other assets and amortized over the life of the contract or the expected life of the relationship with the customer. As of October 1, 2022, Sysco’s contract assets were not significant. Sysco has no significant commissions paid that are directly attributable to obtaining a particular contract. The following tables present our sales disaggregated by reportable segment and sales mix for the company’s principal product categories for the periods presented:
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ACQUISITIONS |
3 Months Ended |
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Oct. 01, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS During the first 13 weeks of fiscal 2023, the company paid cash of $32.7 million for acquisitions. These acquisitions did not have a material effect on the company’s operating results, cash flows or financial position. Certain acquisitions involve contingent consideration that may include earnout agreements that are typically payable over periods of up to three years in the event that certain operating results are achieved. As of October 1, 2022, aggregate contingent consideration outstanding was $93.0 million, of which $89.0 million was recorded as earnout liabilities. Earnout liabilities are all measured using unobservable inputs that are considered a Level 3 fair value measurement. Greco and Sons On August 12, 2021, Sysco consummated its acquisition of Greco and Sons (Greco), a leading independent Italian specialty distributor in the United States, operating out of 10 distribution centers and servicing 22 geographies nationwide. Greco imports and distributes a full line of food and non-food products and manufactures specialty meat products. The acquisition also includes Bellissimo Foods Company, which distributes a broad selection of Italian and Mediterranean ingredients, including a proprietary branded line of products that are sold exclusively through the Bellissimo Foods Company distribution network, serving independent pizza and Italian restaurants. The purpose of the acquisition was to strengthen Sysco’s business within the Italian foodservice sector. During the first quarter of fiscal 2023, the company completed the determination of fair value of the assets acquired and liabilities assumed. The company recorded certain measurement period adjustments during each quarter of fiscal 2022 and fiscal 2023, none of which were individually or in aggregate material to the company’s financial statements.
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Sysco’s policy is to invest in only high-quality investments. The fair value of the company’s 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 the company’s marketable securities are all 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 6, “Marketable Securities.” The fair value of the company’s derivative instruments are all 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 value of derivative assets and liabilities designated as hedges in the consolidated balance sheet are disclosed in Note 7, “Derivative Financial Instruments.” The following tables present the company’s assets measured at fair value on a recurring basis as of October 1, 2022 and July 2, 2022:
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MARKETABLE SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES | 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. The company includes fixed income securities maturing in less than twelve months within prepaid expenses and other current assets and includes fixed income securities maturing in more than twelve months within other assets in the accompanying consolidated balance sheets. The company records 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 13 weeks of fiscal 2023. The following table presents the company’s available-for-sale marketable securities as of October 1, 2022 and July 2, 2022:
As of October 1, 2022, 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.
There were no significant realized gains or losses in marketable securities in the first 13 weeks of fiscal 2023.
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DERIVATIVE FINANCIAL INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTSSysco uses derivative financial instruments to enact hedging strategies for risk mitigation purposes; however, the company does 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. Hedging of foreign currency risk The company uses euro-bond denominated debt to hedge the foreign currency exposure of our net investment in certain foreign operations. Additionally, 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. Hedging of fuel price risk Sysco uses fuel commodity swap contracts to hedge against the risk of the change in the price of diesel on anticipated future purchases. These swaps have been designated as cash flow hedges. None of the company’s hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of October 1, 2022 are presented below:
The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of October 1, 2022 and July 2, 2022 are as follows:
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:
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:
The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 13-week periods ended October 1, 2022 and October 2, 2021, presented on a pretax basis, are as follows:
The location and carrying amount of hedged liabilities in the consolidated balance sheet as of October 1, 2022 are as follows:
The location and carrying amount of hedged liabilities in the consolidated balance sheet as of July 2, 2022 are as follows:
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DEBT |
3 Months Ended |
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Oct. 01, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBTSysco 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 October 1, 2022, there were no borrowings outstanding under this facility.Sysco has a U.S commercial paper program allowing the company to issue short-term unsecured notes. On September 2, 2022, Sysco entered into an amended and restated commercial paper dealer agreement increasing the issuance allowance from an aggregate amount not to exceed $2.0 billion to 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 October 1, 2022, there were $97.0 million in commercial paper issuances outstanding under this program. |
EARNINGS PER SHARE |
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Earnings Per Share, Basic [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share:
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OTHER COMPREHENSIVE INCOME |
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Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME | 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, changes in marketable securities, amounts related to certain hedging arrangements and amounts related to pension and other postretirement plans. Comprehensive income was $236.3 million and $308.8 million for the first quarter of fiscal 2023 and fiscal 2022, 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:
The following tables provide a summary of the changes in accumulated other comprehensive (loss) income for the periods presented:
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SHARE-BASED COMPENSATION |
3 Months Ended |
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Oct. 01, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | 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 13 weeks of fiscal 2023, options to purchase 882,359 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 13 weeks of fiscal 2023 was $24.58. In the first 13 weeks of fiscal 2023, employees were granted 420,627 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 was 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 13 weeks of fiscal 2023 was $85.43. The PSUs will convert into shares of Sysco 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 13 weeks of fiscal 2023, employees were granted 172,987 restricted stock units. The weighted average grant-date fair value per restricted stock unit granted during the first 13 weeks of fiscal 2023 was $85.38. Employee Stock Purchase Plan Plan participants purchased 326,226 shares of common stock under the ESPP during the first 13 weeks of fiscal 2023. The weighted average fair value per employee stock purchase right issued pursuant to the ESPP was $10.61 during the first 13 weeks of fiscal 2023. 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 $27.2 million and $29.3 million for the first 13 weeks of fiscal 2023 and fiscal 2022, respectively. As of October 1, 2022, there was $152.0 million of total unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of 2.16 years.
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INCOME TAXES |
3 Months Ended |
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Oct. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Effective Tax Rate The effective tax rate for the first quarter of fiscal 2023 was 21.74% and was favorably impacted by the excess tax benefits of equity-based compensation, which totaled $8.9 million. The effective tax rate for the first quarter of fiscal 2022 was 25.40%. As compared to the company’s statutory tax rate, the higher effective tax rate for the first quarter of fiscal 2022 was impacted by the increase in our reserve for uncertain tax positions of $12.0 million, partially offset by (1) the favorable impact of corporate owned life insurance policies that total $1.9 million, and (2) the favorable impact of excess tax benefits of equity-based compensation that totaled $1.4 million. Uncertain Tax Positions As of October 1, 2022, the gross amount of unrecognized tax benefit and related accrued interest was $32.4 million and $6.6 million, respectively. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of the company’s unrecognized tax positions will increase or decrease in the next twelve months. At this time, an estimate of the range of the reasonably possible change cannot be made. Other The determination of the company’s provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s 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 the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
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Oct. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 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.
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BUSINESS SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENT INFORMATION | 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 & Sons, 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 United States (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, Mexico, 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 (U.K.), 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 generally includes all expenses of the corporate office and Sysco’s shared service operations. These also include all U.S. share-based compensation costs. The following tables set forth certain financial information for Sysco’s reportable business segments:
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SUBSEQUENT EVENTS |
3 Months Ended |
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Oct. 01, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In October 2022, Sysco and an independent fiduciary of the Sysco Corporation Retirement Plan (the Plan), entered into a commitment agreement with Massachusetts Mutual Life Insurance Company (the Insurer), which has AA+, Aa3, and A++ credit ratings from S&P Global, Moody’s, and AM Best, respectively, under which the Plan agreed to purchase a nonparticipating single premium group annuity contract that will transfer to the Insurer approximately $700 million of the Plan’s defined benefit pension obligations related to certain pension benefits. The purchase of the group annuity contract by the Plan closed on October 25, 2022. The contract covers approximately 10,000 Sysco participants and beneficiaries (the Transferred Participants). Under the group annuity contract, the Insurer will make an unconditional and irrevocable commitment to pay the pension benefits of each Transferred Participant that are due on or after January 1, 2023. The transaction will result in no changes to the amount of benefits payable to the Transferred Participants. As a result of the transaction, the company expects to recognize a one-time, non-cash pre-tax pension settlement charge of approximately $250 to $300 million in the second quarter of fiscal 2023.
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BASIS OF PRESENTATION (Policies) |
3 Months Ended |
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Oct. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fair Value Measurements | The fair value of the company’s marketable securities are all 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 6, “Marketable Securities.” The fair value of the company’s derivative instruments are all 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 value of derivative assets and liabilities designated as hedges in the consolidated balance sheet are disclosed in Note 7, “Derivative Financial Instruments.” |
Liabilities – Supplier Financing Programs | Liabilities – Supplier Financing Programs In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-04, Liabilities—Supplier Finance Programs, Subtopic 405-50, that requires entities to disclose in the annual financial statements the key terms of supplier finance programs they use in connection with the purchase of goods and services, along with information about their obligations under these programs, including a rollforward of those obligations. Additionally, the guidance requires disclosure of the outstanding amount of the obligations as of the end of each interim period. The guidance does not affect the recognition, measurement, or financial statement presentation of supplier finance program obligations. The guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2022, which is the first quarter of fiscal 2024 for Sysco, except for the rollforward requirement, which is effective annually for fiscal years beginning after December 15, 2023, which is fiscal year 2025 for Sysco. Early adoption is permitted. The guidance requires retrospective application to all periods in which a balance sheet is presented, except for the rollforward requirement, which will be applied prospectively. The company is currently reviewing the provisions of the new standard.
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BASIS OF PRESENTATION (Tables) |
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table sets forth the company’s 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:
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Schedule of Restrictions on Cash and Cash Equivalents | The following table sets forth the company’s 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:
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REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | The following tables present our sales disaggregated by reportable segment and sales mix for the company’s principal product categories for the periods presented:
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value Table | The following tables present the company’s assets measured at fair value on a recurring basis as of October 1, 2022 and July 2, 2022:
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MARKETABLE SECURITIES (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-For-Sale Marketable Securities | The following table presents the company’s available-for-sale marketable securities as of October 1, 2022 and July 2, 2022:
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Schedule of Available-For-Sale Debt Securities Held To Actual Maturity | As of October 1, 2022, 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.
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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Swap Agreements | Details of outstanding hedging instruments as of October 1, 2022 are presented below:
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Schedule of Derivatives Balance Sheet Location Table | The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of October 1, 2022 and July 2, 2022 are as follows:
The location and carrying amount of hedged liabilities in the consolidated balance sheet as of October 1, 2022 are as follows:
The location and carrying amount of hedged liabilities in the consolidated balance sheet as of July 2, 2022 are as follows:
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Schedule of Location and Effect of Derivative Instruments and Related Hedged Items | 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:
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:
The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 13-week periods ended October 1, 2022 and October 2, 2021, presented on a pretax basis, are as follows:
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EARNINGS PER SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share, Basic [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings per Share Table | The following table sets forth the computation of basic and diluted earnings per share:
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OTHER COMPREHENSIVE INCOME (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Other Comprehensive (Loss) Income and Related Tax Effects | A summary of the components of other comprehensive income (loss) and the related tax effects for each of the periods presented is as follows:
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Schedule of Rollforward of Accumulated Other Comprehensive (Loss) Income | The following tables provide a summary of the changes in accumulated other comprehensive (loss) income for the periods presented:
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BUSINESS SEGMENT INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Segment Table | The following tables set forth certain financial information for Sysco’s reportable business segments:
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BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Jul. 02, 2022 |
Oct. 02, 2021 |
Jul. 03, 2021 |
---|---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 437,670 | $ 867,086 | $ 2,067,873 | |
Restricted cash | 65,756 | 44,348 | ||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ 503,426 | $ 931,376 | $ 2,112,221 | $ 3,037,100 |
REVENUE - Narrative (Details) - USD ($) $ in Billions |
Oct. 01, 2022 |
Jul. 02, 2022 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Customer receivables included in accounts and notes receivable, net | $ 4.9 | $ 4.6 |
ACQUISITIONS - Narrative (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Oct. 01, 2022
USD ($)
|
Oct. 02, 2021
USD ($)
|
Aug. 12, 2021
center
area
|
|
Business Acquisition [Line Items] | |||
Payments to acquire businesses, net of cash acquired | $ 32,651 | $ 714,010 | |
Series of Individually Immaterial Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Payments to acquire businesses, net of cash acquired | $ 32,700 | ||
Payable term for contingent consideration | 3 years | ||
Contingent consideration outstanding | $ 93,000 | ||
Series of Individually Immaterial Business Acquisitions | Earnout Liabilities | |||
Business Acquisition [Line Items] | |||
Contingent consideration outstanding | $ 89,000 | ||
Greco and Sons | |||
Business Acquisition [Line Items] | |||
Number of distribution centers | center | 10 | ||
Number of geographic areas | area | 22 |
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value Table (Details) - Recurring Fair Value Measurements - USD ($) $ in Thousands |
Oct. 01, 2022 |
Jul. 02, 2022 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 188,824 | $ 635,288 |
Other assets | 65,756 | 64,290 |
Total assets at fair value | 254,580 | 699,578 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 183,816 | 625,281 |
Other assets | 65,756 | 64,290 |
Total assets at fair value | 249,572 | 689,571 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 5,008 | 10,007 |
Other assets | 0 | 0 |
Total assets at fair value | 5,008 | 10,007 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Other assets | 0 | 0 |
Total assets at fair value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Billions |
Oct. 01, 2022 |
Jul. 02, 2022 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | $ 10.2 | $ 10.5 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total debt | $ 10.8 | $ 10.6 |
MARKETABLE SECURITIES - Available-For-Sale Marketable Securities (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Jul. 02, 2022 |
---|---|---|
Marketable Securities [Line Items] | ||
Amortized Cost Basis | $ 126,454 | $ 126,237 |
Gross Unrealized Gains | 0 | 8 |
Gross Unrealized Losses | (10,500) | (6,297) |
Fair Value | 115,954 | 119,948 |
Short-Term Marketable Securities | 5,955 | 5,983 |
Long-Term Marketable Securities | 109,999 | 113,965 |
Corporate bonds | ||
Marketable Securities [Line Items] | ||
Amortized Cost Basis | 96,457 | 96,167 |
Gross Unrealized Gains | 0 | 8 |
Gross Unrealized Losses | (8,615) | (5,995) |
Fair Value | 87,842 | 90,180 |
Short-Term Marketable Securities | 5,955 | 5,983 |
Long-Term Marketable Securities | 81,887 | 84,197 |
Government bonds | ||
Marketable Securities [Line Items] | ||
Amortized Cost Basis | 29,997 | 30,070 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1,885) | (302) |
Fair Value | 28,112 | 29,768 |
Short-Term Marketable Securities | 0 | 0 |
Long-Term Marketable Securities | $ 28,112 | $ 29,768 |
MARKETABLE SECURITIES - Available-For-Sale Debt Securities Held To Actual Maturity (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Jul. 02, 2022 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Due in one year or less | $ 5,955 | |
Due after one year through five years | 71,062 | |
Due after five years through ten years | 38,937 | |
Amortized Cost Basis | $ 115,954 | $ 119,948 |
DERIVATIVE FINANCIAL INSTRUMENTS - Outstanding Swap Agreements (Details) - 3 months ended Oct. 01, 2022 € in Millions, £ in Millions, kr in Millions, gal in Millions |
EUR (€)
gal
|
SEK (kr) |
GBP (£) |
---|---|---|---|
Hedging of interest rate risk, June 2023 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional value | € 500 | ||
Hedging of foreign currency risk Various (January 2022 to April 2022) | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional value | kr 131 | £ 10 | |
Hedging of foreign currency risk euro , June 2023 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional value | € 500 | ||
Fuel swaps | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount (in gallons) | gal | 59 |
DERIVATIVE FINANCIAL INSTRUMENTS - Derivatives Balance Sheet Location Table (Details) - Hedging Instrument - USD ($) $ in Thousands |
Oct. 01, 2022 |
Jul. 02, 2022 |
---|---|---|
Fair Value Hedges | Interest rate swap agreements | Other current liabilities | ||
Derivative [Line Items] | ||
Fair value of derivative liabilities | $ 7,136 | $ 2,820 |
Cash Flow Hedges | Fuel swaps | Other current assets | ||
Derivative [Line Items] | ||
Fair value of derivative assets | 16,188 | 47,170 |
Cash Flow Hedges | Fuel swaps | Other assets | ||
Derivative [Line Items] | ||
Fair value of derivative assets | 3 | 0 |
Cash Flow Hedges | Fuel swaps | Other current liabilities | ||
Derivative [Line Items] | ||
Fair value of derivative liabilities | 1,647 | 0 |
Cash Flow Hedges | Fuel swaps | Other long-term liabilities | ||
Derivative [Line Items] | ||
Fair value of derivative liabilities | 3,844 | 209 |
Cash Flow Hedges | Foreign currency forwards | Other current assets | ||
Derivative [Line Items] | ||
Fair value of derivative assets | $ 945 | $ 633 |
DERIVATIVE FINANCIAL INSTRUMENTS - Location and Effect of Derivative Instruments and Related Hedged Items (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Derivative [Line Items] | ||
Interest expense | $ 124,150 | $ 128,214 |
Interest expense | (1,939) | (6,526) |
Decrease in fair value of debt | (4,315) | (4,093) |
Hedging Instrument | Fair Value Hedges | Interest rate swaps | Interest expense | ||
Derivative [Line Items] | ||
Hedged items | 2,376 | (2,433) |
Derivatives designated as hedging instruments | $ (4,759) | $ (8,390) |
DERIVATIVE FINANCIAL INSTRUMENTS - Location of Hedged Liabilities (Details) - Current maturities of long-term debt - USD ($) $ in Thousands |
Oct. 01, 2022 |
Jul. 02, 2022 |
---|---|---|
Derivative [Line Items] | ||
Carrying Amount of Hedged Assets (Liabilities) | $ (568,766) | $ (568,601) |
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | $ 7,136 | $ 2,820 |
DEBT - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Sep. 02, 2022 |
Oct. 01, 2022 |
|
Debt [Line Items] | ||
Maximum board-authorized aggregate commercial paper limit | $ 2,000,000,000 | $ 3,000,000,000 |
Line of Credit | Revolving Credit Facility | ||
Debt [Line Items] | ||
Aggregate commitments | 3,000,000,000 | |
Increase in commitment fee amount | 4,000,000,000 | |
Borrowings outstanding under revolving credit facility | 0 | |
Commercial Paper | ||
Debt [Line Items] | ||
Carrying value of total debt | $ 97,000,000 |
EARNINGS PER SHARE - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Numerator: | ||
Net earnings | $ 465,568 | $ 378,013 |
Denominator: | ||
Weighted-average basic shares outstanding (in shares) | 507,578,576 | 512,516,067 |
Dilutive effect of share-based awards (in shares) | 2,804,573 | 3,266,861 |
Weighted-average diluted shares outstanding (in shares) | 510,383,149 | 515,782,928 |
Basic earnings per share (in dollars per share) | $ 0.92 | $ 0.74 |
Diluted earnings per share (in dollars per share) | $ 0.91 | $ 0.73 |
EARNINGS PER SHARE - Narrative (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Employee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded (in shares) | 1,393 | 1,963 |
OTHER COMPREHENSIVE INCOME - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Comprehensive income | $ 236,297 | $ 308,840 |
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21.74% | 25.40% |
Impact of excess tax benefits of equity-based compensation | $ 8.9 | $ 1.4 |
Increase in reserve for uncertain tax positions | 12.0 | |
Impact of corporate owned life insurance policies | $ 1.9 | |
Unrecognized tax benefits | 32.4 | |
Liability recorded for interest and penalties related to unrecognized tax benefits | $ 6.6 |
SUBSEQUENT EVENTS (Details) participant in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 02, 2023
USD ($)
|
Oct. 31, 2022
USD ($)
participant
|
|
Forecast | Minimum | ||
Subsequent Event [Line Items] | ||
Benefit obligation, non-cash pre-tax pension settlement charge | $ 250 | |
Forecast | Maximum | ||
Subsequent Event [Line Items] | ||
Benefit obligation, non-cash pre-tax pension settlement charge | $ 300 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of participants | participant | 10 | |
Subsequent Event | Insurer | ||
Subsequent Event [Line Items] | ||
Benefit obligation | $ 700 |
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