LEASES

12 Months Ended

Jun. 28, 2025

Leases [Abstract]

LEASES

LEASES

Sysco leases certain of its distribution and warehouse facilities, office facilities, fleet vehicles, and office and warehouse equipment. We determine if an arrangement is a lease at inception and recognize a finance or operating lease liability and right-of-use (ROU) asset in the consolidated balance sheets if a lease exists. Lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at the commencement date. If the borrowing rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments.

The lease term is defined as the noncancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the company will exercise one of these options. Leases with an initial term of twelve months or less are not recorded in Sysco’s consolidated balance sheets, and we recognize expense for these leases on a straight-line basis over the lease term. Variable lease payments that do not depend on an index or a rate, such as insurance and property taxes, are excluded from the measurement of the lease liability and are recognized as variable lease cost when the obligation for that payment is incurred. For leases in which the lease and non-lease components have been combined, the variable lease expense includes expenses such as common area maintenance, utilities, and repairs and maintenance. Sysco’s leases do not contain significant residual value guarantees and do not impose significant restrictions or covenants.

The following table presents the location of the finance lease ROU assets and lease liabilities in our consolidated balance sheets at June 28, 2025 and June 29, 2024:

	Consolidated Balance Sheet Location	Jun. 28, 2025		Jun. 29, 2024
		(In millions)
Finance lease right-of-use assets	Plant and equipment at cost, less accumulated depreciation	$	476	$	339
Current finance lease liabilities	Current maturities of long-term debt	65		54
Long-term finance lease liabilities	Long-term debt	387		307

The following table presents lease costs for each of the presented periods ended June 28, 2025 and June 29, 2024:

	Consolidated Results of Operations Location	Jun. 28, 2025		Jun. 29, 2024
		(In millions)
Operating lease cost	Operating expenses	$	186	$	154
Financing lease cost:
Amortization of right-of-use assets	Operating expenses	70		60
Interest on lease obligations	Interest expense	17		14
Variable lease cost	Operating expenses	115		111
Short-term lease cost	Operating expenses	54		68
Net lease cost		$	442	$	407

Future minimum lease obligations under existing noncancelable operating and finance lease agreements by fiscal year as of June 28, 2025 are as follows:

	Operating Leases		Finance Leases
	(In millions)
2026	$	187	$	84
2027	188		77
2028	154		62
2029	130		48
2030	119		39
Thereafter	749		289
Total undiscounted lease obligations	1,527		599
Less imputed interest	(342)		(147)
Present value of lease obligations	$	1,185	$	452

We have entered into operating lease agreements that have not yet commenced as of June 28, 2025 with legally binding minimum lease payments of $324 million. The leases are expected to commence during the next two fiscal years.

Other information related to lease agreements was as follows:

	Jun. 28, 2025			Jun. 29, 2024
Cash Paid For Amounts Included In Measurement of Liabilities:	(Dollars in millions)
Operating cash flows for operating leases	$	177		$	144
Operating cash flows for financing leases	17			14
Financing cash flows for financing leases	115			51
Supplemental Non-cash Information on Lease Liabilities:
Assets obtained in exchange for operating lease obligations	$	254		$	287
Assets obtained in exchange for finance lease obligations	202			115
Operating lease asset adjustments, including renewals and remeasurements	80			24
Operating lease liability adjustments, including renewals and remeasurements	83			24
Lease Term and Discount Rate:
Weighted-average remaining lease term (years):
Operating leases	11.10 years			10.63 years
Financing leases	12.38 years			12.50 years
Weighted-average discount rate:
Operating leases	4.56		%	4.19		%
Financing leases	4.65		%	4.50		%

LEASES

LEASES

Sysco leases certain of its distribution and warehouse facilities, office facilities, fleet vehicles, and office and warehouse equipment. We determine if an arrangement is a lease at inception and recognize a finance or operating lease liability and right-of-use (ROU) asset in the consolidated balance sheets if a lease exists. Lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at the commencement date. If the borrowing rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments.

The lease term is defined as the noncancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the company will exercise one of these options. Leases with an initial term of twelve months or less are not recorded in Sysco’s consolidated balance sheets, and we recognize expense for these leases on a straight-line basis over the lease term. Variable lease payments that do not depend on an index or a rate, such as insurance and property taxes, are excluded from the measurement of the lease liability and are recognized as variable lease cost when the obligation for that payment is incurred. For leases in which the lease and non-lease components have been combined, the variable lease expense includes expenses such as common area maintenance, utilities, and repairs and maintenance. Sysco’s leases do not contain significant residual value guarantees and do not impose significant restrictions or covenants.

The following table presents the location of the finance lease ROU assets and lease liabilities in our consolidated balance sheets at June 28, 2025 and June 29, 2024:

	Consolidated Balance Sheet Location	Jun. 28, 2025		Jun. 29, 2024
		(In millions)
Finance lease right-of-use assets	Plant and equipment at cost, less accumulated depreciation	$	476	$	339
Current finance lease liabilities	Current maturities of long-term debt	65		54
Long-term finance lease liabilities	Long-term debt	387		307

The following table presents lease costs for each of the presented periods ended June 28, 2025 and June 29, 2024:

	Consolidated Results of Operations Location	Jun. 28, 2025		Jun. 29, 2024
		(In millions)
Operating lease cost	Operating expenses	$	186	$	154
Financing lease cost:
Amortization of right-of-use assets	Operating expenses	70		60
Interest on lease obligations	Interest expense	17		14
Variable lease cost	Operating expenses	115		111
Short-term lease cost	Operating expenses	54		68
Net lease cost		$	442	$	407

Future minimum lease obligations under existing noncancelable operating and finance lease agreements by fiscal year as of June 28, 2025 are as follows:

	Operating Leases		Finance Leases
	(In millions)
2026	$	187	$	84
2027	188		77
2028	154		62
2029	130		48
2030	119		39
Thereafter	749		289
Total undiscounted lease obligations	1,527		599
Less imputed interest	(342)		(147)
Present value of lease obligations	$	1,185	$	452

We have entered into operating lease agreements that have not yet commenced as of June 28, 2025 with legally binding minimum lease payments of $324 million. The leases are expected to commence during the next two fiscal years.

Other information related to lease agreements was as follows:

	Jun. 28, 2025			Jun. 29, 2024
Cash Paid For Amounts Included In Measurement of Liabilities:	(Dollars in millions)
Operating cash flows for operating leases	$	177		$	144
Operating cash flows for financing leases	17			14
Financing cash flows for financing leases	115			51
Supplemental Non-cash Information on Lease Liabilities:
Assets obtained in exchange for operating lease obligations	$	254		$	287
Assets obtained in exchange for finance lease obligations	202			115
Operating lease asset adjustments, including renewals and remeasurements	80			24
Operating lease liability adjustments, including renewals and remeasurements	83			24
Lease Term and Discount Rate:
Weighted-average remaining lease term (years):
Operating leases	11.10 years			10.63 years
Financing leases	12.38 years			12.50 years
Weighted-average discount rate:
Operating leases	4.56		%	4.19		%
Financing leases	4.65		%	4.50		%