Sysco (SYY) risk factors, FY2026 10-K

Industry and General Economic Risks

1. 01Our industry is characterized by low margins, and periods of significant or prolonged inflation or deflation affect our product costs and may negatively impact our profitability and results of operations
2. 02A shortage of qualified labor and increases in labor costs could adversely affect our business and materially reduce earnings
3. 03Global health developments and economic uncertainty resulting from global public health crises may adversely affect our business, financial condition and results of operations
4. 04Unfavorable macroeconomic conditions, as well as unfavorable conditions in particular local markets, may adversely affect our results of operations and financial condition
5. 05We may not be able to fully compensate for increases in fuel costs, and fuel hedging arrangements intended to contain fuel costs could result in above market fuel costs, any of which could adversely affect our results of operations
6. 06Economic and political instability and changes in laws and regulations could adversely affect our results of operations and financial condition
7. 07Competition and the impact of GPOs may reduce our margins and make it difficult for us to maintain our market share, growth rate and profitability 24% rewritten

Business and Operational Risks

1. 08Conditions beyond our control can interrupt our supplies, increase our product costs and impair our ability to deliver products and services to our customers, any of which could adversely affect our business, results of operations and financial condition
2. 09Climate change and other social and governance matters, as well as the legal, regulatory or market measures being implemented to address such matters, may have an adverse impact on our business, results of operations and financial condition
3. 10Adverse publicity about us or lack of confidence in our products could negatively impact our reputation and reduce earnings
4. 11Our relationships with long-term customers may be materially diminished or terminated, which could adversely affect our business, financial condition and results of operations
5. 12Our anticipated change to the mix of locally managed customers versus multi-unit customers could reduce our gross and operating margins
6. 13Changes in consumer eating habits could materially and adversely affect our business, financial condition, and results of operations
7. 14Expanding into new markets and complementary lines of business presents unique challenges and may not be successful, and failure to successfully expand may adversely affect the implementation of our business strategy
8. 15Changes in applicable tax laws or regulations and the resolution of tax disputes could negatively affect our financial results46% rewritten
9. 16changes, including 100% bonus depreciation on qualified property. These provisions decreased cash taxes paid in fiscal 2026 and may change the timing of cash tax payments in future periodsNew
10. 17no assurance that the final determination of tax audits or tax disputes will not be different from what is reflected in our historical income tax provisions and accrualsNew
11. 18If our products are alleged to have caused injury, illness, or death, or to have failed to comply with governmental regulations, we may need to recall or withdraw our products and may experience product liability claims
12. 19If we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could materially adversely affect our business
13. 20We may incur significant costs to comply with environmental laws and regulations, and we may be subject to substantial fines, penalties or third-party claims for non-compliance
14. 21If we are unable to finance and integrate acquired businesses effectively, our earnings per share could be materially adversely affected
15. 22We rely on technology in our business, and any cybersecurity incident, other technology disruption or delay in implementing new technology could negatively affect our business and our relationships with customers
16. 23Our growing use of artificial intelligence systems in our operations poses inherent risks and could adversely affect our results of operations
17. 24Our failure to comply with data privacy regulations could adversely affect our business87% rewritten
18. 25Our level of indebtedness and the terms of our indebtedness could adversely affect our business and liquidity position
19. 26We may be required to pay material amounts under multiemployer defined benefit pension plans, which could adversely affect our financial condition, results of operations and cash flows
20. 27Our funding requirements for our company-sponsored qualified pension plan may increase should financial markets experience future declines, which could adversely affect our financial condition, results of operations and cash flows
21. 28Failure to successfully renegotiate union contracts could result in work stoppages, which could have a material adverse effect on our business, financial condition and results of operations 38% rewritten

Risks Related to the Transactions

1. 29As used in this section, the following terms have the meanings set forth belowNew
2. 30The Transactions are subject to conditions, some or all of which may not be satisfied or completed on a timely basis, if at all. Failure to complete the Transactions in a timely manner or at all could have adverse effects on usNew
3. 31We and Jetro Restaurant Depot are subject to business uncertainties and contractual restrictions while the Transactions are pendingNew
4. 32The mergers are subject to the requirements of the HSR Act, and regulatory authorities may impose conditions that could have an adverse effect on us following the Transactions or that could delay, prevent or increase the costs associated with completion of the TransactionsNew
5. 33We expect to obtain financing in connection with the Transactions but cannot guarantee that we will be able to obtain such financing on favorable terms or at allNew
6. 34We may not achieve the intended benefits, and the Transactions may disrupt our current plans or operationsNew
7. 35Potential litigation against us could result in substantial costs, an injunction preventing the completion of the Transactions and/or a judgment resulting in the payment of damagesNew
8. 36Our existing stockholders will have reduced ownership and economic interest in Sysco Holdings after the TransactionsNew
9. 37Our authorized preferred stock provides anti-takeover benefits that may not be viewed as beneficial to stockholders
10. 38Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees