Revenue and Income - Revenue for the three months ended March 28, 2025, was $4,279,298, an increase of 1.9% compared to $4,199,913 for the same period in 2024[16] - Net income attributable to Aramark stockholders for the six months ended March 28, 2025, was $167,473, compared to $81,985 for the same period in 2024, representing a significant increase[16] - Earnings per share attributable to Aramark stockholders for the three months ended March 28, 2025, was $0.23, compared to $0.20 for the same period in 2024, reflecting a growth of 15%[16] - For the three months ended March 28, 2025, net income was $61,973,000, compared to $53,002,000 for the same period in 2024, representing a year-over-year increase of 16.7%[41] - Comprehensive income for the six months ended March 28, 2025, was $133,780,000, significantly higher than $48,094,000 for the same period in 2024[41] Assets and Liabilities - Total current assets increased to $3,839,766 as of March 28, 2025, from $3,406,562 as of September 27, 2024, reflecting a growth of 12.7%[14] - Total liabilities decreased to $10,469,290 as of March 28, 2025, from $9,635,397 as of September 27, 2024, indicating a reduction of 8.5%[14] - Cash and cash equivalents increased to $920,455 as of March 28, 2025, compared to $672,483 as of September 27, 2024, marking a rise of 36.8%[14] - The balance of retained earnings increased to $315,470,000 as of December 27, 2024, from $239,709,000 on September 27, 2024[24] Cash Flow and Financing Activities - The company reported a net cash used in operating activities of $331,204 for the six months ended March 28, 2025, compared to $435,797 for the same period in 2024, showing an improvement[21] - Cash flows from financing activities resulted in a net cash provided of $1,066,564 for the six months ended March 28, 2025, compared to a net cash used of $833,012 for the same period in 2024, demonstrating a positive shift[21] - Cash used in operating activities decreased by $104.6 million during the six month period of fiscal 2025 compared to the prior year, driven by higher net income and lower payments made to clients[150] - Cash flows used in investing activities increased by $192.6 million during the six month period of fiscal 2025, primarily due to higher acquisitions of certain businesses ($155.1 million)[152] Stockholder Equity and Dividends - Total stockholders' equity increased to $3,081,884,000 as of December 27, 2024, up from $3,038,974,000 on September 27, 2024, reflecting a growth of approximately 1.4%[24] - The company declared dividends of $0.105 per share, totaling $29,858,000 for the quarter ending December 27, 2024[24] - The company declared a dividend of $0.105 per share, payable on May 28, 2025, to stockholders of record on May 14, 2025[99] Segment Performance - The company operates in two reportable segments: Food and Support Services United States and Food and Support Services International, with a significant market presence in the United States and 15 additional countries[31] - FSS United States segment revenue was $3,056.4 million for the three months ended March 28, 2025, compared to $3,043.4 million for the same period in 2024, reflecting a growth of 0.4%[108] - FSS International segment revenue increased to $1,222.9 million for the three months ended March 28, 2025, up from $1,156.5 million in the same period of 2024, representing a growth of 5.7%[108] Debt and Interest Management - As of March 28, 2025, total long-term borrowings net amounted to $6,109.1 million, an increase from $4,307.2 million as of September 27, 2024, representing a 42% increase[65] - The company issued €400.0 million of 4.375% Senior Notes due April 2033 on March 19, 2025, using proceeds to repay €325.0 million of 3.125% Senior Notes due April 2025[67] - The new U.S. Term B-8 Loans due 2030 amount to $1,395.0 million, which were used to repay $839.3 million of Term B-4 Loans due January 2027 and redeem $551.5 million of 5.000% Senior Notes due April 2025[73] - Interest expense for the three months ended March 28, 2025, was $89.7 million, slightly up from $86.3 million in the same period of 2024[109] Market and Economic Conditions - The company anticipates continued volatility in foreign currencies and inflationary costs due to recent developments in tariffs and global trade[121] - The company reported a foreign currency translation adjustment loss of $26,982,000 for the six months ended March 28, 2025, compared to a loss of $5,246,000 for the same period in 2024[41] Corporate Governance and Compliance - Certifications from the CEO and CFO were filed in compliance with the Sarbanes-Oxley Act[31.1][31.2] - The financial documents are filed with the SEC, ensuring transparency and regulatory compliance[32]

Aramark (ARMK) Q2 2025 Earnings Call May 06, 2025 08:30 AM ET Company Participants Felise Kissell - Vice President of Investor Relations & Corporate DevelopmentJohn Zillmer - CEO & DirectorJim Tarangelo - Senior VP & CFOIan Zaffino - Managing DirectorLeo Carrington - DirectorNeil Tyler - PartnerJasper Bibb - Vice President Equity ResearchKarl Green - Director - Equity ResearchStephanie Moore - SVP - Equity Research Conference Call Participants Toni Kaplan - Executive Director, Senior Equity Research Analyst ...

Financial Data and Key Metrics Changes - Aramark's organic revenue grew to $4.3 billion, representing a 3% increase, despite challenges such as facility exits and weather-related closures [8][20] - Operating income was $174 million, up 9.5% year-over-year, with adjusted operating income increasing to $205 million, reflecting an 11% rise on a constant currency basis [20][21] - Adjusted EPS was $0.34, a 22% increase compared to the prior year on a constant currency basis [23] Business Segment Data and Key Metrics Changes - In the U.S., organic revenue increased to $3.1 billion, approximately 1% growth, impacted by factors like facility exits [9][21] - The International segment reported organic revenue of $1.3 billion, a 10% year-over-year increase, with strong performance across multiple countries [12][13] - The U.S. segment's AOI growth was 5%, with margin improvement driven by supply chain efficiencies [21] Market Data and Key Metrics Changes - Client retention rate exceeded 98%, a level not typically seen at this point in the fiscal calendar [6][26] - New client wins totaled $760 million year-to-date, with expectations for net new business growth of 4% to 5% in fiscal 2025 [7][26] - The company experienced a monthly acceleration of revenue growth, reaching 6% in April [6][26] Company Strategy and Development Direction - Aramark is focused on leveraging its resilient business model to navigate market fluctuations and uncertainties [7][18] - The company aims to capitalize on growth opportunities in various sectors, including education, sports, and healthcare [12][18] - Continued investment in technology and supply chain optimization is a priority to enhance operational efficiency and client service [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial objectives for fiscal 2025, citing strong retention rates and a robust sales pipeline [6][26] - The company is monitoring macroeconomic trends, including tariffs, and believes its business model is well insulated from volatility [16][26] - Expectations for revenue growth to accelerate in the second half of the fiscal year, driven by new business and increased base business volume [26] Other Important Information - The company repurchased nearly 4 million shares, totaling about $140 million, as part of its capital allocation strategy [19][24] - Aramark's leverage is expected to remain around three times by the end of the fiscal year, with enhanced financial flexibility achieved through debt maturity extensions [19][24] Q&A Session Summary Question: Potential for net new business growth above 5% - Management indicated that they expect to exceed the multi-year growth range of 5% to 8% in the fourth quarter, driven by strong retention and new business [30][32] Question: Impact of inflation on Avendra and consumer behavior - Management confirmed that Avendra is effectively managing supply chain disruptions and can pass through inflationary costs, with no significant change in consumer behavior noted [34][36] Question: Expectations for pricing and margin expansion - Management expects pricing to align with inflation, with opportunities for incremental margin expansion driven by supply chain efficiencies and operational improvements [110]

Q2 Fiscal 2025 Earnings Results M A Y 6 , 2 0 2 5 Q2 2025 Earnings Results Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current expectations as to future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. These statements include, but are not limited to, statements under the heading, "Growth ...

Revenue Growth - Revenue increased by 2% year-over-year to $4.3 billion, with organic revenue growth of 3%[7] - FSS International revenue grew by 6% year-over-year, driven by strong performance in the U.K., Spain, Chile, and Canada[8] - Revenue for the three months ended March 28, 2025, was $4,279,298, an increase from $4,199,913 for the same period in 2024, representing a growth of approximately 1.9%[46] - Total revenue for the three months ended March 28, 2025, was reported at $4,279,298 thousand, reflecting a 1.9% increase compared to $4,199,913 thousand for the same period in 2024[54] Operating Performance - Operating income rose by 9% to $174 million, and adjusted operating income (AOI) grew by 11% to $205 million, reflecting improved operational efficiency[9] - Operating income for the six months ended March 28, 2025, was $391,439, compared to $326,036 for the same period in 2024, reflecting an increase of about 20.0%[48] - Adjusted operating income for the six months ended March 28, 2025, was $462,387 thousand, up from $418,005 thousand in the prior year, indicating a growth of 10.6%[56] - The operating income margin for the three months ended March 28, 2025, was 4.1%, compared to 3.8% for the same period in 2024, showing an improvement of 0.3 percentage points[54] Earnings and Profitability - GAAP EPS increased by 15% to $0.23, while adjusted EPS rose by 22% to $0.34[2] - Basic earnings per share for the six months ended March 28, 2025, was $0.63, compared to $0.31 for the same period in 2024, representing a significant increase of 103.2%[48] - Net income attributable to Aramark stockholders for the three months ended March 28, 2025, was $61,854, up from $53,449 in the same period of 2024, indicating a growth of approximately 15.0%[46] - Adjusted net income for the three months ended March 28, 2025, was $91.794 million, up 19.8% from $76.599 million in the prior year[58] - The company experienced a significant increase in adjusted net income (constant currency) to $93.846 million for the three months ended March 28, 2025, compared to $76.599 million in the prior year, reflecting a growth of 22.5%[58] Cash Flow and Liquidity - Free cash flow for the second quarter was $141 million, with net cash provided by operating activities at $256 million[12] - Cash and cash equivalents increased to $920,455 as of March 28, 2025, from $672,483 as of September 27, 2024, reflecting a growth of about 36.8%[49] - Cash and cash equivalents at the end of the period increased to $974,006 thousand from $414,141 thousand year-over-year, marking a significant increase of 134.0%[52] - The company reported a net cash used in operating activities of $(331,204) thousand for the six months ended March 28, 2025, an improvement from $(435,797) thousand in the same period last year[52] Debt and Financial Position - The company extended $1.8 billion of debt maturities to 2030 and beyond, maintaining comparable interest rates[5] - The company’s total long-term borrowings increased to $6.533 billion as of March 28, 2025, from $5.921 billion as of March 29, 2024[60] - Net debt to covenant adjusted EBITDA ratio improved to 3.9 for the twelve months ended March 28, 2025, down from 4.2 in the previous year[60] Future Outlook - The company anticipates organic revenue growth of 9.5% for fiscal 2025, with adjusted operating income growth of 18% and adjusted EPS growth of 28%[20] - The company expects to achieve net new business growth of 4% to 5% of prior year revenue in fiscal 2025[15] - The company anticipates continued growth and improvement in operational performance, despite potential risks from economic conditions and geopolitical events[42]

Group 1 - The options market indicates significant implied volatility for Aramark, particularly for the July 18, 2025 $20 Call option, suggesting that investors expect a substantial price movement [1] - Implied volatility reflects market expectations of future stock movement, often indicating potential upcoming events that could lead to a major price change [2] - Analysts have a negative outlook on Aramark, with the company currently holding a Zacks Rank 4 (Sell) in the Business – Services industry, and no earnings estimates have been increased in the last 60 days [3] Group 2 - The high implied volatility may present trading opportunities, as options traders often seek to sell premium on options with elevated implied volatility, aiming to benefit from time decay [4]

Group 1 - The article discusses the author's long position in ARMK and SDXAY, indicating a positive outlook on these stocks [1] - It emphasizes the importance of conducting due diligence and research before making investment decisions, particularly for short-term trading and options trading [2] - The author clarifies that the views expressed may not reflect those of Seeking Alpha as a whole, highlighting the diverse backgrounds of the analysts [3]

Group 1 - The analyst previously held a buy rating for Aramark (NYSE: ARMK) based on a positive FY25 outlook and confidence in meeting guidance [1] - The analyst has shifted to a less confident stance regarding Aramark's future performance [1] Group 2 - The analyst emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies [1] - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors [1]

Revenue and Income - Revenue for the three months ended December 27, 2024, was $4,552,086, an increase of 3.3% compared to $4,407,765 for the same period in 2023[16] - Net income attributable to Aramark stockholders for the three months ended December 27, 2024, was $105,619, significantly up from $28,536 in the prior year, representing a growth of 270.5%[16] - Operating income increased to $217,264 for the three months ended December 27, 2024, compared to $166,950 for the same period in 2023, reflecting a rise of 30.1%[16] - Earnings per share attributable to Aramark stockholders increased to $0.40 for the three months ended December 27, 2024, compared to $0.11 for the same period in 2023, a growth of 263.6%[16] - The company reported a comprehensive income of $76,699 for the three months ended December 27, 2024, compared to $6,353 for the same period in 2023, an increase of 1,109.5%[19] Cash and Liabilities - Total current liabilities decreased to $3,496,855 as of December 27, 2024, down from $4,214,210 as of September 27, 2024, a reduction of 17.0%[13] - Cash and cash equivalents at the end of the period were $484,149, down from $672,483 at the end of the previous quarter, a decrease of 28.0%[13] - Cash flows from operating activities resulted in a net cash used of $587,152 for the three months ended December 27, 2024, compared to $657,077 for the same period in 2023, a decrease of 10.6%[21] - The company incurred interest expenses of $75,804 for the three months ended December 27, 2024, down from $114,562 in the same period last year, a reduction of 33.8%[16] - As of December 27, 2024, long-term borrowings net totaled $4,976.9 million, an increase from $4,307.2 million as of September 27, 2024[61] Equity and Stockholder Information - Total stockholders' equity increased to $3,081,884 as of December 27, 2024, compared to $3,038,974 as of September 27, 2024, an increase of 1.4%[13] - The company declared dividends of $0.105 per share, totaling $29,858,000 for the period[23] - The Company had $1,158.1 million of availability under the senior secured revolving credit facility as of December 27, 2024[62] - The share repurchase program allows for the repurchase of up to $500.0 million of Aramark's outstanding common stock, with $0.9 million spent on repurchasing 24,743 shares during the three months ended December 27, 2024[83] Segment Performance - The company operates in two reportable segments: Food and Support Services United States and Food and Support Services International, with the U.S. being the largest market[27] - FSS United States segment revenue increased by approximately 2.7% to $3,301.0 million, driven by base business growth and contract price increases[119] - FSS International segment revenue rose by approximately 4.7% to $1,251.1 million, with growth attributed to volume increases and net new business, despite a 5.1% negative impact from foreign currency translation[121] Financial Adjustments and Accounting - The company is currently assessing the impact of new accounting standards on its financial statement disclosures, effective for fiscal years 2025 and beyond[30][32][33] - The company recognized $224.3 million of revenue that was included in deferred income at the beginning of the period[78] - The contingent consideration liability related to the Union Supply acquisition was adjusted to $11.1 million, expected to be fully paid out in Q2 of fiscal 2025[97] - Recent accounting standard updates are detailed in the condensed consolidated financial statements[151] Risk Management and Compliance - The company continues to manage operating costs and interest rate risks amid elevated market interest rates and inflationary pressures[105] - The maximum Consolidated Secured Debt Ratio is set at 5.125x, with non-compliance potentially leading to immediate repayment requirements[22] - The minimum Interest Coverage Ratio is established at 2.000x, which is necessary for incurring additional indebtedness and making restricted payments[22] - The company is engaged in informal settlement discussions regarding environmental law violations, which are not expected to materially affect financial conditions[157] Miscellaneous - The balance of accumulated other comprehensive loss increased from $(132,457,000) on September 27, 2024, to $(161,377,000) on December 27, 2024, indicating a decline in comprehensive income[38] - The company has not experienced any material changes in market risk associated with debt obligations from September 27, 2024, to December 27, 2024[152] - Management has concluded that disclosure controls and procedures are functioning effectively, providing reasonable assurance for timely reporting[153] - There have been no material changes to the risk factors disclosed in the previous annual report[159]

Core Insights - Aramark reported revenue of $4.55 billion for the quarter ended December 2024, reflecting a year-over-year increase of 3.3% [1] - The company's EPS was $0.51, up from $0.41 in the same quarter last year, exceeding the consensus estimate of $0.48 by 6.25% [1] Revenue Performance - FSS International revenue was $1.25 billion, slightly below the average estimate of $1.27 billion, with a year-over-year increase of 4.7% [4] - FSS United States revenue reached $3.30 billion, compared to the estimated $3.35 billion, marking a 2.8% increase from the previous year [4] Operating Income - Operating income for FSS United States was reported at $193.72 million, below the estimated $204.42 million [4] - Operating income for FSS International was $53.69 million, also below the average estimate of $61.78 million [4] - Adjusted operating income for Corporate was -$30.14 million, worse than the estimated -$27.11 million [4] Stock Performance - Aramark shares returned +4.8% over the past month, outperforming the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]