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]

Q1 Fiscal 2025 Earnings Results F E B R U A R Y 4 , 2 0 2 5 Q1 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 ...

Company Performance - Aramark reported quarterly earnings of $0.51 per share, exceeding the Zacks Consensus Estimate of $0.48 per share, and up from $0.41 per share a year ago, representing an earnings surprise of 6.25% [1] - The company posted revenues of $4.55 billion for the quarter ended December 2024, which was 1.29% below the Zacks Consensus Estimate, but an increase from $4.41 billion year-over-year [2] - Over the last four quarters, Aramark has surpassed consensus EPS estimates three times, but has only topped revenue estimates once [2] Stock Outlook - Aramark shares have increased approximately 3.1% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $4.43 billion, and for the current fiscal year, it is $1.93 on revenues of $18.67 billion [7] - The estimate revisions trend for Aramark is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Zacks Industry Rank for Food - Miscellaneous, which includes Aramark, is currently in the bottom 21% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Aramark's stock performance [5]

Financial Performance - Operating Income increased by 30% year-over-year to $217 million, with Adjusted Operating Income (AOI) growing by 13% to $258 million[5]. - Consolidated revenue reached $4.6 billion, a 3% increase year-over-year, with Organic revenue growth of 5%[6]. - GAAP EPS rose by 264% to $0.39, while Adjusted EPS increased by 25% to $0.51[5]. - 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[41]. - Adjusted operating income for the three months ended December 27, 2024, was $257,568, reflecting an 11.7% growth from $230,579 in the prior year[47]. - Adjusted net income attributable to Aramark stockholders for the three months ended December 27, 2024, was $136,934, up 25.8% from $108,802 in the same period last year[50]. - Earnings per share (EPS) for the three months ended December 27, 2024, was $0.51, representing a 23.8% increase from $0.41 in the prior year[50]. - Total revenue for Aramark and subsidiaries reached $4,552,086, with a reported growth of 3.3% compared to the previous year[62]. Acquisitions and Investments - The company completed the acquisition of Quantum Cost Consultancy Group, enhancing its Global Supply Chain spend to over $20.5 billion[12]. - Aramark initiated a $500 million share repurchase program, having repurchased over 645,000 shares for approximately $25 million[9]. Future Outlook - The company expects organic revenue growth of 9.5% and Adjusted Operating Income growth of 18% for fiscal 2025[15]. - Aramark anticipates achieving Net New business growth of 4% to 5% of prior year revenue, with retention levels above 95%[11]. - The company continues to focus on market expansion and new product development strategies to drive future growth[62]. - The company anticipates continued growth and improvement in financial performance, despite potential risks from economic conditions and geopolitical events[39]. Cash Flow and Debt Management - The company reported a cash availability of over $1.7 billion at quarter-end[9]. - The company plans to fully repay $552 million of Senior Notes due April 2025 and refinance certain term loans to 2030[13]. - Cash and cash equivalents at the end of the period were $484,149, a decrease from $672,483 at the end of the previous quarter[42]. - Net cash provided by financing activities was $642,698, compared to a net cash used of $779,003 in the same period last year[45]. - The company reported a net cash used in operating activities of $587,152, an improvement from $657,077 in the prior year[45]. Segment Performance - FSS United States revenue grew by 3% to $3.301 billion, while FSS International revenue increased by 5% to $1.251 billion[7]. - Operating income growth for FSS United States was 10.8% and for FSS International was 16.1% for the three months ended December 27, 2024[47]. - Adjusted revenue growth (organic) for FSS International was 9.8% for the three months ended December 27, 2024[47]. - Food segment revenue increased to $3,926,762, showing a growth of 4.7% compared to the same period last year[62]. - Facilities segment revenue was $625,324, with a year-over-year growth of 2.7%[62]. - FSS United States food revenue reported a growth of 4.8%, while FSS International food revenue grew by 10.0%[62]. - The total revenue for FSS International was $1,251,070, reflecting a growth of 4.7%[62]. Financial Ratios and Metrics - Interest expense, net decreased to $75,804, down 33.9% from $114,562 in the previous year[41]. - Total current liabilities decreased to $3,496,855 from $4,214,210, indicating improved liquidity[42]. - Net debt to covenant adjusted EBITDA ratio improved to 4.0 for the twelve months ended December 27, 2024, down from 4.5 in the prior year[52]. - Free cash flow for the three months ended December 27, 2024, was $(704,940), compared to $(768,278) for the same period in 2023, indicating an improvement of $63,338[60].

Core Viewpoint - The market anticipates Aramark (ARMK) will report a year-over-year increase in earnings driven by higher revenues for the quarter ending December 2024, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Aramark is expected to report quarterly earnings of $0.48 per share, reflecting a year-over-year increase of 17.1%, with revenues projected at $4.61 billion, up 4.6% from the previous year [3]. - The consensus EPS estimate has been revised 0.38% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a positive Earnings ESP of +5.53% for Aramark, suggesting analysts are optimistic about the company's earnings prospects [10][11]. - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. Historical Performance - In the last reported quarter, Aramark met the expected earnings of $0.54 per share, resulting in no surprise, and has beaten consensus EPS estimates three times over the last four quarters [12][13]. Conclusion - Aramark is positioned as a compelling candidate for an earnings beat, but investors should consider other influencing factors before making investment decisions [16].