Core Viewpoint - Growth investors are interested in stocks with above-average financial growth, but identifying such stocks can be challenging due to associated risks and volatility [1] Group 1: Company Overview - Aramark (ARMK) is identified as a promising growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company provides food, facilities, and uniform services, making it a strong candidate for growth investment [3] Group 2: Earnings Growth - Aramark has a historical EPS growth rate of 32.8%, with projected EPS growth of 24.9% this year, significantly higher than the industry average of 10.9% [4] Group 3: Asset Utilization - The company's asset utilization ratio (sales-to-total-assets ratio) is 1.37, indicating that Aramark generates $1.37 in sales for every dollar in assets, outperforming the industry average of 0.96 [5] Group 4: Sales Growth - Aramark's sales are expected to grow by 7% this year, compared to an industry average of 0% [6] Group 5: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Aramark, with the Zacks Consensus Estimate for the current year increasing by 0.1% over the past month [7] Group 6: Investment Positioning - Aramark holds a Zacks Rank of 2 and a Growth Score of A, positioning it well for potential outperformance in the market [9]

Core Viewpoint - Aramark (ARMK) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that could lead to increased stock price [1][3]. Earnings Estimates and Stock Price Impact - Changes in a company's future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements, influenced by institutional investors [4]. - Rising earnings estimates and the rating upgrade for Aramark suggest an improvement in the company's underlying business, which may lead to higher stock prices as investors respond positively [5]. Zacks Rank System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The Zacks rating system maintains an equal proportion of "buy" and "sell" ratings across over 4,000 stocks, ensuring that only the top 20% receive a "Strong Buy" or "Buy" rating [9][10]. Earnings Estimate Revisions for Aramark - For the fiscal year ending September 2025, Aramark is expected to earn $1.94 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 1% over the past three months [8].

Group 1: Company Performance - Aramark (ARMK) has gained approximately 13.8% year-to-date, significantly outperforming the average gain of 2.8% in the Business Services group [4] - The Zacks Consensus Estimate for Aramark's full-year earnings has increased by 1% over the past quarter, indicating improving analyst sentiment and a positive earnings outlook [3] - In comparison to its industry, Aramark is slightly underperforming, as the Business - Services industry has gained about 18% year-to-date [5] Group 2: Industry Context - Aramark is part of the Business Services group, which consists of 260 companies and currently ranks 2 in the Zacks Sector Rank [2] - The Business - Services industry, which includes 26 stocks, is currently ranked 44 in the Zacks Industry Rank [5] - Cipher Mining Inc. (CIFR), another stock in the Business Services sector, has outperformed with a return of 24.8% year-to-date [4]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer approach may involve investing in bargain stocks that are experiencing recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Aramark (ARMK) Analysis - Aramark (ARMK) has shown a price increase of 7.4% over the past four weeks, indicating growing investor interest [4] - Over the past 12 weeks, ARMK's stock has gained 29.9%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - ARMK has a beta of 1.28, suggesting it moves 28% more than the market in either direction, indicating fast-paced momentum [5] - The stock has a Momentum Score of A, suggesting it is an opportune time to invest [6] - ARMK has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [7] - The stock is trading at a Price-to-Sales ratio of 0.63, indicating it is relatively undervalued, as investors pay only 63 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides ARMK, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies tailored to help investors find winning stock picks [9]

Market Overview - The global convenience services market was valued at USD 28.20 billion in 2024 and is projected to reach USD 42.20 billion by 2030, with a CAGR of 6.95% [1][21]. Competitive Landscape - The market is characterized by intense competition and moderate fragmentation, driven by established service aggregators, innovative digital platforms, and agile hyperlocal startups [2][3]. - Leading players like Canteen Vending Services, Aramark Refreshment Services, and 365 Retail Markets are leveraging advanced technologies such as AI for customer behavior analysis and optimizing logistics [3][4]. Consumer Trends - There is a significant shift towards contactless payment options, with 85% of North American consumers preferring these methods at convenience service points in 2024 [6][7]. - Major brands like Starbucks and McDonald's have reported substantial increases in contactless payment usage, enhancing transaction efficiency and customer convenience [8][9]. Food Service Enhancements - Convenience retailers are enhancing food service offerings to meet evolving consumer expectations for quality, variety, and customization [11][16]. - Examples include 7-Eleven's app feature for customizable sandwich orders, leading to a 10-15% increase in transaction values [12]. Geographical Insights - North America dominates the convenience services market, driven by high consumer demand for innovative solutions and widespread adoption of contactless payments [17]. - APAC's rapid urbanization and Europe's commitment to sustainability are also significant growth drivers in their respective regions [18][20]. Future Outlook - Success in the convenience services market will depend on technological innovation, logistics optimization, and the ability to adapt to changing consumer preferences [5][10].

Core Insights - Venu Holding Corporation (VENU) has formed a strategic partnership with Aramark Sports + Entertainment to enhance its operations and redefine the live entertainment experience [1][2] - The partnership includes Aramark becoming the exclusive provider of food, beverage, retail, and facility operations for VENU's flagship Ford Amphitheater and upcoming venues in Texas and Oklahoma, supported by a $10.125 million equity investment from Aramark [2][3] Company Strategy - VENU aims to open over 20 venues in the next 48-60 months, necessitating a logistics-savvy operator like Aramark to efficiently manage large-scale operations [4][7] - The partnership is designed to create a modern guest experience through app-connected systems, mobile ordering, AI-powered menu optimization, and real-time guest analytics [4][6] Guest Experience Focus - Both VENU and Aramark share a commitment to enhancing the guest experience, with VENU's upscale, fan-centric venues aligning with Aramark's expertise in delivering high-impact experiences across various entertainment venues [3][4] - Aramark's ability to integrate local flavors and regional partnerships into its operations will further enhance VENU's appeal and brand loyalty [7]

Core Insights - Venu Holding Corporation has formed a strategic partnership with Aramark Sports + Entertainment to enhance the live entertainment experience through improved hospitality and facility operations [1][2][3] Company Overview - Venu Holding Corporation operates premium live music venues and is focused on expanding its national footprint [1][6] - The company employs a capital-light growth strategy, utilizing a 40/40/20 capital model to finance its expansion without relying on dilutive equity [6] Partnership Details - Aramark will manage food & beverage concessions, retail, and facility operations at Venu's flagship amphitheaters, which includes an equity investment in Venu [2][3] - The partnership aims to elevate fan experiences and operational efficiency, aligning both companies around a long-term vision [2][3] Expansion Plans - Venu plans to expand to 16 operating venues and over 79,000 seats by the end of 2026, transitioning from a regional developer to a national player in high-performance entertainment infrastructure [7] Financial Performance - In Q1 2025, Venu reported $38.7 million in fractional suite sales and a 19% increase in total assets, indicating the scalability of its business model [6]

Financial Data and Key Metrics Changes - The company has seen strong momentum in revenues and expects significant acceleration in the second half of the year [5] - Margin growth has improved from approximately 4.6% in fiscal 2023 to 5.1% in fiscal 2024, with a midpoint guidance of about 5.5% [27][24] - The company aims for a long-term margin improvement of 20 to 30 basis points annually, which could exceed previous peaks [34] Business Line Data and Key Metrics Changes - The company reported a retention rate of over 98% in the first half of the year, with a target of 95% to 96% [13][16] - The international business has consistently outperformed the U.S. business, achieving double-digit growth [36] - The U.S. business accounts for two-thirds of revenue, with a steady state of new business wins coming from first-time outsourcing [44][48] Market Data and Key Metrics Changes - The company anticipates a moderate tailwind from the return to office, with growth in the Business and Industry segment [66] - The international segment has shown consistent margin improvement, with margins ahead of 2019 levels [43] Company Strategy and Development Direction - The company has shifted to a growth-oriented model with a focus on hospitality, decentralizing operations to enhance customer service [9][10] - Strategic actions include realigning incentives to focus on net new business, which is crucial for growth [9] - The company is leveraging technology to improve efficiency and throughput in service delivery, particularly in collegiate athletics [55][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook, citing improved retention rates and a strong start to the year [5][6] - The company expects to exit the year with an organic growth rate in the 5% to 8% range, with an exit rate around 8% [21][22] - Management noted that the current economic environment presents both challenges and opportunities, particularly in the context of outsourcing trends [46] Other Important Information - The company has experienced a $200 million foreign exchange headwind for the year, with potential upside if rates stabilize [68][73] - The collegiate sports sector is evolving, with increased funding requirements leading to opportunities for enhanced service offerings [55] Q&A Session Summary Question: What is the outlook for customer retention? - The company is on track to achieve or exceed its 95% to 96% retention target based on strong first-half performance [13][16] Question: What factors are driving expected growth acceleration in the second half? - The company anticipates an exit rate of around 8% due to reduced rebid activity and improved retention [21][22] Question: How does the international business compare to the U.S. business? - The international business has shown consistent double-digit growth and is expected to continue outperforming the U.S. segment [36] Question: What is the impact of technology on service delivery? - Technology is enhancing efficiency and throughput, particularly in collegiate sports venues, which is expected to drive revenue growth [55][56] Question: How is the company addressing foreign exchange fluctuations? - The company has accounted for a significant FX headwind but remains cautious about potential fluctuations in rates [68][73]

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]

Financial Data and Key Metrics Changes - Aramark's organic revenue grew to $4.3 billion, representing a 3% increase year-over-year, with record AOI profitability for any second quarter in global FSS history and over 20% adjusted EPS growth on a constant currency basis [10][21][24] - Operating income was $174 million, up 9.5% compared to the prior year, with adjusted operating income of $205 million, reflecting an 11% increase on a constant currency basis [21][22] - The adjusted EPS was $0.34, an increase of 22% versus the prior year on a constant currency basis [24] Business Segment Data and Key Metrics Changes - In the U.S., organic revenue increased to $3.1 billion, approximately 1% growth, affected by factors such as facility exits and calendar shifts [11][22] - The International segment reported organic revenue of $1.3 billion, a 10% year-over-year increase, with growth driven by countries like the UK, Spain, Chile, and Canada [13][14] - The U.S. segment experienced AOI growth of 5% with a margin improvement of 30 basis points, while the International segment had AOI growth of 26% and more than 60 basis points of margin improvement [22][23] Market Data and Key Metrics Changes - The company reported a strong client retention rate above 98%, which is atypical for this point in the fiscal calendar [7][32] - New client wins totaled $760 million year-to-date, with expectations of achieving net new growth of 4% to 5% in fiscal 2025 [9][27] - The company noted a monthly acceleration of revenue growth, with April showing a 6% increase [8][27] Company Strategy and Development Direction - Aramark is focused on capitalizing on growth opportunities through a resilient business model, strong supply chain, and a hospitality culture aimed at exceptional service [9][19] - The company is actively managing fluctuations in the marketplace and expects to be well-positioned regardless of macroeconomic conditions [9][19] - The strategy includes leveraging AI for operational efficiencies and enhancing supply chain capabilities [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial objectives for fiscal 2025 and beyond, citing positive trends and strong retention rates [7][27] - The company is monitoring macroeconomic trends, including tariffs, and believes its business model is insulated from volatility [18][27] - Management anticipates revenue growth to accelerate in the third quarter, driven by higher base business volume and new business expansion [27][28] Other Important Information - The company repurchased nearly 4 million shares, totaling about $140 million since the initiation of the program [20] - Aramark's leverage is expected to remain around three times by the end of the fiscal year, with over $1.6 billion in cash availability [20][26] Q&A Session Summary Question: Potential for net new growth above 5% - Management indicated that they expect to be north of the multi-year growth range of 5% to 8% in the fourth quarter, driven by strong retention and new business [32][33] Question: Impact of inflation on Avendra - Management noted that Avendra is effectively managing supply chain disruptions and can pass through inflationary cost increases to clients [34][35] Question: Acceleration in operating metrics for the second half - Management highlighted strong performance in higher education and corrections, with visibility into growth rates due to secured new business [42][45] Question: Retention rates and seasonality - Management confirmed that the current retention rate of 98% is above the typical range and attributed it to proactive customer retention efforts [76][77] Question: Healthcare industry challenges - Management acknowledged ongoing cost management challenges in healthcare but emphasized their strong partnerships and ability to provide cost-effective services [84][100] Question: New business signings and market conditions - Management reported a robust pipeline and consistent selling process, with no significant delays in new business signings due to market uncertainty [103][106]