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Jan 01, 2021
Aramark Q1 2021 Earnings Report
Aramark's Q1 2021 earnings were impacted by COVID-19, but the business demonstrated resilience through cost discipline and cash flow management.
Key Takeaways
Aramark reported a 35% decrease in revenue due to the impact of COVID-19, but improved cash flow and maintained a strong liquidity position. The company is focused on accelerated growth, cost control, and cash management strategies to navigate the evolving environment.
Effective cash flow management led to strong cash availability with approximately $2.4 billion at quarter-end.
Revenue decreased by 35%, with a 36% decline in Organic Revenue, but showed stable sequential quarterly performance across all segments.
EPS was $(0.32) and Adjusted EPS was $(0.31), reflecting disciplined cost management while investing in growth resources.
The company promoted an ownership mindset by adopting an Employee Stock Purchase Plan to encourage employee stock ownership.
Forward Guidance
Aramark expects organic revenue improvement, an AOI drop-through rate of 18%-22% in Q2, and free cash flow generation between neutral and $200 million for fiscal year 2021.
Positive Outlook
- Organic revenue improvement over the course of the fiscal year.
- Improved operating efficiencies.
- Driving client reopenings.
- Growth investments.
- Leveraging resilient and flexible operating model.
Challenges Ahead
- Continued impact of COVID-19 on Aramark and its clients.
- Evolving factors that are difficult to accurately predict.
- The extent to which COVID-19 continues to impact business, operations, and financial results.
- Duration and magnitude of COVID-19 impact.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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