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Dec 30, 2022
Aramark Q1 2023 Earnings Report
Aramark's Q1 2023 performance reflected continued financial and operational momentum despite a challenging macro-environment.
Key Takeaways
Aramark reported a strong first quarter in fiscal year 2023, with revenue up 17% and organic revenue up 18%. The company's performance was driven by net new business, pricing, and base business growth across all reportable segments. Operating income increased by 42%, and adjusted operating income rose by 47%, driven by leveraging higher revenue, pricing, and cost management. EPS grew by 65% to $0.28, and adjusted EPS increased by 91% to $0.44.
Revenue increased by 17%, with organic revenue growth of 18%, driven by net new business, pricing, and base business growth across all reportable segments.
Operating Income increased by 42%, and Adjusted Operating Income (AOI) increased by 47%, driven by leveraging higher revenue levels, pricing, and operational cost management.
EPS increased by 65% to $0.28, and Adjusted EPS increased by 91% to $0.44.
Aramark announced the sale of a non-controlling interest in AIM Services for $535 million, with proceeds intended for accelerated debt repayment.
Forward Guidance
Aramark maintained its outlook for organic revenue growth between +11% and +13% and Free Cash Flow in a range of $475 million to $525 million, before certain payments and costs. The company updated its Adjusted Operating Income (AOI) growth to +32% to +37%, reflecting the AIM Services Transaction, which is expected to be accretive to EPS. The leverage ratio is expected to be approximately 4.0x by the end of fiscal 2023.
Positive Outlook
- Organic revenue growth between +11% and +13%
- Free Cash Flow in a range of $475 million to $525 million, before the payment of deferred payroll taxes associated with the CARES Act as well as spin-off and restructuring related costs
- Free Cash Flow in a range of $300 million to $350 million after these items
- Adjusted Operating Income (AOI) growth of +32% to +37%
- Transaction expected to be accretive to EPS
Historical Earnings Impact
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Avg. Return Before/After Earnings
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