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Dec 29, 2023
Aramark Q1 2024 Earnings Report
Aramark's Q1 2024 earnings were released, revealing record revenue performance and increased profitability.
Key Takeaways
Aramark reported a strong start to fiscal year 2024, with record revenue driven by stronger sales volume, pricing, and net new business. The company saw significant growth in both its FSS U.S. and International segments, leading to increased profitability due to effective cost management and favorable inflation trends. Aramark updated its fiscal 2024 outlook for both AOI and Adjusted EPS growth and reaffirmed expectations for Organic Revenue growth and Leverage Ratio.
Revenue increased by 13%, with organic revenue also up by 13%.
Operating Income increased by 10%, while Adjusted Operating Income (AOI) grew by 28%.
GAAP EPS decreased by 27% to $0.11, but Adjusted EPS increased by 33% to $0.41.
Net debt position reduced by more than $2.2 billion compared to the prior year period.
Forward Guidance
Aramark anticipates continued profitable growth and margin expansion through the operational maturing of new business, ongoing supply chain initiatives, front-line contribution from leveraging a flexible operating model and cost control measures. The Company updated its fiscal 2024 outlook for both AOI and Adjusted EPS growth and reaffirmed expectations for Organic Revenue growth and Leverage Ratio.
Positive Outlook
- Organic Revenue growth +7%— +9%
- Adjusted Operating Income growth +17%— +20%
- Adjusted EPS growth +30%— +35%
- Leverage Ratio ~3.5x
- Business strengthening as the quarter progressed
Challenges Ahead
- Unfavorable economic conditions
- Natural disasters, global calamities, climate change, pandemics, energy shortages, sports strikes and other adverse incidents
- Geopolitical events including, but not limited to, the ongoing conflict between Russia and Ukraine and the growing conflict in the Middle East, global supply chain disruptions, inflation, volatility and disruption of global financial markets
Historical Earnings Impact
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Avg. Return Before/After Earnings
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