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Jun 26, 2020
Aramark Q3 2020 Earnings Report
Aramark's Q3 2020 earnings were affected by COVID-19, but the company showed strong cash flow management and sequential monthly revenue improvement.
Key Takeaways
Aramark reported a significant decrease in revenue due to the impact of COVID-19, which was partially offset by cost mitigation efforts. The company focused on cash flow management and launched a new platform for hygienic standards.
Strong cash flow management and liquidity, with over $2.5 billion cash availability at quarter-end.
Sequential monthly revenue improvement in the third quarter, particularly in Uniforms, International, Education, and Leisure.
EPS of $(1.01); Adjusted EPS of $(0.69), including severance charges related to organizational realignment.
Launched EverSafe™ proprietary platform providing reopening solutions for clients maintaining superior hygienic standards.
Forward Guidance
Aramark anticipates sequential top-line improvement in the fourth quarter compared to the third quarter and is focused on effectively managing costs and Free Cash Flow.
Positive Outlook
- Improved client retention trends and new business wins
- Increased agility in managing cost structure that led to an AOI drop-through at 20% of the corresponding revenue decline
- Enhanced financial flexibility to promptly scale services to meet changing client needs
- Providing meals, food, supplies and PPE for local communities as well as offering safe and hygienic solutions for employees, clients and customers
- Client activity at various stages of reopening based on geography and sector, particularly Education
Historical Earnings Impact
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Avg. Return Before/After Earnings
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