Loading...
•
Jul 02, 2021
Aramark Q3 2021 Earnings Report
Aramark's third quarter performance reflected a strong competitive position and flexible business model, driven by client reopenings and growth initiatives.
Key Takeaways
Aramark reported a strong third quarter with revenue increasing by 39% and organic revenue growing by 34%. The company saw improved profitability due to rebounding sales volumes and effective cost management. Aramark also strengthened its balance sheet by repaying debt and extending maturities.
Revenue increased by 39%, with organic revenue up by 34%, driven by accelerated client reopenings.
Operating Income increased by $402 million, and Adjusted Operating Income (AOI) increased by $250 million year-over-year due to higher sales and cost management.
EPS improved to $0.13, and Adjusted EPS improved to $0.03, including a non-cash gain on an equity investment and a non-cash loss from a defined benefit pension plan termination.
The company strengthened its balance sheet by repaying $500 million in debt, extending maturities, increasing revolver capacity, and completing the acquisition of Next Level Hospitality.
Aramark
Aramark
Forward Guidance
Aramark expects ongoing business performance progress led by an accelerated pace of client reopenings. The Company currently expects fourth quarter performance as follows:
Positive Outlook
- Continued organic revenue improvement, reaching 80% to 85% of 2019 levels
- Adjusted Operating Income (AOI) margin in a range of 4.5% to 5.0%
- Free Cash Flow outlook raised to generating $150 million to $250 million for fiscal 2021, driven by an expected strong seasonal cash inflow in the fourth quarter associated with the Higher Education business.
- Comparatively, Free Cash Flow was a use of $188 million in fiscal 2020.
- Essentially all Education clients returning to in-person learning for the start of the academic year