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Jun 27
Aramark Q3 2025 Earnings Report
Aramark reported its third quarter fiscal 2025 earnings, highlighting significant revenue and profitability growth, record client retention, and strategic advancements in supply chain optimization.
Key Takeaways
Aramark delivered a strong third quarter in fiscal 2025, achieving record revenue and profitability for the Global FSS segment. The company reported a 6% increase in consolidated revenue and a 13% rise in operating income, driven by robust base business volume, new client acquisitions, and exceptional client retention rates exceeding 97%. Strategic initiatives in supply chain optimization and disciplined cost management further contributed to expanded margins.
Consolidated revenue increased by 6% year-over-year to $4.6 billion, with organic revenue growth of over 5%.
Operating Income grew by 13% to $183 million, and Adjusted Operating Income increased by 19% to $230 million, marking record profitability for a third quarter in Global FSS history.
GAAP EPS rose by 24% to $0.27, and Adjusted EPS increased by 29% to $0.40, reflecting a focus on profitable growth and operational execution.
Client retention rates surpassed 97% in both FSS United States and International segments, and the company secured one of its largest new client wins in history within Sports & Entertainment.
Aramark
Aramark
Aramark Revenue by Segment
Revenue by Segment
FSS United States Revenue
CapyFin.comFSS International Revenue
CapyFin.com Forward Guidance
Aramark anticipates strong full-year performance for fiscal 2025, projecting organic revenue growth between 7.5% and 9.5% and Adjusted Operating Income growth between 15% and 18%. The company expects to achieve the high end of its net new business target and potentially surpass it, driven by ongoing base business expansion and new client wins.
Positive Outlook
- On pace to achieve the high end of 4% to 5% net new business target, with potential to surpass it.
- Revenue performance in Q4 expected to benefit from ongoing base business expansion and net new business across all sectors in FSS United States and every geography in FSS International.
- Projects ongoing profitability growth from consistent execution of key operating levers, including supply chain capabilities and operational cost management.
- Business model is well positioned to manage current macro-environment and heightened volatility.
- Leverage ratio expected to reach around 3.0x by the end of fiscal 2025 and even lower thereafter.
Challenges Ahead
- Outlook reflects management's current assumptions regarding numerous evolving factors that are difficult to accurately predict.
- Does not provide a reconciliation of forward-looking non-GAAP measures to GAAP due to inherent difficulty in forecasting and quantifying certain amounts.
- Adjusted EPS Outlook does not include benefit from potential share repurchases.
- Subject to risks and uncertainties that may change at any time, potentially causing actual results to differ materially.
- Factors such as unfavorable economic conditions, natural disasters, geopolitical events, and supply chain disruptions could affect results.