Aramark Reports Second Quarter Earnings

Aramark, a global leader in food and facilities management, has released its second quarter fiscal 2025 results through an SEC 8-K filing. The company has shown resilience and growth despite market fluctuations, driven by strong client retention and new business wins.

Financial Highlights

For the second quarter of fiscal 2025, Aramark reported consolidated revenue of $4.3 billion, marking a 2% increase year-over-year. Organic revenue growth was 3%, which would have been higher by approximately 3% if not for certain items such as prior year portfolio exits, fewer operating days due to a calendar shift, and temporary weather-related closures. The company's GAAP EPS increased by 15% to $0.23, while Adjusted EPS rose by 22% to $0.34.

Operating income for the quarter was $174 million, a 9% increase from the previous year, and Adjusted Operating Income (AOI) grew by 11% to $205 million. The company leveraged its expanded Global Supply Chain capabilities and maintained disciplined operational cost management, resulting in an operating income margin increase of 30 basis points.

Business and Operational Highlights

Aramark's FSS United States segment saw revenue growth driven by higher participation rates, new client wins, and additional services in Business & Industry, as well as strong performance in Corrections and procurement services through Avendra. The FSS International segment experienced broad-based revenue growth across nearly all countries, with significant contributions from the U.K., Spain, Chile, and Canada.

The company reported higher cash inflow in the second quarter, with net cash provided by operating activities at $256 million and free cash flow at $141 million. For the six months ended March 28, 2025, net cash used in operating activities improved by approximately $105 million, and free cash flow improved by $64 million compared to the prior year period.

Strategic Initiatives and Corporate Developments

Aramark advanced its capital allocation priorities by repaying $552 million of Senior Notes due April 2025 and refinancing $839 million of term loans with $1.4 billion of new term loans due June 2030. The company also repaid €325 million of Euro Senior Notes and issued €400 million of new Euro Senior Notes due April 2033. Additionally, Aramark continued its share repurchase program, buying back nearly $140 million worth of stock.

The Board of Directors approved a quarterly dividend of 10.5 cents per share, payable on May 28, 2025, to stockholders of record as of May 14, 2025.

Management's Perspective

John Zillmer, Aramark’s Chief Executive Officer, expressed optimism about the company's performance, highlighting record retention rates, significant new client wins, and monthly revenue growth acceleration. Zillmer emphasized the company's ability to manage market fluctuations and benefit from a resilient business model, supported by a strong supply chain and a growth-minded, hospitality-focused culture.

Future Outlook

Aramark anticipates revenue growth to accelerate over the next two quarters, driven by net new business, strong client retention rates, and volume growth. The company reaffirmed its fiscal 2025 outlook for organic revenue growth, Adjusted Operating Income growth, Adjusted EPS growth, and leverage ratio, expecting significant growth opportunities ahead.

SEC Filing: Aramark [ ARMK ] - 8-K - May. 06, 2025