ARMK - Earnings call transcript Q4 2017

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Operator

Good morning and welcome to Aramark's Fourth Quarter 2017 Earnings Results Conference Call. At this time, I would like to inform you that this conference is being recorded for rebroadcast and that all participants are in a listen-only mode.

We will open the conference call for questions at the conclusion of the company's prepared remarks. In order to accommodate all participants in the question queue, please initially limit yourself to one question and one follow-up. I will now turn the call over to Kate Pearlman, Vice President of Investor Relations. proceed. please Kate,

Kate Pearlman

welcome results and XXXX. conference to call Thank the to fourth operating for year quarter review you Aramark's and full

Here that Steve Eric Chief with Officer. I President are and Chairman, to page Financial regarding me and remind like President you and Relations release be Foss, Chief found can Executive notice our Bramlage, our of statements and would Executive forward-looking our Vice section Officer; our slide morning, on this deck. is on included in which is website, earnings our www.aramark.com, the X our today Investor detailed press in

including as During those other our MD&A, result Factors, uncertainties, risks, in will expectations be Form XX-K may of other we discussed this XXXX. the fiscal regarding and comments Annual on implied the Actual and in results and forward-looking Report call, important those that a our and filings. factors statements including Risk sections for from differ various our of are forward-looking notice SEC materially making or expressed

will our over discussing With we'll release A items these as of morning's can financial as in U.S. non-GAAP to GAAP well Eric. on Additionally, reconciliation to be I press call measures. that, found certain turn be the this website.

Eric J. Foss

long-term achieved year that our laid with us original combined everyone Thanks, free strategy ahead company sheet of balance earnings focused of value to creation The we compelling increase flexibility enabled million, to to flow to month. the Good There's Aramark. in our that to The the continued Kate. in acquisitions target prospects. disciplined public in of take Investor four adjusted years we AmeriPride pleased recently financially morning which, expectations since went I'm IPO demonstrates no we're ago. marks shareholder made our really X.X ratio last management, enabled step strengthening to since has milestone achieving we and another share. double-digit XXXX. and performance the in our share, generated announced Today, times, financial XXXX strong in consecutive sound at underscores the record allowed this of financial leverage clear out and year have us another Day accomplishment our successful cash next company per for also which future pleased execution very us. joining at $X.XXX achieve doubt the our in $XXX also quarterly and thanks that through two of announce our the report growth per strategically and deliver against Avendra that continued dividend fourth our to us confidence

press fourth to framework. with North the revenue the America Revenue and within in multiyear our disasters, results, natural International. revenue expectations. as When we operating from reported Turning strong you growth our the release, solid line of growth factor with a of quarter our results point headwinds in in quarter was about in accelerated growth balanced another saw we in

resiliency of the portfolio earnings a of increase adjusted these results In XX% our despite in reflect fact, share we the in $X.XX our headwinds. as quarter fourth delivered per

natural the up income year was currency adjusted of on constant over sales operating constant million X% from disasters. Adjusted by year, currency despite XX% the organic For basis a International. increase increased X% $X.XX. and Total full basis to prior those an America company a EPS the on X% North were headwind $XXX year, for a driven

the points margins currency basis across improvements This the increased labor, impact headwind productivity drive a point XX and balancing also SG&A to disasters. X constant despite to of from operating the a continue food, on basis X.X% adjusted year, reinvestments business. in basis while income We the

revenue grew adjusted organic percent Turning sports, North to income & $XXX operating segment, North corrections, the to Business as grew X% our year driven as Industry. led leisure, million America well by in strong productivity. America base X% education performance by by

year, growth Mexico. growth Asia, coming X% strong revenue broad-based of For the across Europe, International organic with delivered our segment and

there also light gained unexpected traction our related initiatives quarter, $X.XX to In in the Rico. costs business. lock $XXX fourth installation adverse XX% year disruption growth operations were to currency contracts resulting for our year. industry constant also the on as operating to also to business, X% income of we for year million adjusted in million productivity at related Uniforms basis segment, Our the in an $XXX in $X declined incurred revenues AOI new billion. International flat and of to proactively for the the million in largely was a the boarding our in extended revenue on impact Puerto In

these all are AmeriPride of AmeriPride integration moment, as you two realizing will on a expertise will on with shareholder against strategic the on teams priorities. our to our results through Aramark and me the We we deliver progress rely looking the our on combine well as successful forward take the the our in that synergies companies of customer let financial shift you so a as of focus at to discussion my management value. details sustainable Steve to update

we into sports education, our that up facilities season of by number year well And as revenue where exited across the is number were Our growth as great growth. pleased back-to-school continued benefit wins growth XXXX, as key has across wins key all This we see a about as our broad-based well businesses accelerating accelerate with imperative a momentum of driven as picked a sectors. other sectors. first we to strategic

at our We and business lines rates targeted strong client mid-XXs of geographies. the to remain level retention expect across

of the couple metrics years we're our indicators the gives multiyear revenue best framework. in the with growth new net history, fact, leading also in A one entering performance confidence In us XXXX business of of good. of which company's within looked growth

X% quality, critical we against to consistently as product health, offerings, and four our all these the improve service, and convenience, of across four improving portfolio personalization. innovate We're consumers: Our scores continue the satisfaction technology dimensions across consumer today's for continued expanding to to been and on regular our enhancing additional improving concept unique variety to campaign featuring the XX% limited-time a We've having Heart I'm and strategy and quality offerings, well the By a customer menus exciting our We're segmentation target. the offers, also far around premium seasonal We're Business National café for experience. core laser-focused for offerings are brand experience. partnerships. restaurant Best rotations, with improvement Healthy elevate chef celebrity pleased through and dimensions been dining, health goals and Association. our Healthy calories, targeted healthcare, in Lifestyles in our Group In wellness, ed, saturated We the proud exceeding also dynamic Employer across achieved food and report XX named American fats reduction hall we business XX with Life higher in that a ahead to our X% sodium Health. to our by on annual of

our dining can We're experience. friction generating portfolio our striving that across with and that that customers and continue piloting to on less is from for plant-forward And consumer supply more positive ordering and We sustainably. produced spend process in we're checkout convenience across removes options so deliver time vegan, to our and service We're are to customers. also automated chain create work focused our enjoying from of reviews locally speed the menus that more line with service. ordering cutting-edge the vegetarian, technology meeting time and demand

are and our our are leveraging growth we In Our best every a and we're we to right We've efforts separate pleased growth making very very facilities deliver clients win, important yielding team they food with team And up We're management ensure and to service business. focus for to results this business. long-term each increased improved opportunity. new stood that beyond our day. is that across XXXX, business organization progress. practices our the for the excellence driving our bringing substantial I'm

our in sports Houston continuing partner, victory. that Series we're the Finally, their as be winning long-term to congratulate we're historic honored streak of our Championship. World thrilled on first We're Astros, part to winning

second growth, strategic technology. people, productivity activating also Turning imperative, XXXX, and base while to continued productivity, investing to in improvements in drive our strong we

go our threefold. As focus forward in we XXXX, is

strategic well production to in across complexity supply procurement to the First, from the attack as management. to sourcing, from waste chain optimization food process as food entire menu

our And above-unit finally, labor. labor, standard improving on in-unit on model, count to based head and through working that SG&A overtime is a flexing productivity we on agency labor and controlling we're labor have effective attention demand efficient Second ensure and effectively an structure.

to and inclusive Turning best objective, have to workplace. to attracting the to ensuring a we're third culture create right place great work committed we diverse our a the by fostering talent, strategic

first, Work for our products line life to to LGBTQ market month. front outstanding we Human receive we efforts through Equality by Ring Inclusion And Rights celebration. class annual by the we very Each of so, to Stars Award. recognized be of newest to and of Work Place and congratulate our of Service Places our values, Campaign like once And who I'd our that again bring Best Stars to the honored to recognizing last one pleased make for the as a core Best year, Disability were those

achieving to fourth strategic an portfolio Finally, I'd our optimization. provide update priority, on like

shareholder objectives couple drive and is pending strategy position, of of meet scaling value entering Avendra these geographies and improving capabilities, acquisitions enhancing on of our AmeriPride our M&A a key The focused Our creation. objectives: will channels. competitive new sustainable all and

announce teams our that Senior significant past executive quickly of possible. and Harrald well both from an make Aramark teams of food of be planning operational Harrald as we've implementation our has across global and to terms driven have to of welcoming AmeriPride updates, complex, position AmeriPride, Harrald that is you improvements leading for synergies to experienced, integrations President-Integrations work Harrald excellence over In looking large-scale, with We're these to across companies. record leading achieving the management met he and efficiently forward labor experienced the Avendra successful an track team their been Kroeker and Avendra appointed to lead ongoing Vice leveraging I'm pleased the the focus to will transactions. consumer-driven the Many as and several Aramark the as family integration, integration/planning that success. will has and years. on and productivity to impressive to as operations contributions strategic of the as talent

to and be strategy. clear to encouraged progress execute this making continue focused by against we're We the

adjusted outlook expect midpoint adjusted include range, long-term of growth that our acquisitions be we our will fifth we range dilutive in XXXX acquisitions. Avendra the AmeriPride, also strategic year expected XXXX, the business are $X.XX. of the this pivotal the or this At EPS be And to entire for which, I'm first momentum drive to a of heading disclosed, to have begin cash year Adjusted that which organization. of double-digit revenue and outlook in please flow. is closing, our of previously the integration to $X.XX to we consecutive as by by we impact the the continued would EPS framework. to the to within a the of represent be commitment note that growth. tribute EPS strategic accretive does imperatives, turning our in not of progress So and into real we and our against growth encouraged as year and base our for In company XXXX, the executing strength two

broad Steve clients, and every to the the of want more of the impacting annual team consumers all With team let salute I XX,XXX our operate our who day world. over who day to me members in our disasters, with Aramark the clean-up to natural team members excellence to who service communities our of recently efforts members I across continue thank review unprecedented across at want to I world. service, the where several so and a that, nearly over customers want of our the to do the detailed also call efforts heroic And ahead. lie XXX,XXX and also face results. families who will deliver thank turn Finally, financial of communities that supported volunteered we our for

Stephen P. Bramlage

morning. Eric, good Thanks, and

full the to As be. I performance our quarter expected for them our XXXX, in fourth look and we operating were the year right where back on results

flow revenue continued that fourth we flexibility, gain to are and traction. cash Importantly, of announced. the acquisitions financial the two growth our the for with productivity paving in way quarter and strength I'm which our recently accelerated the also balance our our obviously initiatives by generation, pleased sheet

Organic euro and in against billion U.S. financial to peso. represents mergers growth QX specifically on in This no almost material and the Chilean sales the to dollar, on modest X% now was the sales the the $X.XX currency GAAP X% Sales and in Uniforms. the impact of in reconciliation. weakening the driven tailwinds quarter, $XX the Canadian for a Turning of with were million in an This international quarter. the America or and dollar results was activity growth There revenue basis company any by increase our due grew North acquisition by quarter. of from X%.

However, million related $XX there revenue or was an almost of disasters. estimated to headwind natural X%

to severe States we Puerto in in fourth as factoring $XXX expected impact, Our operations comparable income framework and three prior the operating multi-year earthquake Rico, in year. of were is this low the Adjusted impacted the by to be. Mexico. at the was it end as just as million growth well the in revenue quarter, our United hurricanes After our was which

technology quarter. AOI X% our or half related would were international by impact was business in and shuttering operations. which points material a Puerto the a I partly base our have continue lost capabilities. of share. estimated clearly, $X.XX drive Currency Also, improvements not AOI estimated inventory, currency quarter impacted permanent increased impact or on due efficiencies from $X.XX to natural million SG&A, constant in the approximately by AOI XX year and We the an point on to over spoilage basis offset did prior and absorbed natural asset North by Uniforms America portion disasters to basis reinvestments XX% in XX X%, headwind related note to further impact disasters. and to $XX EPS Adjusted of there of basis planned margin on to the or a an margins accounts Rican productivity impairments. decreased a our business, in that this

recent because the mentioned, quarter, As impact impact AOI year lower increase taxes. expense Interest the to and of we driven prior was the disaster just due versus was in refinancing. declined our of interests natural flat by the

standards Our our almost planning to related benefited compensation. tax from accounting rate share-based equally efforts and tax the new

material no quarter in earlier the the Finally, to there repurchase share was due impact from this year. dilution

our well approximately to However, the improvement the the business growth fourth disasters EPS quarter $X.XX due adjusted balanced. impact EPS on meaning underlying estimated the natural per share, in was was

structure. Turning and now flow cash capital to

a less free flow results net The of reflection cash cash $XXX disciplined expenditures. free strong As record define this a management. is reminder, flow we capital which operations cash operating working company and as of flow from million reported year, capital

leverage times to we but of had mentioned earlier, As than a the efforts which demonstrates ratio anticipated, capital year X.X Eric not we team our earlier achieved the target originally of effectively. our only strength manage generation our of cash

remains a due on Finally, call, cash flows between XXXX the either of reported change our Corporate the strong, in liquidity related the very our on of use a availability share-based as depicted positively This $X.X levels. not This both reclassification and were the to our impacted slide XXXX for rule reflected impact in and revolver also company the and in the billion financing to and at mentioned operating or cash sections to cash flow compensation. reclassification end by accounting the cash quarter. is in does leverage reclass net statement. our the last available years as

delever quickly complete again disciplined the acquisitions, financial following aggressive once strong, robust so management targeted that will to also remain no of laser-focused consistent our sheet we as significant we can with our the at the until demonstrated XXXX. and leverage we financial the pending that balance We repayment XXXX, flexibility flows of are have company debt end delever I'm where maturities having back the enabled IPO. to the combination range. really on is quickly After there positioned pleased cash

for business outlook our XXXX. to turn me let Finally,

a include this reductions mentioned this is share. generate interest range the and our leverage Aramark rising we and With transactions EPS of initiatives million expense to to does in expense accordingly. new Interest expecting expectation current impact adjusted interest of labor by transactions will flow please EPS adjusted food range. expected the of by the productivity offset operating update Avendra and in be the of the be debt, SG&A. not operations to increased an in somewhat of close, and expected First, approximately our pending recent year, month, $X.XX will in $XXX are the performance of After driven continue issuance the rates. finance anticipating strong will We're are this the in the XXXX. AmeriPride. the will mind, outlook mid-X refinancing through initially benefits to in And in acquisitions to result improvements of as ratio times cash note free as per company which we $X.XX transactions be we but outlook last to accretive these dilutive the

effective is to Our expected approximately rate XXXX. tax points versus basis increase XXX

tax benefit the While be related tax we're of as have that to to initiatives, benefits there worth from under excess accounting does legislative to our the reflect currently a noting to pending tax our change of recognized. the the now not less going It's been awards estimated will the consideration. of levels from planning from IPO related higher equity continue rate benefit changes share-based compensation rule any

we not do in tax the we these are higher lower related spite impact the a free over cash timing flow. in million deductible roughly cash This to share-based compensation. generate In and the to tax $XXX from increase of in material expecting year. million cash income, we higher taxes, largely Finally, related of still impact benefit expect year, to of $XXX of taxes an currency credits, anticipate the

as growth we will technology. anticipate last capital of consistent continue spending over average our is to which be years also with approximately and our in X.X% invest sales that two We the investment

the momentum front in based performance, half for a by key our our the accounts framework quarter, multiyear we're expecting the to felt prior number year call first expect to driven continue I'll on-boarding. our turn of with for expansion advance timing first growth and be of earnings heavily now weighted back as impact regards we're margin will across to Consistent reinvestments expectations due half will expecting half that towards Eric remarks, quarter. in to the to with years, the growth revenue of prior in most factors. we second of With new to to the XXXX the turning Finally, broad the start-ups be be over Q&A. closing comparable new some the account of the

Eric J. Foss

with I operator, to Q&A. the ready up And Steve. we're think that Thanks, open for lines

Operator

Thank you.

We question will question-and-answer from begin And from Goldman the Sachs. first ahead. now our session. Stephen comes Mr. the on line Please Grambling go

Stephen Grambling

Good our question. Hey. taking morning. for Thanks

Eric J. Foss

Hi. Good morning.

Stephen Grambling

folks' think on that thing is I rate. just the probably run the sales minds biggest

I has even questioning think been quarter think around a now, asterisk been and you've you this this as years, of of it. three algorithm consistent I an the concern and for point below have kind

can you there us point? is new prior and way potential years that at Thanks. how current So help might in at this XXXX the that to contribution compare quantify of any business the size rate wins' run

Eric J. Foss

Well, and think, Steve I Sure, all, mentioned I as to just related growth. both Eric. me of Stephen. reiterate, of It's first let a things couple

our I the in hurricanes. was expected as think, within in and quarter, the ex again and framework the the first foremost, growth quarter

the America, business. Uniform way across very and of in growth North across describe And about the in so if you we we that, our lines strong returned had International business business, momentum I broad-based our is it growth very kind of three think would to

think as you at I was exactly predicted. QX And we is that, as look so

improve in as be year consumer the part the very started loyalty last that satisfaction in middle good. continue to of I we client of indicators leading in mentioned very, past, the to think,

best the on Our one And business to question the are retention history. the in business, years was new in new company's of rates mid-XX%s. XXXX your

been lot The So growth. of will I is did you around simple in, there's think answer to when we QX all a return questions framework within in

Stephen Grambling

Nuanced one follow-up.

would would strong organic more seen International margin thought segment. bit a the I very, little guess, had very have there. we You growth in have flow through I

segments, ahead, about segment opportunity you around one As little the a to in how in margin the each particular? a think margins outline Thanks. can and you give in of think International bit broad just about the of us

Eric J. Foss

of very just we Well, international the business of margin Sure. significant growth phenomenal pressure a said, I a was in driver, large fairly had our I new and that some account. think startup

it's think as simple that, So I as Stephen.

about great over I progress think broadly, the years. we know, again, made last margin as think you several as we've

of a as year North some strong topic. our related conviction first as of to see think and or margin to We as business, with service have the so of some quarter growth margin business, the I about confidence continue around the very high from see think before recognize business. you revenue. business, international Uniforms growth strong coming And then And business startup margin about we and I the a international pickup to forward, we you'll get pressures new that onboarding of margin the our whole continue as from going through the to probably America that degree we of put think continue this in we new of costs margin into some

Again, changed perspective. to question, nothing's was driven startup to pressure international new from that account. largely a your large connected the by very a margin So, cost margin specific

Operator

Thank you.

helped (USA), Mario us And market consolidation Mario Could next us. Inc. a on Our Mazari looks come sense Cortellacci whether from like - is or what benefits the can the has filling Capital later? in of you Hi. give that go maybe you Uniform from ahead. comes you expect for to Please line Macquarie a This the Hamzah whether Cortellacci for outline Macquarie. Hamzah. question on

Eric J. Foss

me we Well, back little maybe about think just Uniform how the let and let talk business. about up bit a me

growth that is can got love company. good business we acquisition, to got accretive absolutely call when it I It It's the do flow. announced we love. the during this margins. cash a think it's Why We it? I had as I'd love start, strong mentioned the profitability we be we AmeriPride and because of

is, performance place the to that different think I doubt we Uniform did disruptions. we a that results, And look as think of from the in XXXX, think consolidations our we I you're into as took our drive level fact see business. as XXXX there's head think so the no XXXX, we going about at And some marketplace very

So have out. seeing what we you're and done are what we Well, it doing? play

did scale competitiveness top our to the around synergy acquire AmeriPride. M&A et increased we was a And execute structure. we're that. different all and against gives to we then, priorities the continuing things achieve second, the side That and of strategy us of the capture, One lot cetera. We of what side, need to business, on productivity in need terms of to grow to, on things cost an effective

the we Capital to completed continues Macquarie deal think that getting I (USA), about Inc. excited with integration AmeriPride as very we're we be So like. look - it at forward the Mario and – the business, efforts. a our business Cortellacci moving much And

Okay. walk to? us one pay any about we year are the Thank you how just and Could attention you And should through sports issues you. think follow-up. quick comp there whether this calendar

Eric J. Foss

Inc. about – Well, Mario talking say when Correct. Capital you (USA), are Cortellacci you XXXX? Macquarie -

Eric J. Foss

let start Capital with me let (USA), - Macquarie Well, XXXX... Yeah. me Inc. Mario Cortellacci

Okay.

Eric J. Foss

relative I side think XXXX well. see did on to as the we've baseball a actually little pressure and we of do football attendance ...because attendance, some in bit pressure seen

the factors teams how driven the the tends As their real our of that you in perform by drive to think attendance it that, about and/or be playoffs. lapping

to But relative we would the playoffs so, probably And give year playoff that to right. closer at a point we ago. dynamic in headwind. out a who's Mario of I time that versus big significance much. see those to runs All respective Macquarie this in better that nothing we've for - Thank Inc. as it's get you you Cortellacci Capital (USA), there's so us say as called

Operator

Thank you.

Toni question ahead. go on from Kaplan next line Stanley. Our the Morgan Please from comes

Toni M. Kaplan

Good for morning. I basis wanted to expansion about points target your through XXX Hi. ask margin EBIT XXXX.

ago. out your couple you Investor I of laid years think Day a it at

still So the that the that XXXX in perhaps hurricane seem attainable doesn't impact to Or this it is quarter, factors you Is can XXX an fair? out target basis anymore. are there points? even the some that backing get of that

Eric J. Foss

Yeah.

I and confidence think Toni. XXX around we continue have basis conviction the to points,

productivity confidence conviction normal, happen sure little complexity things costs to. and the labor continued there we across around is that structure are couple in think probably about was sure attacking wins, of across But much the we really year-over-year basis you uptick saw going and facility's supply when One other impact to and XXXX again, I was, a to, the that headwind in things making up around think and above-unit. stood about lot Steve number. a mark, new So the as XXXX business be of continue have have I point that it. drive think to as focus our organization food heavier a think XXXX. be There's if And, about obviously, XXXX well the the hurricane than the point you – committed might in have XXX on some significant the we I as two and think chain, the you're have making won't startup SG&A we I right fact as we a you of business we

So, want add Steve, anything? to you

Stephen P. Bramlage

would. I Yeah,

overall company, gap line finish that fiscal being ultimately year that good at basis point we've when number. the or on drops and at made able line other. the through investments doesn't one just way an what the close very time And on we of the to sight I as the I with we we sight the to just sit we you that happen XXX the pace to here necessarily look look by think obviously, basis, the a we've of when annual of we of of business line today, XXXX absolutely But have especially straight technology map got today. think in have

Toni M. Kaplan

helpful. ask of sense just Services I very specific North where That's a were segment, specific Food America? and types negatives there were the Okay. client And to that wanted America types that get to any Thanks. just in were the in just weaker? that then, positives were wanted stronger, on any North growth

Eric J. Foss

talking Toni, assuming I'm QX about specifically? And, you're

Toni M. Kaplan

Yes. Thank you.

Eric J. Foss

Okay.

we North America, and also than saw business how had. and in we growth was that think leisure, the to the relative well the that some following the you growth I and in very Facilities attendance saw quarter. momentum of sectors rate business, if QX to to mentioned But our run pressure Food of Actually, the dining, really that, about And North made statement America education, in our rest business performed the America business, expectations. about returned North in North some corrections. broad-based healthcare/hospitality the America: of So challenges out was Sports other of relative business. the we the

Operator

Thank you.

comes Bisbee on question Gary RBC ahead. Capital. Please next from line Mr. go from the Our

Gary Bisbee

back me last that on Let a bit. push one

into if even So impact $XX of Food, realize the while assume and a of under given ones them, partway growth I the think the citing. ex X% and here is number you quarter, or through be looks organic that and least so North of phone all million can America realize most what's on back on And you're the revenue like But it America? going Thanks. terms at I the on the business better. of expect that hurricanes on a hurricane education pretty the would understand I to sub-X% couple the you North at still the the quarters? in lot Why disappointing everybody us you've that would help in analyst segment new next wins what came you'd stronger investor that level, been the wasn't X% within came business delivered. overall, side, we argue

Eric J. Foss

Well, Eric. Gary, it's

perfectly just segment in of that growth Let the to ex again. America hurricanes North X% let the be I was the quarter. And... clear me start me want

Gary Bisbee

ago revenue up, How in that I did add $XX points And and something X. get like release, those does the unless – basis math. help with divided wrong you points. something, XX that from Am saw year million here? X.X%, XX basis the I so or that me don't you is a you by two missing

Stephen P. Bramlage

Yeah. me let Hey, to help, Gary. try

So, entity on level let the North we'll first, me go start with then America.

was number X% was referring number growth was a hurricane the was company's in was for exclusively framework the million we so on impact North revenue North level that entity America that impact on previously. number our almost minimis revenue framework of X% for Uniform The X%. the to clarity. FSS So $XX hurricanes The number the within all and de were America the There ex organic segment. hurricane the ex impact the around

Gary Bisbee

Yeah, right.

guess have commentary given would think sports everything And X% is what the so below I'm I below – ex positive growing. I the is hurricane but wondering, expected we and the

any should or about So commentary I'm just understand – all the there is X% guess that talked understand business new on? wondering, help us I that with could get to if over business why you you've more us color your color help could bringing either

Eric J. Foss

Yeah.

for you, me let me go Let deeper Gary. level a maybe

think been if to So specifically relative it was the would attendance. off, expectations, one have there related that sports was business I and business, to

we're quarter, pretty timing with but other fourth October a expected think and mean, couple the of only very commentary, consistent that was trying into growth very, in the deep think is we that school for the business we trading we a be days the a finished were North to on across there variable, color growth lost the way sectors I education that started start-up. broad-based that I America. getting But what of thing from in the But, perspective, a way I what shifted may weeds. is just based very convey we're again, on not

Stephen P. Bramlage

specific within that we of because would Baseball conversation quarter. a was don't entered reasons, variety there's around that decline for point reiterate to had the a level that, we're and a League but versus Yeah. America quarter the participation – the North point obviously, the at I Major at where segment we provide expectations Eric's in on point the revenue revenue

keeping worthy I of in that's think as well. mind So

Gary Bisbee

sometimes some reason that around that going growth. a think forward? stuff stronger then just the of way, bit the in was seasonal than sort it there's other about how Great. quarter, so quite events do there a Okay. the that move maybe the – organic helped, Were And And international it the follow-up, some we was that strong? there or Thanks going lot. timing is or

Eric J. Foss

Yeah.

if forward. at not growth I significant the think, the was Again, you I quarter look driven rate by of business, again, grew business win. Having think kind we digit think, Gary, our project new going onboarding I forward. going a that's at the expect performance for the should business, international rate that the as said that, about fourth fairly the you look international growth if of, year, mid-single of XXXX you would which

Stephen P. Bramlage

And you everyone magnified quarterly that a business about as individual would Yeah. within remind lumpiness talk on we I and segments. in the lumpiness that becomes the basis, go down

try So and therefore model I people not quarter, from any more would come that. to or back to it. certainly we at difficult caution It's level, down segment difficult to to individual extrapolate a up

Gary Bisbee

enough. color. you. Appreciate the Fair Thank

Eric J. Foss

Sure.

Operator

you. Thank

from Please Our ahead. comes Patnaik. on next Manav question line go

Manav Patnaik

$X.XX that Good target you. around in out first morning, XXXX. EPS the is Thank My quarter set you just guys.

end was in until just were sounds quarter if you through think guide. low I going just are to on $X.XX, to what And was was of whatever energy going where you that what's gave pieces helped today at the I it getting to even but that first wondering some are. walk tax hurt be when midpoint, deposit up could is, on probably debt the number. last and to I the and refi know like negative, color that we moving you the maybe maybe guidance at

Stephen P. Bramlage

take an at Day did $X.XX. we I'll previously was stab only expectations when talked EPS XXXX and knowledge, XXXX in provided Investor of to the the mean, commentary we Sure. I we aspirational my target about around back a that.

at set So difference the $X.XX is in out of that let we range I $X.XX Day start me our and to XXXX Really, that only there. currency. the of between $X.XX midpoint the

XXXX. at share that in a look in existed $X.XX the difference the rates when a about today currency versus impact rates versus rates there's just today So the you

the I ourselves of expecting completely consecutive guidance with for out at XXXX. we my consistent the – the growth. set EPS That's double-digit would from that at what fifth So be that the perspective, in Day another midpoint EPS we are of range year

going the more stock-based higher in moving in comp around of little add so than Interest I bit, rate form a lines a a XXXX the of a is close we year-over-year growth, the we that referenced And to towards business are modest pretty same, progress as a to the very have what maybe we we've then have depending up referenced So growth. and significant continue earlier. end basis, individual moved headwind actually contribution tax positive rates line the got pieces clearly little on margin top and on headwind to the changes target – we've we'll course, based on the doing.

yourself we together, get XXXX. XXXX in out of for you So, that number, which, number those put midpoint for double-digit all to the my perspective, ourselves you from set is exactly kind a

Manav Patnaik

and But line, said did guess, X% half, for assumptions put XXXX, color line? you got quarter X% just last at again, first guess, least was reach. to talk you about you I then at being the on on on top And X% least Okay. well the second the I X% there. impression the think I for that half faster I than comments the maybe the your in XXXX top doesn't some growth within

Stephen P. Bramlage

the be revenue a perspective, XXXX over of From we revenue within no, the course expect to consistently framework.

to the we this from our And the and year revenue expect reasons standpoint, largely within to a clearly year. second framework the about more be in for we've margin would of all previously, so, I enter entire half be But that will talked for the weighted framework expansion year. the will

Operator

Thank you.

ahead. the go on Wittmann line Please question next Andy from comes from Baird. Our

Andrew John Wittmann

Oh, great.

Steve, clarification just a last Sorry. on that one.

that that ramp that was food American X% for one the given range. that just when the guys the the in, is or business you that of expected year, as in framework revenue talking organic to were going must the in growth year is through is to size well? On And come about that at food, imply North that least North American X%

Stephen P. Bramlage

than XXXX right, all we specific revenue for out we is segment generally expectations America better of lot of we in have expect to revenue a a performance had year-over-year FSS Booked in the segment. a I momentum strong that earlier provide sitting comment, and we reasons quarter. you, not within FSS new talked back certainly North for Well, business. that America my within business new don't sector the growth about, certainly we North that would the tell

So, segments our performance all of XXXX. expect the over generally three of individual I better would revenue from course

Andrew John Wittmann

flattish other stock last year. maybe as you year of year it that EPS, that Got or it. as it there on the in what guess, XQ this that you back last XQ benefit were that because the as Is holding if main reason just that did are made you I reinvestment feel also the comp And don't XQ. of I comment factors fact relates guess, some reinvestment, then, to was some much are specifically?

Stephen P. Bramlage

sure, EPS, the specifically for to higher. be rate is Well, on going tax

modestly in every be comparison for is to And year-over-year first revenue those we the generally So, first a have we that's as larger have revenue we in year-over-year. compression start-up Because to and accounts going segment, while will be specifically expenses. negative higher quarter, education growing quarter tend have us. start-up higher the higher

a tax of combination year-over-year and a that growing that comes as basis. start-up some a revenue rate as it's well on So, of higher the with

Andrew John Wittmann

retention. then much and Got today just attack reason expecting you're for you the sounds Maybe of retention, improving rate your how like doing you're for broadly the it to more disconnect (XX:XX)? Eric, And think do that, you versus retention of higher maybe, consistent it. part growth just on of little the of Aramark is an retention, aspiration, bit a peers

Eric J. Foss

see consistent think about the growth if the think new from for retention rates. Well, again, way vary business from about for think, peers I the the XXXX, to base we improve retention and half yeah, growth, the that pretty for our think by That's said you'll the what sectors line and of business. each going looked industry, Having I about targets the rates, of and think you certainly kind competitors, from certainly as peers. business, algorithm if algorithm, that, the mid-XXs. largely relative the you'd set of see about competitive history. you somewhere from you to of as past, half our been high food been consistent we that's us is in a at it consistent with if coming side. gets growth coming about you you low I XXs said we've kind our on think facility the to think I and it's to and think I Again, plan have pretty very That are XXs And growth the

Andrew John Wittmann

Thank All you. right.

Operator

you. Thank

next Please Instinet. Dan Nomura line question ahead. Dolev on Our comes from from go

Dan Dolev

question. taking for Thanks guys. Hey, my

you that guidance. weak? in Xth, went reiterated quarter weeks of Was that resulted organic there being Thank anything the August on in the say, that North in, think last America the seven growth you. I wrong

Eric J. Foss

Well, again, the topic risk come we'll at the back I repetitive. of guess to being

the the growth ex consistent in expectations. hurricane, for So North was with QX America, our very

as... So

Stephen P. Bramlage

would that. I reiterate

Eric J. Foss

QX, saw up that ramp XXXX, broad-based the year we declined. and really across that the has was to things the leisure, going we what certainly, been out, a early finished if the the QX with that QX, perspective, ...we due we startup of saw growth including And very That which was attendance saw quarter during saw continued. as played Sports company's point momentum that area back of successful it of one season. hospitality business us that lot has was, And, saw enterprise quarter to ,for for framework happen we which the will fourth a the going was in from we where by within new But, obviously to we The the for better to be quarter that the in within part healthcare both grew. growth in and company, the told there football did. continue. we driven the side surprise, ex framework, want was the well business growth XXXX, corrections that to first QX. way I at played what bodes the was think come mild Steve's we the We perspective, up XXXX the business and the to play out that hurricanes, in from out looked a the sector, much in my had sets baseball some again, you that the sector, because began the dining in just education to perspective, we on from

you So America. Steve, North that's anything? want story do in the add

Stephen P. Bramlage

anything the is there don't quarter. exception outside in be with you. results referenced, than of where what last have think little course been not expecting the (XX:XX) hurricanes had that with bit company's I over baseball the the entire there's a can to month-and-a-half, the I recall weaker candid Eric we thought. you don't the date, versus a we I of But as specific Yeah. tell being of performance over different landed

Dan Dolev

Thank the And hurricanes you. statement? is my of FSS, North fair that think America, the a understand. $XX follow-up that impact I then, predominantly Is I was in you mentioned that million?

Stephen P. Bramlage

Uniform perspective, AOI AOI Uniforms have a revenue the that and From two And FSS facilities that it business, America we North line of reason true. touch those there's is off. and an anticipate that is segment the both between that perspective, disproportionately a we direct business them Uniform that the be we impacted facilities written evenly have From the is is not one will hits. more the And in in permanently in currently Rico, split International Puerto and as of reopening, took well. on

Dan Dolev

I'm highlighted your that competitor asking. Is it revenue specific as geographic why towards – hurricanes. a split as decline the levered of wasn't areas your Uniform as a That's much hurricane-affected the basically not result because in

Stephen P. Bramlage

exposure anyone probably standpoint, geographical answer for can't else's that a speak specifically. so from can't I particular I question

Dan Dolev

I much, guys. Okay. appreciate very it. Thank you

Operator

Thank you.

for taking Our ahead. Credit Securities next LLC line Thanks Suisse. Anjaneya from (USA) from go Singh Please comes K. Anj question on question. Singh Credit Suisse Hi. - my

Retention on business been. to wanted seems are strongest saying follow I wins you're off, some First are earlier they've rates new strong. questions. the up It

lapped at the of lower headwinds, framework. end you're the a of You've lot yet firing

is it midpoint framework? for what that think closer than of was ahead, X% organic XXXX growth to, rather you look your to there longer-term say, anticipation closer X%. some that the be we I as gets Because So, you'd

if you understand that? just So us could help

Stephen P. Bramlage

Well, growth. again, composition I'll of to the talk just the

from I come new base and an rates, about about think that half we half see will our growth improvement is of business. as So come about our in think growth business, XXXX from what you'll will

although within have is into to was trying have XXXX, to we guidance, that be what to revenue about the framework. in as and think build is think same drive Relative And any we're as by about talked at confidence our improved we degree convey to growth the improvement think of to initiatives XXXX, X%. retention, you encouraged I we we try continue momentum. don't the retention. about, So, the least algorithm as that, And we

business the that, I've framework that us, you're encouraging as is I I'd in to XXXX growth how that that, the is a year the at where least the within going rate The we've and see quarter where getting assuming important and out, And it that's look milestone fact at that beyond see mentioned, the at So, perform done as to we'll X% think that growth was fourth was level. to was leave plays we it. important fact you.

Eric J. Foss

Yeah.

to over Eric. productivity as Fair confident you've it better bit, I update very (USA) particularly year to I in LLC Singh wondering Suisse it's of technology be going off were than and this XXXX, trying initiatives the this been excited entering can the reason is last K. we pricing just Credit that and opportunity. whether we prescriptive an your will be feel the we the know one course was relates if that and level, Anjaneya that. but in you we the lumpiness don't Okay. that's significantly us business, We little enough. be a fine-tune whether continue some to at significantly line-of-business-by-line-of-business we're because better year, more prescriptive feel that inherent or year were that of we to aren't than gears in give the - year look, on that's are granular look, about, Shifting it's more we this in not in a entering we quarter-by-quarter accurate Securities that

that we that Maybe Thanks. tailwind. a on that perhaps Is at become when on all can bit where journey? some of thoughts more outlook? a to are little material So, XXXX your contributing

Eric J. Foss

Yeah.

I think ability is to base levers, we we're growth that our to and pleased pricing we've effectively about work the mix as you doubt and certainly, no are, and think there's beginning the the with off. pay where I manage done think

we'll year, impact. later where we about point as a at think talk the get the we're again, more in I So,

to have along, to think progress. we're from that, Ariba - XXXX with we is rollout, as the a immediate a than system I as point the for march, things continue bit deploying impact said think think of and particularly of Having Thank the analytics the us. Securities and sale I tools Kronos, again, technology how little a rollouts control manage limiter we margin pricing to those more LLC data K. one everything (USA) is that that we've Credit labor the across effectively of point gain you. as pricing about the Anjaneya us ability said all Understood. relative will you But, make Suisse to technology. Singh of

Operator

you. Thank

this remarks. have to to over further now for I Eric at the no questions We turn would time. closing like call

Eric J. Foss

Thank Great. us much. always, Everybody, have Aramark. Well, great We thank your as joining very you we and appreciate in interest you appreciate a day. you.

Operator

This gentlemen. conference. for you Thank and ladies participating. you, today's Thank concludes

You may now disconnect.

Aramark (ARMK) 14 Nov 172017 Q4 Earnings call transcript