ARMK - Earnings call 1 2024

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Operator

Good morning, and welcome to the earmarks First Quarter 2021 Earnings Results Conference Call. My name is Kevin, and I'll be your operator for today's call. At this time, I'd like to inform you this conference is being recorded for rebroadcast.

We will open the conference call for questions at the conclusion of the company's remarks. I will now turn the call over to Felise Kissell, Senior Vice President, Investor Relations and Corporate Development. Ms. proceed. please Kissell,

Felise Kissell

well welcome January. Conference and be First Fiscal for in Zillmer; Quarter from Jim appointment. Financial Thank who Jim's at Terangelo, and to Aramark webcast. Earnings started as John Officer, Call Chief role will our This XXXX Chief our Officer, in you, this Executive Aramark's as We morning, hearing excited we are

found morning, on is reminder, website. included forward-looking in which our can release press a be As statements this our notice our regarding

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

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

John Zillmer

morning, for thanks joining and us. Good

I started, devastating first wildfires Santiago. to team in acknowledge get Chile dealing as near we Before with our they are want

affected, relief We're organizations. our everyone's team appropriate scores are have been we'll employees be impacted. and safety operations our the ground Although response thorough working the with not leadership our ensure with of on to coordinating a

profit the new FSS business. The segments, record margin generating International. in quarter. the solid and strong both our year, am start really first fiscal with to for record the resulted I to revenue with revenue performance Now the quarter along growth international and in pleased broad-based across improvement with U.S. AOI great

Jim cost year's scale as we're are shortly. We're are by management strategies in be and margin Aramark's helped been contract has SG&A purchasing working efficiencies moderating maturities, have inflation. focused CFO. greater new excited reviewing and detail in we appointed favorable and driven the seeing extremely what will tight by our growth business, to We're which Our and seeing by trends encouraged in Jim prior newly

XX-year with knowledge the the having the closely new company As know, our the years, proven across of International board asset depth company with for Jim record tremendous is a and he's his you across served as track in veteran worked his Tom about over past and of is X role. a segment CFO a borders,

a is joining over seamless adviser Tom today strategic a on as serve both continues the a chain ensure few to above-unit costs is new us mindset he the and to transition a as trusted deep, and net containing broad that economics, organization. partner value-creating strong help legacy optimizing Tom leaves focused next instilling throughout also months. supply and business, accelerating

NFL was residential business top combination the compared with of attendance levels hospitality sales are year seasons, from of revenue is Collegiate and program which dining to dining, athletes revenue training program, fully personalized events. NCAA athlete's each performance, experienced the integrated and more app. Sports strong nutrition spending improved pricing to per retail segment accessible regular capita start a with base the with prior with our having our net top line. collegiate is organic pricing the which starting and in Hospitality, to Our U.S. regimen catering first organic year. We're Eat driving through XX%, academic The Health as and easily contributed year-over-year balanced by continued positively Entertainment to XX% new along launched performance goals strong higher demonstrated support increased and that is on with digital growth Wellness volume early competitive well the a and of and and recommendation success peak favorable business dietary with growth, student biometrics. strong as Excel with focused which concert the the especially recently schedule line providing high quarter momentum The to trends in driven pricing. A and

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Tulane have adding our New includes and hospitality, see in others. We Central Bank stage across is across our company. in been business retention Germany new This broad-based wins Zoo, high the the to awarded expanding services and this for year more robust, at the collated levels locally University fiscal European the portfolio. client and pipeline believe business we Philadelphia being early among continue to

chain. to turn global Now let supply me

landscape compliance and opportunities, supply inflation actively quarter running take further this are presents to the seeking this seen to while to and customers. show costs. do. We're Well proud in providing potential, overall clients update. for on in we advantage working on products Health commitments from and the review to the first efforts released Our by on robust our path which the net value our and in report, Last zero people, for also business is ethics governance while we to millions globe Planetary on equity quarter. And these moderating benefited our the includes encourage areas growing promoting leveraging continues slower including expected, partners. originally generate services to better of highlighting tailwind and overall and distribution focus practices, current product you everything some our and this this enterprise, of the our progress and than with enormous responsible We've believe I closely past Do inflation of we manufacturing and improved planet, are areas Be over Well to be trend, well-being on spend chain enabling week, our and quality in-depth specifically assuring We

perspectives, time member Before a Republic also company Brian last annual and call Aramark's Delgaccio I'd President our is as I of to turning week. currently my Allied following know extensive Waste. Brian's well our and M&A. Brian and for Executive the to Jim, to meeting Services, behalf Officer Art the for want over provide of to like Art's company. On thank not valued for reelection. experiences Directors in of Board to of welcome Jim? particularly we're Vice at the Financial Chief at service retirement extremely newest from also grateful his executive contributions planning strategic of all announced stand did Board. will immense Aramark, our I Winkleblack Art us

James Tarangelo

and continuing transformational pleasure forward you. as real to May. adviser you wish this industry look toward a with a you good privilege on I strategic his leadership thanking full of it's we start past and Tom journey to years have and Combined, well over by everyone. retirement John, partnership transition to a to and tremendous you for wanted have as XX be and Thanks, morning, in the been experience, X over years. We

Adjusted XX XX% 'XX. the income prior currency first volumes, in billion, as was a unit-level generated broad-based growth profitability well period, has by from year terrific segments XX% margin reported in profit the prior pricing AOA basis. net XX% operating increased as SG&A last with $XXX same the at P&L compared year-over-year up up growth constant as on The driven cost the the higher of basis new million, organic versus million, first and of revenue combination management growth. both base currency income from off on growth the $XXX are strong quarter financial start a revenue $X.X constant We through quarter double-digit company line efficiencies. points the business. quarter. Operating well versus Aramark chain to and the X.X% reported performance sales to year. Both as and fiscal contribution representing consolidated disciplined a a The and strong basis higher volume supply In was was top year. leveraging in quarter, of U.S. and was business International

We overall, experience inflation also which did trends favorable benefited quarter. the

yet Our results innovative aided our practical were approach by to technology.

more continue utilizing leverage manufacturers. pricing including most to supply suppliers and throughout We spend effectively aggregate better get from our and technology, recently our chain AI to

businesses, constant currency corrections particularly Education, our from U.K., strong and a Turning team's and higher basis B&I, all XX% AOI the the efforts leisure price basis, driven points and segment AOI improvement growth revenue, effectively almost international same AOI by period corrections had and ability in recover led reported had year-over-year of business and in improvement our last margin discussed. On to the an the inflation compared XX hospitality to sports, segments. XX% growth we've of AOI points, basis U.S. by especially with to the year. previously collegiate XX lag Germany of Canada. an the margin The leveraging quarters of

fiscal savings of Uniform will associated interest $X.X compared to 'XX the from debt $XXX remainder billion repayment the income Services year. expense the the million $X.X transaction. The the to Turning about proceeds spin of Interest in repayment in the benefited from the statement. quarter expense debt with prior billion in result

$X.XX, tax which year basis. completion EPS constant rate spin on of related versus EPS adjusted performance $X.XX, the XX%. resulted and to quarterly in was prior included of Our of the GAAP expenses of approximately XX% the adjusted increase an The a currency

experienced capital specifically and as entertainment. as Regarding sports quarter which flow, collegiate quarter the hospitality natural business, use the growth the increased first cash due of we of a first of higher moderately a This to consistent normal our working with and compared a outflow seasonality with levels result percentage historic the increased capital the year expected last is and due expenditures, a of revenue. strong and business, cash of to to consistent as in cadence,

another taxes addition, noncontrolling more resulting net $XXX the and balance billion compared San several the period. of our impact and reduction position spin strategic We've includes gain and end the by proactive Antonio proceeds debt In the we AIM. of than AIM taken our to sale divesting year debt of Spurs. strengthen on of had onetime sheet, repayments also interest a our cash steps million billion $X.X our on the or to This in from from paid prior in $X.X

in billion to expect Aramark to the has end, performance the our debt right over has goal. experienced on at X.Xx quarter combined with availability. continue represent us this We leverage leverage our the path lowest for and repayments, At approximately had since fiscal $X cash This 'XX, company be achieve improved to business would XXXX.

opportunistically We our to for will shareholder this our continue capital up expectations year. fiscal includes leverage as financial enhance comes a down. valuating additional I'll ratio flexibility. This returns given with structure our our wrap performance

by are the what combined discipline We chain the we saw with initiatives encouraged business growth, moderating. first in in cost highly revenue around organic inflation strength quarter the and supply continued and

financial XX% X%, ratio and fiscal for organic year, our of revenue results and As we are growth mentioned. I'm both full a end these approximately organic as and of revenue that, EPS XX%; reflect to I quarter. With and very and result, between favorable our the adjusted growth growth 'XX the and adjusted fiscal X% AOI leverage AOI by XX% targets. this a outlook between expectations profitability trends and X.Xx the leverage pleased EPS growth we between for expect with growth XX% updating reaffirming

We serve clearly of to the years honor at my I've sustainable Aramark across strong, momentum the to business. Aramark be commitment growth XX energy of performance. I ability business, our unwavering the focus see profitable that the of build new to our to in teams and win are the in the and confident today, had collective career. to continues our for clients, achieve

great working that, John. this is I'll strategy turn producing And Our Thank to you it back results. time morning. with and for the

John Zillmer

beyond. a done has Thank 'XX for now for continued be you, great our valued we'll we The And now to come. set on with success, building about work confidence. excited clients. consistent open on carry is the hospitality foundation and momentum look focused centered providing fiscal and and we've we expect sustainable business couldn't Jim. call year our operator, underway, what's this questions. ahead to services more I through With to The

Operator

Instructions] [Operator

Goldman with first Our question from Dove Lizzie comes Sachs.

Elizabeth Dove

across that Firstly, Jim pretty the drove being set much end. the board. big course, more And certainly your in you I than to and a is is range I'm the this side. And wish adjusted organic outperformed there. the much revenue really One main some question appointment out just wanted CFO if of to coming a of color to just me outperformance start and higher then curious on guidance in what I'd can results with. you great for congratulations particularly on to expected, provide areas? higher international these the point details

James Tarangelo

Yes, the about, food SG&A, Sure. margin Thanks, talked We're think underlying it. drivers you middle in the really the I of Lizzie, the results costs. and about efficiencies. and P&L think appreciate the good it's seeing scale supply performance, right, we've main chain levers with labor if and of

really if moderating coming think bps underlying think delivered from the little of XX you upside. XX And about inflation probably So the of bps overperformance, think -- I I primarily a then the performance. bit the sort

Operator

Bernstein. with Martin Harry from comes question next Our

Harry Martin

on the I obvious guess I'll the guidance. ask question

the X%. would the first hit of bottom that slowdown. a to quite be kept growth mean, the You quarter, X% did in I at organic range to guide end XX%

So I line little you of level Can on assume of care for? was the what add QX. Jim. segment, long that that how actions. you're weakness could just I that change underlying organic of slot market year the health guidance line, expectations a revenues including and level next presentation, related the are growth. And In the a the didn't next your the services headwind health why bit in now trend care in guess, wondered you to rest down on and portfolio the question in FM then, last and the that's for within by the I for detail

James Tarangelo

I'll Sure. Will kick do. it off.

very early revenue. growth. in the first we're business make on encouraged trends the what year revenue we're and quarter the with It's revenue, the outlook, saw by so strong On we in call the to seeing base still particularly

price new well. And forward we moderate could effect know, going then having affect as the can about business as base strong top revenues As the were that how moderates. Obviously, the timing and you quarter. in of on loss we've they seen, the an trends think inflation line very first

to early if still it's see are think I those sustainable.

optimization So the through why with continuing revenue for the we're posted year. a keep with for see, as revenue. previously why remainder with respect, improving the next the reclassified And growth with a you Yes, that's for that, driver our decline have of of within that how is discussed, that show care and you we so seasonality, how -- see the health we've you level we've moderately now our can And revenues see and down our portfolio in segment. some to key progresses. being folks in that --

John Zillmer

Yes. just that in we and segment level very that a strong in segment forward that, I'll going that's -- confidence of a add that's still remains opportunity And growth robust. have

kind turning going reportfolio And of restructuring of and we growth the and really forward. this so see then a portfolio as to -- significant temporary reoptimization back

Operator

comes Andrew question next Our JPMorgan. with from Steinerman

Andrew Steinerman

margin on XX the try of kind When or calculate it's and is? to looking either it, revenues guide, what to change range for want depending how assumption to XX math and 'XX of the XX AOI to you guide. implied And at the XX I been want year know I know the fiscal if 'XX also the kind on I in to margin AOI. any of inflation food there's fiscal do

James Tarangelo

Andrew, Yes, Jim. is this

to right you're of XX% at range the be closer profit that's I end think at to higher Again, be the of sort the math, and I the of the yes, of range, to basis you're points. of lower sort of if would XX of XX bps. straight XX XX end the the think revenue XX% sort high, the the load math straight the of So to sort

Andrew Steinerman

asked food I assumption guide? about change in then inflation the there also in is a margin of 'XX And

James Tarangelo

The guidance today. how reflects running inflation current is

it So for first the guidance and reflects inflation, in outlook that it's we provided how pretty current our with quarter. the consistent ran

Operator

Next question with Stifel. comes Shlomo from Rosenbaum

Shlomo Rosenbaum

just I of maybe the see where is without a to And maybe the to to think could how are just about free those there? give could Uniforms think first year you see should that on little the you but quantitative a last maybe it few us give to talk things some what Could trends, guidance cash the terms about are something trends quarters bit then also, we give pricing you in that the that year range there's And items. this fiscal about flow also seasonality, 'XX. know business. compare

John Zillmer

John. free This is pricing I'll flow. Jim Sure. tackle and question, the tackle can cash

now the of the pricing. caught seen of that cost pricing up. pricing had in fact, catch First that over we we're little pricing may -- enter and of up we're course and that largely and currently. increases position pricing. If, environment the our where but that go of like seeing more lag forward, a very some on as a good in bit an inflation going it We we've ahead pricing not perspective contractually of we're last recover We able that we've all, feel the moderates terms seeing a were year, result pressure of from businesses we're in bound a in to aggressively put

right year pretty pricing benign up education So which the it's environment. pricing and we've corrections. caught We're higher recover costs, on a able now, say, and to in, last existed lag, our

Andrew J. Wittmann

And always seasonal the heavy had use we a so free normal do cash flow, as on we first in yes, quarter.

AIM. of averages. in of we $XX million cash well there, And new drivers Capital think have. gain I noted, quarter. And due our taxes the to driven were is business, the working in of on by so not line taxes the to problem about bad then some as with as the growth capital additional up paid the I of timing expenditure historic still the sale our again, but a of cash up finally,

being we're full AIM cash achieving million providing million $XX the cash of the spin toward I have on incremental X.Xx. that the $XX the again, noted gain of transaction we $XX we're million guidance to leverage specific the part in that flow, the with And 'XX. into not about fiscal of costs from trailed then so sale. or cash year, on guiding onetime taxes, For

Operator

Our next question Securities. comes from with Jesper Bibb Tru

Jasper Bibb

wanted costs guess peers the I any margin I labor you're was in cost labor of that on coming I what in been if to down. the the even change inflation? think food seeing there's your growth follow in indicated curious sticky if were cost upside. kind remaining up

So I'm curious if you expect similar been there. have

John Zillmer

the are the Yes. as I a wage food costs we're estimate on the there appropriate say to in Clearly, improvement P&L people the the our well labor overall, middle there's overtime. different costs. the generally, expectations side less X% particularly range moderate think payment of there. But probably touch our structures, our contract would would environment, somewhere of seeing that and than an the go-forward managing cost it workers and a in P&L the of as labor Labor kind It's running be through on the as competitors inflation, benefits those probably been of significant are no I basis. relates is pressure as one like

Jasper Bibb

ask you're to change And opportunities seeing there wanted a then new has what the from I of perspective. respect to takeaways? with and any and new other mix And been outsourcing sales pipeline

John Zillmer

the results date so We're what the so and It's pipeline say No. robust. big level working outsourcing have very as very still activity. as change And -- pipeline close, to we're in we're very encouraged seeing been. pipeline and ever be it's pleased by we're far. in of is that I'd the to with a lot our no continues to the

encouraged. specific we're into getting without very So opportunities,

Operator

with Heather from Our Balsky next question BofA. comes

Heather Balsky

want segments with in prior when think I guess to demand kind just you most right you the to you're the how And to about might about end add seeing business your to you be on be think in? of in, and the mix where the pipeline. I'd you like also question markets different the of terms regards your to

John Zillmer

virtually seeing really or collegiate significant domestically were every vertical. arising Well, across opportunity experience opportunities and in in And -- we're it's all internationally. workplace opportunities yes, health it hospitality, we're very we the broad-based whether businesses, significant both care,

to So resourced and have grow we're be in. opportunity all -- We're we and it's in of serve. we in we seeing that market we're the we're focused, every really want them, businesses to literally

it is that across We've another are -- I'm got so There and what to pursue no can the domestically encouraging. we that's limited so internationally. the delivering story makes one particular a not So both And or another. what people one business makes opportunities that's board exciting. our vertical range or -- in growth of

Heather Balsky

an food curious same think seeing investors helpful. distributors really reading the I'm report which are ask you time. kind or looking of also and question, And to what are costs saying example, be That's a a looking I the is they I'm of lot about your going pricing, don't necessarily at they're for food mix have the talk business presumably, the things? you selling. terms about when what were how different distributors should center plate, Because than of of have thinking we food in at inflation

for kind us you it your mean can of provide or color any helps saying they're kind business? term Just might of what what

John Zillmer

that's -- on it's Yes, a can focused very that given clients buy from us inflation kind that which question, opposed It's we that commodities our we confusing Heather. our serve. really great basket little are -- the is one the numbers specific. as report, products be more to of to the a they bit and products that that the of customers numbers want market buy. And are And our

what weekly unit -- we're are by the and paying ours we on at across business this by look for So exactly We services number basis. know a goods literally enterprise country.

for that. a do correlation our high basket to commodities much have what spot distributors more our normalizes degree of market exposure contract kind of typically, are. The to have pricing costs various we So

hard our as you modulating, distributor and see lower would pricing and see utilize transfer very that well. to our buy But between -- I into would direct commodity So as costs. to costs I a And eventually prices comparison that it's make products you'll say, we

hasn't you but make further helped. to tough if that So happy always correlation, to confuse the

Operator

comes Toni Stanley. Kaplan with from question Morgan Our next

Toni Kaplan

had Can and talk you've you that innovation focusing deployed. on creative in particular? past, some about you're initiatives where initiatives any technology you've the AI In

John Zillmer

inside as a Jim a company comment can on meeting Yes, on very the of significant that's the can question Board this. both and I initiative technology both -- business where the underway technology apply parts week and our I to the managers great frontline we to It is the our And last as company. really well the had report benefit literally initiatives a inside customer. the to

for And most evaluate sets menu and are you some the menu structures menu around to technologies multiple nobody well a what, as acceptability going are need that from customer in will buy use lowest you world prevalent on literally things to using can AI serve expect, create AI perspective businesses guess optimization optimal cost the cost and in design both menu might and menu we to go have because customer and it. them, ahead as optimization, the a perspective pilots and as

So have both to those of balance objectives. you

as consumer. are. go to the in really and by develop AI the it's both models for the shown as programs that we're possibilities the well And large optimize and have what dramatic pilots using And so language and encouraged results, us very ahead we're exciting, very

James Tarangelo

negotiate Yes. really optimizing SKUs suppliers AI with within our better I'll our our script. the seeing chain opportunities, I us and pricing harmonize and to We're that. as and is in in group effective good my add send across enabling mentioned to manufacturers. of just supply aggregation and our AI matching to data utilizing board enables We're

Toni Kaplan

in market up follow or Are with regard mid-sized changes any to large the to competitors wanted either the the you competition. seeing even on space? I small or in the competitors Terrific.

John Zillmer

still very And would those a clients pursuing there, to all environment. competitive answer out competitive all say that strategies. range been no. bidding of always I and to change, organizations competitors of overall, continues I'd really the Yes. very smaller no like. But regional evolve certain businesses short environment, Really change brand-name is a disciplined change. say companies economic time. We're the structure, and it's no plenty they positioned It's niches against the

the customization quality that's selling seeing also We on. and are continue always and And we focused what thing. our doing frankly, focus on competitors to we're same

the environment. course the like say over And consistent years. it's I very opportunity. would we last the been several the So like We of

Operator

Redburn. Neil from Tyler comes question with Next Atlantic.

Neil Tyler

A couple from me, please.

ramping back if achieving year. of contributing midpoint go you way terms the bridge, margin that. the things like the like, new versus and year-on-year relative to Do question That's about the hitting then the volumes to and sort particularly, year? business consistent the move I remain expect those as the through the components the contribution question. terms GPO? Do for national to suppose, question really over or importance or in that ramp-up you relative in change in and the is of the comp contribution Just expect the you think of inflation, we remainder of you And and second first on The the business. price the of base

upwards? about what's be could of sort a that normalization of the still not seeing acceleration extent if there in to is going sort and of -- you classified there sort volumes talk a more whether might you Just but contracts on bit won relatively -- little I recently what new, in as net -- wonder

James Tarangelo

take levers. first with the to underlying the I'll respect Yes. one

business think again, QX from, scale generated the I those SG&A, results in in efficiencies, and new the continued and the So margin we margins of food labor middle sources disciplined coming supply P&L of progression of maturity. with at the chain and the

expect we think similar remainder toward the of look the a I we mix year. as

sort seeing. rounded the to obviously think, the of As about inflation not Again, of in sort upside, look moderating with margin consistent bps, in majority think is look And that's that's if XX I XX of you into said, the QX I you the the like definitively what at built improvement outlook... guidance came our we're midpoint drove I QX, from pretty at generally levers mentioned, points. if core of basis I at the and

John Zillmer

sorry, Yes. I'm to think base And you. that business I we're I I just the seeing. I was didn't -- mean interrupt would just add, acceleration going add on

basis. a to having locations, a in volume it's think more combination full-time It's things. customers return work improved existing I of on

seeing beginning last ramp also over of offerings in of a of as you're we couple seeing customer terms And of the accounts of of course sold years well. So that range you're ramp-up the the mature counts. the improving to

of combination both. a it's So

I steady and losses get basically put to the we can volume recovered now and think growth fully and that we COVID working base any that during mirror experienced really counts. on the COVID, back in a to and improving just we're rearview beginning customer business of we state say

Operator

Markets. Our with Capital from next comes RBC question Ashish Sabadra

Ashish Sabadra

I thoughts if had M&A, results. Jim, congrats pretty on terms and terms or done of that tuck-in the in anything portfolio, acquisition rationalization, non-core but on you're on you portfolio just to thinking of even ownership? any solid remaining appointment you've front some wanted in any good of see if

John Zillmer

would the become today can will, as we I to may at those available it looking build We're kinds of tuck-in potential capabilities and to talk for businesses nothing out an we horizon various if on -- with Yes, basis. -- open We're acquisitions go things you Union if of ahead the on extensions, is to this John. And did we're supply. And willing and open pursue we do to operate. about. always always always accretive looking but say that

driver. So It's we'll as Well, growth we be but be our driver, and very secondary M&A really disciplined. don't opportunistic, we'll view primary a

Operator

Chan Josh comes next question from Our UBS. with

Joshua Chan

at year. I on aim net a the know that you side, X% new to X%

for biggest opportunities front? feel with about are guess what And in, this see do the you target risks quarter or I that on how do So year? one you

John Zillmer

system. absolutely ourselves. Yes. have we say into built would established also target It's a that for that's our compensation I

you team net entire the initiatives those on So have on new focused growth. management

it. nothing as And disciplined to quarter And that's achievable. We target. I those believe, that me change they and last said are in so the would very are that earlier, our there's robust. is organization the on cause transpired would opportunities setting in that targets focused very obviously, I say, very

Our pipeline net have very to challenge. a concern And no specific into is without X% opportunities, large. getting new being around the number X% I

Joshua Chan

new the if to going was that. And had nicely. of ask I That is Perfect. sure what lowered corporate expect forward? the can But expense. the one we on should I spin guess, with corporate expense level do I'm

James Tarangelo

and functional spin. closely with in benefit very forfeitures oversee. never that We the groups SG&A. share-based We're of comp, my did focused sort and the we a true-ups have quarter. It's saw That's I right. on work area a to that's year. role, prior prior try to for rebate an Yes, with be that a very moderate the provided benefit there flat some to moderate some to some the few I

be -- consistent. So should I that rate fairly but run think generally,

Operator

next Wittman question The Baird. from comes with Andrew

Andrew J. Wittmann

-- that kind of their could a now guess they're been corporate months the their that the wondering that has Rental business. with agreement out probably you're result few calendar identifying maybe it out, supports structure of efficient, services in anything as John. anything look systems, think off making today? the transition just either there's later this at at you I since as there about Is when was year look the to Uniform I for Or more you if here the probably separated there. benefit if business runs that

John Zillmer

already, those organization the services rebased maintain the really of We've forward. adjustments. going we'll that with base minor and are provide able There employees to probably we're level Yes.

or change. further any anticipate don't significant So any restructuring

organization without the that in we're add to to as we'll to growth both SG&A. of very expect think the additional having in level able resourcing organization we that add business internationally And continues can net domestically new and happy and absorb with growth we the that grow I today. be absorb

we're in forward. So being that's confident able and appropriately very to why manage lever going that very aggressively

no So going change significant anticipated forward.

Andrew J. Wittmann

obviously, COVID retention. I you And I one last retention on the is that is was And guess, address that, COVID the helpful. view in seen how the good from from that happened here That's guess a if in your you've things I the averages. COVID, months and rearview point of mirror, said then to Okay. to but ask relates during could of spiked retention, just I wanted maybe that trends retention historical you wondering the the of few spikes versus kind those that period and in

John Zillmer

the -- year our will be we average think settle expect say change range don't see and to basically pretty yes, I any as And no XX% spiked that expectation. But the of dramatically. COVID to year would in, I range. change in Yes. on first this that really the again historical And retention I pattern. we're right any during really this it in

XX.X%. be will it years, Some

might is any it don't I in years, approach certainly to in that. Some and level But see achievable threat of general, XX%. think retention that

Operator

from Our next comes Anta question Harold Jefferies.. with

Unknown Analyst

Stephanie onto is more. for Harold on This

So June, quick question.

rearview, that and over Just in year want fiscal the for the further. strategies are is for COVID eye an get priorities and to which our focused next forward company the looking

James Tarangelo

it's growth-oriented implementing Sure. working I've the years right. obviously, and our worked right, strategy, with and over John Tom,

do what and see growth first the great we're You results. quarter, producing in can

as strategy is I this transition So role. the into consistent very

year that is I discussed. over execution, to so the levers underlying think next the the continuing or about drive really -- we've

operational chain behind I is that of think terms the us. supply in to COVID it's back and of disruption discipline basics sort now the

So our opportunities, service P&L mineral I there clients. think, disrupting food with without that deliver the are the to and some high-quality labor we

the and focus that's provided So established. in the we committed very for company has am fully and me. for I 'XX this outlook really committed to the year confident targets the

Operator

Alwy question with Faiza Our next Deutsche Bank. comes from

Faiza Alwy

up follow to supply wanted I chain. around

talked we improving bit current a product made around So comment little inflation the presents significant costs how and you but a landscape about opportunities.

I initiative wanted decelerating. supply chain just your around little to inflation So bit more a hear beyond

John Zillmer

serve sales arena. the geographies new on very GPO the that contract chain It's robust be continue we we we the and as internationally. And and but we a Yes. service know, core efforts that and of the size have as taking organically also to in well GPOs, and you family vendor domestically in both -- only GPOs in a by of interested not organization scope new businesses, on number customers food different extending includes -- different verticals different both very Avendra supply focused business, expanding the as through

of Atom job. an And Bales year that the our effectively efficiently away, future so really profitability. It's role. last of leadership passed growth he future it a He's over important organization. and doing Orobono taken and when terrific a he's very that is component into John terrific for integrated having organization our runs who

pleased very with we we're sustainability that well. from on so the the through focused products, have perspective And all right frontline the managers focused an ESG right optimizing on overall our hyper those efforts right services, and performance. partners. They're as for They the very are

We committed be chain supply continue can we that accelerate long-term to going an margin important believe of our will of we're it. the the forward. to that so growth profitability, part improvement And and

Faiza Alwy

just clarify then wanted And made on or to Great. follow-up around comments pricing. you

Are inflation anticipating assume said of pricing, moderate you pricing? -- well. guess, pricing you Or I moderates, how really inflation incremental pricing get are to the extent moderation we that question. as is just do the going think any you're a forward should sort back it's in some have will that pushback see just around moderates, pricing? to you starting to of Or you starting curious I sort to give on as

John Zillmer

Yes. price rate more No, we'll expectations. see on giving moderate may align with closely back be but to wouldn't increase pricing, we inflation the of in

you increases aggressive for cost increases think had norm. So very That's the as rate. inflation if that beyond last we very of pricing outsized to our example, or price pricing you about lag, high recover year, the what of will, because pursuing we kind were were drove

inflation just to around to range. this somewhere that kind really without level to spikes, any recovery. think more And see I I you'll is future think industry normalized in moderate pricing pricing the of go model, a which is inflation, significant of much back likely

Operator

Zaffino Our with last from comes question Oppenheimer. Ian

Ian Zaffino

aboard. see Congratulations, Jim, happy welcome Very to these here. numbers

to this would competitive environment, how wins? you're force your versus like the We're we good now, more get new guess, in seeing getting really this I seeing to How seems impact guess, inflation new I new down. Pricing is question, confidence coming this ability to win be business. business, does sales to on top. are outsourcing be as So your

be growth buckets? accelerating the drivers as about think the or to environment, how about et those of now forward So do far in cetera? going how that big And think either decelerating, we as what will

James Tarangelo

as Yes, a talked insourced. a about, currently a portion have large I is a continues to right? There's for that environment, tremendous think very us, It's we market opportunity of portion. -- significant is the still overall significant that

about focused the new. So I driving the going previously. that talked said, strategy forward we And like on net levers remains

more outlined. and sort with us, the supply brings of us chain think disruption underlying the we've COVID those us levers that it I and behind driving makes important just toward behind strategy

John Zillmer

Yes.

just couple I'll add comments. think a I of

all, will important drive resourced of that place of believe the those the rebuilt We've to the success sales the the new we And are We've our culture. continue the organization. rebuilt numbers things are is organization. long-term growth and for First company. net and long-term We've in sustainable achieving and performance.

the sustainable long-term geographic limitless very of certainly to as perspective. opportunities new customers literally marketplace then of as forward. XX% retention model. to available range we're of that, a that and value-creating around going conversion can year absolutely a all recovery existing And model call a cost but retention X% at the And support into the really inflationary growth both net and range, through perspective is committed, us our X% So recovery maintaining from it, and translates the scope a are pricing well

competing be So going the plenty very And left the to growth to organization. markets. in we're of all of self-op conversion aggressively the continue

business on and compensated those love results. we're of now that it. take is focused organization delivering built model. advantage We've it and is it an the So we can on on

Operator

closing Zillmer now any will to the turn over call Mr. remarks. for I back

John Zillmer

to I'd this the attention much and XXXX. to for that quarter. thank to Well, proud also work Aramark, your of investment have say morning. has the at your like the first results hard part of team the done. Really looking I you would produced good all, the organization. very of members efforts. all for for you a thank time all the of all of work forward you team who for like and first thank community in Thank terrific the and we're

Operator

you participating. This conference. Thank concludes for today's

now You disconnect. may

Aramark (ARMK) 6 Feb 242024 Q1 Earnings call transcript