ARMK - Earnings call transcript Q2 2024

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Operator

Good morning, and welcome to Aramark's Second Quarter Fiscal 2024 Earnings Results Conference Call. My name is Kevin, and I'll be your operator for today's call. [Operator Instructions]

I will now turn the call over to Felise Kissell, Senior Vice President, Investor Relations and Corporate Development. Ms. proceed. please Kissell,

Felise Kissell

as to call Welcome hearing quarter XXXX as fiscal our Tarangelo. Officer, Thank webcast. Aramark's This conference well Zillmer; John and Executive be Chief morning, earnings Financial Chief Jim you. Officer, second our we from will

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

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

reconciliation Additionally, in we our of be GAAP morning's to this website. will well found can U.S. be items discussing as A release measures. these as press on non-GAAP financial

So with to over that, John. call I'll turn the now

John Zillmer

the great growth hit by had as driven of quarter profitability record as We results strategies everyone. well up benefiting X.X% from company total second pricing in in record the morning, the across second Once our revenue for history, improvement was profit came vast year. International. to quarter quarter another while new majority taken Good The quarter prior of business our in any to to also net and the company. in quarter substantial base performance, revenue commitment our organic from which Aramark growth, drive tailwind. inflation growth, some we've again, business contributed compared to second

business potential. strong consistently retention experience along rates, sizable to continued new with We

led X quarter increased by areas versus the of U.S. last in X% revenue business. segment the in the second by year, Organic

well increased the momentum capita due attendance business with Sports levels, during culinary per in NFL quarter impressive especially in as participation. continued and to & our spending as well to the growing NCAA. seen higher from rates presence new enhanced innovation had Entertainment great season, Hospitality leading we've another First, wins as partnerships Collegiate and

offerings and expanded with partnerships, We fans. continue which our to grab-and-grow restaurant local additional markets launched self-checkout and resonate micro

also respective Aramark Iowa Hawkeyes We'd their championship Boilermakers Gamecocks, to and games, NCAA reaching for Carolina the achievements basketball South their in all the like Purdue clients. the congratulate

momentum And the regions lastly, new workplace experience participation by and board, all additional progressed, coming led catering increased as gained on activity. across rates quarter business employee

I stadium The San of add continues to segment home firsthand wins. for recently, deliver fan proudly the Oracle to were new with of U.S. to with Francisco day business very the creations new opening and innovative fans enthusiasm the serving favorites. Most combined was Park, at Aramark baseball portfolio. experienced Giants, culinary iconic we our excited team our the

Collegiate Dublin Clark few. in new Other University of New Hospitality, the include City additions client and Student Mexico, and to as Nutrition University well Schools as Denison University name a

Corrections the XXX portfolio, pride continued that in program a expand second as employer, success now of is a to of in our also program the over locations. INXWork our chance taking great

Aramark portfolio the the organic XX%. continued strength and mining Canada, a resulting the Latin U.K., quarter, by across business segment, of In second increase saw in increased led within in the in in volume growth country every America, International dining revenue region education and in year-over-year services

for opportunities to pair sports. in the San played who Our new the L.A. Major Diego opening quarter, the the team League and of League a towards the Padres at fans rivals, baseball Aramark in games leading West served end National Korea Seoul day of Dodgers,

awarded in AG New B&I U.K., numerous capabilities collectively as our Group the in to serve. has providing been the and been building build scale LNG us remote clients. the services business which we with and International Woodfiber new International, in presence Merlin Continental Germany, additional Canada, countries camp strong to our wins, most has in Ledcor upon expanding included team in Entertainment adding offering recently ability The

In Santiago, which and our global XXX focused from our facility Innovation technology participation in and the partners, the intelligence. with Chile, we of our country around customer time to leaders, hosted explore Summit included We first innovation second sustainability models International safety, approximately service together on food attendees. artificial and used clients quarter, future experience,

supply turn chain. to global let's Now

our of Our of on International an clients. focused several our clients, providing and procurement managed scale. and continues $XX our insights growing focus network services GPO expansion on spend offering and opportunity to global chain objective services with our overall multinational supply be broaden strategy consistently on to analytical global billion, quality our leveraging to area is and a of services the us products,

I As the will quarter. second Jim saw costs we're we on improvement additional continued helped mentioned, side, on detail which previously benefits the some the in experiencing. inflation product providing be

chain and supply global efficiencies harmonization reporting. and in with and for operators work optimization data enhanced analytics sourcing our particularly in clients, creating additional AI is Our

and and As our achieve community an spend insights further share sustainable these clients to example, impact to with ESG goals. their their we're understanding local, capabilities with leveraging regional, diverse

of Finally, ownership the in franchise. San NBA we Spurs balance our are sheet continue remaining to active stake discussions strengthen sell portion Antonio to our the and in

and interest a remaining on to expect detail fiscal the the soon. provide transaction of year, potential We additional will sell we prior to end the

Jim. over I'll now turn the call to

James Tarangelo

Thanks, John, everyone. morning, and good

levers. to priorities the the spent and of new with in CFO margin underlying reaching growth leveraging and of Over X business levels have growth you I on of have capitalize focused I on profitable time our performance, the January. areas: financial several that my many past goal immediate to outlining months, since with becoming reviewing continuing drive primary

value we that With that, execute we inflection With on our and for environment in producing as significant firmly framework model this at results now point strong the had momentum operating is another the mindset in we the quarter, the stakeholders. building an our with place on and the generated reinforcing very the first quarter, we strategies, our working is company all of creating normalized, exciting expect.

the growth more a the by strong along of disciplined P&L new AOI the inflation those than business, up including progression the supply grew maturity, improving new we SG&A, from currency of basis, X% our reviewed, margin scale to by pricing. constant to driven growth XX% second XX currency the model, underlying driven operating basis contribution net year-over-year and business organic business John core reported Operating As constant versus $XXX prior base with year year-over-year XX% from in was the coming income income and quarter and second approximately year, grew points from a revenue XX to basis with of on basis by ago in in management quarter, a by on million, points $XXX so trends. million. levers middle with chain efficiencies, nearly adjusted remainder

of had the with basis last businesses base discussed. all segments. achieved Collegiate previously AOI disciplined growth especially compared margin strong higher from middle and with same in of & and constant price to combined the FSS business the P&L points the AOI to year. & Sports, management, to our U.S. Education, of improvement Corrections Correction to growth recover our Business business ability lag period Hospitality Turning particularly inflation due basis we've Industry, quarters XX%, XX a an currency on Leisure

Germany and both U.K., XX AOI chain The an AOI International AOI base year-over-year led growth points, by Year-over-year and basis of business America. a basis. driven constant efficiencies XX% margin of segment the growth business, improvement by nearly volume, supply net on was new higher had currency and Latin

in first X% consistent Regarding anticipate inflation seeing our underlying some trends inflation, to conveyed year, tailwinds quarter, We margin quarter. with the expectations to what X% we and to the around fiscal levers. providing experienced we for last are tracking to we be our similarly still

$X.X almost the Turning from tax Interest to XX%. senior billion expense primarily was by XXXX adjusted decreased the the debt notes. remainder of The statement. of XX%, approximately rate repayment the income

EPS of on prior $X.XX, an basis. strong quarterly $X.XX versus resulted currency adjusted in of XX% GAAP Our of performance increase the and constant a year EPS

the by a was inflow The generated the to flows and the With free increased from the payments seasonal activities million. fees approximately transaction, Cash associated quarter of million, in the million and in cadence. spin $XX tax quarter $XXX flow respect the growth, of income consistent impacted cash business remaining completion from for more second was payments the higher profitable with operating capital quarter as our with flow, cash $XXX current normal cash company slightly well as was expenditures.

had company $X.X cash the over availability. At in billion quarter-end,

million. to We also is XXXX term and by savings structure of at repricing $XX took rates. capital approximately our repricing generate interest our to annual interest expense This loans XXXX expected lower enhance steps

opportunities We to will our strengthen balance continue proactively further pursue sheet. to

remainder the for expectations outlook year. our this with up wrap I'll of fiscal

we the pleased performance We and business. year-to-date are the in very with trends seeing our are

at a and last updating result, be quarter. EPS 'XX our fiscal expectation are X% the range indicated to adjusted As higher of we we would or growth growth growth for be and AOI better, reaffirming for the toward which end outlook our organic

leverage Organic year. currently XX%; we lastly, XX%; following growth XX% the growth better; that, of approximately full adjusted With at the to anticipate increasing end a the revenue ratio fiscal or AOI performance. of and EPS year to by X.Xx of X% XX%

reinforces strategies strong are growth working. that Our our profitable performance

we couldn't about in the excited for foundation organization, firmly future. the With success place across be our more

turn time it for to you this Thank And back John. I'll with that, the morning.

John Zillmer

Thank you, Jim.

Our EPS momentum revenue upon and to day We're on build force our financial teams organic reason and promises go around in the on expansion, remain the to growth targets, for our driving capital key deliver I confident behind our adjusted through our all hard structure ability a enhancement. and are globe our and margin stakeholders. working success each growth, focused to

We the end Very raised strong that specifically, quarter environment that's guidance in about that to is respect our for feel and the we've I'd to year last expectations AOI the like qualitative risen. the cooperate, update second range the revenue good as quantitative to guidance plan Having guidance AOI the point the and believe very have that of convey towards books. pointed our we the both on continues this quarter of macro with the AOI to the we progresses. range high our half already quarter, year

the call over we'll turn questions. Operator, to now

Operator

from first comes Morgan Instructions] Kaplan Toni question with [Operator Our Stanley.

Toni Kaplan

range. you in moved color It of good give of remarks. the out job like -- guidance end and Really growth maybe business. prepared business seems could in really quarter, to hoping on a just momentum that you higher you times on I it some the the the nice new called was the and revenue additional this number

trending, that's are shortening a environment us give was Are sense just you seeing a to So guess, new business. you seeing and of able what Like, there? of for changes, and like you sales net just clients? cycle? find the quarter I new acceleration how the in Are new the

John Zillmer

question. Toni, Thanks, for Sure. the

First and in momentum about that development and don't we wins. signed new feel wins new the business have we verbal good of many of are contracts pipeline that already all, very our in for. Many terms account

seeing in higher So season still very middle on we're very pipeline, education and the know, as business the active selling selling in you significant they're new side, seasons. of which active momentum their very K-XX,

to feel now, for very we'll and goals new and momentum about right the results wins and full net our enterprise. we good So the more and after for And the some date, the But of components got very to very net with our the disclose many satisfying growth year momentum the are pleased what fully year. come. new we're entire about

Toni Kaplan

business already you're latest AOI Terrific. particularly on margin end. you And thinking the strong. in side? little just particular, on the some and U.S. U.S., the Wanted performance? drivers of higher my prior go Margin in drivers But of any it And how wanted like as updating at margin. sounds a from we you're understand the and on commentary spread looked along you're margin the on guidance bit thinking just Are the to price/cost particularly benefiting about the maturity the new -- ask in about to the year's better. follow-up

James Tarangelo

Yes. Thanks.

growth and seeing results The improvement. margin underlying performance levers, strong about remaining averaging to XX, about really from our chain. supply chain of inflation of those deals, that efficiencies, really organization coming basis like really seeing supply with better out on positioned our noted, So we as what moderating. Within coming we're XX XX good I in GPOs. And we're particularly generate the basis from points the negotiate margins, year-to-date points has

really continues our Secondly, optimizing I seen would just note the normalize environment the can as P&L, service to focus We've well. to of and as food there operating labor middle without our nice results operators clients. and sacrificing on the

Operator

Zaffino Ian from comes with Oppenheimer. question Next

Ian Zaffino

more your Very then primarily are there. lines there as well? competitive your new I that? opportunities business. outsourcing? or new Were -- Maybe little pipeline, bit good And again, you quarter. doing could -- Wanted what specific pipeline us as to new ask Were that a on wins? particularly big give into was they about? look on the Was you What look into any client business of talk color

John Zillmer

well Actually, All wins. is based. new terms performance most very is ever the to doing with education of higher Sure. business very And of numbers the broad may history business in their sold new accounts. in respect business they've sell

solid in from Big growth corrections, in and strong Very year wins, verticals. very in perspective. a the been enterprise in that it's across B&I. other other So obviously,

had and both the very nature perspective. have the the with of wins. broad-based year new business strong pleased a from domestically very pipeline, strength account new a International we're The the of internationally, So

we're seeing still all seeing think significant all you, tailwind and self-op the yes, world. encouraged. verticals around would very I from the we're And I opportunities across significant conversion So tell We're across geographies.

So results. very about business pipeline overall the the feeling and good new

Ian Zaffino

then status in of quarter. you company, sense? the And have last the you type Ridge if been your you've in just great of could another any if posting I sneak including And question. share Great. results, from Can ownership Mantle

be of overhang Some could are that type some thinking it coming.

insight any behind you that give would the... us, helpful. If So it's could be

John Zillmer

I little And their and generally Generally, not that bit key in details stock because believe on the of but circumstances, share no factor fully has confusion a obtained the shareholders, that I'm the of current Mantle relating do there's ownership. have Yes, of and our wound permanently held for longer Aramark. permission to the have reason to the state current commenting habit around we to a down a certainly. in of Aramark been vehicle Ridge matters short, is

confirm has by said, So been all has that as stock long-term I a the can and the wound permanently controlled fully Ridge home. fund found down. I Mantle

in sold way was sell-down the X course long-term balance initial Some August, holders. months over the and last their found the of to since their has

received of of sure who of next that company's filings investors As underwritten that the thoroughly. relationship. the the course we very And I the well-respected will have shares feel the over strategy good organizations have the show, quarters am nature are couple long-term about

is Ridge for no and longer be is a friend, will line I with on Aramark. for ownership trust bottom but an the is the ownership Ridge's So advice Mantle him longer calling I no a factor perspective. Mantle Hilal future, Paul from a in have we relationship

Operator

Dove Our next from question comes Sachs. Lizzie with Goldman

Elizabeth Dove

it nice of ask on terms like we've I'm just weeks. the negative seeing in also there and update of you're an provide companies now, of what could pricing. kind And of consumer? some over I'll you're health pressures? on few heard kind if same seeing last any follow-up my receiving on Congrats the a from commentary the curious, Curious Does feel quarter. you other you're pushback

John Zillmer

the in, in strong organic is would Continue and that seeing healthy we the by levels the of of and a the Entertainment as verticals I response high evidenced we're really business, in which the Yes, -- consumer attendance consumer, very enterprise. very particularly and operate per businesses a Sports spending, think strong see capita to I indicator. very say and growth

businesses and in a verticals we of to geographies. operate and part of across think the that the I range we provide speaks services a essential of range

but So retail pressure, you that organizations if may we be seeing. seeing aren't consumer will, other

and perspective. offset inflationary to show achieve believe to for we've X% still in expectations as that labor From a also we're about. talked perspective, those food an X% the an environment -- seeing are able some But range, pricing our that is both to to inflation we're beginning cost moderation We pressures.

recover So we about serve. those the overall model that's of that enterprise the very to state and the we place, consumer the of in good of state feel growth the costs, our ability the and

Operator

from comes question with Our BofA. next Heather Balsky

Unknown Analyst

on This Heather for is [indiscernible] Balsky.

in well? guiding as like growth to high guidance? is growth just First of question AOI end. EPS terms on It you sounds Is your clarify you're or could that the

James Tarangelo

Yes.

the have. traction really pleased In of and performance we terms with year-to-date the we that the guidance, are

towards to it's AOI I the of fronts end So higher on be range and EPS. both the think reasonable on as conclude that well we'd

Unknown Analyst

then -- on last follow-up, or months? quantitative of And anything couple some maybe accounts, could you could the what provide new you Okay. on seeing a in clarity as has terms in discussions pricing changed of if any you're the the and

John Zillmer

new business. accounts, are P&L a pricing sell we appropriate With is really a is what new perspective respect perspective as to business. negotiation new margin always as the discussions part nothing. the from process sell based of we pricing But No, and on the

is new that clients. we And already pressure got on no velocity good accounts frankly, there pricing serve. downward So pricing those on we've discussions very with

environment. would say very now, with right pleased So I we're pricing the

As you pricing we know, of a contractual last ahead due the lag. recovered, that been and businesses during of the are process struggled year, fully lag period we has on That to couple now.

the good feel we So about very environment in pricing general.

Operator

question next with from comes JPMorgan. Andrew Our Steinerman

Andrew Steinerman

business point to fiscal? to I inflation that half your to costs wanted continue in get input just the of assume. was on that data in book of X% X% you the that a How first for food

John Zillmer

of again X.X%, recent in in seeing actually X.X%, it we're slight first saw first the Andrew, was That most was second We stable in X.X% then easing it of half. quarter, saw that. quarter, then was in roughly now around and some at very And some in it -- the hung kind stable. we the Yes. saw the quarter first a improvement we weeks

the we'll the of the on easing But some bit predict the how the range of that input quarters. continued over in expectations with that it's balance just will are see So in to year. much be. X.X% side It's all little very hard volatility our much exactly been a to year, X% pretty

Andrew Steinerman

And that's for right? Aramark's book of business,

John Zillmer

for book of our that specific for That's our and sell market business to basket products and correct. buy That's consumers. our of we

Operator

Our Redburn next question with Neil comes Atlantic. from Tyler

Neil Tyler

your any this first-time the in wins bids? change that the compared the First, that's expressed That's there John, you last on or question. outsourcing competitive whether of confidence new say, earlier, is year, time and first source those to,

is still Can obviously at then what secondly, that Merlin the growth. comparison? remind contract contributing segment, sort within meaningfully altitude, to extent organic of now is year-on-year strong us or And International you to the cruising

John Zillmer

say, speed year-over-year. Merlin, respect operating I Merlin the and of cruising All to was at it's Yes. year first well. all, time at last with would business open as this

So to a similar We very pick it's Merlin, of just piece environment. did beginning operate from but an basically business that now. operating up additional we're

So year-over-year in really comps. of the yet -- really hasn't that affected that terms hasn't numbers revenue

would And in wins, of major continue still consistent be bids similar. with source terms other say, we I of very competitive regionals General would business year. the to new XX% I industry first either say in it's from business balance new the time saw and trends or range wins, what players. XX% the last contributing probably outsourcing to of

sales very year's say, balance, to So would similar environment. on I last

Operator

next comes Stifel. question Our from Shlomo Rosenbaum with

Shlomo Rosenbaum

kind room John, Is there? you a piece where can are Or now? that out client that point additional over you you where a back are of to of you has of you that maxed business. that picked comment up just made, -- a you at to going expand right from lot Merlin an

John Zillmer

in speak still those, they but say to room number one of operator would I No, I'd of the for they operations world very with of still say would self-operate state, obviously with the continued in the feel about piece. I steady where for love and to -- to U.S., parts expansion addition this other world. the pretty in with be respect it's don't We have U.K. the we additional and for an want parts a them, to them good business is the continue of they other it. there Merlin.

job there's there we'll still continue with runway continue to to work But and partnership. for and to yes, expand Merlin, great hopefully do a think very I the them aggressively

Shlomo Rosenbaum

you just into to growth to comment, U.S., how follow-up, frame stabilization a the And it strong growth then know then it's Maybe just talk in little there know world a is out time weeds just of well. grow? I kind And getting you're thinking, of for don't that really rest stood for could the a a kind care. about some there. tough the the health was stabilize just comp, doing you Great. in bit. reach Okay. over if for I a X% International. everything amongst that, And start taking Could that's to time really and of

John Zillmer

Yes.

we We're team leadership that stabilization in point reached specifically stabilized we've in very we've for and business, progress you're care growing think the the with from believe living. speaking the here I I business that they've of that We senior business. that and health be and that about pleased think made segment. will the

ability grow time. So significantly very over to that confident our in

With respect have rest we to the world. X% comp over for rest of in growth of organic XX% world,

all that GAAP the think impact which I numbers, effects currency the to is talking respect reflect International. with you're in really about translation the

would for that organic world of variance. that is But account our over rest we're So calculation growth. XX% that

James Tarangelo

see world, I'll John, of the that FX that America. in add Latin headwinds of you in $XX the specifically there, rest the that just primarily was million in

Operator

next comes Citi. question comes with Our next our from Carrington Leo -- question

Leo Carrington

it raised in could to year. the AOI XX% Jim, like be you're the and John sounds XX% growth that indicating later guide

why off you of it could pursue What the end the above now? So in hold lands middle? what top doing or that,

of what just year-over-year be kind expect basis what you've on expansion perhaps HX? a margin achieved secondly, in then in to might reasonable to HX And compared

James Tarangelo

Sure.

strong QX, improvement. like we QX performance had very yes, So with in of and points I XX basis margin said,

we're expecting be that the said end outlook, very and In terms to of range. the higher optimistic, remain of we towards I

factors terms some pricing of year. of actions we're prior the couple significant lapping in A in

you that the But inflation front. and new, have plays could of well. outlook, obviously, like to out posted the we'll impact optimistic continue it as with said, really I on and So an timing keep how see we'll we're

John Zillmer

just add a commentary. would I And Yes.

of -- EPS, on very of we're top respect. environment deliver ability at and to As that subject in to somewhat range that the to we confident happens in from our the that. also in what -- the the indicated AOI We're inflation end

And And into so quarter. ultimately that good inflation and tailwind does, if a that continuing third have believe And guidance. fourth as those good update this that it is the this we moderate we continue may that changes, AOI environment be a to -- that is a we further. experience we'll will

Obviously, thing. for to high inflation what the number have all more we We can. same drive we're respect working data we'll to get as the that want as half we to look all We're of further organization. incented second as that And update like. the with might performance

Leo Carrington

Okay. up If one. on I might just that follow

help within expansion what you expansion, the margin i.e. cost pricing caught the could to up -- the has has to pricing inflation? incurred been the now If margin QX, the extent driving that in on

James Tarangelo

Yes.

again, XX levers, which pricing the excludes the So underlying right, basis component, was about points.

a delta the the improvement, margin was moderating. basis result and XX inflation and between so XX, of XX pricing points to XX So

Operator

Our question Ashish RBC. Sabadra next comes with from

Ashish Sabadra

was front. efficiency the expansion, particularly front. margin the cost the you the could place drive continue efforts to the progress chain supply margin wondering on better on as well more if progress on Solid to side as of takeout I in some highlight

John Zillmer

Certainly.

On aggressively chain work pursue. continue to to we supply the side, very

we've to and go use attractive the As more suppliers our enterprise. profitability. we the in organization, improvement continue and build that to And to chain manufacturer do seeing new world. just and that. able the and contributes That to we the and supply grow better leverage around year-over-year overall ahead deals have we profitability negotiate business been the We're with that of significant the partners

pleased very So that progress. with

international which gives and other working global and scale, both We're additional the chain impact internationally. us of and in also to to working very business go that ahead partners terms our aggressively with scale to supply build opportunity domestically build

contributor levers identified So contributor And we've supply key big will be in has we think chain proven and time. solid it you Day, be very margin to over of and one and to be. our that for be continue the growth, will it in that case expansion a business focused That's to company on if a forward. will will, Investor going our the

get of question. And I the didn't I'm second sorry, half the

James Tarangelo

of the a of of P&L. overtime Yes, middle over We again, we what and environment labor more saw and some other agency our labor, job, that environment, more operating the expansion, the operators drivers costs, normalizes. are optimizing really food as specifically margin doing the like great normalized, there reducing

And organization really then fit-for-purpose SG&A, spin. is on with the the our secondly,

costs You a SG&A bit versus prior corporate actually down can see the little year.

So we're take a to without to adding growth much able line more really cost. on top lot the

Operator

question comes Stephanie Our next with Moore Jefferies. from

Stephanie Benjamin Moore

hoping little you're was in of the you could strength What's driving business. seeing bit growth I about the a talk lot base environment? a this this in

John Zillmer

Yes. campuses. on seeing more upperclassmen basis, growth driver We're in frequent in acceptance is strong a performance seeing select which we're overall a on key Higher board the customer businesses. plans a rates We're strong seeing and education, terms customer university participation opportunity. and of very of number satisfaction scores of participation the overall

B&I on has business strong very and domestically base that. well return We're to B&I contributing seeing focused both businesses strong the in and normalized as very in we're to wins internationally, growing segment, And as seeing work new again. business growth are

that seeing pleased all very overall environment all very in. the we're overall, with businesses both just overall business for very the So strong a And healthy of participation counts, their we the we're the growth. results supportive operate cost base customer operating containment, in rates, environment,

Stephanie Benjamin Moore

follow-up, Great. then are trending just at rates a the could which That's helpful. as you retention remind moment? for us And

John Zillmer

our which expect historical we and -- this are we XX% on is standard, achieve that retention, to we're achieve now, Right objective year. track to Yes.

So feel very good about continued high retention rates across the enterprise.

Operator

Securities. next with Bibb question from Jasper Our Truist comes

Jasper Bibb

the are a you and could margin under that leverage? I terms guess color what how growing spend efficiencies. over bit more the hoping in years could GPO supply give on chain was few next to of I drive the opportunity thinking keep and management you about

John Zillmer

GPO specifically, the is we very supply opportunity Well, believe very chain significant. that

to domestically build We continue sector, growth the well GPO internationally, both scale. in of both as looking potential at to at the organic business activity the as through continue ways and new M&A the look to that addition of

our But the benefit. new has be organic will $XX business, accounts of GPO of adding spend billion double growth vehicle selling adding to a new primary and our spend. That growth existing for that the worth

from we both and impact business income increased of in core are that volume. that our result the we the GPO a to negotiate as So are better able deals

a the is long-term margin it enterprise. key expansion for of factor So the

of said, that new of in up them us. I very range are as serve a with continue to whole the opportunities domestically working parts build find both aggressively ways and our internationally, to we to existing opens and working other partners And world. business, to for That

Jasper Bibb

if there then be sales few provide like a today would that gotten could helpful. any investments update stands productivity. on you made you And It where seems But update ago. on curious the any leverage good years on you've force

John Zillmer

Yes. say with productivity of each the discipline XX basis every days. overall we literally businesses very the force as presidents work operating the sales a with presidents, with results have with I the we -- businesses, sales that we're review we through would down country those the sit pleased review and on monthly and of

that see we the a on so evidence of basis. productivity And continuing

got with pleased sales we a And very feel productive So the frankly, results. very like organization. we've

always the go the pursue. that the we're with the different universe new are sales to positioned have to expand add the group We opportunities feel verticals growth resources and of staffed looking And comfortable of to of against for that and we to level and fully for company capabilities ahead opportunities.

look was past. add vertical It a -- for great example XXX% which we had opportunity. that. we can self-op business Merlin great a new that verticals So was the of continue to to And the is in was That portfolio. a

Operator

comes question Josh from Our last UBS. with Chan

Joshua Chan

underlying the improvement points quarter. that mentioned you margin think was basis this XX I

last was I think quarter. the it same

implied what's remind year? just you improvement of in in could underlying margin your terms us for guidance the So

James Tarangelo

Yes.

our the or in So We were are moderating the levels inflation benefit haven't is inflation at second they for they any the baked year quarter assumed year. again, we for guidance. of from remainder as tailwinds for as inflation full -- similar

Joshua Chan

you your then that improvement, XXXX And in you to in on margin initiatives Okay. about could the that guess based core just terms of I confidence the beyond drive improvement? have sustaining talk

James Tarangelo

Yes.

trends that and respect levers working. margin made will some as respect XXXX, at driving will the seeing, middle are that next the of to years efficiencies of And P&L, is continue will tailwinds the with supply Given as into again, the and be for we're well. XXXX into as in that we that the we comfortable we the scale SG&A that think, plan commentary similar traction improved the our the XXXX the model I chain, have, very improvement give And on and couple with us are then to well. momentum

John Zillmer

would one no, I final just just all terrific. And add I'll -- just comment right. Yes. add -- that's one

you clients good And manage organization. results business that Can to go your about expect? effectively we the best ahead middle the ability business the that, about deliver the feel the our impact good on team and an the -- very feel of delivering the of P&L we on customers. indicated, a way. operating to great do ultimately, a of that's very efficiency that's And Jim test to management, job meaningful and and doing our focusing in As in ability and our services

I'd achieve for quarter. And good we that, to So year appreciate great spent as like of this thank all continue results. we I time about it. through the of feel update to the will us with Really morning. you you this that balance you the with

So thank you very much.

Operator

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

You may now disconnect.

Aramark (ARMK) 7 May 242024 Q2 Earnings call transcript