ARMK - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to Aramark's Fiscal 2024 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. [indiscernible] I will now turn the call over to Felise Kissell, Senior Vice President, Investor Relations and Corporate Development. Ms. proceed. please Kissell,

Felise Kissell

welcome This and CEO, earnings call Tarangelo. conference Zillmer; Thank we to will webcast. Jim CFO, morning, well Aramark's be and as you, as Aramark's hearing John from

accompanying always, the website through are for slides As access. and are for call be webcast the that on available this also easy viewed can IR there

Our notice release. press forward-looking regarding statements our is included in

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

these press U.S. in We be found and items release can will discussing reconciliation to non-GAAP be GAAP our certain website. financial IR measures. of A

With John. to call that, turn will I the over now

John Zillmer

Aramark's will morning the and morning, fiscal a detailed you call, Good Thank 'XX. business everyone. of Jim results for joining today's expectations be for providing sharing On our earnings us. released I in all review and this

we our and year ourselves and Every any full testament new services fiscal this and throughout are day year year, record raising to performance, in reached in for fiscal past bar across global teams financial history. outlook food the and highs a in our what achieving ultimately 'XX challenging AOI for which to resulted the deliver single support stakeholders. profitability every our quarter This is capable revenue raising our organization of, us

on to full in income EPS is operating year-over-year believe this basis. growth 'XX, XX%, revenue rising a increasing potential. come adjusted yet I currency and fiscal best led truly XX% our to adjusted the constant recognizing organic For mindset by XX% of

the $XXX repurchase the and million We Board also clearly a continued our in this the program, business growth share confidence opportunities significant demonstrating morning new approved that announced ahead.

the drive growth, to financial line a our on clear focus to cash prominent to of strategically provides on second, program us around with quarterly leverage increased client buyback first, and by a highlighting predictable dividend, to initiate our repurchase share invest and strong just structure shares, debt considerable fiscal fourth, Aramark Xx capabilities. by portfolio; year; building to issue to sight flow of flexibility XX%; end Our down which a capital third, was pay reducing this

great our commitment global FSS. and ongoing These annualized experienced further a maximizing X% on significant we year 'XX, totaling again, wins reflect year value than fiscal new and business gross the actions $X.X deliver billion prior representing positioning ever in shareholder results. to firm more foundation best nearly for the Once to business revenue, of

change services Retention for schools by the on I'm by And policy most occurrence. as total notably number while lower-margin result unique public driven some of accounts, a a our impacted recently the considerations. overall exiting we political this pleased see a not company had with was this facility of XX.X%, as Chicago effect retention

United Foodservice retention in fiscal and the achieved core both XX.X% of in year. the businesses Our States international

including substantial, fiscal organization we first-time pipeline year XXXX. in large already start new business to several great and into fiscal leaking remains off Our with across opportunities the are a outsourcing, this

with net I beyond. weeks, and first fiscal confidence Broward new Medical in we've achieve XX% 'XX levels ability clients have such company's Health added to X% retention X the and of the just as Mastercard. in X% above In strong to

normalize the particularly and with pricing. U.S. the base Education. In improving business in organic business began to fourth from X% revenue revenue fiscal Turning segments. as grew in inflation, the volume pricing increased organic quarter, primarily 'XX segment in X% record FSS to

I Corrections in attendance with Experience. participation facilities, retail increased rates fan high referenced expansion Sports and in which spending capita in And & Workplace than along per levels Strong earlier. continued Entertainment offset more

refreshments provide in added dining locations to and fourth services as in with Asbury continuing and and now hospitality quarter the & business Sports and communities in communities. care in partnering senior Blues House well Entertainment SAP retirement Palantir Guinness included clients Experience, New as Workplace of our America LifePlus

operations total, which began continued in also at Destinations on offering expand Adventures with Corrections quarter its program, portfolio recently INXWork fourth employer, and encompasses graduating warehouse than chance a program from and and second scholarships. more INXWork a more internships X,XXX supply than the to Gorge, graduates. Virginia. class key West a the acres record in XX,XXX the in as our training, now had differentiator has chain certification,

to Connected, that enhance data are the Aramark and hub Mosaic around IQ, receive an AI for U.S., a customized to to services we experience, which open clients' specific multiple Copilot, include frictionless our supply launched Culinary clients provides business the creates objectives. empower and real-time clock. further their platforms award-winning applications which AI-powered real-time platform, supply locations; chain guest chain drive business just that allows the leveraging our In resource Hospitality unified These operators guest AI-powered experience, autonomous menu recommendations; actionable a our

Education, in provide particularly Workplace practical solutions and innovative IQ mission clients represents Experience. clients for Aramark's Hospitality Healthcare benefits. is strong another to in offering to This with appealing and financial step forward

sharing These extraordinarily XX% been serve fiscal priorities retention team high on deliver business. practices Now U.S. to we significant and the international. in across in on with to best business has in partnering led to borders Momentum increasing from actions 'XX outside growth, organic international continued countries to building successful collaborating new strategic in our the revenue thoughtfully strong to the scale. as

specific geographic Canada contribution Germany, Chile In regions international's U.K., leading quarter, the and the across performance. portfolio fourth the to included country organic all increased revenue XX%, the with from

opening just Entertainment League Football stadium new Aramark and La a the our for food Liga as in presence Germany with Spain. call, months. more the in is last my shared the entering few and English long-standing Club's recently, become official partner Bundesliga Sports of proud Premier European and & in Everton on experiences And their global I

of of and will the one new exclusive the long-term year. and reopen with scheduled also and global our later food most partner the now stadium camp renovated to brands for relationship hospitality dynamic We this the powerful Through Barcelona. [indiscernible] sports are beverage be of pleased to continuation XXX,XXX-seat in partnership, expansion announce a Aramark

clients Bank Allied offshore Espana many among awarded in Ireland, fourth in new BP included Additional business, our international Spain Irish of BBVA within in the and in quarter Gulf Mexico others.

economics, chain a solutions global to supply and providing chain. Moving for insights products, Global spend sustainability our analytical supply by clients. and optimize standard leverage to our continues services, high of grow,

year with of This reaching and GPO billion past senior $X wellness from living, momentum Our global wins total $XX expanding our double-digit GPOs in organic contributing are in with to comes spend new billion. channels, the spend across this fiscal all aggressively growth entertainment. net hospitality, new

service to enhance acquisition to key to We also in complement International we selectively marketplace, and areas. area Avendra opportunities potential our for in us. focus success, enhance a capabilities fourth international the the organic our pursue our in efforts launched continue To of quarter our accelerate targeted

continues A across word America continued on North all to Inflation Europe, global and Latin behind. showing are be portfolio. favorable improvement Asia our America only inflation. lagging with

We to in move historic the fiscal returning we to expect range X% X% business to overall this through continue as the inflation 'XX. levels with trend

balance I of the sheet our mentioned focused leveraging remarks. beginning flexibility, my and in we're on Lastly, our optimizing financial as

the we million debt use for Spurs for and approximately stake part this San and sale NBA Antonio debt of the -- $XXX of strategy, completed our use the the repayment. As recently franchise in proceeds remaining ownership

continue Spurs valued a with client. work closely We to the as

quarter. Jim, the received turning I'd a in Before highlight over fourth we to the recognitions more the to few call like accomplishments and

school academic year new and Chile. the backpacks need [indiscernible] worked with began, assemble across as First, to local in together Aramark in XX U.S., to communities supplies students organizations and the deliver volunteers Ireland

America's Healthcare Workplaces key the XXXX with Second, considerations. Work fostering Healthcare innovation Newsweek professional the company Modern growth to named the by the We Best Most highlighted and one in was as #X by as also industry-leading spot. taking were publication, Place in as Admired of

finally, year And have building featured Aramark Sustainability, people DEI Head and the we've speaker runway for number of environmental recognition Alan forward. proud know our we This past at leaders Aramark accomplished during included a Horowitz, sustainability, to Week. efforts communities. of this tremendous Climate planet local a and received as and commitment what UN of prominent going of I'm our

call to Jim. turn over the now I'll

James Tarangelo

and John, morning, Thanks, good everyone.

mentioned, quarter, have building we record-breaking throughout results the another had delivered John strong on we the As fiscal year.

growth Our revenue passionate across significant to and opportunities, teams efficiency which drive are business. are expected operational the pursuing company the momentum in continued

with pleased Aramark's in really are We 'XX. performance fiscal

compared year revenue, a XX% And to to point As you an we we leverage to ended XX% the started had growth to improvement in delivered of we of EPS, with organic we growth in XX% XX%. XX% X% the year. XX basis X.Xx, in AOI, XX%. the we adjusted XX%. prior X.Xx, reported at recall, growth X% approximately outlook year

board, and generating financial We the high growth-oriented underlying levers that reinforcing end our working, exceeded is expectations of or model the margin achieved driving our our across performance. substantial

Now let's results detail. in review these more

the currency foreign For X% basis translation reported year, billion, prior GAAP of to a fiscal up impact. revenue of X% compared full $XX.X with on year approximately we the

business by base X% Fourth increased business grew revenue was pricing prior volume, business. favorable reflecting year and net contribution inflation up record revenue from base the organic volume trends. the Organic quarter XX% from versus driven pricing normalized more and from new

our of progression a $XXX basis profitable execution in XX was X.X%. model for the full of income basis, points. operating on to margin currency margin up XX% AOI in consistent constant 'XX, fiscal resulting Adjusted of led million growth an This year

discipline X% more currency XX the a growth, from which For cost margin offset the $XXX at site, million fourth highlighted. chain interest and than efficiencies, from Destinations and higher the previously was possessory a which quarter, we basis. constant basis gain year on supply in points AOI AOI prior was up revenue grew

experienced item, growth. double-digit would AOI company this the Excluding have

fiscal XX% the constant adjusted on year a Our of EPS basis. results to increase $X.XX, for an currency led of

Interest EPS provided and For basis. the line and currency in adjusted $X.XX, with expectations a effective our XX% with the rate on fourth assumptions up our modeling quarter, expense ended constant consistent was on site. up IR tax

and income fiscal $X.XX was 'XX. of $X.XX. the On GAAP EPS basis, EPS Aramark for was million, $XXX operating million fourth And operating for a and consolidated of income reported $XXX quarter,

year. Moving our contributed the of to with fourth inflow, the which Consistent to full business, quarter strong seasonality the significant typical a cash cash flow cash generated for our flow.

fiscal Net by free cash flow in and was $XXX 'XX activities was million. $XXX operating cash provided million,

from period working flow favorable year the higher grew XXX% cash to Our free cash prior capital. and operations from compared by

sale from we activities earlier. as Spurs would as benefited of for were remaining to spin. investing previously free payments from NBA expenses San cash approximately of As if higher for flow the the John from ownership million taxes stake from stated, well the shared onetime our Antonio have for $XXX cash Services even in been related sale have our gain as Cash it not current the AIM franchise, the

by debt our fiscal availability. leverage improvement year X.Xx, which billion, of net reduced cash the an $X.X $X.X ended of year-over-year. billion In contributed basis we down fiscal with to 'XX, [indiscernible] over ratio points getting to We

to continue for maturities around our monitoring balance our sheet and opportunities. strategic cost remain markets of credit extending financing, the We closely

our program. This repurchase Lastly, strength Board's capital we the $XXX is a demonstrating and our in excited on are approval in further creation. of share future new the very our value about structure, step million confidence focus of shareholder significant

stock a opportunistically, pursue to is accretive minimum to be intend and to We equity expected at offset which earnings. dilution repurchases

excess approach factoring in allocation optimize top propel the priority invest be with we In so. of our repurchase cash in drive our activity. conjunction achieving utilizing actions, our to assessment have deleveraging and always is to capital me financial do will shares, valuation these generation flexibility that and repurchase business the and strategic to let clear growth, to the intrinsic equity be to objectives Our in

now up I'll for with 'XX. fiscal [indiscernible] our outlook

the which to and achieving pleased to extremely 'XX, with financial in through. we I fiscal am in make progress and longer-term us are great targets, We confident performance in continue our going

revenue full AOI. Of organic to of and following of on X% potential and XX%, specifically expected note, we or extra a include AOI to X.X%, contain revenue which XX% an of quarter 'XX and approximately share X.X% week. fourth adjusted growth occur that, XX% EPS Also, the anticipate any benefit adjusted has EPS a Xx. fiscal growth XX% increasing With doesn't currently to of year ratio repurchases. the the XXrd for outlook organic performance: would about an leverage benefit This from

and performance. on continue summary, both In line to top bottom deliver we

momentum Our this great we excited results, going. strategies producing keep are and to are

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

John Zillmer

new this confident growth upon we've hospitality our Entering fiscal in you, to to Thank establish, we so are build worked success Jim. mindset. the leveraging year, hard culture ability our and

needs business we and create know have laid be to new significant what groundwork value-creating Our teams opportunities, the done. and to

We will really continue about am what's to performance. new to financial levels take excited the reach and ahead. surpass steps I necessary of

the for now we'll questions. we'll operator, take And now call -- open

Operator

question [Operator with Tyler comes Instructions] first Our Redburn Neil from Atlantic.

Neil Tyler

please. Two,

just The is exited. first facilities question you've the really contracts that on

We portfolio what you're missing profitability of of that's of? from that you sort that mentioned an it points give there You the you sort of a confirm can more unique within the means no that, of are could specific basis of first That's unsatisfied can issue. 'XX? And revenue terms with indication growth the perhaps in FY lurking question. take from us

is one on really Second the margin.

the toward excluding close one-offs year-on-year. level half that to implies margins year. points those the think The of year, expanded X I sort the something in base forthcoming for guidance basis

which years, those sort in talk sort of the from take could you for 'XX? So different I order contributing FY the over what wonder factors margin improvement see you X of within side the about and you just levers side by which to if

John Zillmer

take question the part that, first. We'll Sure. the of first

First contracts I manage of unique background circumstances, are there large as public in unprofitable way of Chicago one are out or described, that Those schools. our are exit all, no of. was, looking lurking other yes, to to we facilities very are the which that

was with tough year. very very ahead fundamental organization literally made large change some to gone a change prior decision and a that's they've the go they to And through industry. their Another decision very the made respect

course that then very a went it they recently in back them. reversed significant way they had of which things So [indiscernible]. to begun won to the contract, was and and doing a organization, change had done had we new leadership And because

largest business, yes, difficult the overall of and and that very continuing. margin the that and circumstances. its growth don't forward. ahead. profitability one So see very going company's unusual the is facilities profile pleased the for businesses runway the very of we're We with has And the state rate opportunities It

Jim, and... to want you ahead So go

James Tarangelo

Yes.

rate XX% In terms of the in business said, we impact, food the like was the XX%. so retention versus

facilities impact overall retention. about X% on So

think well. of in an had could the rate X revenue as over that that of was just contracts You of John mentioning. terms impact the larger The X% on retention impact

XX I terms generated rate. working. of we've the but that this one-offs year. margin great levers We in basis so progress improvement. quarter-to-quarter, of of underlying see run There's made the Yes, are as really points some our progression, sort margin always

efficiencies We've seen supply in great chain.

to scale We continue our overhead.

at we're business with can a how the able growth. take revenue to If look you you scale the SG&A the cost, see

range. I for think at of midpoint so, at or And the the we're there's 'XX. fiscal guidance about XX a points again, basis

If and end than you end revenue take be the low AOI, high you'd that. of of higher

So the rate with XX And we'll year. play out seen. that the said, points like very basis we're things and the over how we've comfortable progression underlying I next see

Operator

Josh Chan next Our comes from with question UBS.

Joshua Chan

of net QX and I basis. are kind noticed year. a to on new, wondering good presenting on on that you consolidated a Congrats finish the your was them I

international new this year terms of there's in any in of So U.S. aware we should past be that versus of? terms if wondering difference net

John Zillmer

present strong consolidated the new both new basis. -- had yes, a wins. net losses we it have the factor had both out well. And on record but would strong as on The very very facility organizations you is in we net when did account international. retention and new domestic But that Yes, side, had the international

this services, would have this that frankly, consider that year. first of said, very opportunities. confident closing last anticipated size I of particular opportunities, we leaked runway and the the unique So for into think business we quarter pipeline as very frankly, in U.S. be year of some food overall has, I that accounts that, our support And the the circumstance, in

sizable. very were them of Some

So to of a with a those. when recognize difference little we respect would timing bit

rule, we about general disciplined a have recognize when to tied As new, it. we incentive because compensation net we're very

we So called at number. the end of year, the fiscal the

And shortly. talk that about able some very the to And this opportunities be year those those leaked quarter of of we to first are look significant. into

Joshua Chan

that you're basis some in That overall I an currently could that price is That's really really lapping if of on in be helpful. just forward specifically you prior embedded that on Education going increases. year was pricing What pricing And level about guidance? helpful. wondering XXXX. talk just then mentioned the side you would

James Tarangelo

Sure.

inflationary X% the expect we our X% for pricing could the fiscal 'XX. normalizes to the or as environment So think range be in I Xs so, in to

Operator

Our next question comes from Ian Oppenheimer. Zaffino with

Unknown Analyst

terms help This is 'XX. Saulson question in Isaac us main revenue drivers Ian. the contributions of [ ] international is My vertical breakdown. you could on the for just strong or for on U.S. or if Maybe guide understand

an the And you've fiscal guess, week. extra I 'XX includes then noted,

on guidance. of help the us maybe the year the again you remind So if impact -- could us and

James Tarangelo

Sure.

So X.X% from the about week. in growth X.X% a fiscal to X% guide on is 'XX. estimated the We print, the XXrd impact

adjust you for if X.X So we X.X is would be. where that, to

we of way in think growth and both about across the -- really contingent both terms the across In growth, sectors international. growth broad-based the U.S. all

pricing, be then to new I volume. think, As coming the net at about generally of mentioned, that, and I remainder X% to X% X% X% will from

John Zillmer

correction net Yes. for X% net on right? the Jim, to new year, it X% should new, for next be

James Tarangelo

impact. the Yes, in-year

John Zillmer

Oh, got impact. it. you. In-year Thank

Operator

Our next question Steinerman JPMorgan. comes with from Andrew

Andrew Steinerman

at a you win does impressive still industry between how And food kind a break trend services new of growth, outsourcing tide that overall for feel towards rising and like in outsourced looking the When do away? newly terms there's of contracts? down provider your

John Zillmer

environment we growth. well Thanks, outsourcing market Andrew. see Yes, just account in still of I terms the first-time both a a opportunities, as very new would robust say from as

pipelines very internationally, the every that business, and there's unit. the in literally range So lots I we think both business of domestically believe ahead, runway across of strong

that objectives set. long-term So we company to feel our ability about the very achieve those strongly has

just very hard take to environment one that of. working changing, and a really robust very advantage we're So nothing still

Andrew Steinerman

still for quest required And the conducive? profitability the looks and outsourcing new upfront

John Zillmer

margin the in and cost with historical profile still it, call X% that at to consistent really our of the new absolutely, in Yes, X.X% single-digit business low business. investment potentially rate,

change to really business. profile the new of economic overall winning So no

Operator

Next question Sachs. comes from Lizzie Goldman Dove with

Elizabeth Dove

if spend. Wanting could get I GPO network an to update see the on

by I opportunity pass margin benefits just update especially year. the think of Any $XX you that and billion on key to previously was of grow of remind side of to further on end this the said to that you the the there, kind things? how see

John Zillmer

going [indiscernible] Sure, Yes, as we the absolutely key Lizzie. network the one continued see profitability question. Thanks the growth of in our for for GPO forward.

We are expand opportunities, reach. and both GPO consistently for new looking domestically to the globally acquisition

last successful partnerships accounts organic very major in are new selling helping this deals, of not negotiate the and year, we've domestically been the and We've $X of adding cultivate better new But new and relationships that -- help only some billion strong very spend. to growth some able internationally. that to both been also and us

are to this through several on focused be its the we January Internet which earnings probably we'll strong to of of able process respect the some frame disclose working growth to So the because segment potential. opportunities, business continue the we And [indiscernible]. of time with opportunities in in be in

Elizabeth Dove

then business [indiscernible] new especially Got it. [indiscernible]. the I the net And side, on know That's helpful. just margin

James Tarangelo

we're having Lizzie, a you. little trouble hearing

Elizabeth Dove

Oh, can you hear now? me

James Tarangelo

Yes.

John Zillmer

Thank you.

Elizabeth Dove

Perfect.

Or at? Is margin that through now just a was XXXX? business? bit kind benefit of of does you it's that a that have of -- give that post kind that in little Could that margin a initially, up lot still of and ramped we new COVID you're on business, you of new time. to kind -- a and jump that the profitability the new So over obviously, since got a ramp? kind of net the ramps reminder headwind phasing where with then of Is net side, a with

James Tarangelo

Yes.

the row a new years print, in right, record and 'XX. again, a business printed we've again, excluding uniforms X business, a here So record in

as with margin right, we of those so the progresses And accounts talked newer profile over time. that, about,

respect think the be that with materializes. It that think levers, benefit, sort 'XX. if and continue new in 'XX, a it steady progression be state of to margins to of I margin And you a in the by look we'll fiscal progression 'XX. business how will I at in that the benefit was

Operator

comes question with Truist next Bibb from Jasper Our Securities.

Jasper Bibb

new some next and On the the year, the contracts guidance, exited mentioned year. at end work the the facility of services XXrd week won then you

Just cadence should the, about any guess, growth color 'XX, pieces? organic quarterly fiscal on of think through given moving I those how we

James Tarangelo

Yes.

growth I think that, we'd accelerate. quarterly with the to expect

just is the So fiscal QX revenue that be the out highest losses the the in growth John all way and new timing the mentioned facilities. some will 'XX likely quarters, of working of of X

Jasper Bibb

about Got How the of support power impact GPOs? sense. there international potentially And launch. it. an do GPO international Avendra overhead your required those maybe benefit operations? think costs consolidating Like down you That to makes is then taking the some was wondering to International or of the about purchasing I the

John Zillmer

Yes.

We have one organization. the already done internationally the work GPOs of consolidating into

built one them and So work into as leadership GPOs already individual back-office we've the Avendra done, acquired We're organization. as work but consolidation the companies internationally, really has we've been done. International, rebranding has been the already

for reaping spend, we're chain total the earned in benefits the improved year-over-year that internationally. the that management and monies improvements supply GPOs And which significant of of in resulted

are we it. the benefits reaping So of

to focus by growth have and way a because We as States those continue just growth we're our strengthen other well with to we organic we on of United very bolt-on serve in the opportunity world. of believe position working the that grow and that in organically customers And existing the as existing network we the acquisitions GPOs. parts strong to internationally

Operator

with The Faiza next Bank. from Deutsche question comes Alwy

Faiza Alwy

been what over I like wanted has if few over about ask wins. And changed to time? Yes. the business has win And years? your the rate last new that

John Zillmer

Yes.

over Our several years. win up last rate has the consistently gone

Our sales -- sales yes. very a organization, obviously, -- strong leadership, very internationally. We and strong have both domestically we

insights that give, are that improvement competitive don't And individual rates year-over-year, because and seeing we very so performance. that, by in closure would we're continued while rate excited closure we businesses in of our disclose

say, to overall improvement I XX% our a probably year-over-year substantial. number you generally, in attribute of would So could closure rates, XX% is which

Faiza Alwy

-- expense I you there color behind debt, in what do know down due the wanted are some you've have to interest your guide? expense ask guide. I in And I'm us just you you bonds your because have on XXXX. that you Jim, and Great. built curious give some Could about some then, paid interest assumptions

James Tarangelo

a moving pieces There's lot of there.

you'll repriced term in recall, favorable So loans 'XX we some pricing.

mentioned, need in some swaps few we have that months and some well, the off to rolling we you XXXX well. next as have As address as maturities we

is guide rates there. other basis, XXX, at the were a how decline, how continue year the XXX if on XX-week built those we up opportunity they this we On We'll a So basis. XX-week XXX. potentially play out interest guide. some But see and think, to the moving pieces in

Operator

Our with from comes Shlomo next Rosenbaum Stifel. question

Unknown Analyst

company more This normalizing, is in the business? [indiscernible] much had Shlomo. pricing the Did in new to rest And Education. on being of the for segment business? win is pricing The see particularly this than precompetitive less company Education

James Tarangelo

Yes.

I the education sector business less prior fourth is week in generally the of think in seeing the quarter year. higher Education there days had what one in you're that operating the

just calendar later. a about week the So started

again, about in and talked rest in rate pricing see of growth the segment the QX that normalized what So consistent business. for we more should with we the

Unknown Analyst

you And this more noncash Okay. write-down? provide on a inventory in Corrections the color Does imply business? adjustment could

James Tarangelo

sure. Yes,

integrated Corrections lot getting seen again So you've the that building deal been generated as not acquisition, our but attributed excellent commissary, fully capabilities a Foodservice we and in transaction only the that business, in for an that has which to of the that strategically Union we've done. growth and

some did. policies million. of the brought about like $XX the concluded. And we period we adjusted companies during business as earn-out Over has the a inventory, procedures, and up as And integrated many on that The built we to it we've past to year, inventory fully Aramark's optimize. business continue COVID charge took noncash essentially

Operator

Stanley. Toni with comes Our next Kaplan question Morgan from

Toni Kaplan

trending. on you turnover pricing. is the X% an to was also, the I And how particularly you could hoping update give us X% workforce, mentioned

just So about how be we spread we the as through 'XX? should move thinking price/cost

John Zillmer

Toni. Thanks, Sure.

price/cost supplies we able First the anticipate normalized through inflationary any food increases recover to spread, fully pricing. being from of all, on

labor a both and So we don't inflationary this food side. year an on affecting see us from the spike particular perspective,

X% the We well. in to to range. X% able inflation recover Labor anticipate being that is price to as

be X% So how the a overall, in the over pricing should on year. of course X% things higher bit to depending be out might roll range, the little

sensitive environment. be to well we as But perspective think I perspective. food a a both we'll very as much watching more But a normalized see from labor

at ability Our impediment recovery really rates. built we these kinds structure, recover costs don't our any into contract to reprice ability and is our have of to and to

James Tarangelo

I'd other note is Yes. The in John has reduction which agency only productivity offset There's seen inflation mentioned. the operating a of over with labor. costs, right? environment normalized, right, We've there that some the thing time a does

Toni Kaplan

Great. saw all headlines September. then think we a a of I for just in follow-up, And number

M&A So wanted to seeing your the drive point industry just this and consolidation environment? would we you just get what thoughts whether on and should at maybe that be think

John Zillmer

X parties. Yes, are Sure. on somewhat anticipated the as there And organization, other no discussions publicly going I this question. between was I think stated by the

I organizations in kind may of be at industry margin, that some any further basically consolidation smaller family-owned the to regional the sell, this likely and decide may go ahead that that that think it's So will sell, of thing. players

think major any this industry. see you'll any consolidation don't I in longer real

competitive. So highly it's

that it players some large very that X to consolidate? have staked the And out. companies regional well are got probably are a That's there going significant. potentially are You won't positions possibility, that be but

Operator

next The Andrew with Baird. question Wittmann from comes

Andrew J. Wittmann

targets at how thought those it start just they're ask what just still would Last good, on time, year thinking I was John, if the this them, tracking XXXX towards about out you cetera? the Yes. I status you're you're of wondering, kind of et Great. guidance. here. and I reiterated

John Zillmer

I through Yes. been and targets year. good, still Absolutely. to it's Those we've able think them. to are our and overdeliver And intention get to this

the XXXX in that another year strong money or the is 'XX be very targets for established. Our expectation and to on we above

So Andrew. and very the bullish about yes, the environment, overall we're overall performance feeling

Andrew J. Wittmann

I bit of the in Cool. caps just segment. what seeing year. business I on & good of was wondering quarter wanted the terms mean good comps And Sports attendance, highlighted you ask then this every And almost I a little you're to Entertainment 'XX. kind per through here

is notable, just like thinking curious which always maybe good. kind be look of It that to games, sounds some that. you like you But picked about things other even be can venues, at how you're I'd up playoff just if as

across that, how your in little of of business of as these consumer specifically experience are or Sports consumer in commercial well. what you're extent the spending. just I'm is the underlying curious bit spending & but the to terms really there, commercial ones Entertainment the a kind And seeing you've that more that got the

John Zillmer

Sure.

or Entertainment. in either ahead level, to across venues. sporting experiential capita go very We behavior continue spend, the concerts. People events we from & that any consumer to ahead really activity and per the whatsoever. very And willing spending, of Sports change markets go attend have high; the to demand see very And robust consumer to all still not much seen perspective strong and

From teams We'll playoff perspective, games budget, playoffs. in for short will, playoff But year, experience very, teams last be if this had planned already you the X go year experiences. probably we where a X of of we deep. our exceeded our a MLB had couple we've very

a close forward season to teams -- and the in we're strong from like shape good very we've number performing NHL [indiscernible] expectation that very an to well. a are then strong internal feel we where So perspective. and NBA NFL, got a of and

is of well, team doing ahead see a willing and and caps to spend your are to are go team. when literally drives they're So lot And per their what performance. excited, teams customers

robust very it I to now, be and right very say supportive. So continues would

Operator

with question Paribas Jaafar next Exane. Mestari Our from comes BNP

Jaafar Mestari

if okay. that's couple, a have I

the Could timing on You you just a give numbers little new HX. those? about signings. do in comment of not explicit maybe business the Firstly, bit

half? the you're number. through fast assuming, it any start ramp-up reason weighted on Was sort And year? We asking a way those in second contributing can the broadly was get this towards view have I'm linearly of the 'XX. of a the Or is billion $X.X to some revenue in how signed

James Tarangelo

Yes. Again, 'XX. think was relatively I that spread fiscal $X.X throughout signing out billion the of generally even

there's for would out anything [indiscernible] So fiscal I 'XX. unusual point don't that to think roll business out

Jaafar Mestari

or where on maybe terms if are is retention, always some us a any retention your in it's Super. Very to not the Could points. clear. a in food, And basis hits, you've outside down obviously, trends highlight then bit FM, successful still just you been there bit broad-based. of if about color XX give of big

in And a flagged a change in XXXX contracts you're some that because still up but 'XX. procurement be little a of coming number bit those XXXX in and they had that 'XX they competitors in has one something specifically, have say that Education, in resigned in in renewal And of Is seeing? large K-XX, regulation. less for your of -- are to

John Zillmer

out depending regs USDA It how the terms often affects very a explicit to contract. to on sector school of bid. K-XX districts of company's the need bit The little Yes. go in the of the are differently all in timing award

have more we a where out would contracts bid. year for year So we last expected had larger

do. Our competitors, have season rebid active we year this I think, than a more

with most facilities -- would companies there's of affects the of outlier, that somewhat or both of it terms very businesses the we I us. primarily in strong for So the consistent each of differently, being domestically phenomenon in domestically. say all retention is but one X had retention,

I circumstance. retention So be higher and anomaly strongly added ability I year we historic last terms and the feel -- to to of levels the it's even about in company's be to an consider very think really think this

one internationally offset able through price had significant significant, bid international also We new performance. was due sales but a that low to loss that to was their

overall, that with annualized in in range retention basis. and being XX% very the to an X% new range I'm rate our our X% net on plus with comfortable So

We've very greatest the ourselves are the accounts very equation, levels So existing to record degree to selling customers possible. for their achieve our both I of the able new sides think about people are and retaining at established And targets we've been disciplined them. that consistent.

Jaafar Mestari

XXrd for last the me, this If that with contribute me very guidance, your on need I promise. one math pricing, leaves And then business, do or X%, I volumes positive a net your X.X%. on X% like-for-like week, in to Super. [indiscernible] new X%

In this industry, historically, it's been flat.

the it office? are forecast the that self-help, to more Is more digital, there's you customer? to So how Is end still return able to it positive upsell better markedly some volumes?

James Tarangelo

business, the fiscal really And in across all price both throughout of of again, strong the volume high 'XX. sectors. fourth base levels had, We really base even and business quarter,

even to out and historic even So volume that's both month performing as the expect than in better base here. -- with business, we we're see close we 'XX, seeing trend the continue first

that record not So yes, 'XX we we our be at in levels certainly historic expect to 'XX. base in than higher saw levels the visits to but elevated, continue elevated, levels be

Operator

with Our from Antor Harold next comes question Jefferies.

Harold Antor

seeing with This is cross-selling clients the Harold Antor on how business Avendra, any initiative. I on could see expand them expand your how guess, guess of clients your and particularly on for then, And guess, as current Stephanie Moore. if could I the I being you you receptive, internationally, provide this us as you you through provide sense opportunities? are clients the, grow you with can

John Zillmer

Yes.

think bit opportunity of And in with with multiple First a heard of Avendra multiple all, to you, but we continuing markets. very let around first difficulty the have our answer significant in all, international is growth little I that existing me hearing we're I do the of sorry, that work them world the had what customers of rate, Avendra. we I'm countries

these growth that Overall, very result internationally had generated we And of Avendra, talked we billion and expanded in in as a spend year, potential significant relationships. we organic of being $X.X growth over remarks, as that organic see significant. our as domestically both new about last

new with So some also significant base. but very just large existing growth our volume customers client

that but chain better which supply Avendra earnings to add deals the foodservice side as see increases ability customers and and at not we our only it So an Avendra spend, for as well. opportunity our also contract new Aramark negotiate continued growth time Every on we improvement. the benefits our overall impact

feel that we're and good one on results pursue to very relationship, And symbiotic aggressively. much continue year, growing. business we very last about a very it's we'll focused So the

Harold Antor

Hospitality guess, one IQ. I then, And just on

If who [indiscernible] -- clients you're receptive can sense the tech I been guess, the you could on how you anything have there? on doing side. or provide clients now, if And else provide any receiving are

James Tarangelo

of our matching live, our and Yes. talked with our menus Copilot and Culinary about it's is with already with out that contractor with complex there requirements, we've A examples The chain. our couple IQ clients. supply requirements Hospitality menus optimizing that's our often optimizing

manages So that's but the that client enhances cost needs something effectively. also

We've well. to business. So very SKUs that's across used aggregate that's tool the the our working something

and know, thousands centers, profit of SKUs. of thousands we thousands have you As

the enabled to common And and denominator effective is what more and do manufacturers pricing our has that negotiate with suppliers. the to with allow us AI us tool aggregate spend

So results. those are X tools very already underway, generating -- positive improving

Operator

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

John Zillmer

feel about for for very fiscal very Terrific. runway XXXX 'XX. about for the good the We Thank company. very XXXX. of positive you much, your and the results I'm everybody, support very,

our proud really thank have dedication I in job. I'm the for team shareholders. of our customers, Aramark an this to team. the extraordinary and our all together. They we're And Aramark clients to work done want and hard their

to veterans have for Aramark, Day. that this care. service say to And great serve like also Take to country. you your I'd the Veterans thank a

Operator

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

You may now disconnect.

Aramark (ARMK) 11 Nov 242024 Q4 Earnings call transcript