PHILADELPHIA - Aramark (NYSE: ARMK), a global leader in food, facilities management, and uniforms, announced a robust second quarter with record revenues, surpassing analyst expectations for earnings per share (EPS).
The company reported an adjusted EPS of $0.29, which was $0.02 higher than the analyst consensus of $0.27. However, the revenue for the quarter, which stood at $4.2 billion, fell slightly short of the consensus estimate of $4.24 billion.
The company's revenue growth of 7% year-over-year (YoY) was driven by strong base business volume, pricing actions, and net new business growth. This performance was particularly notable in the Food and Support Services (FSS) United States and International segments, both of which achieved record revenue for a second quarter. The FSS United States segment saw a 7% increase in revenue, while the FSS International segment reported an 8% rise, or 16% on an organic basis, which adjusts for the effect of currency translation.
Operating income saw a significant increase of 27% YoY to $159 million, with adjusted operating income (AOI) growing by an impressive 29% to $187 million. This resulted in an operating income margin increase of 59 basis points and an AOI margin increase of 69 basis points YoY. Aramark's profitability was propelled by leveraging higher revenue levels, strategic supply chain initiatives, and disciplined cost control, in addition to benefiting from improving inflation trends.
John Zillmer, Aramark’s Chief Executive Officer, commented on the results, "Our revenue performance reflected our ability to execute on our strategic priorities, including driving volume growth and net new business. The vast majority of our profitability improvement in the second quarter was from leveraging higher revenue, accelerating our supply chain objectives, and ensuring a disciplined control of costs."
Looking ahead, Aramark raised its full-year outlook for organic revenue growth, now anticipating approximately 9% growth, with AOI growth and adjusted EPS growth expected to be toward the higher end of the previously indicated range. This updated outlook underscores the company's confidence in its global teams and its strategies aimed at creating significant value for stakeholders.
Aramark's commitment to capitalizing on higher revenue through supply chain efficiencies, including enhanced data harmonization and analytics, and disciplined cost management, positions the company well for continued growth. The company's culture, focused on hospitality, is believed to be creating significant opportunities for Aramark's future.
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