Aramark
ARMK
$37.95 0.98%
Exchange: NYSE | Sector: Industrials | Industry: Specialty Business Services
Q3 2024
Published: Aug 6, 2024

Earnings Highlights

  • Revenue of $4.38B down 10.7% year-over-year
  • EPS of $0.22 decreased by 72.2% from previous year
  • Gross margin of 5.2%
  • Net income of 58.13M
  • ""Revenue for the quarter was $4.4 billion, with organic growth up 11% year-over-year, led by base business growth from a mix of volume and pricing as well as contributions from new client wins."" - John Zillmer
ARMK
Company ARMK

Executive Summary

Aramark delivered a robust QQ3 2024 despite a challenging inflation backdrop, underscored by broad-based growth across geographies and services. Reported revenue of $4.376 billion on a GAAP basis, up 8% year over year, with organic growth of 11%, led by base business expansion and meaningful gains from new client wins. Management highlighted decisive margin discipline, with AOI (adjusted operating income) up 21% YoY on a constant currency basis and AOI margin expanding roughly 40 basis points. FSS U.S. produced 14% AOI growth on a constant currency basis, while International AOI rose 41% YoY, supported by volume growth, net new business, and cost controls across food, labor, and SG&A. The quarter featured notable strategic milestones, including the Everton Stadium partnership in the English Premier League, a Michelin-star chef collaboration (Daniel Boulud) to expand B&I capabilities, and ongoing expansion of the global GPO network, with spend expected to surpass $20 billion by year-end. Cash flow remained positive, with net cash from operating activities of $141 million and free cash flow of $62 million, while leverage improved by ~50 basis points and the company extended liquidity by increasing revolver capacity and terms. For the balance sheet and capital allocation, Aramark reinforced deleveraging efforts toward a target of ~3.5x by year-end and signaled potential capital returns, including a possible share repurchase program, to be discussed at the next earnings cycle. Looking ahead, management guided for roughly 10% organic revenue growth, ~20% AOI growth, and ~35% growth in adjusted EPS for the full year, with inflation tailwinds expected to moderate into FY25. Investors should monitor GPO expansion velocity, international outsourcing momentum, retention and net-new sales cadence, inflation trajectory, and leverage trajectory toward the 3.5x goal as key indicators of sustainable upside.

Key Performance Indicators

Revenue
Decreasing
4.38B
QoQ: 4.19% | YoY: -10.72%
Gross Profit
Decreasing
227.08M
5.19% margin
QoQ: 2.45% | YoY: -56.33%
Operating Income
Decreasing
161.68M
QoQ: -0.56% | YoY: -41.82%
Net Income
Decreasing
58.13M
QoQ: 8.75% | YoY: -71.71%
EPS
Decreasing
0.22
QoQ: 10.00% | YoY: -72.15%

Revenue Trend

Margin Analysis

Historical Earnings Comparison

PeriodRevenue ($M)EPS ($)YoY GrowthReport
Q2 2025 4,279.30 0.23 +1.9% View
Q1 2025 4,552.09 0.39 +3.3% View
Q4 2024 4,416.95 -0.52 -9.9% View
Q3 2024 4,376.08 0.22 -10.7% View
Q2 2024 4,199.91 0.20 -11.6% View