Aramark Q1 Earnings Beat Expectations with Strong Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy ARMK?
Source: seekingalpha
- Earnings Highlights: Aramark reported a Q1 non-GAAP EPS of $0.51, aligning with expectations, while revenue reached $4.83 billion, reflecting a 6.2% year-over-year increase and exceeding market expectations by $70 million, indicating stable growth in the food service sector.
- Fiscal 2026 Outlook: The company anticipates fiscal 2026 revenue between $19.55 billion and $19.95 billion, representing a year-over-year organic growth of 7% to 9%, showcasing Aramark's confidence in future market demand, particularly in the post-pandemic recovery phase.
- Adjusted Operating Income: Expected adjusted operating income is projected to be between $1.1 billion and $1.15 billion, reflecting a year-over-year growth of 12% to 17%, which will further enhance the company's profitability and competitive position in the market.
- Leverage Ratio Target: Aramark aims for a leverage ratio of under 3x, demonstrating a cautious approach to financial management, with the goal of enhancing financial flexibility and long-term sustainability by reducing debt levels.
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Analyst Views on ARMK
Wall Street analysts forecast ARMK stock price to rise
9 Analyst Rating
8 Buy
1 Hold
0 Sell
Strong Buy
Current: 39.160
Low
43.00
Averages
45.38
High
49.00
Current: 39.160
Low
43.00
Averages
45.38
High
49.00
About ARMK
Aramark is a global provider of food and facilities services to education, healthcare, business and industry and sports, leisure, and corrections clients. The Company operates through two segments: Food and Support Services United States (FSS United States) and Food and Support Services International (FSS International). The FSS United States segment consists of five sectors, which include business and industry, education, healthcare, sports, leisure and corrections, and facilities and others. Its FSS International segment provides a similar range of services as those provided to its FSS United States segment clients and operates in each of the sectors. The Company provides food and beverage services, including catering and retail services, and facilities services, including plant operations and maintenance, custodial, housekeeping, landscaping and other services. The Company's core market is the United States, which is supplemented by an additional 15-country footprint.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Aramark Shares Surge After Earnings Beat and Strong Revenue Growth
- Strong Earnings Report: Aramark reported first-quarter adjusted earnings per share of 51 cents, surpassing the analyst consensus of 50 cents, with quarterly sales reaching $4.832 billion, reflecting a 6% year-over-year growth and indicating robust financial performance.
- New Business Momentum: The company highlighted strong momentum in new business wins alongside record client retention, with net new business tracking ahead of expectations, positioning Aramark favorably to meet its full-year growth targets.
- Robust Cash Availability: At the end of the quarter, Aramark had approximately $1.4 billion in cash availability, ensuring flexibility for future investments and operations, which further boosts market confidence in the company's stability.
- Stable Dividend Policy: The company approved a quarterly dividend of 12 cents per share of common stock, payable on March 4, 2026, demonstrating a commitment to returning value to shareholders amidst strong operational performance.
See More
Aramark Q1 Earnings Beat Expectations with Strong Revenue Growth
- Earnings Highlights: Aramark reported a Q1 non-GAAP EPS of $0.51, aligning with expectations, while revenue reached $4.83 billion, reflecting a 6.2% year-over-year increase and exceeding market expectations by $70 million, indicating stable growth in the food service sector.
- Fiscal 2026 Outlook: The company anticipates fiscal 2026 revenue between $19.55 billion and $19.95 billion, representing a year-over-year organic growth of 7% to 9%, showcasing Aramark's confidence in future market demand, particularly in the post-pandemic recovery phase.
- Adjusted Operating Income: Expected adjusted operating income is projected to be between $1.1 billion and $1.15 billion, reflecting a year-over-year growth of 12% to 17%, which will further enhance the company's profitability and competitive position in the market.
- Leverage Ratio Target: Aramark aims for a leverage ratio of under 3x, demonstrating a cautious approach to financial management, with the goal of enhancing financial flexibility and long-term sustainability by reducing debt levels.
See More
Aramark Reports Strong Q1 Fiscal 2026 Results with Significant Growth
- Significant Revenue Growth: Aramark reported $4.8 billion in revenue for Q1 2026, marking a 6% year-over-year increase, with organic revenue growth of 5% excluding currency effects, highlighting strong performance in new business development and client retention.
- Stable Operating Income: The operating income for the quarter was $218 million, slightly up from the previous year, although impacted by a $25 million reduction due to calendar shifts, indicating effective cost management and technology application.
- Cash Flow and Capital Structure: The company recorded expected cash outflows in Q1 due to seasonal business cadence and increased capital expenditures associated with new business, while repurchasing $30 million in stock, demonstrating a continued commitment to shareholder returns.
- Dividend Declaration and Future Outlook: The Board approved a quarterly dividend of $0.12 per share and anticipates organic revenue growth of 7% to 9% for fiscal 2026, reflecting confidence in future growth and strategic planning.
See More
Aramark Reports Strong Q1 2026 Results with Revenue Growth and Strategic Initiatives
- Revenue Growth: Aramark's Q1 revenue reached $4.83 billion, reflecting a 6% year-over-year increase, with organic revenue up 5%; without calendar adjustments, organic growth would have been approximately 8%, indicating strong momentum from base business expansion and new business wins.
- Operating Income Performance: Operating income slightly increased to $218 million, while Adjusted Operating Income (AOI) rose 1% to $263 million; AOI growth would have been around 11% without the calendar shift, showcasing improvements in technology capabilities and supply chain efficiencies.
- Capital Allocation Strategy: The company repurchased an additional $30 million in stock as part of its share repurchase program and successfully repriced $2.4 billion of 2030 Term Loans by 25 basis points, expected to generate interest expense savings and enhance financial flexibility.
- Future Outlook: Aramark maintains an optimistic outlook for fiscal 2026, projecting revenue growth between 7% and 9% and Adjusted EPS growth of 20% to 25%, demonstrating the company's strong competitive position and ongoing growth potential in the market.
See More
Aramark Scheduled to Announce Q1 Earnings on February 10th
- Earnings Announcement: Aramark (ARMK) is set to release its Q1 2023 earnings on February 10th before market open, with consensus EPS estimated at $0.51, flat year-over-year, and revenue expected at $4.76 billion, reflecting a 4.6% increase, indicating potential for stable growth.
- Performance Analysis: Over the past two years, Aramark has beaten EPS estimates 88% of the time, while only achieving a 25% success rate for revenue estimates, highlighting volatility in profitability that may affect investor confidence.
- Revision Trends: In the last three months, there have been no upward revisions for EPS estimates, with 9 downward adjustments, and similarly, revenue estimates have seen no upward revisions and 7 downward adjustments, suggesting a cautious market outlook for Aramark's near-term growth.
- Growth Targets: Despite uncertainties, Aramark has set an organic revenue growth target of 7%-9% for fiscal 2026, supported by record new contract wins and strong retention rates, demonstrating confidence in its long-term development prospects.
See More
Aramark Declares $0.12 Quarterly Dividend Amid Uncertain Growth Outlook
- Quarterly Dividend Declaration: Aramark has declared a quarterly dividend of $0.12 per share, consistent with previous distributions, indicating the company's ongoing ability to maintain stable cash flow despite facing an uncertain growth outlook.
- Dividend Yield: The forward yield of 1.26% provides investors with a relatively stable return, reflecting the company's financial health in the current economic environment and potentially attracting income-focused investors.
- Shareholder Record Dates: The dividend will be payable on March 4, with a record date of February 18 and an ex-dividend date also set for February 18, ensuring shareholders receive their dividends promptly and bolstering investor confidence.
- Uncertain Growth Outlook: While Aramark has outlined a target of 7%-9% organic revenue growth for fiscal 2026, the recent order from U.K. regulators to unwind its Entier acquisition may impact its future growth strategy and operational stability.
See More
Aramark Shares Surge After Earnings Beat and Strong Revenue Growth
- Strong Earnings Report: Aramark reported first-quarter adjusted earnings per share of 51 cents, surpassing the analyst consensus of 50 cents, with quarterly sales reaching $4.832 billion, reflecting a 6% year-over-year growth and indicating robust financial performance.
- New Business Momentum: The company highlighted strong momentum in new business wins alongside record client retention, with net new business tracking ahead of expectations, positioning Aramark favorably to meet its full-year growth targets.
- Robust Cash Availability: At the end of the quarter, Aramark had approximately $1.4 billion in cash availability, ensuring flexibility for future investments and operations, which further boosts market confidence in the company's stability.
- Stable Dividend Policy: The company approved a quarterly dividend of 12 cents per share of common stock, payable on March 4, 2026, demonstrating a commitment to returning value to shareholders amidst strong operational performance.
See More
Aramark Q1 Earnings Beat Expectations with Strong Revenue Growth
- Earnings Highlights: Aramark reported a Q1 non-GAAP EPS of $0.51, aligning with expectations, while revenue reached $4.83 billion, reflecting a 6.2% year-over-year increase and exceeding market expectations by $70 million, indicating stable growth in the food service sector.
- Fiscal 2026 Outlook: The company anticipates fiscal 2026 revenue between $19.55 billion and $19.95 billion, representing a year-over-year organic growth of 7% to 9%, showcasing Aramark's confidence in future market demand, particularly in the post-pandemic recovery phase.
- Adjusted Operating Income: Expected adjusted operating income is projected to be between $1.1 billion and $1.15 billion, reflecting a year-over-year growth of 12% to 17%, which will further enhance the company's profitability and competitive position in the market.
- Leverage Ratio Target: Aramark aims for a leverage ratio of under 3x, demonstrating a cautious approach to financial management, with the goal of enhancing financial flexibility and long-term sustainability by reducing debt levels.
See More
Aramark Reports Strong Q1 Fiscal 2026 Results with Significant Growth
- Significant Revenue Growth: Aramark reported $4.8 billion in revenue for Q1 2026, marking a 6% year-over-year increase, with organic revenue growth of 5% excluding currency effects, highlighting strong performance in new business development and client retention.
- Stable Operating Income: The operating income for the quarter was $218 million, slightly up from the previous year, although impacted by a $25 million reduction due to calendar shifts, indicating effective cost management and technology application.
- Cash Flow and Capital Structure: The company recorded expected cash outflows in Q1 due to seasonal business cadence and increased capital expenditures associated with new business, while repurchasing $30 million in stock, demonstrating a continued commitment to shareholder returns.
- Dividend Declaration and Future Outlook: The Board approved a quarterly dividend of $0.12 per share and anticipates organic revenue growth of 7% to 9% for fiscal 2026, reflecting confidence in future growth and strategic planning.
See More
Aramark Reports Strong Q1 2026 Results with Revenue Growth and Strategic Initiatives
- Revenue Growth: Aramark's Q1 revenue reached $4.83 billion, reflecting a 6% year-over-year increase, with organic revenue up 5%; without calendar adjustments, organic growth would have been approximately 8%, indicating strong momentum from base business expansion and new business wins.
- Operating Income Performance: Operating income slightly increased to $218 million, while Adjusted Operating Income (AOI) rose 1% to $263 million; AOI growth would have been around 11% without the calendar shift, showcasing improvements in technology capabilities and supply chain efficiencies.
- Capital Allocation Strategy: The company repurchased an additional $30 million in stock as part of its share repurchase program and successfully repriced $2.4 billion of 2030 Term Loans by 25 basis points, expected to generate interest expense savings and enhance financial flexibility.
- Future Outlook: Aramark maintains an optimistic outlook for fiscal 2026, projecting revenue growth between 7% and 9% and Adjusted EPS growth of 20% to 25%, demonstrating the company's strong competitive position and ongoing growth potential in the market.
See More
Aramark Scheduled to Announce Q1 Earnings on February 10th
- Earnings Announcement: Aramark (ARMK) is set to release its Q1 2023 earnings on February 10th before market open, with consensus EPS estimated at $0.51, flat year-over-year, and revenue expected at $4.76 billion, reflecting a 4.6% increase, indicating potential for stable growth.
- Performance Analysis: Over the past two years, Aramark has beaten EPS estimates 88% of the time, while only achieving a 25% success rate for revenue estimates, highlighting volatility in profitability that may affect investor confidence.
- Revision Trends: In the last three months, there have been no upward revisions for EPS estimates, with 9 downward adjustments, and similarly, revenue estimates have seen no upward revisions and 7 downward adjustments, suggesting a cautious market outlook for Aramark's near-term growth.
- Growth Targets: Despite uncertainties, Aramark has set an organic revenue growth target of 7%-9% for fiscal 2026, supported by record new contract wins and strong retention rates, demonstrating confidence in its long-term development prospects.
See More
Aramark Declares $0.12 Quarterly Dividend Amid Uncertain Growth Outlook
- Quarterly Dividend Declaration: Aramark has declared a quarterly dividend of $0.12 per share, consistent with previous distributions, indicating the company's ongoing ability to maintain stable cash flow despite facing an uncertain growth outlook.
- Dividend Yield: The forward yield of 1.26% provides investors with a relatively stable return, reflecting the company's financial health in the current economic environment and potentially attracting income-focused investors.
- Shareholder Record Dates: The dividend will be payable on March 4, with a record date of February 18 and an ex-dividend date also set for February 18, ensuring shareholders receive their dividends promptly and bolstering investor confidence.
- Uncertain Growth Outlook: While Aramark has outlined a target of 7%-9% organic revenue growth for fiscal 2026, the recent order from U.K. regulators to unwind its Entier acquisition may impact its future growth strategy and operational stability.
See More
