Food Service Provider Aramark Posts 2% Revenue Growth In Q2

Aramark ARMK shares are trading higher on Tuesday after the second-quarter FY25 earnings.

The company reported second-quarter FY25 revenue growth of 2% year-on-year to $4.28 billion, missing the analyst consensus estimate of $4.35 billion.

FSS United States sales increased 0.4% to $3.1 billion and that of FSS International gained 5.8% to $1.2 billion.

Total costs and expenses increased 1.6% to $4.1 billion. Operating Income increased 9% year-over-year to $174 million and the operating margin expanded 30 basis points to 4%.

Also Read: McDonald’s Stumbles On Weak Traffic, Despite Margin Gains And Analyst Optimism

Covenant adjusted EBITDA improved 9.7% to $1.4 billion. Adjusted EPS of 34 cents beat the consensus estimate of 33 cents.

Aramark’s board approved a quarterly dividend of 10.5 cents per share of common stock, as announced on April 30.

The dividend will be payable on May 28 to stockholders of record at the close of business on May 14.

The company held $920.5 million in cash and equivalents as of March 28. The operating cash flow for the quarter was $256 million with a free cash flow of $141 million.

“We are experiencing very positive business trends across the Company as we head into the second half of our fiscal year, including record retention rates, significant new client wins, and monthly revenue growth acceleration,” said CEO John Zillmer.

Outlook: Aramark sees FY25 organic revenue growth of 7.5% – 9.5%. The company anticipated adjusted EPS growth of 235 – 28%.

Price Action: ARMK shares traded higher by 1.97% at $34.88 at last check Tuesday.

Read Next: