Aramark (ARMK) Q1 2026 earnings summary

Executive summary

• Revenue increased 6% year-over-year to $4.83 billion, with organic revenue up 5% (would have been 8% without a calendar shift), driven by strong new business wins and record client retention in both U.S. and international segments.

• Operating income was flat at $218 million, while adjusted operating income (AOI) rose 1% to $263 million; both would have shown double-digit growth without the calendar shift.

• GAAP EPS declined 8% to $0.36, but adjusted EPS was flat at $0.51; adjusted EPS would have grown 13% excluding the calendar shift.

• Net income attributable to stockholders was $96.2 million, down 8.9% from the prior year, primarily due to higher personnel costs and increased interest expense.

• International segment delivered 13% organic revenue growth (17% reported), marking the 19th consecutive quarter of double-digit growth, led by the U.K., Spain, Germany, and Chile.

Financial highlights

• Q1 2026 reported revenue: $4.83 billion, up from $4.55 billion in Q1 2025; organic revenue growth: 5% overall, with FSS United States up 2% and FSS International up 13%.

• AOI: $263 million, up 1% year-over-year; would have been up 11% without the calendar shift.

• Adjusted EPS: $0.51, flat year-over-year; would have been $0.57 (+13%) without the calendar shift.

• Free cash flow for Q1 was $(902) million, reflecting typical seasonal outflows and higher working capital use.

• Interest expense was $81.9 million; adjusted tax rate was ~25–26%.

Outlook and guidance

• Fiscal 2026 revenue expected between $19.55–$19.95 billion (+7–9% organic growth); adjusted operating income guidance: $1.10–$1.15 billion (+12–17%); adjusted EPS guidance: $2.18–$2.28 (+20–25%).

• Leverage ratio targeted below 3.0x by year-end 2026.

• Q2 expected to benefit from a positive calendar shift, with revenue and AOI in line with Wall Street expectations.

• High confidence in achieving or exceeding full-year targets due to strong new business pipeline and retention.

• Management expects continued volatility in macroeconomic conditions, including inflation and interest rates, and is taking actions to mitigate these risks.