Aramark (ARMK) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 delivered record revenue and adjusted operating income, with organic revenue up 10% to $17.4B, the highest in Global FSS history, driven by base business volume, pricing, and net new business across sectors and geographies.

• Adjusted operating income (AOI) up 20% year-over-year; adjusted EPS up 35% to $1.55 on a constant currency basis.

• Board approved a new $500M share repurchase program, increased quarterly dividend by 11%, and reduced net debt by $1.6B, ending with a leverage ratio of 3.4x.

• Strong free cash flow and significant leverage reduction, with robust pipeline and continued investment in innovation and supply chain expansion.

• Strong new business wins totaling $1.4B, with core food service retention at 95.2% and overall retention at 93.2% due to unique facility exits.

Financial highlights

• Fiscal 2024 GAAP revenue was $17.4B, up 8% year-over-year; organic revenue grew 10%.

• Adjusted operating income reached $882M (5.1% margin), up 20% on a constant currency basis.

• Adjusted EPS was $1.55, up 35% year-over-year; GAAP EPS was $0.99, down 42% due to prior-year nonrecurring gain.

• Free cash flow grew 121% to $323M; net cash from operations was $727M, up 42% year-over-year.

• Net debt to covenant adjusted EBITDA improved to 3.4x from 3.9x.

Outlook and guidance

• Fiscal 2025 guidance: organic revenue growth of 7.5%-9.5%, AOI up 15%-18%, adjusted EPS up 23%-28%, and leverage ratio targeted at 3.0x.

• 53rd week in fiscal 2025 expected to add about 2% to organic revenue and AOI.

• Net new business expected at 4%-5% of prior year revenue, with retention above 95%.

• Guidance does not include potential benefit from share repurchases.