Why Food Company Aramark Shares Are Sliding Today

Aramark ARMK reported Q4 revenue of $4.902 billion, beating the analyst consensus of $4.79 billion. Revenues increased 12% Y/Y.

Quarterly adjusted EPS of $0.64 came in line with the estimates.

Net new business, pricing actions, and base business growth drove Q4 revenues. The effect of currency translation increased revenue by $19 million.

Operating income gained 40% year-over-year to $278 million, and adjusted operating income grew 28% to $339 million, reflecting an operating income margin increase of 115 basis points.

Aramark completed the spin-off of its Uniform Services business, now called Vestis, on September 30, 2023, the first day of the company's fiscal year 2024. 

The company declared a dividend of 9.5 cents per common share, which will be payable on December 8, 2023, to stockholders of record at the close of business on November 28, 2023.

The company exited the quarter with cash and equivalents worth $1.963 billion.

Outlook: For FY24, Aramark sees organic revenue growth of 7%-9% Y/Y, projecting adjusted operating income growth of 15%-20%. The company expects Adjusted EPS growth of 25%-35% for FY24. The company has kept Global FSS Post-Spin as the FY23 Reference Point.

Aramark expects its typical "U-shaped" margin seasonality to continue in its Global FSS segments, with margins higher in the first and fourth quarters compared to the second and third quarters.

Price Action: ARMK shares are trading lower by 7.22% to $26.46 on the last check Tuesday.