Company Reports

Aramark posted 9% organic revenue growth in its fiscal third quarter, driven by continued strength in its base business and new business wins. It raised its 2026 organic growth outlook to 9%-10%, now factoring in the contribution from its first data center site. Shares rose 10% intraday on Aug. 11.

Aramark is a global foodservice provider that also offers facility management services. Food services is its largest division, contributing about 85% of group revenue, while about 75%-80% of its operating profit is in the United States.

Aramark is well-positioned to benefit from the large data center opportunity, which requires an integrated offering of housing, dining/hospitality, transportation, and housekeeping/guest services. To serve these clients, Aramark has launched Aramark Nexus.

Driven by record net new business wins, Aramark reported organic growth of 12% in the second quarter, although it received a 3% bump from the calendar shift. Management now anticipates organic revenue growth at the high end of its previously stated 7%-9% range.

Aramark is a global food service provider that also offers facility management services. Food services is its largest division, contributing about 85% of group revenue, while about 75%-80% of its operating profit is in the United States.

Aramark is a global food service provider that also offers facility management services. Food services is its largest division, contributing about 85% of group revenue, while about 75%-80% of its operating profit is in the United States.

We view Sodexo's cut to 2026 guidance and initiation of a company review as a sign of Aramark's successful disruption, which has allowed it to capture a greater percentage of net new growth and increase market share.

Aramark's organic revenue growth was 5% in the first quarter but would have been 8% after adjusting for a negative calendar shift, complemented by strong business wins. Management confirmed their 2026 guidance.

Aramark is a global food service provider that also offers facility management services. Food services is its largest division, contributing about 85% of group revenue, while about 75%-80% of its operating profit is in the United States.

Aramark's full-year results fell slightly below 2025 guidance, but strong contract wins in the fourth quarter show growth potential. The group will target organic growth of 7%-9% in 2026, aiming to build off its strong net new growth in the fourth quarter.

We are launching coverage of Aramark, the third-largest global catering company, alongside Compass and Sodexo. The majority of its revenue is from food services in the United States.

Aramark is a global food service provider that also offers facility management services. Food services is its largest division, contributing about 85% of group revenue while about 75%-80% of its operating profit is in the United States.

We are dropping analyst coverage of Aramark. We provide broad coverage of nearly 1,500 companies across more than 90 industry groups and adjust our coverage as necessary based on client demand and investor interest.

Aramark’s organic fiscal fourth-quarter revenue was roughly flat with the same period last year, excluding foreign exchange and an extra work week. North American food and support services sales fell 2% organically in part because of the previously disclosed nonrenewal of a major sports and entertainment contract. This was only partly offset by previous new business wins in education end markets. The international segment generated 3% underlying sales growth on strength in emerging markets, particularly China. In the uniform services business, continued capacity expansion supported 5% organic growth; slightly above the 4% increase posted in the fiscal third quarter.

We reiterate our $26 fair value estimate and no-moat rating for Aramark following fiscal third-quarter results. Consolidated revenue remained flat year over year at $3.5 billion when excluding the effects of currency translation; however, underlying sales actually grew 2% when adjusting for an extra calendar week that affects the comparability between fiscal 2014 and 2015. Nonrenewal of a major sports and entertainment contract held organic revenue flat in the North American segment, despite brisk new account sales in the education and health-care markets. Strength in Germany and China boosted organic revenue growth in the international segment by 6% year over year, while capacity expansion in the uniform segment supported a 4% increase in sales on an organic basis.

We reiterate our $26 per share fair value estimate and no moat rating following Aramark’s fiscal second-quarter results. Consolidated revenues reached $3.6 billion in the quarter, growing approximately 6% on an organic basis, or 4% when excluding an extra calendar week that affects comparability between fiscal years 2014 and 2015. Robust activity in the education and health-care sectors contributed to healthy underlying sales growth of 4% in North America, offsetting some weakness in the Canadian businesses exposed to the oil and gas sector. International sales increased organically by 6% year over year, bolstered by low-single-digit growth in the improving European region and double-digit growth in emerging markets. In the uniform segment, recent investments into capacity expansion boosted underlying sales growth to 4%.

After fully incorporating Aramark’s 2014 fiscal year results into our discounted cash flow model, we're raising our fair value estimate to $26 from $22 per share. The increase conveys our greater confidence that productivity gains achieved by the first stage of the company’s transformation initiative are sustainable, allowing Aramark to drive more profitable growth.

Following a leveraged buyout in 2007, Aramark's recent IPO is the third time the food, facilities, and uniform services provider has offered shares to the public. Aramark's North American food service business, which represents nearly 70% of its sales and operating profits, trails only competitor Compass Group in the region. This asset-light outsourcing business generates recurring revenue streams by promising customers more efficient methods of managing costly cafeteria operations and other non-core service functions. Corporations that offer employees access to on-site food service generate about 31% of Aramark's sales, followed by educational institutions at 26%, health-care providers at 17%, and sports arenas with the remainder. Lengthy client contracts shield Aramark from the vagaries of consumer preference to a certain extent; however, with over 70% of food service contracts under a profit and loss structure, the company is still subject to food sales cyclicality and cost inflation.

Aramark served up strong results in its first full fiscal year since its December 2013 initial public offering. Consolidated sales reached $14.8 billion, reflecting a year-over-year organic growth rate of about 5% after adjusting for the impact of an additional week in 2014. In particular, North American food service experienced healthy new account sales, benefiting not only from several large client project wins throughout the year but also from a large facilities maintenance project in the fourth quarter that accounted for 2% of segment sales. In addition, double-digit sales growth in emerging markets helped offset somewhat sluggish European food-service activity in Aramark’s international segment. Uniform services also enjoyed a steady cadence of new account growth throughout the year, prompting the segment to consider adding plant capacity to satisfy mounting demand.

Following a leveraged buyout in 2007, Aramark's recent IPO is the third time the food, facilities, and uniform services provider has offered shares to the public. Aramark's North American food service business, which represents nearly 70% of its sales and operating profits, trails only competitor Compass Group in the region. This asset-light outsourcing business generates recurring revenue streams by promising customers more efficient methods of managing costly noncore functions, such as kitchen operations. Corporations that offer employees access to on-site food service generate over one third of Aramark's sales, followed by educational institutions at 30%, health-care providers at 20%, and sports arenas with the remainder. Lengthy client contracts shield Aramark from the vagaries of consumer preference to a certain extent; however, with 70% of food service contracts under a profit and loss structure, the company is still subject to food sales cyclicality and cost inflation.