Aramark ( ARMK ) shares are trading lower on Tuesday.

The company reported first-quarter adjusted earnings per share 51 cents, beating the street view of 48 cents. Quarterly sales of $4.55 billion (+3%) missed the analyst consensus estimate of $4.62 billion.

Revenue growth outweighed the loss of lower-margin accounts in the FSS U.S. segment.

Food service revenue rose 5%, with a 6% increase in organic revenue due to strong business and new contracts. Currency translation reduced revenue by $62 million.

Operating income grew 30% year-over-year to $217 million, while AOI increased 13% to $258 million. Profitability improved due to higher revenue, supply chain efficiencies and cost management.

Currency translation reduced operating income by $3 million.

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Aramark ( ARMK ) saw stronger cash flow, with net cash used in operating activities improving by $70 million and free cash flow up by $63 million, driven by higher net income and favorable working capital.

The company ended the quarter with over $1.7 billion in cash availability.

Dividend: The company approved a quarterly dividend of 10.5 cents per share of common stock, as announced on January 27. The dividend will be payable on Feb. 24.

Outlook: Aramark ( ARMK ) expects revenue growth to pick up, especially in the second half of the year with double-digit growth.

The company forecasts FY25 organic revenue growth of 7.5% to 9.5% and adjusted EPS growth of 23% to 28%.

“Our new business pipeline is significant, and we are already having success this fiscal year in both new account wins and client retention,” said Aramark ( ARMK ) CEO John Zillmer.

“We have the strategy, sales pipeline, and talent in place around the globe to capitalize on the many value-creating opportunities ahead. I firmly believe the best is yet to come.”

ARMK Price Action: Aramark ( ARMK ) shares are trading lower by 2.55% to $37.47 at publication Tuesday.

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