Aramark ( ARMK ) shares slipped Monday after the company posted a fourth-quarter fiscal 2025 earnings miss.

Details

The company reported revenue growth of 14% year-on-year (Y/Y) on both GAAP and organic bases to $5.05 billion, missing the analyst consensus estimate of $5.16 billion.

Revenue was driven by strong new business, high retention, and base volume. An extra 53rd week added an estimated 7% to revenue.

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Adjusted operating income rose 6% Y/Y to $289 million thanks to higher revenue, technology-driven efficiencies, especially in the supply chain, and effective cost management.

Adjusted EPS of 57 cents missed the consensus estimate of 65 cents. GAAP EPS fell 28% to 33 cents.

Incentive-based compensation reduced both GAAP and adjusted EPS by 7 cents, representing impacts of 15% and 13%, respectively. GAAP EPS also reflected a non-cash asset impairment tied to a prior-year minority investment.

The company held $639.1 million in cash and equivalents as of October 3.

The operating cash flow for the year was $921 million, with a free cash flow of $454 million.

Segment Performance

FSS United States sales increased 14% Y/Y to $3.61 billion, led by Business & Industry with record net new business, Education supported by high retention, optimized meal plans, and rising enrollment, and Healthcare, posting its strongest results in over two years.

Meanwhile, FSS International sales gained 16% Y/Y to $1.44 billion, aided by broad-based growth across the U.K., Canada, Ireland, Spain, and Latin America.

Dividend

Aramark’s board approved a 14% increase in the quarterly dividend to 12 cents per share of common stock.

The dividend will be payable on December 17 to stockholders of record at the close of business on December 5, 2025.

Management Commentary

CEO John Zillmer said, “In addition to being awarded one of the most prestigious medical systems in the world, we delivered almost $1 billion in Annualized Net New business, added more than $1 billion of new purchasing spend in our Global Supply Chain network for a second consecutive year, and achieved a leverage ratio of 3.25x, a number we haven’t seen since prior to when Aramark ( ARMK ) went private in 2007.”

Outlook

Aramark ( ARMK ) forecasts fiscal 2026 adjusted EPS of $2.18–$2.28, versus the $1.90 estimate, and sales of $19.55–$19.95 billion, compared to $18.624 billion estimate.

The company sees adjusted operating income of $1.100-$1.150 billion in the year.

Price Action: ARMK shares were trading lower by 4.90% to $36.17 at last check Monday.

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