Aramark (ARMK) 9 Feb 212021 Q1 Earnings call transcript

Good morning and welcome to Aramark’s First Quarter 2021 Earnings Results Conference Call. My name is Kevin and I will be your operator for today’s call. [Operator Instructions] I will now turn the call over to Felise Kissell, Vice President, Investor Relations and Corporate Affairs. Ms. Kissell, please proceed.

to webcast. quarter welcome conference XXXX and and call you Aramark’s fiscal first earnings Thank those are hope I listening doing well. Financial well This from morning, our as our hearing Ondrof. Chief as Chief Executive we Officer, John will Officer, Tom be Zillmer

statements As our included can found press a website. which in on morning, is our regarding this reminder, notice be our forward-looking release

uncertainties expressed other this our and factors, of may differ results call, forward-looking. are Actual result those including we During factors, our XX-K filings. MD&A a from important will report or those discussed that various risk and as be Form SEC on risks, sections making comments the annual implied materially other in of and

can be financial morning’s certain non-GAAP this will as of press measures. release we as these our discussing found U.S. be website. well in reconciliation Additionally, GAAP on A items to

the So over with call to John. now I will that, turn

Thank you, Felise and hello everyone.

a good a First, of all I ahead you of all way return to year like a us. includes to would more life for and bright that of conventional wish health

progress for through expectations value the quarter of for exceptionally resiliency This emerging our the insight first this considerable will we to business strategies. I the stakeholders. growth I performance, progress highlight our in accelerated significant year, morning, business into for our through provide and immediate the as by period our Aramark’s encouraged our unprecedented Aramark. am opportunities committed share as new well We unlocking remain As

participate as of people, ownership believe an employee stock will and provides align Importantly, We opportunity employees that mentality this the approved more performance. owners values further to just purchase we within broadly continue our business. action promote to organization, the an program having an

with earnings the early These first as first on organic quarter, consistent keep higher and with was as majority down of ongoing call we their quarter the to Turning subsequent quarter’s last the expectations various fiscal campus. as that results the now XX% preserve revenue stages line schools re-openings with expected year-over-year, of quarter education within disclosures to levels. we timing safely fourth concluded revenue reflected well client students ‘XX articulated ability in organic shift intentionally to in serve the revenue

with across resolve and extraordinary of end stated cost unwavering by an the This XX%, low business contributed in the to outflow year teams the that of flow expectations. cash a free quarter seasonal drop-through $X.X approximately Our end. resulted demonstrated prior managing availability maintained at million improvement while quarter. compared in rate maintaining dedication effectively discipline the reflecting $XXX billion AOI We at cash to of our ample period,

operating quarter business well sector business retention clients the & both a demonstrated line we stages with commenced new U.S. preceding year, for hybrid recently, University all we with most continued business the in-person clients effects organic for each our working level clients portfolio, Facilities stability activations. State as and segments Florida fiscal including as We preparing of Education of levels. added models. our an the reported COVID-XX new client as learning improved prominent performance drove as simultaneously while As across U.S. Food and managed served revenue navigated reemergence. in various

resulted the holiday As semester during in reflected earlier, that retail spike season. typically shortened schedules activity noted education also catering higher to reduced and

semester second The is currently underway.

for anticipated many gives districts districts fiscal teams Sports, our entered in navigating tremendous optimism progress programs. improved changing approximately business. quarter-over-quarter Sports virtually classes we as while and population or a pickup, leisure semester. year. certain team at to the serve process our corrections we job In we slightly continue hybrid student offer meal of a customized entertainment manner resuming some the learning. with as setting This universal whether increased experiencing operating fans menus models considerable activate began the in-person us in new on introduced and client the limited the as to NFL joined implementing a upcoming XX% promising and in Parks clients We serve steady locations did K-XX, – National in-person capacity increased for into NHL as we the and XX% through The attended for in campus where NBA fall head are are team maintained as during than the the higher strategies continue attendance and communities spring their client based ramps the on performance strategically to the in of of Leisure designing with services curbside government-sponsored and local regulation. of needs games. various the up in meet partial a participating to student meal the Approximately season. activity

stable. Business Lastly, corrections a longer We recovery Industry. & remained experienced in

largely team historic client educational in orders currently across from business. home We The returned delivery offerings. is gourmet This are has setting. Other the has option country. operational deploying Facilities the occurring already curated innovations Mail within office developing provides offer fulfilled that the and thousands content insights digital beyond project-oriented clients to exclusive includes provide success an that innovative of B&I levels, a ago, tens of clients significant services. solutions essentially go traditional their few that weeks to related to & to new of team The Facilities launch Munch

cross-selling delivery improvement relatively our this government-mandated evolving to leverage and driven meal tirelessly operates telehealth safety team’s effectively numerous managing in for homes, the clients. patient care to the ability capabilities in Europe. complex provide given the post extending offering opportunities performance addition has area, and in demand pursuing specifically stable are and worked was expertise the Aramark mobile ordering, heightened Healthcare in We hygiene. restrictions, boundaries by to to team to serve quarter-over-quarter International and in remained

enhanced particular the revenue in win again Our once implementing drove team double-digit this year-over-year ongoing collaboration additional The million the totaling the investments scaled already our across service to integration recent in the nearly simultaneously resilience demonstrating of business, over healthcare efficiencies $XXX and broad-based accounting are while on while retention exhibited including and international in demand with supply continued which portfolio, are significant extractive strategies, strong rates. delivering value team with productivity businesses supplier growth driving provides that Uniform In focused clients. and offering that resources, our and remained priorities services growth. culinary to China to system new quarter, growth and implementation ABS offerings expansion development. services well capabilities of first the chain, sales double-digit committed conversions Services creation, we value-enhancing our adjacency area route innovation, in progressing and that high

we optimize our and a teams efforts. operating right strategically tools. new opportunity the Aramark’s that tools this promising and leverage to pursue supplier will to simplify adherence mission, are This spend that as have improve we their visibility, system ensuring serve spend As uphold diversity We to exceedingly regional commitments sustainability, our suppliers. future local approach we has to programs and represents advantageous proven introduced

Be tuition ESG as healthy capabilities, Well, sustainability support efforts Do our initiatives, highlights frontline for Well Lastly, released associates. partners we resource diverse and impact employee owned to equity for our eating that Aramark’s just part business millions to report commitments, and enable related of qualified well-being further

sourcing focus margin of on centered our and on while progression. responsibly ongoing are strategies operating Our efficiently, mindful

simultaneously highly to impressive over with of Bridgette Bridgette food, with would diversity of the is and several Aramark’s turning XXX companies, record of years Fortune while a business wellness Before championing health growth to experience XX Directors. respected accelerating an I Tom, like highlight inclusion. Board to and consumer recent it extremely leader, Heller care in election of of track and

leverage We the extensive have her will are the to call now value-creating a over Bridgette of review financial to and to detailed I experience. thrilled for the Board turn Tom the business. for opportunity join

morning and everyone. John Thanks, good

serve to collective begin, to the ability financial while unwavering our teams our globe continue rapidly commitment commend an to also reflected and I to to dedication their want the our clients. around maintaining focus current be strong we Their operating in performance. and Before adapt safely environment, on

remained stable across resulting favorable as last the on mentioned, improvement to revenue maintain a decline, corresponding and to enabled approximately all million cash year. billion the at results These materialized in drop-through we of $XXX COVID-XX, cash quarterly call, revenue quarter us organic of performance ample impacted first our management, XX% results effective John last availability on AOI flow cash of As segments, sequential including discussed by rate continued the earnings quarter $X.X compared quarter flow free same an in while end.

in which ancillary, frequency revenue Ed, and which revenue XX% had completion quarter academic business compared year, the higher of compared fourth of new was decline All a fourth year. the the continue down on For Canada consistent increased improvement trends segment. the to as considerable the organic was productivity the restrictions hygiene fourth the the the loss nearly in-unit of third and company, per reported favorable particularly in with preparing reflected quarter in organic Corporate to place government-imposed safety diluted were since a services XX% our by work. the the this fiscal share last the of loss with business to government-imposed sales of million Growing billion, down our an first the clients of within a year, in quarter future was Teams put drop-through including Uniforms to of a of interest and from from well revenue from growth and Facilities effectively rate to on modest to expense, needs, reported affected loss corresponding creation. fiscal the year, prior restrictions, and and Organic $X prior in ‘XX. for the in the value GAAP a million basis labor compensation based last due line to offset quarter. of to bond issuance XX% benefiting demand managed services, purposeful improvement for operations growth to in was business project throughout shareholder total establish adjusted product, Food an of Adjusted appropriately Aramark expense equity-based also versus reported revenue related expenses International while preceding or retention as Once of costs year, of drive on the $XX $X.X and led again, the performance navigate and U.S. $X.X to loss of delivering $X.X strong all teams billion was basis, other in increased versus in provided operating quarter improved the exception EPS & revenue which serve demand the benefited compared $X.XX decreased to also largely prior early the XX% existing year, On resources Higher prior Facilities, anticipated impact organization quarter. ‘XX. trough prior foundation that clients to compared of revenue the a organic in quarter operating quarter, primarily XX% inspire compared million stable for while to effectively rates. continues revenue of in reward quarter unfavorably $X.XX. an higher the AOI April. relatively up additional the to of semester a adjusted decline. by early specific balance Company similar lines This and the increase investment operating for activity. their direct

flow. turn me cash to let Now,

the normal first cadence was the business, Ed, is seasonal flow As free specifically a during cash to within of Higher of use quarter. due – the

the lower provide management, same was the and expenditures and However, net allocation smaller more working priorities. income income million strong prior of The strong compared than year. flow, flow flow a slightly better accrued than focus platform lower advance through company’s on quarter than capital improved disciplined A to $XXX million, with our expense liquidity position cash to cash coupled capital, cash outflow year. offset $XXX payments million deferred and last $XXX capital more

capital in First, we accounts. use will the to and results existing continue invest new through drive growth to facilitate wins in disciplined invest client to of business

to with targeted and be continue tuck-in will we Second, accretive opportunistic acquisitions.

de-lever. Third, look to will we

U.S. share remain fiscal returning to of the lastly, our approval million $XXX committed Later expected credit on an These quarter, As an previously Board’s $XX million additional facility March expense proactive totaling And in we X repayments and per upcoming record receivables in the February facility. savings on October. are approximately U.S. we March repaid interest payable revolving revolver we repaid of to of announced, shareholders of remainder in result $XXX our our quarterly week shareholders of on last to $X.X million the the over billion through on value $X.XX – on sorry, dividend XX. year. for

We and employees related incurred the U.S. continued of as remittance we cost furloughed to offset federal of to labor of first these CARES approximately assisted global from participate for million the the specifically, taxes received we of approximately we in cost associated to credits in the retention related million the Act the Act Through globally in appropriate benefit including programs, with $XX NOL programs, benefits payroll CARES tax to $X country-specific government the quarter the XXX% employees. quarter of absorbing income well modifications. the as deferred had carry-back benefits in Under

to opportunities will available We stimulus appropriate. continue the pursue optimize programs to as

an exact of fiscal remainder timing the of the for update year, provide is view to pace want and of our I the the evolving. recovery Finally, appreciating

the income rate cash for sharply anticipate to $XXX and expected the flow in the long-term to first second as results are we the of growth now, mindset. a as resilient organic fiscal quarter variable XX% for improvement operating of in back we of invest And pace your a time transition margins XX% first neutral operating to to on growth, business strong to managing depending continuing for to result management half AOI the model, and and to John. the XXXX in resources efficiencies, over delivery on client year business drop-through while adjusted underlying re-openings. in of year free second the of a positive current drop-through quarter improved second course million, in in growth-oriented in improve flow the I operating from with cash call progression timing while revenue the our the preparing Thanks investing cost and quarter the rate will expectations, this margin morning. quarter. to will and a of revenue based Based turn improvement on with compared activity raised driving modest We of our over recovery the continue leverage fiscal

I Place you, our serve well Equality around best as Campaign. teams named to most Fortune’s unwavering the for am to clients, and being companies exceptional grateful employees in the Tom. latest in immensely LGBTQ who Work an globe by demonstrate our Best admired Human resulting Aramark’s Thank Rights the communities, inclusion as commitment for

we extensive the As opportunities. future, our business transformative remain committed actions across we on capitalize on highly Aramark’s focus extraordinary to growth executing

time, been please for Thank company’s operator, now in open stronger. the success belief Our the has questions. call never your you for and

you. [Operator Our from comes first with Thank Instructions] question Ian Zaffino Oppenheimer.

hear very took free guys. Thank be the you much. Good morning, up. everybody. you to took from flow, you it you Great Question range cash on up would the

Just quarterly business in You to are you like think you I the Thanks. What the as seem understand how about very have then trying you driving be wanes? what’s giving the and confidence that’s well. that? dividend as And follow-up. confident COVID-XX a to maybe seeing

can I and Tom address Sure. both this.

that to COVID-XX. affect First the variations of are to ability management business our the confident through we manage in all, team’s extraordinarily due

results able the the We to months. to that through generally, quarter-to-quarter last is cash team We balance business of very strong management that. the you positioned believe we course some do do to And been Tom, to and very improving the flow And over is demonstrate add well year. want commentary? our the believe of continue will X have

Yes.

time more ability the you there, which us more about well environment, the working and gives and CapEx. how think teams to and receivables the our are as management, I certainly confidence on comfortable if inventory, with we and the suppliers core us working comfortable on more are our think getting I with capital as manage managing team’s talk it’s as that, how goes are just clients some payables just so

the Aramark. just quarter as far then know then then like what pitching as changes? environment, you hard And done last been great. you what Is also almost guys right far from deliver, are with really and seeing you maybe you what are the upon can Okay, that, sort And guys to feedback what hearing Aramark touch there also, as resonating customers about bidding guys new them sort on have you of And versus have Thanks. year-over-year? of working now? to able is a I maybe customers that as

wow. Yes,

think heroic people sector that’s is perspective, customers very first Okay, this customers. to we results significant Aramark’s it’s retention sell all, just improvement their very are question. the evolution and from think and the right what’s clients well good a our the serve have well. committed – that’s Well, in And extraordinarily that hospitality strong resulting And our doing around cultural the last that yes, international messaging been the of throughout customers with recommitment rates also organization business to serving world around and being resonating efforts I demonstrated and and our very, world clients to in and the in to culture received a the new are making in in quarter. really business for ability has

would growth, bidding of in results we very enterprise with terms to pipelines we businesses, are additions number new appear business, looked a conversion opportunities the strong customers. serving at are significant seeing to the With significant seeing across strong and their begin also as seeing business of a of outsourcing of we historically self-op respect way In domestically. are different not some have activity, which across

and invest that’s resources our growth very growth we the cost management, why operating opportunity see enterprise. we we say industry cost disciplined we the The we that and in across individual So, sector. business of would very been forward on opportunity companies business. the but businesses in all bid to in have continue are bidding in continued containment focused the going bidding this process. are Obviously, is for see the in significant – I the about

much color. Great. for the Thanks so

Richard from with comes Bernstein. Clarke question next Our

for good Hi, morning. my Thanks taking question.

question, about and in sure are a of am Aramark margin peers? What you you in that going different talking drop-through language are from some recovery. hinted signals stop change European your profile. have that are of rates should they counterparts year your kind that maybe Tom, to second the a talking dropped I the Anything margin drop-through you guidance still maths to kind drop-through And language Just that seeing mentality? of half, aware about start European about sort that in think to we this turned and compared that change already

don’t it. anything is I think unique No, about there

a easier explain the talk and business to as second growth are business be the think year, we just it business we measurement. will the in of half COVID finding flip the little I rate a pre-lapping about manage as declines. we are And with the and the a drop-through it to

it’s And I the that to just begin lap think of change. end but nomenclature you evolution will so as that March, natural

the So getting becomes second maybe assume of sort we your follow-up a you for back a then, dependent sort volumes on just half to that from less little margin can come volume dependent or margin be as bit to that will back? of recovery still

of it’s where not dependent areas in a got on a completely recovery. help volume cost like it’s Uniforms think base, of I both. margins fixed certainly Certainly, the bit bit a but the more

Thank Okay. you. That’s very clear.

BNP next with from Our Jaafar comes question Paribas. Exane Mestari

Exane. Two okay. if me, Hi, Jaafar good morning, everyone. from questions please that’s It’s for

drop-through you the about their talking But actually would on drop-through, are can they in XX% was did level below be are ago. in revenue that achievable is year have XX%, a theoretically new a better global Sodexo, Firstly, calculate XX%, actually all acknowledge competitors than if past. XX% I XX% like to and would that anyone have guidance significantly this picky, a I or obviously, EBIT assumed they

and this those when is growth in a into to be in but quantify you you fair dollar is the XX% at investments assume it probably about question investing terms would business? you then my could making are something you So, drop-through, talk resources, are

I identify salespeople – investments. different disclose dollars come Yes. am am really that’s don’t And respect going I assumption. with reasons, what and to doing resources. growth range the across competitive of businesses. a would I say I They relatively to that, good want to that’s a not sales a adding specifically for probably to probably

been in have explicit of added We very the Services. about have we people last We number added Uniform XXX year.

adding Uniform this that’s the significant are progress up and making XXX productivity rapidly. on the an sales side ramping year additional pretty is We and

foodservice if will. number a you to the we throughout resources side, On of continue lines business, add the of

have we of that long-term in the been we a early right environment down about disciplined we health of that what’s in terms long-term the get could the business. if guide So cost believe to range, we XX% did on drop-through we were doing very cutting but

a the or cut made have part of organization. to not growth the marketing We single a organization

of We cost about the have focused the at been cost management very future. all accelerating but are we growth company, still and disciplined levels containment on in

effectively, on we differences the terms are managing seasonality in So, the say Sodexo we that priorities focused controlling difference and between well. Compass are I would business, and have it maybe that we are we of might the business and as e that very for us, mix drive some of there both

we think for strategy, on but we are focused we things are doing the business and the theirs. – our right not So

clear. Uniforms have And follow-up on case been actually. of my Very actually, specific Super. that would

happening. your a be which leadership it’s significantly the review? with open-ended decide sales Uniforms and can if more business Is or improved for strategy still that push whether So and there under more due those you stop a clearly date is at investments reflect

Yes. Well, taken has that reflection place. already

dramatically can taking result the growth So, business I that improvement are can the see margins in ABS the taking. improve, significantly significant that a by rates know that of we actions we We implementation. business and improve that both as

are that one-third size that level from of was sales greater one significantly organization the of one We roughly has Cintas resources. to transitioning the

– strongly organization can that and profitable business as improvement possibly is we on are is – we beginning competitive improve as making effectively show and changing focused as we it yes, can. so So and that on to showing the believe that

Thank Super. you very much.

Thank you.

of Kaplan Morgan Stanley. next from question comes Toni Our

talk this can weathered cash trending the are on how flow it much so is decision well that to and Just about given seems have pretty sheet? pacing about now, point still a of you on have the balance and economy the question looking scale recovers? positive, you thinking storm as Just pay-down the debt to cash forward the pay-down, you

Well, back know and continue out uncertainty at prudent certainly were There to we prudent. and And in Certainly, there it. looking all that. the we vaccine still we will we April be are is starting far and roll positive have ourselves. to macro want is just and there a of too we other seen all change but quickly standpoint, to signs things fairly ahead get we from is don’t

are of as looking go. a last at so we will we to review So, it to and couple quarter progress speak payments continue we that

the of remind the be when you And think of implemented line you’re then And you and Okay. when about system the can That’s helpful. time to then any had you integrating should ABS the can benefits long-term us you’ve within convert to system? success margin routes get beginning you savings routing Uniform, this and financial from fully talk any seeing just that? can

a Yes. great That’s question.

fiscal are have rapidly finish the in ABS revenues of we range by throughout the anticipate and covered end of quarter of all, we’ll our that this of of the We First next somewhere probably that year. we’ll deploying first deployment year business. through the XX%

obviously, a the January revenues, a, has by team XXXX, all in We’ve we’ll if environment, operating undertaken vast company of this the that majority, the not of under done operating of extraordinarily well. pretty difficult but have ABS. So the

when do to are that our go enterprise. are in aware, were facilities former and there the as We And the operating ABS you the converting pre-work versions these new have facilities, ahead got probably certainly versions. existing doing plus across updated teams on we we implementations is multiple

we and the having to have our aspects to spend managing have – customers customer visitation place. margin those it. route business where dramatic us system, service It with to dramatic. to the much the customer old from ABS transitioned in So there allows schedules, our manage are In taking to XXX% locations is multiple the of to conversions are more accounting our have improvements as improvements field the accounting time maintain to opposed

we’re excited are the across we’re can move conversion. hundred they of those I we improvement and progress a during organization, results seeing and were of about significant, are operations. this think ABS. of margin as pilot that the articulate we seeing And So points past, of we’ve basis Those talked through replicated we’re all enhancement the – from long-term couple potential margin the results those about impact that very the demonstrated in

Thank you.

with question next JPMorgan. comes Andrew from Our Steinerman

sure last Hi, you I comment the expect to Tom, the that the to quarter just wanted improvement of good compared organic second year-over-year particular, in way of thinking And words, like those that you comps. make X point correctly, X quarter, you how I quarter am how new you X that is I that hits until comps? about understanding the in mid-XXs and saying a where talk are revenue XX% last to of other period then quarter? they maybe kind which fiscal if are about, give might easy last sense this afternoon. kind the weeks growth the weeks of are weeks things up, your decline. volumes lining as enter the modest could of X quarter in want are of weeks of if easy first organically year-over-year look now, March in just In now of that growth just stay us now from growth revenue we declines from you those that

but really to it’s in to hard positive weeks think tell Andrew, at exactly because you X things continue be and subject this point time, Yes, change. again to March in what I dissect

step we in thought we the the some as first in primarily we U.S. and modest saw said January, improvement So primarily guidance in our

confident some exactly trend, stay necessarily will modest the will believe, work make going doesn’t of a that the the to right and should that’s will continue the hopeful, then remain diligent very and we to two-thirds point, we sort our quarter end. of So how some your costs on a show to improvement mask show, we the And there. on that month growth first be based we January because improvement but are at

stayed the we volumes we give the to of way when what last pre way could growth just are showing But that be kind a they now me if you entering? March, of of got they And improvement. mathematically, of Right. weeks are would now, just not X type sense

We are just not point. prepared to of give that this granularity level at

Okay, much. very you fair enough. Thank

Ainley The from Citi. James next question comes with

Good morning. much about you what you mail. how your hybrid thinking about food models hear some people And between you that think their onsite, space? locations, clients maybe their plan I’m said of Good they those planning how whether everybody. the B&I get people provide some mentioned, got maybe about clients afternoon the Can about are to office. plans interested clients service future into to saying Yes. are more but maybe office two some back of where you’ve figure groups? you kind to particularly I how And are they people I’m use offsite, and some thinking to expand can they

I And eventual that still collar going say like, of I – the their is viewpoints. would office say there kinds situations range white to still would there pure locations. Yes. of what companies wrestling particularly with are the are that a are look

back. many are we customers have We saying who coming are basically

are our committed We to space.

our are that employees work our bringing do. to we the culture. from what who important strategies return going having home. companies and and have committed Therefore, And and we’re together, are – We office for to that’s that’s some extraordinarily back some some return-to-work evaluating include to

and to good service trend to that to do any to are the location. for very of combination an But a serve that serve in whether can So client customers at business. the a be model which an capabilities just environment capabilities, service there’s operating is wants of yet range. and impact the or home our in broad the flexible, terms it’s thing our we includes what might whatever in-office us Hard say them, adapt office for just

So and we have solutions have us need customers’ been go and that across for busy serve opportunities them. to to do to flexibility range do of they our whatever designing needs ahead

a in operating point, range back this confident those are employees capacities need to But I’m of that. kinds most is, because that like. customers in sector, if really to collar So and to you location production they of at really very we’ll and the blue have of adapt. the there’s In on definitive companies site no such have we large model, work different will.

mixed and of are operations work. returning So operations, blue both most environment, collar white those the to

end of really evolve So think, up. longer still period, for one longer business that normal levels, business recovery to to where it a you several in if but will months it’s be That’s how too that we some think spectrum, business much we early I back to get terms in say of broad will, a lining. it tailwind will a course, have

Thank you.

question Patnaik from Our comes Manav with Barclays. next

to Hi, is about the I just sales on retention. Greg services line today. hoping talk this food actually was the force

and management I efforts about engagement and retention talked all of think around employee a senior that. you couple of

on side So just engagement on around color and Thanks. for hoping efforts for incentivization services? the some sales more force food

Sure. think With we I think respect a I of leaders. to have have team terrific – engagement, we sales a got

and enterprise growth the We very have of incentive the committed organization focus now is much an that growth. on to

them We’ve very programs team as earn of really to well together We’ve a So of you sales redesigned in operating working the so address potential enhanced improvements level achieve engagement. income. closely a allow the commission team very growth high sales as incentive the such very objectives to to have significant to structures, changed in way structures the force. company, commission the both

think – very very we’re good are prospects. And about their a so they frankly, we’ve team. got excited And I very

We are growing it.

people throughout the We are adding business.

all resources lines the to of adding We’re almost of business.

on our be to for that’s organization And exciting focused growth, so engaged. I really think be

this team of this for entire management incentives built year, growth incentive Our the senior for company. including compensation their has into

force. focus one singular the just company got and engaged sales it’s that’s entire not So,

It to becomes across offering gone then is delivery. delivery the of permanent during I you on think segment, hit a of a all do food services of a wanted forward? also Thanks. that seeing Okay. you more of or almost as going quickly period sort the transitory part Do this And theme. that view strategy

services, where delivery. with implemented evolves respect to that’s in and that and at be necessary. developed whether to locations I to to it’s and Yes. we or capability say go offer And service designed ahead would whether we’re have on-campus, whatever it’s patient prepared that are ready and prepared home B&I whether

when health our to in-patient of are that service where that effective it for So have I in-patient at delivery begun find to permanent, and hospital clients will meals, that’s an the setting, return business support area of they patients parts become of is the some really there think from particularly and home very on important a hospital focus very offering. be

have developed we’ll and serve go we to well direct as it in of both to more we’ll permanent have advantage marketplace and ahead have in some solutions that think develop offerings. that continue try and/or solutions to implications ventures need. And I as will So take partnership B&I, with

you. Thank

from of comes question Stifel. next Your Shlomo Rosenbaum

impact was that? there? what shutdowns quarter some is they I there terms think with I just the And Thank improvements business. talk don’t there Hi, am for John, your comments in where Does my you in Canada The maybe like last like on do a on bit little Hey, this Uniforms quarter seeing if it or on difference taking with X.X% have like last Tom a good that it beforehand geographic geographic flat, X.X% the maybe with have like made down be basis. with consistent to did. of morning. more in just sequential you in Cintas I little I year-over-year of a I growth the might Uniforms of progress touched kind seems seen like growth want kind questions. to this you over to bit more was the and know trying something or or quarter. more decline of contrast to am like a I like have

question, differences. the for There really Thanks Shlomo. two is Yes.

restrictions obviously, the been So I is, the think very one, in difference dramatic. have Canada geographic

that results across in the business impacted in mix than and the the concentration West so that factor. the December And for – significantly pretty that’s So enterprise. the is of on reacted to more us, U.S. then Coast business California. Canadian results shutdowns the much definitely Also geographically a our

have more a bit we know, focused. little you As of a hospitality focused, restaurant

shutdowns affected competitors. more to during us our significantly to limited were had where shut have in it would time and they capacity – operators the than down so had other periods impacted And various and had then to limited restaurant Cintas serve

it’s else. than related shutdown and geographic anything primarily think mix more I So related

When we at disaggregate that our year-over-year our in think of similar our business competitors, mix think – and those the all I exception exception growth differences to of with look we business, core and geographic difference. the rates very the we’re comparable. are very, with very

talked while Are for in office, through that are people In to seeing bit words, has there it seeing as potentially year it’s looking to in terms remind, would if goes that – activity of Okay, little it in sector, kind the collar headwinds particularly B&I is snowballing? to for a the you could white to and seeing to really of overtake that you of take companies of that kind you commenting that do just have that, think other return the more period in true, terms great. outsource been more that more? where show taking up you of time on in And more, the if the of outsourced time jobs? that you we’re And kind kind numbers. then looking about a been companies self-service the

and we’ll yes, an good trend, a University, more opportunity in accounts was seeing closures a if think, there are self-op announced. the are there State And we seeing that Sacramento taking And the we for It’s that’s conversion be recently Yes, several some over I in pipeline. are lots that self-op And new are included because question. I – to will. care, that example. that to in want universities, you be hate – acceleration business don’t of perspective, conversion may to entertainment my the of competitive really that across about from range a types, are I give competitors a identify I I and us opportunities accelerating, things that trend being significant. But are information them very there can’t health sports I any working is would say, generally, facilities, presented conversions on.

you. Thank

Stephen Grambling question next comes Sachs. Our from Goldman with

you Hi. wins? impact to the retention just and the new of ideal Can are, remind retention spur may Thanks. rate contract in changes rates what where addition to be how incentives also you’d is us targeting

is – The first now. see question. improvement we very service, Great standards. our including And all, uniform and we retention running enterprise the have businesses historic of we continued retention rates higher all Sure. the high operate, at than across right

of this is goes down. higher a know point, you retention goal are at XX% operating say of course, metric corporate We a ultimately we that only to are targeting would XX%. But at that. a I level than

at operating very of retention. high we’re today, levels So

are very We had about results very And business. the we that. have good across excited

as we specialists. as team well – the include retention also are the sales programs incentive operations our compensation We of also as retention did element for

able we on that focused it, are deliver very results improvement yes, corporate target very good to long-term are and significant retention of So annualized seeing we we And all an to basis. it, much on XX% hit XX% we in be expect call want to to this. of,

the headwind one the is improved? in from Uniform on that And should helpful. to are off permanently? assume based demand on a growth would or to that Canada, your do some opportunities because quick government or lose fair you sequentially excluding have That’s that function segment, rebase some clarification improvement it have step restrictions comments, of And you assume generally of lifted have you these would will build lower we base sales once and the

very a of That’s that as significant of short closed that were customers, once I shut customers. limited have businesses COVID down. result that there as Yes. restrictions lifted. We our restrictions – – are growth quickly. I business the restaurants, say we able are the very you’ll the have on saw think small a are during of would permanently acceleration were There revenues are elements summertime, see eased recapture an that to were

impact way And our we that. number that anticipate will be so we will can’t through today, is really sell I but that from there to able you that. decremental some tell be what

first of the productivity we about the account ancillary are as business this sales new continue revenues. core as well that bullish One rental is delivering, services reasons that aid very our both be like to managers

of result as we a face So may impacts face business ability overcome of to we very may our or good competitors COVID-XX. closed feel our about of that any kinds the

you. Thank

Our America. comes Bank Jay next with from question of Hanna

Hey, Gary for is today. on This Jay guys. Bisbee

flexibility you to lot costs and mean, within some and you the and new particularly going to how begin services regard Just – trend B&I these prior these customers as yours, see start of new reopen I of questions they to back with offerings a from do expect increased customers? within of to of the the accounts some those to events

implemented increases – are From those allow a of along those us – those contract on say different a question. basis, service permanent will, more cost great cost of contract our development today essentially of to and get those And alternative kinds approaches be structures. types, will into I increase those that baked in would providing that’s ask models impacts – the definitely, our as and for of any services.

of So I that find offerings implications result – we core don’t contract. these actually as anticipate of Aramark. adding may that any potential margin these a We to for some secondary have improvement that margin we’re

a service can we through customers. So for the those cost will variable, effectively manage and we think our be deliver to offering

of And Uniform to of sites the in reduction actual wearers the stayed that then customer sort positively Okay, have the Uniform sustained that any back insight or or the seen any on back there would other trend have great. seen appreciated? you business, be open, have you for customers number

to will. return some of so really haven’t particularly blue-collar analytics – I consistent that hard book that base business, me you in revenues Yes. accounts, the I when tell that would you based level terms base pretty of to total they granularity location the I guess, to closed as business the haven’t done I seen it to if looks number versus are of weekly words that business level like But to look the and at – location, of if the operations. again, as extract on data. you holding

you. Thank

Our next from Mazari question Jefferies. with Hamzah comes

to the you toward Ryan in management what Hamzah. do today? P&L? verticals? revert that is is P&L have, And How room have does contracts in the contracts you fee for make you Gunning move at mix only room back do particular this future? guys what And more it how stand guys Hi, from would And much much

business. in now, by Yes. all the when revert vertical, that to it’s are P&L tell back fee different the original and to a would They populations you to changing P&Ls as obviously, can of to were part loss are And I the our facilities renegotiated contracts they for they left the few of various respect would those report normalized and than with strategy management all and that B&I during customers more days needs profit our responding pandemic. levels, sector, operation.

from back point we We’re them that to fee future. we where management will hopeful the point be get to in at converting P&L some the

if have of or have terms you Higher modified. other contracts those other verticals, been contract our types In will, our different In they Education, contract structures.

they’re our for We’re operating understanding with our right letters what’s of customers under impacted. customers. memos doing clients to our understanding or of But think committed as university the we’re I and throughout organization,

our shareholders. right our We doing to are committed for

impact very disciplined will able contract that in a long-term able will And with contract so of of the initial in we to company historically. any of of we overall this the and days do don’t very expect to process responded to significant the respect. meet We’ve through needs that to been the the change pandemic evolve be I be and change respect And everybody’s company. adapt come structures. able way manage rapidly We anticipate during profitability we the out margins as or overall to to

are you now hearing my for you of And thinking a business? successful from you. book anything implications about Thank And vaccine there it. the rollout? from sports Got are follow-up, how

Yes.

crafting It solutions for jurisdictions teams somewhere jurisdictions, think jurisdictions At their making. is arenas. months. of the contributor driving spring league spring us I a first of training significant some be time. decision that’s present and opening summer local around like spring their to go and obviously, is something for also develop and both the are through local working league training looks by approaches. start during the April and political health X-month planned working days and those to it environment now, the roughly teams the and on will with this that both time, ahead and And right for got NBA impacted is baseball Major NHL and local you have the

have in higher fans I with in solution and occur fact will allows in was will venues. a NFL lot any without complete of find to fans league sports to able and an for stadiums. the us a a encouragement also opportunity in that to games drop, missed think season that you And baseball that acceleration fans rates gives vaccination hospitalization major the of be outdoors, the stadiums and rates as attendance, be infection some see

recovery prospects and and in So coming in excited through fourth we we baseball the and fans we’ll have some are and ballparks. anticipate sports back about league third major quarter entertainment that have to those

now turn back the for over Mr. remarks. you. call Zillmer Thank I’ll to closing

for everybody, morning. this much, Again, time thank your you very

for Aramark. to We a just of are running their and efforts the are prospects I and do. industry company of of and of, really business the the the in proud about excited team job, to frankly just the company of this resilience a reborn I and be of I management who customers day-to-day. People organization part lives doing to so this hospitality extraordinarily ordinary best and them think, this the dedicated terrific serving am want bunch to thank be work people a an all the they leading that and to just

you much, everybody. thank very So,

today’s conference. Thank you concludes This for participating.

You may now disconnect.