Aramark (ARMK) 9 Aug 222022 Q3 Earnings call transcript

Good morning, and welcome to Aramark's Third Quarter 2022 Earnings Results Conference Call. My name is Olivia, and I will be your operator for today's call. At this time, I would like to inform you that this conference is being recorded for rebroadcast. [Operator Instructions]. I will now turn the call over to Felise Kissell, Vice President of Investor Relations and Corporate Affairs. Ms. proceed. please Kissell,

from welcome Tom Conference and you Third Fiscal our be Quarter doing Zillmer; Officer, Thank well as and to Webcast. Earnings as hearing will we Call This Financial of Chief I XXXX Executive well. John Officer, you, Chief morning, Aramark's our Ondrof. hope are all

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

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

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

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

Felise, all Thanks, of joining us. and you for to thanks

know, major I you progress of across growth on stages and is strategic intended I'll pleased of company, a those years, the value transform of hospitality tax-free the Aramark past organization over This plan, update challenges. have an navigating of reigniting early which be tough couple of more couldn't on Aramark drive provide our to continues focused to I shareholders. a quarter. to growth to team's also with actions while long-term through be the all and which planned performance including Aramark led our instilling delivery momentum in several mindset, which Services, stockholders. culture will backdrop, we've our and Uniform the for a all create to the its Against review business macroeconomic morning, been the in As areas, strong spin-off

for across we continued effective business. management Our quarter new across business which results demonstrated and of momentum already And ongoing X raised pipeline Industry, the of and reflected believe through last progress surpassing have & full-year through significant number. next in pre-COVID year's year. slower well of business revenue segments. sales milestone, we been remainder the business the us target third course over capitalize that we robust achieve carrying poised this acceleration first Net with into reached 'XX our growth year, quarters recovery. on fiscal new the new well Business cost now in all to year surpassed is levels And the positioning expect quarter, return, had to has its a a the net the an record-breaking fiscal and

heightened inflation a While we trends the to business. reduce on remain global impact are the focus elevated, with operating

this extensive environment, with we inflationary through believe others. in efficiently inflationary and as this menu previously clients period. have resources and to manage the As reengineering, that included costs navigate we we also including we growth prior year compared mitigate have the from deployment labor Revenue X% quarter pricing among optimization work to discussed, closely to technology

Education newly preparing is of by school business have bottom branded tailored Our gain Nutrition, and performed all while to the insights forward. Food of segments is both sectors effective businesses. and to year-over-year, contributing. Each XX% Student season teams revenue in for team end Collegiate the lines through team pricing business strongly momentum, our currently geographies. with academic our into grew both supply new the on organic U.S., client clients, Hospitality put business Facilities, and continue year, Education our Higher the driving the hard chain Within strategies, top and X for reflecting of providing real-time and the work specific line, the

retail led increased on-campus enhanced concert of implementing Sports schedule begun client significantly led and Education. capita venues. levels. Sports, return at drove in our per improved League strong outlets compared robust board for plans year, the & from well Entertainment & have by spending, to We prior Major by Higher Baseball pricing Leisure Corrections strategies as more benefited a attendance as upcoming the

return-to-office Our destinations greater wins. new now Parks. experienced speaking client strong National are activity, with wellness and again continued culture more show to particularly engagement. remain Experience sessions, and once in-person client in And branded events, levels portfolio offerings, the core Facilities employee services. added engineering in-person networking to success drove fall. & levels testament specific a social Group, project ongoing a in portfolio Other on greater Workplace performed due new the already progress interactions engagement to gatherings, clients, active importance of in including Industry, the demand of business solutions And above pre-COVID gradual & as with even geography. guest optimistic from and the value an business focus Corrections to remain with as Business we Clients and for opportunities continued

We as renewed elective activity are team to increased surgeries has significant marquee new several innovation accounts adding offerings, advancing Surgical Centers. capabilities, robotics related example. led clinical exhibited Ambulatory and Healthcare+ including by client including successfully in growth, and and The established an care.

builds geography to particularly new Entertainment in organic the Healthcare, U.K., wins have in as International was on B&I to led particularly performance The well and was across XX% from Education, drive and Uniform services, Organic as for Patient Sports performance team and net to with XX%, to complement Uniform's as company. grew serve. improvement by to towards Chile, we've activity, team continued quarter, the a adjacency focused countries new in our post-care made the consecutive already size, and B&I. momentum in Since available is extensive that and in last independent place. in increased Canada Additionally, by International expertise Europe we've experience we growth many beginning revenue excitement company its grew have with second made the and growth surpassed partnership debut model consistent spin team execute This revenue operational year-over-year. industry patient well traded leaders Germany, as business. a quarter the as deep value-creating strength event an & the industry in added rental public progress of progress pre-COVID healthcare as the within revenue created announcement broad-based separation publicly on both the in by Advisors. Engagement driven levels to great opportunities introducing business

am track of we character thrive Letter have the am able Disability now to named grow more culture Aramark do. the Places It's "Best Aramark careers, can on is again Inclusion, and place no like essential the was an CEO that, the and the team that and inclusive, proud people taking their our at one With I to equitable workplace, to success. signed the I of continue we and Index. shareholders speak our spend we've on the the I Work future to everything the Aramark's Inclusion" that company. even in on focuses as other would across to about serve employees, people and of fiscal volumes as by stakeholders. initiatives some second the of planet, for client will are that serve vision transaction and -- the are Disability XXXX been impacting appropriate. special We Moreover, provide sharing a to updates we cornerstone Disability partners, accessible Equality half 'XX, proud complete Building to our where create and we positively moment and all for secret employees

conjunction with emissions we XXXX, Resources significantly Our as associated in gas progress Pledge. reduce U.S. greenhouse Cool the by in to in committed World this the by our with just effort we Institute's serve Food continues food XX%

We like healthier, to to client-friendly plant-based meals across Tom turn also I'd a financial now of expand availability the plan lower-carbon-footprint the the to call significantly portfolio, solutions. for detailed our offering business. review more of over

good morning, John, Thanks, everyone. and

step another the to on performance progression. third to growth both we continue execute Our drive strategies in margin forward as quarter and revenue took

the clear have outlook, of We sight first year. a continued reviewing improvement financial our results in But the discuss before quarter. for fiscal of to updated the for want XXXX our I line remainder

recovered $X.X business roughly lines organic recovery retail pricing prior as and other convention XX% about last attributable quarter. reached to in associated to levels and XX% remaining be B&I, driven which catering well up at pre-COVID total and Healthcare. COVID-related the of time, including of is revenue continued and XX% white-collar the with and with was as the conference company, in More centers the rest pre-COVID to higher exceeded than billion Sports compared and the volume For first volumes, half pass-through by new Leisure of offerings of service of net end levels ancillary and for year over business, strong

will the streams We fourth and into quarter throughout XXXX. to continue expect improve fiscal revenue these

adjusted improvement year-over-year, resulting the to basis, XX% on negotiated carry allowing in has increased to the of basis costs volumes in labor chain of by and a to returning the move $XXX margins the fill seen of us leverage improvement in management, to where the line, income operating the back increase was life agency reduced. anticipate effect revenue operating approximately tight margin suppliers. million was well In related labor supply growing We've incremental as contract. we products preferred temp from natural with levels over levels on reminder, of due quarter, start impacted XX% use and rates, points to and higher currency new was slight inflation constant also increased XX%. of particularly the a As quarter significantly higher-than-average to been AOI ramp third to as X.X%. an the This Margin start-up profitability the from of AOI XX business cost progression a

drag our to inefficiencies growth top to inflation, levels. line margin in profit contract our as we start-up these have we new in ability growth, exceed expect costs pre-COVID and factors time, and margins will on margin benefit AOI add accelerate well, us short-term confidence as giving today, a dollar While

included Aramark share of of led EPS first compared Group, to with to to early and closed results GAAP diluted On earnings revenue, months adjusted X Compared revenue, of $X.XX $X.X results revenue next-level of and in of in EPS million, of in June. the per consolidated operating month adjusted income $X.XX of basis, a Our the quarter which $XXX QX million associated $X.XX. Supply $XX in GAAP last hospitality year. organic reported million Union an

revenue metrics the lapped and our now part date. AOI is organic as Level acquisition have we of Next

Now of cash in of with the operating free period COVID-based and business availability billion was maturities accounts quarterly $X.X interest $XX turning increased line receivable, significant the we of approximately began normal as was strategic until specifically had use in opportunistic we the result XXXX. end, a was revenue $XX debt flow In In to volumes new this in debt The capital, million the repayment increase and of quarter cadence cash in activities operating and no At and business, rising of continue quarter working to cash recover. significantly cash flow. and rates, used be net million. will due refinancing.

While continue ratio leverage activity, below performance by invest we will drive to committed and in existing support a accounts to we remain XXXX. new business achieve X.Xx fiscal growing to

billion, to up $XXX the reached $XXX our Organic results inflow at for cash expected fiscal clients standard pipeline revenue outlook This between of expect stakeholders. growth now net the fiscal Let beginning AOI business our provided to growth poised never million. line Fueled We at at annualized year-to-date, performance twice-raised I'm by both inclusive is million XXXX's indicate $XXX new to me growth. to line million by full outlook of fiscal $XXX improvement ongoing X%, believe XXXX's fiscal move of We being before as proud improved initial a the than year levels quarter year and now for revenue $XXX organic and outlook double continues latest this with reviewing approximately they our performance with of of as at a QX, by sales target into expected business revenue the near the to robust XX% new surpassed and Like XXXX an and we XXX% for outlook and is to outlook compared mid-X% for full-year we annualized is our with fiscal . and that more for and And company's anticipated a organic to progress X.X%, $XXX fiscal driven flow of outlook quarter as of margin our now maintain fiscal our million year-over-year our are previous close fiscal AOI of or $XXX and cash fourth improving to new XXXX we've about XXXX. Aramark, be be between levels net to teams carry toward outlook year. $XXX would where full-year extremely free fourth work for previously top rates expectations. John? wrap XX% X% the $XX service the levels. pre-COVID had outlook X.X%. reached our to net XX% I'm we QX new fiscal we where strong that up in of million, wrap great is XXXX. for excited We deliver to and heading of margin we very are year, raised XXXX continue margin to significant million fiscal the business and million are of million, as Annualized now to prepare our pre-COVID we which will include seasonality. for be John, XXX% in

Thanks, Tom.

quarter As exceeds levels, run ahead. about revenue pre-COVID the that rate a I'm we the move fourth excited with opportunities into

that industry to spin-off success a continues business growth what transform from culture as heightened proud to execute The other resilience consistent global Uniforms. leverage partnerships new as and decisions accomplished ability fiscal working of our team we've the has our breadth we and improve, we since extremely planned include drive and I'm strategic trends. fiscal to achieve across purpose for line operator, sectors reinforces Margin as of portfolio position well growth-minded of our more also positive making open in now Aramark Our plan, and progressed 'XX, against to and to created our net has are our couldn't benefiting for foundation and be for 'XX acquisitions ratio targets. geographies while clients, as and we'd to our strategic our confident future. results our our I outsourcing And people, like questions. our the value-enhancing business. a

And Instructions]. a with question. [Operator Kaplan from the line Stanley Morgan Toni is on

of on quarter Congrats front on business the any you're uncertainty in increased across sort out really a very, in just new the but find board. the the client as change to result the conversations. change if new growth outstanding wanted I was the in environment a very any Obviously, organic strong macro, in just quarter. business of seeing the

that update didn't So it like most the you you're give seeing. an seem on are, just but recent us

Thanks, bet. You Toni.

next into pipeline fourth is Our sales the going year. very robust, into quarter and fiscal

first activity don't So currently business. as on really see for self-operated, continuing And to any in continued it relates we new client-related we change emphasis the see are clients time. that outsourcing

So we trajectory next is year be for also going to strong. believe very the very,

from results. which the seems be to new impacting nothing macro a perspective, business So

dissipate starts a food meaningfully Maybe Terrific. to less impacting commodity a Could to detail headwind is be future inflation little that you, And on quarters? much forward, little in looking you to shifting And give chain, of May, with that supply should us just margins. costs? regard pretty down a maybe how prices with since bit.

and will both take Tom think I Toni, this. Yes. I

commodity purchase in indicated, softening, favorable the as which several very we it think beginning our you of utilize see, are to price as and particularly some for to is us, locations. that commodities relates we I

So we if that mitigate of inflation. do continues, phenomenon believe the will that that help impacts

to to I to think pricing improvements, and date expect be environment. overall offsetting And have a margin the mature, in new touch businesses for we as the do have saw And that, that to in -- and open our along we continue in in both inflationary with to strategies expect, continue those accounts the new in inflation through as come just to and quarter, we good operations happens those account of it. teams a the job we accounts significant very whatever margins in number operational seen other done a openings macro we impacted quarter. of able

and on clients, inflation progress. we've ahead the about front. about at unit very serving level, are pleased our we're and we're the very the the to we're managing that go data the our executing we and way terrific that. way things people So that got taking provide We're do the to pleased actions operating And the people

in Tom, as So a add? they're real-time managing to anything costs those basis able recover occur. they and to very

No.

a that things we that a And the what levers preproduction Just continue John are addition input pure engineering, continue the to pull waste, of of as input product just experience reminder in portion we cost on our cost. on, to teams a control, those line. said, costs just lot work all the in are there waste, postproduction portion and to menu

a So levers team lot there, is of well. the doing and

Ian coming of is line question the next Our Zaffino Oppenheimer. from from

to -- what about organic quarter, talk I have of that's Street, we for clearly on same It's of billion And think you kind revenues Good I Question the be $X across next higher would over had by guys year. case. $XX billion. the hear the guys. than

-- coming us basically little kind a growth bit of on that. strong the expecting? from? is vis-a-vis what's what So of Street it is color where so why is And that Maybe give

the helping already combined see really. with we're the booked And we sales what pipeline, then And as in revenue into has bigger of confident. and the kicks about its move B&I as driver mean confidence the year's recovery, very Obviously, beginning Probably stronger year Conference, things. recovery season pricing. talked roughly obviously, centers, year, growth next in now. pricing the COVID we year, into concerts few year, net this as we've confidence that seeing base even we're exiting the the our of unrecovered. is trajectory. with as at we what $X.X well. in this weren't year and billion I the continued already A selling very continues strong that's what That in next all flows that convention throughout that right base. the And funnel, --

but combined well potentially all think year factors give think confidence at able net record as the in been know a us as continue the will don't market that recovery. the for $XX I to third those billion, what it's -- the roughly. And on levels that missed, where the underlying it's be So has I being growth COVID I

net then would How all months I you would And there than additions because be a had much X Okay. customer that the of predicted just ago. much business, that new a guess, new either effectively know has -- whole the et sticking don't on inflation just isn't probably is because lot Is that? to in renegotiations, entire customers or new change inflation effectively cetera, much of correct? quarter-over-quarter increase I that So there, quarter-over-quarter, about given right? think way how stronger that

second Well, a new and is That's in There raise that -- strong is had customers. those number stronger net get there's throughout it's the inflation year. continuing guidance component new last results no client the year. for for reason the the have all the no and been new record time. business, to That exceedingly We new. renegotiation now the and results rate

top this roughly guidance strong actually and side. exceed has job a great equivalent year done been business new to terrific of was the Very Our for we've retention delivering our to team new numbers, net year, to expectations. that, on wins. The and able business last

question next Balsky our line of coming from America. the Bank from of is And Heather

guidance guiding quarter this for from realized implies next could year. pretty we're talk about you And was next I fourth you a the hoping away a I year quarter margin. guys healthy your year.

think margins new about the give and XXXX? Just take, new should How think for we businesses, the impact about maturing, businesses help from inflation. us

Well, said, path our to continue as progress 'XX. fiscal in X% X.X% those to forward we'll we on to

but we last 'XX. on from factors into takes year of we As this There's at of mentioned, completely able are build certainly margin sure to lots doubling again, that puts X.X% into 'XX, -- year and of. to progressing few are not then, you still move a and the we'll just fiscal be as the

we I we think ago, proved as thought we transitory, sat that here thought and inflation all a year -- was differently.

of as costs. and do, in we mentioned input bit start see a to easing both before, just availability John So little

of as news, progress continue good year. contract it maturity we year, that's that this margin. accounts well the So 'XX last help accounts in as the and to The booked will will

mix. tightly. the continuing to So The above-unit the that -- revenue COVID margin that very, very to starts recovery and cost going to incremental flow-through those is cause. We're manage add help to our

are So for going our things work and the in margin all to that us to those track goal. keep 'XX favor on margin progress

only of of fiscal a would couple I months the And -- that close away just Yes. add year. are from we the we're

We and profitability will disclosures margin expectations fourth on shake quarter and will net the those working impacts the our what next our year and for how the ramp-up be components you and very chapter to that on out for for in verse are wins diligently give business year. new

what at So reflect think, our we'll to be able that point are. expectations accurately, I in more

talked we given potentially that nature there's uncertainty continued to we back This seasonally moderate have our showing would quarter. degree fourth expect as a respect -- very quarter, half year inflation we've be to -- quarter, next to the that -- finish expect how results. quarter, that chain. with year, the in improvement. year's the about, expect seen We we the the favorably mid-Xs believe we'll over and to of very to but the remain remains of impacts we it of show supply is we then And strongest is the expect business, -- the It's

a giving say, perspective. earnings on we trajectory. I early business. confident very from say unfolding the would we're growth expectations And have for this bit the I just we're for really And a our as that had little perspective, teams a year, we like guidance would feel margin exactly handle in year So perspective, from is but the an next predicted

said, in confident trajectory, we're as So the into Tom running XXXX. very

Great. And one question. just housekeeping

would it running. sort You in of talked last for quarter expectations your terms inflation be how about of

think -- with lining had in talked for? sort easing. of you just now curious range. single-digit right it kind you up about some high what the I'm forecasted of is I was it How

announcement nothing present, had, yet some way other, expectations. at Well, that bodes continued commodity as categories, say, the potentially you pretty the strong we the like. as on or yesterday, signal. would and supply we've their said, One our gives a availability markets I chain lining well. But Really the Tyson in it's on up to us certain protein saw with which impact in using close

reengineering still is we're either on I Do manage really I'm the impacts be business, through But what to the managing have or all through and that hit that have control that. those expectations? our that that targeted most of we passing and on pricing fully we So about. our capability of navigating can we or expect we ability. are able the we other that so levers And we to which in believe operate concerned business pull, to we that have

coming is Martin question line next from the Harry Our of from Bernstein.

I hope the it bit a I net the and really get of Is kind game guidance color sort little international changer is we more the sort business we was prior year And than dig more U.S. in gross little helpful. very year, the Or as accelerate in of new mean, the the side? can lot uplift in to on better drivers a starting versus international running But compared a of into the could the the well. faster Any sort be of retention is this start win detailed. of new guidance big would average. business that at last bit expected? on the the uplift more to of then the U.S.,

Sure.

gross settles being Merlin But record as the of the really across wins year's bread relatively year. built and year broad-based. we they've consistent a retention. with little when it on like I end the think, pretty broadly in the more fiscal up wins see. win, level. Retention to will the had from the are than geographies benefited dust terms probably almost on which speaking, level, coming last all last driving but be, another again, record the gross extraordinary International, also wins will year butter It's well, certainly, the an

extraordinarily again, As then forward just investment new a to have steady on continue That inefficiencies back Corrections and to to on traction, their take good to Facilities, out. Uniforms, And before, less U.S. salesforce, there's traction. broad-based with they years. time the continues had little work the ramp engine made talked The about a gain the wins. 'XX. we they push and based does Fairly in in good just continue gain business starting and

the it's So primarily pretty broad-based, with retention again, I gross from driven levels. wins, think consistent

little turning to shake as the And phasing from follow-up, the last this volume? then wins give of million a into million will can those what's in the a annualized about much How related year, get revenues? to new XXXX So of at $XXX help bit translate going you how Great. And us take out those and around really $XXX of much full revenues XXXX? to beyond year? annualized for into midpoint thinking

Yes.

of bit generally the go areas, is year the rolling ramp-up of then it's particularly XX% still being dining one, that, a will the you maybe year, bit is a a to COVID sort taking year, ordinarily, primary time. in XX% back, the XX% because XX split. If into following where with following little a roll XX% for think in couple the Right that the business of a typical of balance and and now, it's ramp-up, a to little off populations if into beyond I -- use sort you you. of tail of year work full But in the just

And coming Steinerman Andrew question line from of our is from JPMorgan. the next

give we're where currency $X of an on X% Was revenue if you little segments X to the give how wondering, backing color, Tom, directionally, -- the about the since was organic you perform quarter? could billion. think just a fourth X momentum Even a number, $X.X you're just the basis? organic revenue the not amongst of the far you XX%. into just I. already, on in fourth billion think going currency It's constant segments X will segments into is to do so I to growth if quarter about the of quarter constant

pretty about. and it's as each, talking Yes, consistent was broad-based across

better then think I better I have I the just little Uniforms bit fourth even to a again, could Uniforms, of chugging couple in And along. little show have is in U.S. couple continuing and last progress, -- mean, rollout quarter, could a given big quarters. within as Facilities, bit of particular. sorry, trending keeps think, Corrections of international accounts, a have the they

they'll think I quarters. shown continue previous the show pace So that to of in and the couple trend they've

the Shlomo with coming next of Our question from Rosenbaum is Stifel. line

unit pretty focus points the I when XXX start Uniforms revenue routing software bit division. implementation, to to the those XXX and of with little And back coming seems finished there. pre-COVID basis margin want a to is expansion take the John, see versus to on to margin that should -- with going get Or levels we like really much significant long in was that, harvest just It in to COVID? to doing expansion? the when already order prior it's the to what the you setup how company

thanks the Shlomo. for question, Yes,

First was think remarkable growth itself third perspective this of growth And quarter resilience the shown retention its has performance significantly. competitors the a the truly as from a as outperforming year. on all, line well business I extraordinary, perspective, both side top

start job doing. see So expansion with really are flow pleased the through we on margin the they're to And continuing to that the business.

shareholder through about is with you spin of begin plan, harvesting which the implementation have The the is stage talk to the community will, so begin investors And optimization she'll as community. the and we with if to complete. dialogue go the and is ongoing. process investment And

business and detail earlier, we made. as said And the greater have basically under strongly do what the we the business in four, circumstances is given but the thought would believe very trajectory performance. we'll the it we've doing and of So the exactly I investments after quarter

ABS a the is, of as the that most One salesforce growth to as up. see year-over-year. productivity that's XX% to That's levels, staffing we the result well increased leading ramping continue things implementation of encouraging

so that mechanisms recovery and various this inflationary And is part the implementation to system we've the of that able the of of -- investment that in undertake that been environment. during

I business we we into So that get add very be And first apparent, go of about to get as strongly and quarter process feel very begin out through the disclosure added the that year into forward. will going more year. close and it we'll as next spin this the specifics

Tom. Okay. Great. one maybe then And for just

if been pro higher, heading I achieve have way typically, have of company spin-off time are make to to upstream the challenging reduce it targeted but does rates dividend. for that should like to the fluctuating, But a some some generally over think it? going it it to debt see interest a sign does more the you're leverage of spin-off? we company As heading about to in ratios the the forma for impact higher, mean we -- the rates to the interest kind of that

second half next like helpful. We fiscal would about year. time. a benefit calmer But we We've not it's have more the of the market. Well, certainly of talked

we it So an nice yes, on -- markets. and move But we're keep would winter, work it have opportunistically continuing we'll the settled. market refinance through to the be the and We'll as out. eye the fall through to into

add -- the business. the I add core forward as and is that would thing execution elements would both the the of yes, most the spin continued I improvement business strategy important from with both of we move earnings the

multiple flow, levers and to in have very we cash We ability we're have to our go -- ahead. to manage confident with very respect

very, Our an refinance confident well. our debt appropriate on ability We're trades to basis. in very

get macro see to ahead strategy for environment moving the our to as ability and a respect significant don't that that go down XXXX. X.Xx we've level impact So with item to modeled forward and our

from of Our next question from is coming Wittmann line Andrew the Baird.

a capital-lighter that mix or there the anything great needs a these all little has the hoping of bit announcing the or you're wins could margins talk you in capital-heavier winning new little bit you're customers? that I if if changed talk the about Maybe about capital, today. customers was are on

Sure.

On no mix. the real capital,

matter probably use a a & and which think pretty into Higher Entertainment in going little robust year actually pipeline than fortunately, We've Ed, I got, lighter more it's next normal. fact, CapEx. do or use Sports little a to of As tend a

would we normally contracts with margins to of these we're brings see longer-term wins. able higher been use But So it. year, we clients. probably generally to lighter Margin-wise, invest nothing CapEx think I love this little it's when use than again, overall, extraordinary. It and in a

in sort nothing of ramping wins ordinary think are continue to start-up feel I confident 'XX, which the typical of margins, we out there. 'XX the

feel to general look. Again, push and and testament then general, the at, good to forward. And market, about we're an So the outsourcing going in looking what overall that.

of robustly, coming outsourcing I think industry, people the in as more we, It's years out from it. couple increased benefited last look activity, and an we're made benefiting at pandemic. the have of all certainly

really So terms we're This disciplined more in potential. process. to bottom, growth of a the race to a and is not strong or is speak, getting good, in having that bid. good, we is idea what industry We're the just price chase mix. again, to more so to in the robust This

X times, going I've we're X and pace. I'd of X many than XX, said that win As out continue out to rather of

very as forma and return that add, the Yes, still for rate generally have the we have of changed. our for We business. have very return would development still the grow we pro not I And high expectations company just internal strong practices. requirements

larger up come way Tom the for all I. So these accounts the to performance and

a business in profitable have not sure that and return is very process changed. make that to place new is selling there So our we significant margin are and growth, requirements

high have this going we will deteriorate to the we it margins, continue that business, help so And as to forward, us expectations sell not the grow margin. new

while that contribute in cycle the margins. to our expanding are have of returns will and investment than expectation close early openings of a to very over account effects short-term stages account, So life of higher is and company those new the new we the or account, the average

That's helpful context.

Uniform in segment question, bit I margins little the about ask more follow-up detail. to my wanted For a

margin think were was kind honestly, margins guys flat true you I materially. on Obviously, here. think, here. probably made the that for pretty and pretty a that's most comment John, you up side, peers, a But good rate companies, of good had you but growth above the very outcome I

if Certainly, labor was around some price other some But the easy just that could you could or were color there's think I you about Maybe drivers talk of expense but I margins? an about imagine component, what factors. those merchandise talk it's to So of comp. would cost, I maybe one be wondering got helpful. has would be

absolutely. Well, you. Thank

that excited are think and discipline the in I improvement, been cost business about We extraordinary. has the margin

side full-time worked make able on got aggressively to staffing labor they've sure And think employees contract merchandise they're the labor make they those additional that use to worked plant eliminate very or the issues, mitigate as that sure place to side. particularly, in they've very I have the on to temporary they've diligently labor of costs.

So the that I think they've have then job done leverage front. And the natural execution good margin growth rate. a operational on very you of

accounts, margin is rental weekly those contribute immediately. the we particularly accounts, rental -- as the to revenues revenue add almost average there new So

have that the leverage natural growth margin You rate. of

So add is the the almost there new those -- as contribute accounts, accounts, average we weekly particularly margin immediately. revenues rental rental revenue to

well, of we're very recover they've good And They've there. cost the ahead so made been able as very margin that's improvement. that contributing to and progress And go to fuel encouraged. inflationary and

have So you multiple elements.

You have the ABS implementation.

new account wins. You have

that You to , improvement. contributing and that's have margin

So you have multiple elements.

the have You implementation. ABS

account new have You wins.

You high in control to have a contributing discipline a lot margin level performance. cost the of very and improvement operations of that and

our And from Carrington from line Leo of coming is the next question Citi.

business drivers on two I questions new of just a follow-up want -- and guidance the range. net follow-up to ask the

this, trends businesses? targets considerations But specified of on what know seeing to the between this, versus environmental or there tenders in in in positive any was to positive. of out good see Firstly, I you environmental the -- specifically difference X mean, benefits to it Uniforms of call now? was being emissions said Uniforms is catering then source the you're the And of reduction or magnitude announced real wins terms magnitude from I catering. was the informally June. secondly, aside in extent

all the the the is to to might increasing And importance dealing issues anything in what entities. reporting take these question with ESG on days, various I'll with second SEC many respect first. do government requirements. placed tenders approach related to and company's as particularly ultimately initiatives There obviously, we're

is on there heavy both of attention a the lot and the a paid well. as sustainability side So emphasis governance and side being

and is are in planet. committed to are the efforts we've Ash the very So our people on And named and great who very a efforts. on we focused attuned for right gentlemen doing those we focusing to Alan got and Hanson Horwitz, it, leader sustainability what's

is the -- it so including has it days. it that And attention heightened processes does these Board. And something bid attention come and is of with the everyone, in

So I arena. sales spends say, presentation the process of Ash with and proposal sales time significant working -- very would component in the process process on the and a her

important And So do Tom, element. it is you an want...

the as And equivalent. we years on year. back, forward, between make a to Uniforms to delivering setting drive great into continue last Uniforms pipeline Facility new business side, the level sales that to year. few the the bit investment well be record started sales a in shown incremental with Kim I just result Yes, record 'XX the pandemic, the the this question, continue that reinvestment to as move and business year, Food Again, next I I think intends that And but momentum made away a going there of is side momentum they're already Food robust, going better. forward. then And early same to little think and get on stages and fiscal and on chugging and the team Food your on in later into that know to investment is first continue pretty gross is Facilities wins team a in to

of of wins. sides well both So business terms new the are in performing business

And our line from of the next question Hamzah Jefferies. Mazari coming from

versus the I pricing kind us aside first us lag? through you adjust in feature you just of of how as deployment go You inflation. just lag you in your deployment? How had is? and of terms talk part. And a -- how what could one walk the And real-time portfolio then of has part secondly, that, that That's mentioned how managing much much if pricing remind long just of could labor where optimization? tech are those on room terms optimization is more about two-part labor question. much Maybe to there of tech and in from

are almost Collegiate the Education of or quarter. on pricing ahead. there's to Sure. is portion one that a pricing, is that Hospitality business. timing government the opportunities specific pricing obviously comes the are on. respect contract fall. Higher the typically year pricing the then renewal that entities. in They There them Board couple very have is business A in elements plan of Those Obviously, And a significant that we're date, focused set occurs to very with have of focused Corrections which contracts fourth with businesses that

the Board are so plan operating fixed essentially year. And prices throughout the

we in Collegiate The the in business significantly account more real-time. increases client our is is negotiation every are starting fourth of guests rest So that in Hospitality, have a expectation and rather pricing customers' the houses. each we an quarter. because Again,

focused with find directly the ability prices the so prices, be it the through we approval many negotiation do a with and it said when a very clients. to. to has our general times, And pass we're we as environment, we Tom we pretty those and cooperative as on need raise to rule, always hence, But go delivering ahead first. when and value But

business the in other managing of terms of labor technology, the levers levers containment aggressively, optimization elements are So our terms other those important strategy. in of cost

I would can time. the to but With manage the technologies pricing we're technology respect And in side, be important, labor other opportunities for deployment, at value deployment particular, there on deployed, Facilities that and early largely levers look costs same but reducing. to is we the of enhancing stages. in the so Payment are technology, are all say,

or would have I significant would we gap a you say will. opportunities plenty of debt, a So left. if We don't have characterize for deployment that technology I what as

any are decision. make deployments optimization technology that debt these not decide to of we So decisions,

technologies. requirement have business basis, it. don't how we an these deploy based the customer, order on to decisions and on make deployment client backed-up and the some implement best we in capital We So what's these for and that's individual

Yes, I not in a our thing technology point and the is, an last business, that revolutionary labor around one. add process it's on only evolutionary deployment think I'd

core, At to it subtract. pace can add the We our at And we're has continue technology technology. a our engagement can experience also many that, times, but of move with John taste as people hospitality, said to consumers' business.

careful and And want. our move so what sure we at about got we've to the be with make pace appropriate which it's clients

drive speed mostly and While at just queues simply times, not customer enhancer increase it's to experience, doing to the bottom we're out line a it cost.

line the next is from from RBC coming [indiscernible] question our of And Capital.

increased on Maybe quickly, Is other fact helping that have Can that the the you us pricing? ESG Aramark drive more concerns? as on rebranding higher give or recent just you you on color emphasis as Higher on more value Hospitality, Education. well especially the sustainability, to capture

would absolutely. it's I Yes, say,

approaches desires all our unique develop individual in audiences, needs we to and for their are speaking locations, we the administrations, in campuses. client As their particular, individual students, and always really understanding

clients Collegiate think and So for customer particular we of they're and and it set a managing customers. as a of ecosystem constituents that

So really it's a in frontline at Donovan managers, student very expectations deliberative process. the intimately leadership one change locations are holistically It's managers, and the their Hospitality, and that Collegiate team. constantly our who look really our the marketplace of are differently this RVPs engaged adapting entire lead constantly all business it operators. assessing people client needs, Trevor of constantly. very Jack They and and our district Ferguson, behavior has in our the assessing and impact the very most than focus

it important. is So very

As at are you expect, students forefront. the would

customers. at in are way doing people focused those changes the forefront operate, we the and on what's the of serving best for always of Young we're many desired

that would follow-up maybe any in maybe of Or volumes sector. around B&I touch just just recovery a on other of kind information great. the then percentage in Can on Great. lost And 'XX? the quick you baking return to what you're those just continued be

through next and the 'XX that guidance. working our answer park I'll into quarter what view there. recovery B&I when We're is of still we to full give

So more to come on that.

for closing now remarks. I back to call Zillmer Mr. the turn will over

you the the the performance thank year. excited of extremely of expectations morning. We're and quarter about balance the for this us joining for the all Again,

going the We more do, future in of excited for forward. We expectations love organization. have, made the progress team I we're the industry. be what we I really and think, the with the about and the couldn't best business the pleased we've

care. very further look you Take your much, and support and to forward -- thank company of the conversations. So and appreciate

concludes today's gentlemen, and you Ladies conference. participating. for This thank

You Good disconnect. may now day.