Aramark (ARMK) 6 Aug 242024 Q3 Earnings call transcript

Good morning, and welcome to Aramark's Third Quarter Fiscal 2024 Earnings Results Conference Call. My name is Kevin, and I'll be your operator for today's call.

At this time, I'd like to inform you this conference being recorded for rebroadcast. [Operator Instructions] I will now turn the call over to Felise Kissell, Senior Vice President, Investor Relations and Corporate Development. Mr. proceed. please Kissell,

well welcome Conference and hearing Third Fiscal Zillmer; Quarter the Tarangelo. Officer, Thank and to Webcast. Earnings as John Officer, Call Chief be Chief This XXXX Financial company's Jim you, Executive Aramark's as morning, from we'll

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

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

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

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

Thank everyone. morning, you today. joining us Good for all

pleased strategic quarter in We continue record for revenue third profitability profitability our to as I'm Aramark for for of revenue successfully another our any and and with FSS execute vision. quarter results quarter. strong as to international record well on U.S. report

financial the just review outperformance fiscal the and go. drivers quarter Jim to our I to the with key expectations one before will for for turning year

Aramark's geographies. year beyond. confident of business them, the lines business Given and ability coming proven quarter momentum next substantial from growth was opportunities that broad-based, our we're fiscal all continue our capitalize on revenue ahead and to virtually and will growth into third

higher led multiple contributions up an volume, supply as by inflation manage all volume effectively growth achieve chain from with a and as scale efficiencies, client again company's pricing costs benefiting sales us operating quarter base once wins. new tailwind. mix while for was from the allowed to Revenue from billion, year-over-year, of organic and levers $X.X business well The growth XX%

to performance we basis. a talent organization, in world-class the while path income to to to income currency XX% extraordinary testament increase which prior year a in operating XX% a on compared us Aramark's forward. year-over-year increase is operating services clients our this and hospitality allows constant ambitious focus to provide adjusted actions Our within the contributed a on

and Hospitality Turning business X% the led plan business wins FSS coming grew in meal attendance organic U.S. of the this Pinehurst now Corrections. capabilities continued fans prominent and XXX,XXX to commissary revenue Collegiate industry, season and at per comparable Entertainment, Indianapolis events, the and versus U.S. capita Championship in and saw higher over addition enhanced greater Travelers entering the the and Open record last professional to board segments. summer revenue spending at before by We serving levels year, Sports as in strength tournaments the services XXX. quieter our period golf event to quarter and including at such on initiatives volumes using new deliver

pipeline merchandise both also they remains York London series. first-time outsourcing. extremely and as for the Major New participated sales League Phillies across retail Philadelphia in provided Aramark Mets, The the We particularly strong sectors, in Baseball's clients

as in to a clients Harding and opportunities, offer name we and client throughout the year. be which close events, Boulud Manhattan University from operations The new Star, kitchen include Oklahoma with some with New offered innovative and Public entry capabilities partnership a first beyond. branded sizable Daniel centralized Southeast primarily Georgia York collaboration conferences are more. corporate New Schools, efforts Health Boulud, focused in Cuisine on experience, ongoing which of to few. just renowned the New will first part System Metropolitan into for Student this will entered the client a Tulsa our our fiscal We're we differentiated located be finalizing Nutrition, in targeting process to of culinary expanding special a our Michelin into B&I with catering, area and services the York

FSS the X,XXX leaders operating teams and training, senior for our partner will our and a clear across celebrating sponsor equipment services, together Expo we culture. leadership products, values technology educating and of ongoing through top the in is excellence of in weeks of help and a new regional hospitality district, us brought our back, of type U.S., Lastly, into development lines corporate few initiatives, on realization business function our and collaboration future. This propel job

geographies Now business, organic to base Canada portfolio All well revenue growth XX% pricing Spain organic business from international. Momentum and by increasing year-over-year. the with America new led as and U.K., experienced volume as continued revenue initiatives. the segment net in Latin International in the

hard teams presence work, events. driving attended successfully Our were in sports included entertainment, at our which and increased and in highly recognized globally particularly

of served Germany, X.X in In with Aramark multi-day One the for the and the served Formula X are clients, into growing match Berlin. which majority the and the in partnership events Grand over men's rapidly approximately we European next for fans we the race plans are this with partnering in Barcelona, XXX,XXX And summer stadiums and we during final already million the in season. Prix Formula working XXXX for football on upcoming tournament championships, Spain, including visitors

one company's Liverpool, our food with business on capacity as has ahead in We are be in 'XX, and of will that thrilled Premier stadium, selected expands 'XX sports stadiums Bundesliga the approximately opens Stadium for the Dock Everton English accessible Germany. most in XX,XXX season, and League been Bramley-Moore official European global Everton share Spain experiences and partner clubs and marks the in Liga England. entertainment engagement new long-standing and and The sustainable Football which La This at Aramark to the the of in first Europe. the

government-related in in to build countries new health in and services from We industries Chile, within serve China with coming client continue other in we also scale wins Ireland. mining care

Toronto, we of year after a Cup recognized And from in-country international recently which our chefs Canada, in celebrated the competition, and culinary international, talent finally, each concluded global in chefs our country. winning

which leverage performance effectively in optimize chain contributed grow, supply spend, strong Aramark global team and quarter. the our to continues to Our

this the services, network we chain of expect billion. year, $XX global By supply our to GPO spend and end fiscal managed surpass

expertise and complement particular fit. adjacent growth expand capabilities opportunities pursuing We seeing faster areas. we hospitality acquisition are and are we International enhance if the to Domestically, key more are leveraging to and a deeply in organic GPO entertainment. the industries wellness as to drive find expansion even is growth such we penetrate our in right interest

continued America into in has In Asia, Latin been third originally already the long in seeing low the range. front, On and bit quarter, quarter stickier. we're that for dropping a and improvement the inflation America, Xs reached U.S. next of as expect the the favorable inflation the with as North we we these trends global estimated range Europe while continue end

ensuring opportunities we're capturing any As contracts maximize business always, supplier benefits. transition and our are we'll to market these appropriately

to Lastly, to remaining reached Spurs ownership anticipate our San an subject we of in the will fourth approval. Antonio stake the portion quarter NBA agreement the close NBA in sell We the transaction franchise.

our for We expect deleveraging the proceeds debt to as strategy. of part repayment use

a as We the to Spurs continue closely client. valued with work

key and highlight I'd a turning we third to Before few received call recognitions over the like accomplishments to the quarter. in Jim,

Light, First, companies people-powered the of as States, organization often community-minded the referred Civic in the we to United were dedicated named most by as X to XX change. Points an XX of accelerating

XXXX members Executives, Second, women the the of and a Canada as of highlighting outcomes. Aramark we our for of FairXXX to of Black has that racially green and the XX% our for in focus on for and are practices recognized led to being one people employer company, a Diversity serve differentiator the greenest ongoing diverse both by operations. key Board ingrained the our We company's as which top our and And with innovative management Mediacorp commitment sustainability Aramark color. employers lastly, country's communities the XX% tremendous ethnically Canada, was and believe now

Jim?

and morning, everyone. John, Thanks, good

had growth geographies. line the top we sectors strong quarter and nearly with another all and the mentioned, both very John solid across on bottom across business As

many excited about operational growth ahead. and are opportunities efficiency the We

In foreign $XXX on reflecting the compared basis the X% reported translation. we period, to third revenue of approximately year GAAP billion, a up of million currency $X.X quarter, prior

constant XX and points grew XX% on year-over-year increased to business basis new business volume AOI with to year, and a prior underlying on net million, along versus those third progression basis, including the with $XXX year-over-year increased inflation so a the a disciplined improving $XXX majority P&L the business contribution XX% adjusted middle new from core operating ago of driven along basis efficiencies, quarter currency driven supply up the in to currency chain Organic levers, our operating by XX% by pricing. grew trends. model. was margin revenue from and year Operating management income income of nearly million. constant

segments. AOI year this year. comparable the currency insurance-related compared achieved costs. wasn't FSS favorability it growth quarter. been a prior last Turning an in Note, to item, would margin XX%, the points, AOI to to U.S. constant associated the with of some XX margin same of on there U.S. the AOI was last improvement for basis If FSS improvement have both basis period business with

control business expansion of segment AOI higher improvement also The was constant Ireland volume, currency had led Latin labor points, U.K., and and XX XX% and AOI year-over-year a on operational costs, International new by AOI particularly business food, growth the overall Year-over-year net Spain, of by basis base SG&A and of margin basis. America. in driven

margin trends provided levers which underlying to inflation, continue our favorably, to some third Regarding in the track quarter. tailwinds

global our X% U.S. the saw range at we to inflation X% even come in of with low shared, John As the end expected better.

current overall expect quarter X% next come trends year. down we so more heading into inflation tracking the and if or for even the are seeing range fourth fiscal to continue, in inflation We

XX%. XX% the The the repayment the the billion tax rate approximately decreased from to XXXX notes. year-over-year senior debt Interest expense of Turning primarily income of adjusted was remainder $X.X statement.

increase XX% Our basis. resulted adjusted an GAAP quarterly a versus over $X.XX of currency year of on performance constant and EPS prior the $X.XX, EPS in of

free net seasonal our activities in Regarding million provided cash $XX third the operating $XXX and an consistent cash was flow, normal quarter, with flow million by cadence. cash inflow was business

availability. had flow operations capital to cash compared year. the from higher working company $X.X $XXX and end, billion the from cash cash by prior favorable quarter At free in Our improved almost over million

this capital reaching the to structure, financial period. to improved the trend leverage focused end of our XX to A on points increasing our we and revolving balance committed our the years. continue This maturities extending by took this credit action flexibility prior under year, the $X.X revolving basis compared another quarter this borrowing loan $XXX After includes sheet we end, remain financial and as also ratio leverage steps quarter ratio. fiscal by facility discipline by to are to we capacity our our further X additional and also reflects our reducing X.Xx Part year billion. Term of positive Turning facility we strengthen create million by credit of our

on opportunities will shareholders. We other our pursue with to capital optimal proactively returns for structure a enhance focus

our with the up year. this wrap for outlook I'll expectations of remainder fiscal

are year-to-date to we pleased targets. as our against performance We financial with great continue very our make progress

performance. As and X.Xx we anticipate leverage the at at approximately XX%. AOI improvement. and with XX%; growth lastly, year growth approximately Organic revenue at XX% approximately a result, at growth adjusted currently ongoing EPS approximately a following ratio full

to execute will significant deliver in we shareholder strategies, reinforce focused value. expect our our turn, ability which, results Our on

John. I'll that, Thank with you this for time turn to it And your back morning.

Jim. you, Thank

We continue ahead stakeholders. to excited hard to and opportunities about every for work deliver our day are the

exceeding are we fiscal for initially our confident and set the vision. year strategic expectations We in the financial remain

pursuing bring globe performing a our Our the culture levels level talented new path will of us embody and a success. at that across teams to high

And operator, for we'll now open questions. the call

question [Operator Instructions] first Rosenbaum Shlomo Stifel. with comes Our from

space. John, the can about through success the for that, expected, it one And next runs a bit a usually have most up that how and you a had, after whether what with talk little year? important education follow-up. July. comment the bit about company quarter the you you lot in Can I you contracting sets kind the it was is of higher little June

strong a education. higher we season very selling new ever had our accounts this actually year Yes, We sold in than more in history.

the very, has Board new well. contract about feeling in process we're gone for of good very pricing for year the negotiation terms growth, very plans next sales So

for And beyond. so opportunities higher next education, feel about year we good and very

to couple strongly perform a education in we yes, at very selling new retention ability a and business' all So of have we're We and good higher year very feel very on level. about that season. all, focused so did both transitioned that accounts the a and sales obviously this efforts and high

to just point are And be for really expansion. the not to going we wins operating about the concerned would a margin new impeding Great. have something are them that then Jim, be at that

a wins the we're at the are margin to ahead offsetting to new of what last ramps? where you had was maturing headwinds where expansion just new the were as situation we Over years, them several starting we were expansion, business really ramp see operating something the and expected. point that contracts Are margin

of if at of right. XX be prior significant business point, this profile. the the business year-to-date again, new is are, like should Yes, are strong, the was to all given I underlying no expansion levers up. you that's it longer at maturity look that we And new where ramp a is right? those working mean basis the points margin And margin and one very those levers headwind

Toni Our next from comes Stanley. with Morgan question Kaplan

ask International might And strong any been implementing attributed business, about really quarters, in you've Could of prior to you I success? led about to momentum wanted there that there quarter outsourcing. the talk you've again. initiatives to the growth have the

the going sort And of of more does the of I'm move on? there assuming sort towards lingering being dynamics comes inflation else? any that's by case, So are is the particular down, And this you're but that or where driven that geographies change seeing outsourcing? something as inflation still

terms Thanks, Frankly, geographies. success the where we're success very in I area not to we're couldn't really point growth. broad-based an across all Toni. the enjoying in that that seeing International of

across a in discipline terms virtually growth in of of we've disciplined just very for time been team That and we the great had part to continue every I has for results place international. longer-term country. and the it and long think focused is in portfolio is see

which So still that and I even secular just way activity have expectations is it's see we one impacted or more continued the now robust Outsourcing would sector. growth remains It's thing. I trends, ever been. really think strong don't pipeline the in pipeline, amazing another. any than sales high an for

international, that, pleased very results in we're that and So we with continue. overall the growth will expect

then on chain margin remarks, the talked in And drivers, the Slide and on mentioned Terrific. prepared you've efficiencies. about you supply X. just

of from seeing been now. be from that sort more that You've go a calling quarters how operating for regard talk efficiencies margin expansion been supply just out much chain additional of Maybe there is to about helpful. or the with would couple you've to that

model. significant There's really Supply opportunities ahead, nice are right, this chain efficiencies margin generating growth-oriented still with accretion.

fit management to We growth. continue see disciplined of SG&A, the is for organization

growth the So a you we're more adding SG&A. in much well. of able to that on as corporate results in way lot our take And without see

And then finally, P&L. the of middle the

clients high-quality the more as improvement as our in example. seeing staffing agency to and continues labor environment to service obviously, think productivity is We're time, I now. normalize, over without maintaining operating food with and reduced available an

into tailwinds to pronounced. margin to that continue next those -- continue more year be be will will levers provide So and

that and last benefits to and on the in that contract of both growing internationally spend significant we products GPO and the for domestically on focus development acceleration spend Toni, And has continue factor of we for Obviously, both us, right. new that overall buy. efficiency That's the rates supply chain. terms

we see continuing be So impact lever forward. significant that going item a to

Next comes with from JPMorgan. question Andrew Steinerman

you years? food growth for right is see given book the the wanted to industry of you services next above food year is stands industry, know just business, growth. I had of And a XX% growth couple Aramark what think now. not this do you services think organic out as of growth to products you what the for industry just The sense me revenue And in for if what growth industry

That's question, Andrew. a great

all first have I is of see year-over-year. we growth do I the think all, ours competitors experienced think, industry-leading.

we that's a think account of the based terms improvement. that both I have number success a on factors on had business we've and result and acquisition different of in base the based portfolio of new

seeing similar competitors our sure going I'm forward. also So are opportunities

growing we've would the mid-single in going rate talked think a that's it, us forward. at than about the expect, I for is growth digits, call X% inflation. probably slightly I long-term I industry rate think And higher a

very going And It's so think a benefit industry. we'll disciplined I all forward.

managing But we lead think we're our to I on strategy think and effectively our going growth it will portfolio, focused all we our love clients. and forward. for significant

with Our next question comes from Ian Oppenheimer. Zaffino

I'm opportunities trying key maybe vertical Can about this gave bit as areas what's country? a but there kind bit and in Are well a talk I little on little a maybe you guess I Everton, of that more other just on in little pipeline of kind bit and geography on congratulations color, in there to getting. deeper? that you some the going know or

are there and opportunities both the in other that in other world. definitely vertical, of there Yes, parts

to retain sector in that very another In segment. fact, and both to that's we're closing the close International in grow on opportunity

we're overall So We're business. significant performance also excited revenue overall the sports event opportunities, the sales big and a the on team of about a has Entertainment impact seasons. very enjoying prospects in growth And special concert entertainment. growth very Sports and and

seeing So around that teams core strong we we're very the serve performance world. our by actually

So going all we're continued in opportunities and see forward. pleased good all, very we it, with

any talk Remind -- of Okay. guess And impact a there. of to recession other type maybe a kind now. us of then business how performs, reduce can could any I'll give you ability your I the color recession? about you And

Yes.

the I of and over recession. business up of mean think hallmarks during set this diverse XX,XXX stands a XX a business one profit very well with countries. centers I across literally is of it's sectors

stands natural and business very economy as challenging. more the the that to So becomes diversity is there's resilient a up

financial business a the tad were again, to If with you revenues in margins you the look years intact. and very well and XX down relatively fared crisis back go just back over 'XX,

economic and good spot be a challenging times. when facing So we're to it's

just to consider would we very I the recession-resilient. Yes, add, be business

of I our in we as to P&L the us disciplined We the a that terms of literally the in for processes and said, manage labor diversity we portfolio environment, managing on position. that the on Jim the middle place the ability have a this and manage basis. business that it's a have food place, good think and businesses and the puts in in systems based we technology very strength in of weekly serve the both and operating really

And conditions. the are that of in years So very changing we people very Aramark feel been well can in respond is and company, many, react demonstrated it's equipped the part economic recession-resilient. many over particular, our to rapidly we particular, food and particularly the very business

Our next Balsky question from Heather comes with BofA.

was I more bit about could GPO. a hoping your you talk little

get $XX talk And the a answered opportunities your big You look pace margin and target ahead, When about that just do growth talked it? about you how there. that seeing, perspective? terms surpassing of what's in been when talked you driven you billion. guess, about think Can you can Toni's how you've do about you question, the you it of from you you opportunity at peers, I the think have it

an to It that that think business. model GPO company a to could certainly. bear contract supply good create against on a a be very Avendra was create additional strategy chain And not the brought to but only for on. leverage beginning and business also good Avendra, way the the obviously focused much area back we're I is Yes, to acquisition, the all embarking

and on new approach, significant that in expanding very I obviously, before. Wellness Hospitality industries So this script, geographies, rounding services client or haven't very way and we of the year. and got we as Entertainment increasing both some portfolio that process wins the through We've a in approaching the out active We're mentioned and the we spend. sales that also very focused our offer Entertainment domestically we're a

related a to as internationally. clubs customers an and I of of have expand core think significantly our growing success kinds very facilities well and outside had States, good United expansion. And opportunity in GPO domestically both geographic with and golf business as other we the we've the

not We're there. it. out build going number throw to continue to we'll a So

as rapidly to both give going see for sides, I strategy frankly, build and can and think, as continue goals we as benefits on establish more try insight and because next we're we'll you year. it we we and just information to the the more

a helpful. any point currently regards business That's of are And Any with question segments managing the to consumers? through of change the business sort that to risk on you also Great. from of sort curious, in your downturn. I'm trend? in the softer of or seeing just potential demand anything

in we're that would I in I way. say, strong particularly sports very entertainment. experiencing seeing would trends, and no, spending any we're not significant say

because We have of sports to continue the so willing particularly we for the past, the expenditures. in to consumers activities who experience, attendance people to in home. do very, may the businesses still of flights those of continue but would make significant they're their that stadiums They even are reduce recession that times continue will serve, airline to kinds event-driven teams support was spend strong of that and number people in take, very to may very they closer they are

that portfolio businesses. a opportunity, But our to are to we're capture designed it. consumer-driven clear, So that lead downturn is our and trends seeing we very to not be in feel in that believe very seeing core us spending any consumer good about we specifically

from Neil with Atlantic. Our Redburn's question Tyler next comes

please. a couple, Just

mentioned, that in expand if initiative bit has market you a new how your to it wonder see the you back the addressable changed, you having B&I all. U.S. potentially could little on business B&I in I Going if at

vending I size of model -- customers, things -- the like size that's therefore, and describing question. serving long-winded unattended changed new market? As bar of the brings through down the a sort Sorry, worth of the kitchen bar for commerciality a or, serve consequence, different lots whether whether and using that's how the customer sort to you're initiative of this that single suppose, of that

one for Jim. secondly, And then simpler a

QX, bear there rate we for an looks couple like considering in level, at income comp, comp growth in anything when anything that for sort the mentioned of implying -- mid-to-high of a the currency. we're single-digit fourth Is mind year-on-year should growth? quarter constant you things in base guidance the operating of Your it's at the

that I'll Yes, start with question.

X% again, does the So a in the long-term high this single The cruising We've mid- quarter. fourth for Xx to where that's enough That's X that's guide of model were about. sort fuel talked than the X% to that business. leading that's range, to higher growth up And the and to right. to 'XX. we imply speed digits margin good talked those in for about growth levers years we fiscal

are the somewhat. We lapping strong pricing come speed as into we're of moderates growth. with But QX level we as inflation significant very some exiting actions at pricing down a will come year good the

I'll the issue. And Yes. on operational comment first

all, marketplace of opportunity. is the First Boulud high-end on catering the that really Cuisine focused is

-- production a And and high-end established it's catering really -- to is not like. that so in This New or facilities go and we on the and York haven't focused smaller opportunities ahead facility for serve both is central operations. restaurant

there model on. it's -- -- So so focused that that's the

rates growth we're continued be The the opportunity may be populations accounts. the business see addition we fit robust, XXXX, that of used be service each different selling there. more and altered of to to grow very and accounts. those We've new the lower rates than has style slightly in but to season through participation and been continues account it And a the very to serving population B&I and of had segment the strong

like Vending is and Office extraordinary robust. through Services Mini enjoying B&I model division, Micro account growth overall, is Markets, and the Services Coffee So Refreshments Markets and The the through we small Services, our which model Snacks Services. very serve Refreshment

a was service and and the specific So offering that's the smaller former marketplace that a to of we will. and way Cafe chefs. you to one solutions, high-end reference opportunity new world's site on related really serve catering do focused Michelin-starred differentiated in those really Boulud the or with But renowned this have Cuisine morning if most

next comes question Baird. Andrew from Wittmann with Our

Yes.

about at you remarks expectations you'll guess commented prepared it it to benefit end in how some low inflation your of comment in stays your There I times 'XX. has the and if been of a the quarter. couple on for here, talking guys a get came So

idea of only to terms you the where bit So or that. next help you expand know comps your points in you Jim, do wondering of know about for a us the fourth maybe longer comps given the probably to to think inflation, the I benefit thought all to little that's of wanted for little a last not was it's opportunity quantum talk help But base any sounds year. tail inflation think no it of you could little a quarter defined just when trending from topic. end it's quarter, results. with and 'XX. how in more like get I the been could that benefit here of kind I said a but that on the don't about a I if into basis we you the end bit I detail case a bit that, point

about quarter the to U.S., in quarter. Last range in the third inflation talked the and at the high Yes. it globally. X% Xs the low of X% quarter, for third we of end range, in that the for In came we are expectation

fourth fiscal the U.S. moderate in Xs now QX. trending favorable trends quarter, to the organization, organization both internationally. across and tailwind be we're we're 'XX. the in we a the as seeing into to in obviously As It we're plan And continued for

QX. But it tailwind to will over -- be continue inflation sort organization. think into I continue right, neutral be talked price about I the of to We've quarters. will think moderate run a for it and a of the pricing the moderate long tailwind profit, provide don't will in couple to we next

guessing the I that sense John, for my always pretty good maybe, worth for the And year, give the follow-up, retention year-end, know at in. got helpful. That's falling you've then a but of you I'm

new. side You've was in to fared retention wondering lot I if how the expect you could about year? of the talked a just net talk how and quarter it the just about for net new, you in that come

Yes.

new And end good with of we're on But down. about historical expect nothing and I the you're I the right track the averages our think to expectation. feel right, in we will business. the year averages, And significant up net our our really historical on we overall very be at we now, or right would in line on. say, right retention are comment

Our next Jasper comes with Truist Securities. from Bibb question

year. like year on too. You up the for for balance light in seems return this reiterated leverage increase company pretty And set appropriate of thoughts next well it might improving to just when any sheet? the target updated has capital be It

point the represent as fiscal there's clear plan that path of will think, the to XXXX have low this the to to line this we've leverage XXXX, back about 'XX, year in Xs, since by fiscal end sight in had, at lowest of period be has I will lowest which this organization again, a So XXXX. we Xs, leverage X.Xx LBO the for a we going the

board had that's repurchase the expect another strongly program, tracking and to give are with on have we call next the is earnings considering. level with we discussions We leverage favorably, already update ratio that. you at to at respect potential something But share the

optimize our Yes. generation, The cash recognize do free continues discussions and how Board had returns. has and shareholder strong to recognition we flow around

at and said, what you considering in earnings approach intentions as And our that. And terms we so call that is update the strongly for Jim next should it like. of look and plans will

contribution on And net year terms and for then I conversations? annual of I retention see? but some you sales next not guiding you're existing feeling client want I and the you're And based what of your to take 'XX in how that, new today on guess, targets your to your for pipeline know temperature fiscal

about target digits fiscal the And committed to the our that to in high $X we 'XX we've as yes, terms of billion exiting remains for we AOI previously, revenue. of about we sales So robust. talked year pipeline the very -- mid- already plan remain in single

So momentum of a we lot targets, that established those the have to we there. confidence remain business see achieving we committed and targets in to in get the and multiyear good

UBS. Chan next comes Josh Our question from with

those, quarter. held you excluding the last Jim, I margin favorability back to similar mentioned by a be think, that some And year. as margin last then little the improvement will was U.S.

some rate and U.S. the rate of last quarter's is So margin How to actions? of improvement the think kind going about your think the given improvement I forward? should about internal guess margin productivity we

Yes. XX remains The points. strong, right? International and margin the in XX to both So improvement basis underlying U.S.

of the know there in insurance I less had that activity favorable and the QX. So work we Coming simply some there less actuary liabilities required some COVID, experience insurance out was occurred. prior comparability, with that true-up

run So expect consistent normalized the for we'd same respect with rate And but well. the we're underlying now margin and QX to remains a in improvement strong. as more insurance,

year. just you Is a mainly to Perfect. it And believe next your comment food Could that inflation that kind being comment? lead components have Is comment? next down of then possibly on lower inflation a labor right. that you the for you lower year? about All break different

Yes.

Both trending We have inflation up food building and favorably. very our detailed labor. of information, them obviously, are

just the down. outlook fiscal I for food think give closer labor 'XX. X% will overall to a this talked still that, and respect that X%. about that confidence visibility as to continue lot come we to we we point, seeing X% have and trends us labor inflation to of enter range, trending the with we're At good is

Our next comes question Stephanie from Jefferies. with Moore

like are Antor This space. It in GPO is I to the on Stephanie you Moore. acquisitions. key Harold configuring sounds some for wanted

space. like particular in that that you So the just see geography to -- geographies acquire, where most any opportunity to grow you

Yes. have the to is already and marketplace serve and we GPO focused well. very both ability enhancing that infrastructure We're where European scale margins our to our existing adding on specifically customers

impact They are well. ability multi-geography. have in only operations but acquisitions the in to Europe, our those as America of Some Latin not

focused with other establish where GPO networks also had they've in never we're on our to got partners we've of the in pilots a world current GPO. doing markets parts where underway And work

certain in that it. is overall, ability spend investment of very based is capture to opportunity GPOs. additions the the I strategy to outsized that people focused kind significant. an capabilities -- the want are really both on markets. we So bolt-on and We're a have material sure This not organization impact at looking understand, will on make the to our the the for

strategy. our approach that's So and

expect run is should should just then corporate XQ other you the impact about that more favorable, on should margin well? some levers And rate, expect. the we in costs versus in think the said I as rate we know think And I run it. there? to on how XXXX there guess insurance of favorably this I Got room were to costs, on you then XXXX And how much margin.

of we the repeat question, hearing you. part little you your Could first trouble just had a

said I the benefit. insurance cost was a

about sense run the that XXXX we XXXX then much So in in XQ And I And there just is how that run. the we're how about more on is rate well. costs, I seeing when as get corporate to rate? should guess of think want room a think as new you to

Yes. Understood.

costs Just benefit or the was QX of or 'XX. to insurance in confirm, a savings

out pointing -- low lapping cost. unusually a insurance So period we we were just that of we're

run insurance rate is the now normal. So

it we're We to a at can margin revenue increase growth. to the going planning a rate be respect costs target sort headwind corporate either of corporate our I growing or moderate forward. overall. think the So With tailwind about cost, half

what for 'XX. So the X% to X% can range model you is fiscal

this showing closing at not time. to I'll over turn for further any I'm Mr. now any back the Zillmer remarks. questions And call

Terrific. thank to this for the The employees dedication very questions of our and organization. and feel their you, We for quarter all very organization much, And for ahead Thank for work growth support Aramark hard opportunities third of your continued about diligence, the want around to I are results. thank everybody, the the company. the their world bright. the you good and

the thank very and of again, enjoy So the much rest day. you

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

disconnect, and a day. have wonderful now may You