Post Earnings Coverage as Aramark’s Adjusted EPS Jumped 15%

Upcoming AWS Coverage on Papa John’s International Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 26, 2017 / Active Wall St. announces its post-earnings coverage on Aramark (NYSE: ARMK). The Company reported its financial results for the second quarter fiscal 2017 (Q2 FY17) on May 09, 2017. The provider of food, facilities and uniform services outperformed earnings estimates. Register with us now for your free membership at:

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One of Aramark’s competitors within the Specialty Eateries space, Papa John’s International, Inc. (NASDAQ: PZZA), reported on May 02, 2017, its financial results for Q1 ended March 26, 2017. AWS will be initiating a research report on Papa John’s in the coming days.

Today, AWS is promoting its earnings coverage on ARMK; touching on PZZA. Get our free coverage by signing up to:

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Earnings Reviewed

In Q2 FY17, Aramark reported net sales of $3.62 billion compared to net sales of $3.57 billion prior year. The Company’s revenue numbers met analysts’ consensus of $3.62 billion. Aramark noted that a stronger US dollar decreased sales by approximately $22 million, but had no material impact on operating income or earnings per share.

For the three months ended on March 31, 2017, Aramark’s GAAP operating income totaled $191.42 million compared to $172.11 million in Q2 FY16.

For Q2 FY17, net income attributable to Aramark’s stockholders was $70 million, or $0.28 per diluted earnings share, compared to net income attributable to Aramark’s stockholders of $66 million, or $0.27 per diluted earnings share, in Q2 FY16. In Q2 FY17, the Company’s GAAP diluted earnings per share is increased 4% y-o-y. Furthermore, adjusted net income for the three months ended FY17 was $113 million, or $0.45 per share, versus adjusted net income of $96 million, or $0.39 per share, in Q2 FY16 outperforming Wall Street’s expectations of $0.42 per share.

For the six months ended on March 31, 2017, Aramark’s net sales came in at $7.36 billion, up from $7.29 billion in the year ago same period. Furthermore, net income attributable to Aramark’s stockholders for six months ended FY17 stood at $195.5 million, or $0.78 per diluted share, compared to $159.70 million, or $0.64 per diluted share, in FY16.

Segment performance

During Q2 FY17, Aramark’s FSS North America segment’s net sales totaled $2.56 billion, up 2% compared to $2.52 billion in Q2 FY16. The North America segment was positively impacted by growth in Sports, Leisure and Corrections, Business & Industry, and Education. The segment’s reported operating income increased 11% to $151.97 million compared to operating income of $137.24 million in the prior year’s same quarter.

For Q2 FY17, Aramark’s FSS International sales totaled $674.46 million, gaining 2% compared to sales of $664 million in Q2 FY16, delivering strong, broad-based organic growth. The segment’s operating earnings surged 27% to $31 million in the reported quarter versus $25 million in the year ago comparable period.

Capital Structure & Liquidity

During Q2 FY17, Aramark refinanced approximately $3.5 billion of debt, which extended maturities, improved financial flexibility and lowered expected future interest expense. The Company also increased its revolving credit facility to $1.0 billion in capacity.

The Company’s total trailing 12-month net debt to covenant adjusted EBITDA was 3.7x, a 30 basis point reduction versus the prior year measurement. At quarter-end, Aramark had approximately $1.1 billion in cash and availability on its revolving credit facility.

During the reported quarter, the Company repurchased 2.8 million shares of Aramark’s common stock for an aggregate amount of $100 million. The total remaining share repurchase authorization through the end of 2018 was $150 million.

Outlook

Aramark increased its adjusted EPS forecast by $0.05 per share to a range of $1.90 to $2.00 per share, which includes $0.02 per share of currency headwind. This improved outlook is due to lower interest and tax-related expenses. The Company continues to expect full-year free cash flow of greater than $350 million.

Stock Performance

On Thursday, May 25, 2017, Aramark’s share price finished the trading session at $37.04, marginally up 0.24%. A total volume of 734.84 thousand shares exchanged hands. The stock has surged 3.43% and 12.52% in the last three months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 3.70%. The stock is trading at a PE ratio of 28.76 and has a dividend yield of 1.11%.

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