Aramark (NYSE:ARMK) stock rose 1.08% (As on November 18, 11:22:08 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the fourth quarter of FY25. Organic revenue grew 7% compared to the prior year period. Growth was strengthened by net new business and base business volume, somewhat offset by the Company’s portfolio exits in Facilities in fiscal 2024. The contribution from the 53rd week increased revenue by an estimated 2%. Operating income increased 12% year-over-year to $792 million and AOI grew 12%1 to $981 million, which represented an operating margin increase of 20 basis points and AOI margin expansion of nearly 25 basis points1 year-over-year. Profitability growth resulted from higher revenue levels, expanded supply chain capabilities, and disciplined above-unit cost management. These increases more than offset additional incentive-based compensation recorded in the fourth quarter of approximately $25 million, or 3%, associated with achieving record Net New business.
Moreover, FSS United States revenue growth was led by 1) Business & Industry continuing its strong pace of record net new business; 2) Education with high retention rates, meal plan optimization, and benefits from increased student enrollment; and 3) Healthcare reporting its best performance in over two years—which more than offset a shift in the timing of new account openings and a majority of the Company’s MLB teams within Sports & Entertainment ultimately falling out of playoff contention towards the end of the quarter. FSS International delivered another strong quarter of revenue growth, with broad-based contributions across geographies, particularly in the U.K., Canada, Ireland, Spain and Latin America. Top performing industries included Business & Industry, Healthcare, Education, and Extractive Services.
ARMK in the fourth quarter of FY25 has reported the adjusted earnings per share of 64 cents, missing the analysts’ estimates for the adjusted earnings per share of 65 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 6 percent to $5.05 billion in the fourth quarter of FY25, missing the analysts’ estimates for revenue by 2.11%.
Additionally, Net cash provided by operating activities increased 27% to $921 million in fiscal 2025 and Free Cash Flow grew 41% to $454 million. The Company’s leverage ratio improved to 3.25x at the end of September 2025, compared to 3.41x a year ago, and represented the lowest level in nearly 20 years. In the fiscal year, Aramark repurchased in excess of 4 million shares of stock. Subsequent to year-end, the Company has repurchased shares in the market under a 10b5-1 program.