Aramark reports growth in 2024 as consumers continue to spend at sporting events and corporate sites achieve higher levels of participation

The sports and entertainment sector had a strong year for Pennsylvania-based foodservice provider Aramark. The company, which reported its fiscal 2024 full year earnings results on Nov. 11., attributed some of its growth in the U.S. to higher attendance and spendings at stadiums.

The company reported 7% organic revenue organic in the U.S. for the fiscal year 2024. This success was driven by the strong performance in sports and entertainment, as well as new contracts and increased diner participation in corporate dining. For the company as a whole, the foodservice provider saw 10% organic revenue growth, which was driven by volume, pricing and new business.

“We continue to see robust consumer demand in the experiential markets of sports and entertainment, people still very much willing to go ahead and spend to go ahead and either attend sporting events or concerts, and the activity level very high, per capita spending very strong across, really, all the venues. And we have not seen any change to consumer behavior from that perspective whatsoever,” said John Zilmer, CEO for Aramark, in a conference call to investors on Nov. 11.

The company also noted a strong performance at its corrections sites, particularly through the expansion of micro markets and its second chance employee program.

“Corrections continue to expand the portfolio in the fourth quarter with our Into Work program, a key differentiator as a second chance employer offering training, certification, internships and scholarships. Into Work, recently, had a record graduating class from its warehouse and supply chain program, and in total, now has more than 6000 graduates in the US,” said Zilmer.

The foodservice provider also reported some improvement for recent challenges in the operating environment, such as in pricing and inflation. The company said that pricing began to normalize this year, and inflation also continues to ease, with it currently sitting around 4-5%.

Retention in the U.S. was at 95.2%, which was impacted by some contract losses during fiscal year 2024.

Aramark also highlighted its expansion of its use of AI during fiscal year 2024. During the year, the company launched two AI-driven programs: Hospitality IQ and Culinary Co-Pilot. Hospitality IQ is a hub for AI-powered business applications that aim to enhance the guest experience and help its clients with their business goals. Meanwhile, Culinary Co-Pilot is an AI-powered program that offers real time menu recommendations.

“This offering is particularly appealing to clients in education, healthcare and workplace experience. Hospitality. IQ represents another step forward in Aramark’s mission to provide innovative and practical solutions for clients with strong financial benefits,” said Zilmer.

Jim Tarangelo, chief financial officer for Aramark, also noted that the Culinary Co-Pilot program has been especially helpful in effectively managing costs.

“That's optimizing, often complex requirements, contractor requirements with our menus, and matching that with optimizing our supply chain. So that's something that enhances the client needs but also manages cost effectively. So that's something that's working very well. We've used the tool to aggregate our SKUs (stock keeping units) across the business,” said Tarangelo during the conference call. “We have 1000s and 1000s of profit centers, 1000s of SKUs. And what the AI tool has enabled us to do is aggregate that spend with a common denominator and allow us to negotiate more effective pricing with our manufacturers and suppliers. So those are two tools already underway, improving develop, generating very positive results.”

Aramark also commented on rumors from earlier this fall, that the company was in talks with fellow foodservice provider Sodexo, on an acquisition. Sodexo put those rumors to rest, during its latest earnings conference call, which took place in Oct. Zilmer backed up Sodexo’s comments during its conference call on Monday.

“As I think, was publicly stated by the other organization, there are no discussions going on between the two parties,” he said.

Overall, Aramark feels confident about its 2024 performance and believes it has set a good foundation for 2025, which the company has estimated to see a 9.5% organic revenue growth.

“Entering this new fiscal year, we are confident in our ability to build upon the success we've worked so hard to establish, leveraging our hospitality culture and growth mindset, our teams have laid the groundwork to create significant new business and value, creating opportunities, and we know what needs to be done,” said Zilmer.