Moderating inflation helps Aramark's sales

Inflation continues to moderate in the on-site foodservice space. That, at least, is according to Aramark’s first fiscal quarter results which indicated a strong performance in all segments, led by moderating inflation, strong sales at colleges and universities, and attendance at events.

The foodservice provider reported U.S. organic revenue growth of 10% for the quarter, due to stronger sales volume, pricing and new business, according to a statement.

“Education, B&I, sports, leisure and corrections all had particularly strong quarters, driven by effectively leveraging higher revenue, especially in our Collegiate Hospitality and correction businesses, from our ability to recover the price inflation lag we've previously discussed,” said Jim Tarangelo, Aramark’s CFO, in a conference call to investors on Feb. 6.

Moderating product costs also helped the foodservice provider in the quarter.

“We’ve seen inflation moderating over the past quarter and while some areas of the globe are slower to show this trend, overall inflation is running better than originally expected and the first quarter benefited from this tailwind in improved product costs,” said John Zillmer, Aramark’s CEO.

When it comes to performance at colleges and universities, Aramark saw a strong performance in residential dining, retail and catering. Pricing also improved at the start of the academic year.

The foodservice provider also said it is seeing early success with its Eat to Excel program, designed for student athletes.

The Sports and Entertainment sector also had a strong performance in the first fiscal quarter with high attendance from the NFL and NCAA seasons. The foodservice provider also saw more concert events.

Revenue in the workplace experience sector has fully recovered from pre-COVID levels, said Zilmer. The sector benefited from new client wins and a strong base business growth.

“We are highly encouraged by what we saw in the first quarter and the continued strength in the business around organic revenue growth, supply chain initiatives and cost discipline combined with inflation moderating,” said Tarangelo.