Aramark misses Q4 estimates as record new business drives incentive costs

PHILADELPHIA - On Monday, Aramark (NYSE:ARMK) reported fourth quarter earnings that fell short of analyst expectations, as record new business wins led to higher incentive-based compensation costs.

The food and facilities management provider saw its shares fall 1.87% following the release.

The company reported adjusted earnings per share of $0.57 for the fourth quarter, missing the analyst estimate of $0.64. Revenue came in at $5.05 billion, below the consensus estimate of $5.16 billion, despite representing a 14% year-over-year increase on both a reported and organic basis.

Aramark attributed the earnings miss primarily to approximately $25 million in additional incentive-based compensation recorded in the fourth quarter, which impacted adjusted EPS by $0.07. This compensation was associated with achieving record net new business, which reached 5.6% of prior year revenue.

"Fiscal 2025 represented many consequential milestones for the Company, contributing to the strong growth trajectory ahead," said John Zillmer, Aramark CEO. "In addition to being awarded one of the most prestigious medical systems in the world, we delivered almost $1 billion in Annualized Net New business."

The company’s fourth quarter revenue growth was driven by substantial new business, high retention levels, and base business volume. However, this was somewhat offset by the timing of onboarding new business. The 53rd week in the fiscal year contributed approximately 7% to the quarter’s revenue growth.

For fiscal 2026, Aramark provided guidance below analyst expectations, projecting adjusted EPS of $2.18-$2.28 compared to the consensus of $2.29, and revenue of $19.55-19.95 billion versus the consensus of $19.7 billion.

The company achieved a leverage ratio of 3.25x, its lowest level in nearly 20 years, and announced a 14% increase to its quarterly dividend, which will be $0.12 per share.

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