Aramark reported second 2023 fiscal quarter revenues of $4.6 billion, an organic 19% year-over-year increase in revenues that included an identical 19% organic revenue jump in its United State Food & Support Services (USFSS), by far its largest, which generated $2.843 billion in the quarter. That increase was primarily as a result of strong net new business growth and client pricing, Aramark noted in its earning release, along with other factors like higher per capita spending in the Sports & Entertainment business and greater return-to-work activity in Business & Industry. In its Education business, the division saw strong retail and catering in collegiate Hospitality that was slightly offset by the end of universal government-sponsored programs in Student Nutrition at the end of June 2022.
Profitability in the USFSS unit also expanded dramatically, with operating income up 90% (43% adjusted), driven by maturity of prior year new business, improved supply chain economics and above-unit cost management across the entire segment, as well as an increase in return-to-work volume in the Business & Industry sector and higher per capita spending in theSports & Entertainment business. These profitability gains more than offset higher product costs and costs associated with opening a record level of new client accounts, the company said.
"Now halfway through the fiscal year, we continue to make progress on our strategic priorities,
resulting in strong business performance, additional balance sheet optimization, and positioning the Uniforms Services spin-off for success," said CEO John Zillmer in announcing the second quarter results. "As we move into the second half of the fiscal year, I am excited about the opportunities ahead for Aramark as we finish the year and continue our momentum into fiscal 2024. Revenue is strong, AOI performance continues to build, and we remain committed to our strategic agenda."