Aramark Q3 FY2026 earnings: Revenue rises 9% as margins expand

Aramark (NYSE: ARMK) reported fiscal third-quarter 2026 revenue of $5.058 billion, up 9% from $4.626 billion, while GAAP EPS increased 34% to $0.36. Operating income grew faster than revenue, and both reported and adjusted operating margins expanded despite a calendar shift that reduced year-over-year comparisons. The company also raised its fiscal 2026 organic revenue growth outlook.

Core earnings data

Broad-based new business and momentum among existing clients supported revenue, while supply-chain efficiencies, productivity gains, and cost management helped convert that growth into higher operating profit. Organic revenue also increased 9%, indicating that currency translation was not the main growth driver.

Adjusted operating income and adjusted EPS are non-GAAP measures. Revenue received an approximately $33 million benefit from currency translation, while operating income received an approximately $1 million benefit.

Business and segment performance

Both operating segments expanded, but FSS International produced the faster increases in revenue and profitability. The U.S. business remained the larger contributor, accounting for approximately 69% of consolidated revenue.

In the United States, Sports, Leisure & Corrections benefited from higher per-capita spending, stronger attendance, FIFA World Cup matches, NBA and NHL playoffs, and an expanded client portfolio. Business & Industry maintained double-digit growth, while Healthcare benefited from new contracts and expansion among existing clients.

International growth was broad-based, with Spain, Canada, the U.K., and Germany contributing through base-business expansion and net new business. Strengthened supply-chain economics also supported the segment’s profit growth.

Fiscal year-to-date new client wins exceeded $1.6 billion, 51% above the comparable prior-year period, while client retention reached approximately 98%. These figures are year-to-date operating metrics and should not be treated as quarterly revenue.

Aramark also began operating its first Texas site for a global hyperscaler late in the quarter and was mobilizing a second location. A separate multi-year engagement with an AI data-center colocation provider will cover workforce communities at multiple sites, including locations in Wyoming and Texas. The company did not disclose the quarterly revenue or profit contribution from these contracts.

The calendar shift masked stronger underlying growth

The 53rd week in fiscal 2025 shifted the calendar used for fiscal 2026 comparisons, primarily affecting Education within FSS United States. Aramark estimated that growth would have been higher across revenue, operating profit, and EPS without this timing effect.

The calendar shift reduced estimated revenue growth by 2 percentage points, operating income growth by 11 points, and adjusted operating income growth by 8 points. As a result, reported year-over-year comparisons understate the operating momentum indicated by the company’s calendar-adjusted estimates.

Profitability, cash flow, and the balance sheet

Operating income grew faster than revenue, reflecting supply-chain efficiencies and productivity gains alongside higher sales. Segment improvements were partly offset by corporate expenses, which increased to $35 million from $27 million, primarily because of higher share-based compensation.

Net cash provided by operating activities increased by $41 million from the prior-year quarter, while free cash flow improved by $42 million. Aramark did not provide the absolute quarterly amounts for either measure. Management expects a large seasonal cash inflow in the fourth quarter, primarily from Collegiate Hospitality and Sports & Entertainment.

The company ended the quarter with more than $1.4 billion of cash availability and repaid approximately $100 million of 2028 term loans after quarter-end. It continues to target a leverage ratio below 3.0 times by the end of fiscal 2026.

Aramark has also repurchased more than 5 million shares for approximately $194 million since its program began. Separately, the board approved a quarterly dividend of $0.12 per share, payable September 9, 2026, to shareholders of record on August 19.

Fiscal 2026 guidance

Aramark raised its organic revenue outlook after the first three quarters of fiscal 2026, citing broader portfolio momentum and the start of operations with a global hyperscaler. It reaffirmed its adjusted operating income, adjusted EPS, and leverage targets.

All percentage-based guidance is presented on a constant-currency basis. Management expects adjusted operating income growth and margin expansion to accelerate in the fourth quarter, supported by operating efficiencies and an initial profit contribution from Aramark Nexus.

Risks investors should watch

• Calendar comparability: The fiscal 2025 extra week continues to distort year-over-year comparisons, especially within U.S. Education, making reported growth less directly comparable with underlying operating trends.
• Seasonal cash generation: Management expects a significant portion of cash inflow in the fourth quarter from Collegiate Hospitality and Sports & Entertainment, increasing the importance of Q4 execution and timing.
• New-business mobilization: Aramark is onboarding a record level of new business while adding resources to expand Aramark Nexus. The pace and cost of those mobilizations will influence whether expected revenue growth translates into faster margin expansion.
• Corporate cost pressure: Higher share-based compensation increased corporate expenses and partially offset profit growth in the operating segments.
• Currency effects: International reported revenue rose 13% versus 11% organically, while total revenue received a $33 million currency benefit. Future translation movements could change reported growth without altering local operating trends.

Summary

Aramark’s fiscal third quarter combined broad-based revenue growth with faster operating profit and EPS expansion. New business, high client retention, supply-chain efficiencies, and cost management drove the results, while the prior-year calendar shift restrained reported comparisons. The main items to monitor are fourth-quarter margin acceleration, seasonal cash generation, execution on record new-business mobilizations, and the early financial contribution from Aramark Nexus.