Aramark (ARMK) Stock Rebounds a Day After Reporting Q1 Loss

Aramark (NYSE:ARMK), founded in 1959, specializes in providing food and laundry services to industries ranging from education and healthcare to business and leisure. Since its inception, the company has been strengthening its offerings and expanding its customer base.

The company’s stock was performing well in 2020 before the start of the Covid-19 pandemic. Its shares were trading around $40 last year in February, before plummeting to a low of $12 in March following the Covid-19 crisis. The pandemic-driven lockdown restrictions hurt its domestic and global operations. Nevertheless, ARMK stock regained most of its lost value in the second half of the previous year.

Aramark on Tuesday reported a loss of 32 cents per share for the three months ended January 1, as compared to a profit of 57 cents per share in the comparable period of 2019. On an adjusted basis, it lost 31 cents per share, narrower than a loss of 41 cents per share forecasted by analysts.

Speaking on the results, CEO John Zillmer said, “The resilience of our business through this dynamic period is rooted in the exceptional performance of our people on the front-lines, serving clients—many of which are essential businesses—across the globe.”

Revenue for the first quarter came in at $2.74 billion, well below $4.25 billion in the year-ago quarter, but just ahead of the consensus forecast of $2.73 billion. The drop was mainly attributed to the weak performance of its food-service business, where revenue declined 45 percent to $1.45 billion. Comparatively, global foodservice revenue fell 27 percent to $694 million, while revenue at the uniform apparel segment slipped 10 percent to $604 million in the quarter.

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Aramark shares fell 2.65 percent to $36.02 on Tuesday following the results. However, the stock is marginally up in the mid-day trading Wednesday. Overall, ARMK stock has lost about 10 percent of its value during the past year.