Aramark (NYSE:ARMK) Q4 2022 Earnings Call Transcript

And as you know, we run the business with literally weekly P&L. So our frontline managers are constantly adjusting to the realities that they’re operating in. And we expect to be able to continue to mitigate those inflationary pressures, whether through pricing or menu adjustments, or supply chain changes, we’ve got a number of tools to address it. And it’s just the nature of the business. And I’m confident our people will be able to manage through it.

Operator: Thank you. One moment for our next question. And our next question coming from the line of Ian Zaffino from Oppenheimer. Your line is open.

Ian Zaffino: Hi. Great. Thank you very much. Very strong results here. So congratulations on that. So it was a clean sweep on the IR side and Tom John Felice, also IR says that’s a big accomplishment. So congratulations to you guys. John, I know when you joined, you mentioned enhancing the sales force, and that would be the driver of new business, but a new business clearly coming in better than expected. What is going on there as far as is this just the sales force? You putting in any in any other measures to get the growth that you have and then can you comment maybe on how much is market share, per se versus industry growth like a post COVID environment? Thanks.

John Zillmer: Certainly. Well, there have been a number of actions taken over the last couple of years to drive this step change in terms of new business growth the first of which was, as you described working on the sales organization, adding resources, adding sales management expertise, and really giving the sales organization and the operating organization, the freedom to respond to customers, and develop proposals that are highly customized to meet their particular needs. So I think it’s both the tools as well as the resources in order to accelerate that increase sales activity. It’s also frankly, cultural. It is the objective of the entire organization to grow. We believe that our best pathway to improved earnings over time is to grow the business.

And so we’ve implemented incentive programs for both the operators and the sales team that are aligned with that. So 40% of the incentive compensation for the entire leadership team is focused on growth. So it’s cultural. It’s resources. It’s individual tactical decisions made inside the business. And it’s just focus. We wake up every day thinking about how are we going to grow the organization and what accounts are we working on and how are we going to achieve higher growth rates as well as higher retention rate. So it’s more cultural than anything else. And we’re very, very excited about the results over the last two years, when we have high expectations, not only for this coming year, but for the entire future of the organization. It is the way that we will do business going forward.

Thomas Ondrof: I think just picking up Ian on the market share point too because it’s an important one, that we’re in an industry that’s got tremendous opportunity, a lot of insourced opportunity that as we’ve seen over the last couple of years is has started to move and consider outsourcing. So that’s really been a heck of a tailwind for us overall as an industry. And we don’t focus that much on market shares. It really just depends on the line of business in the country that we’re in, it varies. We believe the opportunity, really, for the industry is to grow. And that it’s just a matter of taking advantage of it and having the right tools and processes and people a place to capture it.