Aramark (NYSE:ARMK) Q4 2022 Earnings Call Transcript

John Zillmer: Labor environment continues to be challenging pretty much everywhere around the world. We’ve met, however, we have been able to, through the use of both technology and a number of tools and resources we’ve established for people in the businesses, we’ve been able to meet the staffing challenges that are that our units face, we have a very, very strong talent acquisition organization that’s been in place for a number of years, and is very adept at meeting the recruiting needs of the business. As you know, we have a couple of businesses that have very strong seasonal ramp up activities. So we’ve built the processes for the organization in order to meet those ramp up demands for sports and entertainment, higher education and other businesses.

And so we’ve been able to go ahead and meet the needs of the business. One of the tools that we put in place over the course of the last year was daily pay, that was a very strong incentive for lower wage earners to go ahead and join Aramark as they were able to access their pay on a daily basis with very little cost to them. And that’s been very, very successful in terms of driving recruitment activity. And so, all in all, still, the pressures exist. But we do see a softening in the labor market, as you’ve seen announced layoffs and others, we’re beginning to see more people returned to work and a higher level of concern. So I would say our turnover numbers are kind of normalized. And our recruitment activities are in very good shape.

Operator: Thank you. Now our next question in queue coming from the line of Manav Patnaik from Barclays. Your line is open.

Unidentified Analyst: Morning, thank you. This is actually on for Manav. May I just reconfirm for the 11% to 13% organic contributions from each of net gross price volume COVID recovery? And I’d be particularly mindful in consideration of timing, I think you’d said, most of the COVID recovery should come in the first half. And then lastly, any insights for organic constant currency revenue expectations by segment?

John Zillmer: Yes. The COVID recovery, we do expect to be weighted more to the first half as we lapped we got to 85% here in the fourth quarter a little better than that, actually. And so by the next fourth quarter, that should be waiting versus we talked about being much less than the first quarter of last year it’s time to recover. So the first half way to determine that. On the other, no real comment on the split by geography.

Unidentified Analyst: Okay. And then can I ask you just to repeat the contributions from net growth price I mean prior COVID recovery?

John Zillmer: Sure, it’s all one of the it’s on the slides attached to it. No problem, 4.5 to 5 for net growth. 3 to 4 from COVID recovery, and a 3.5 to 4 for pricing. Again, assuming a constant inflationary environments.

Unidentified Analyst: Okay, thank you. As a follow up.

Operator: Thank you. And our last call question coming from the lineup, Stephanie Moore from Jefferies. Your line is open. Stephanie your line is open.

Stephanie Moore: Hi, good morning. I wanted to touch on the business and industry continuing to see a nice recovery there. Could you maybe speak to areas where you’ve seen or areas where they might be lagging just versus those pre-COVID levels and other areas where you’ve seen some improvement here during the quarter, and particularly throughout the year? And then I just wanted to get your high level thoughts as you think about this business returning to pre-COVID levels, and what that means just given hybrid work schedule companies that have maybe reduced office space, at the same time, the opportunity to gain new business and kind of how all of those triangulate together. Thank you.