F2Q: Hungry For More. ARMK Well Positioned To Win in Data Center

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F2Q: Hungry For More. ARMK Well Positioned To Win in Data Center

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MSD% base growth, LSD% volume, and unchanged retention of 98%. Moreover, in an industry that's Source: Factset

seeing increased outsourcing vs historical levels, we believe ARMK is well positioned to capture any

incremental growth driven by their exposure to data center, investments made into Healthcare, and

Figure 1 - ARMK Actual vs JEF Estimates

culture of the firm that focused on profitable new business wins. All in, we're raising our revenue Results vs.

estimate to $20.054bn from $19.859bn. Total Revenue 2F26A$4,907 2Q26E$4,690 JEFe4.6%

FFS - US Revenue $3,430 $3,344 2.6%

Turning to the margin front, we anticipate it to run 5.3% (+30bps YoY) in-line with its historical algo of FFSAdj.- OperatingInternationalIncomeRevenue $1,477$258 $1,346$255 0.9%9.8%

+30-40bps of annual margin expansion, driven from disciplined cost mgmt. productivity gain, supply MarginFSS - US Operating Income $2235.3% $2145.4% (19bps)4.3%

chain efficiencies, and disciplined cost mgmt. We think our estimate could prove conservative FSS - International Operating Income $69 $71 (3.6%)

. EPS $0.49 $0.46 6.5%

driven by the maturation of new business wins (won $1.6bn last yr.), offset by the ramp in cost from Source: Company data, Jefferies

new business wins YTD paired with the potential for incentive comp to be paid (~40% of bonus

structure). That said, we're constructive by the long term margin opportunity in the business given

the company's increased wins in Healthcare and data center as margins run above consolidated

levels in both of these business lines, therefore, as these businesses grow, we think consolidated

margin should improve as well given mix shift.

Everything We Know About The Data center Opportunity.