Research Update: Aramark Outlook Revised To Negative From Stable On Susceptability To Pandemic-Related Risks; Ratings Affirmed

U.S.-based Aramark's business is highly exposed to renewed pandemic risk in the U.S., including virus mutations such as the delta variant and potentially waning vaccine efficacy. We believe these risks could at least temporarily reduce people's ability and willingness to engage in social interactions and depress demand for food away from home. Notwithstanding its recently improved performance, concession operator Aramark's business has proven to be highly susceptible to the effects of the pandemic, including government-mandated restrictions on social gatherings and people's hesitation to engage in food away-from-home settings. Adjusted leverage was 10.5x as of the 12 months ended July 2, 2021, with significant adjusted EBITDA improvement in the most recent quarter--albeit still 36% below the pre-pandemic 2019 comparable quarter. While

...- U.S.-based Aramark's business is highly exposed to renewed pandemic risk in the U.S., including virus mutations such as the delta variant and potentially waning vaccine efficacy. We believe these risks could at least temporarily reduce people's ability and willingness to engage in social interactions and depress demand for food away from home. - Notwithstanding its recently improved performance, concession operator Aramark's business has proven to be highly susceptible to the effects of the pandemic, including government-mandated restrictions on social gatherings and people's hesitation to engage in food away-from-home settings. Adjusted leverage was 10.5x as of the 12 months ended July 2, 2021, with significant adjusted EBITDA improvement in the most recent quarter--albeit still 36% below the pre-pandemic 2019 comparable quarter. - While we have not substantially revised our base case forecast and still believe Aramark can reach our 5x adjusted leverage forecast for fiscal 2022 under...

Research Update