Good morning, and welcome to Aramark's second quarter fiscal 2024 earnings results conference call. My name is Kevin, and I'll be your operator for today's call. At this time, I'd like to inform you this conference is being recorded for rebroadcast and that all participants are in a listen-only mode. We will open the conference call for questions at the conclusion of the company's remarks. I will now turn the call over to Felise Kissell, Senior Vice President, Investor Relations and Corporate Development. Ms. Kissell, please proceed. Thank you, and welcome to Aramark's second quarter fiscal 2024 earnings conference call and webcast. This morning, we will be hearing from our Chief Executive Officer, John Zillmer, as well as our Chief Financial Officer, Jim Tarangelo. As a reminder, our notice regarding forward-looking statements is included in our press release this morning, which can be found on our website. During this call, we will be making comments that are forward-looking. Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties and important factors, including those discussed in the risk factors, MD&A, and other sections of our annual report on Form 10-K and our other SEC filings. Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP can be found in this morning's press release, as well as on our website. With that, I'll now turn the call over to John. Good morning, everyone. We had another great quarter of results, driven by our commitment to growth across the company. Aramark hit, Aramark hit record total company revenue for any second quarter in our history, as well as record second quarter profit in International. The vast majority of our profitability improvement in the quarter came from strategies we've taken to drive performance, while also benefiting from some inflation tailwind. Once again, substantial base business growth, pricing, and net new business contributed to organic revenue growth, which was up 9.4% in the second quarter compared to the prior year. We continued to experience consistently strong retention rates, along with sizable new business potential. Organic revenue in the U.S. segment increased by 7% in the second quarter versus last year, led by three areas of the business. First, we've seen continued momentum in Collegiate Hospitality due to enhanced culinary partnerships and new business wins, as well as innovation leading to increased participation. Sports and Entertainment had another great quarter with impressive per capita spending rates and higher attendance levels, especially during the NFL season, as well from our growing presence in the NCAA. We expanded our Grab and Go micro markets and self-checkout offerings and launched additional local restaurant partnerships, which continue to resonate with fans. We'd also like to congratulate the South Carolina Gamecocks, the Iowa Hawkeyes, and the Purdue Boilermakers for their achievements in reaching their respective NCAA basketball championship games, all Aramark clients. And lastly, Workplace Experience gained momentum across all regions as the quarter progressed, led by new business coming on board, increased employee participation rates, and additional catering activity. The U.S. segment continues to deliver new business wins. Most recently, we were very excited to add Oracle Park, the home of the San Francisco Giants, to our baseball portfolio. I was at the stadium for opening day and experienced firsthand the enthusiasm of our Aramark team, proudly serving fans with new innovative culinary creations, combined with iconic fan favorites. Other new client additions include the University of New Mexico, Denison University, and Clark University in Collegiate Hospitality, as well as Dublin City Schools in Student Nutrition, to name a few. Corrections also continued to expand the portfolio, taking great pride in the success of our IN2WORK program as a second chance employer, a program that is now in over 300 of our locations. In the international segment, every country and region within the Aramark portfolio saw organic revenue growth in the second quarter, led by mining services in Latin America, increased business dining volume in the U.K., and continued strength in education across Canada, resulting in a year-over-year increase of 16%. Our Aramark Korea team served fans at a pair of Major League Baseball opening day games for the National League West rivals, the San Diego Padres and the Los Angeles Dodgers, who played in Seoul towards the end of the quarter, leading to new opportunities in sports. New business has been strong in international, which most recently included expanding our presence with Merlin Entertainments in the U.K., offering additional B&I services to Continental AG in Germany, and building upon our remote camp capabilities in Canada, adding Woodfibre LNG and Ledcor Group as clients. The international team has been awarded numerous new wins, collectively providing us the ability to build scale in the countries we serve. In the second quarter, we hosted our first International Innovation Summit in Santiago, Chile, which included participation from our country leaders, global clients, and technology partners with approximately 700 attendees. We used our time together to explore food and facility service models of the future, focused on innovation around customer experience, safety, sustainability, and artificial intelligence. Now let's turn to global supply chain. Our overall objective continues to be focused on consistently growing and leveraging our managed services global supply chain and GPO network spend of $19 billion, and providing quality products, services, and analytical insights to our clients. International expansion is an area of focus on our strategy with several of our multinational clients, offering us the opportunity to broaden our procurement services on a global scale. As I previously mentioned, we saw some continued improvement on the inflation side, which helped product costs in the second quarter. Jim will be providing additional detail on the benefits we're experiencing. Our AI work in global supply chain is creating additional efficiencies with enhanced data harmonization and analytics for our operators and clients, particularly in sourcing optimization and reporting. As an example, we're leveraging these capabilities to share insights with our clients in further understanding their community impact with local, regional, diverse, and sustainable spend to achieve their ESG goals. Finally, we continue to strengthen our balance sheet and are in active discussions to sell the remaining portion of our ownership stake in the San Antonio Spurs NBA franchise. We expect to sell the remaining interest prior to the end of the fiscal year, and we will provide additional detail on a potential transaction soon. I'll now turn the call over to Jim. Thanks, John, and good morning, everyone. Over the past several months, I have spent time with many of you reviewing the business and outlining my immediate priorities since becoming CFO in January. I have focused on two primary areas: continuing to drive profitable growth with the goal of reaching new levels of financial performance, and leveraging that growth to capitalize on our underlying margin levers. With that, we had another very strong quarter, building on the momentum we generated in the first quarter, reinforcing that our model is working and producing the results we expect. With this framework now firmly in place and the operating environment normalized, the company is at an exciting inflection point as we execute on our strategies, all with the mindset of creating significant value for our stakeholders. As John reviewed, in the second quarter, we reported organic revenue growth of more than 9% versus the prior year, driven by strong base business growth and the contribution from net new business, along with pricing. Operating income in the second quarter grew by 27% year-over-year to $159 million, and adjusted operating income was up 29% on a constant currency basis from a year ago to $187 million. AOI margin grew by nearly 70 basis points year-over-year on a constant currency basis, with approximately 50 basis points driven by those underlying levers so core to our model, including scale and SG&A, supply chain efficiencies, disciplined middle-of-the-P&L management, and progression of new business maturity, with the remainder coming from improving inflation trends. Turning to the business segments. FSS US achieved AOI growth of 21%, with an AOI margin improvement of 65 basis points on a constant currency basis compared to the same period last year. Education, Business and Industry, and Sports, Leisure and Corrections all had particularly strong quarters due to disciplined middle-of-the-P&L management, combined with higher base business growth, especially in our collegiate hospitality and correctional businesses, from our ability to recover the price inflation lag we've previously discussed. The international segment had year-over-year AOI growth of 29% and an AOI margin improvement of nearly 45 basis points, both on a constant currency basis. Year-over-year AOI growth was driven by higher base business volume, net new business, and supply chain efficiencies led by the U.K., Germany, and Latin America. Regarding inflation, we are seeing trends tracking similarly to what we experienced in the first quarter and providing some tailwinds to our underlying margin levers. We still anticipate inflation to be around 4%-5% for the fiscal year, consistent with our expectations we conveyed last quarter. Turning to the remainder of the income statement, interest expense decreased by almost 25%, primarily from the $1.5 billion debt repayment of the 2025 senior notes. The adjusted tax rate was approximately 26%. Our strong quarterly performance resulted in GAAP EPS of $0.20 and adjusted EPS of $0.29, an increase of 79% versus the prior year on a constant currency basis. With respect to cash flow, the company generated a cash inflow in the quarter, consistent with our normal seasonal business cadence. Cash flows from operating activities in the second quarter was $221 million, and free cash flow was $140 million. The current quarter was impacted by payments of approximately $25 million for the remaining fees associated with the completion of the spin transaction, as well as higher income tax payments from the increased profitable growth and slightly more capital expenditures. At quarter end, the company had over $1.1 billion in cash availability. We also took steps to enhance our capital structure by repricing our 2028 and 2030 term loans at lower interest rates. This repricing is expected to generate annual interest expense savings of approximately $10 million. We will continue to proactively pursue opportunities to further strengthen our balance sheet. I'll wrap up with our outlook expectations for the remainder of this fiscal year. We are very pleased with our year-to-date performance and the trends we are seeing in the business. As a result, we are updating our fiscal 2024 outlook for organic growth to be at 9% or better, and reaffirming our expectation for AOI growth and adjusted EPS growth, which we indicated would be toward the higher end of the range last quarter. With that, we currently anticipate the following full-year performance: organic revenue growth at 9% or better, AOI growth of 17%-20%, adjusted EPS increasing 30%-35%, and lastly, a leverage ratio of approximately 3.5x by the end of the fiscal year. Our strong performance reinforces that our profitable growth strategies are working. With a foundation for success firmly in place across the organization, we couldn't be more excited about our future. Thank you for the time this morning, and with that, I'll turn it back to John. Thank you, Jim. Our teams around the globe are the driving force behind our success and a key reason I remain confident in our ability to, in our ability to go to and through our financial targets, focused on organic revenue growth, margin expansion, adjusted EPS growth, and capital structure enhancement. We're working hard each day to build upon our momentum and deliver on our promises for all stakeholders. Very specifically, the point I'd like to convey with respect to our strong quarter is that we feel very good about the quarter that's in the books. We believe that the macro environment continues to cooperate, and we've raised our revenue guidance and our AOI expectations for the second half of this year have both risen. Having already pointed towards the high end of the quantitative AOI guidance range on the last quarter, we plan to update the quantitative AOI guidance range as the year progresses. Operator, we'll now turn the call over to questions. Thank you. We will now begin the question and answer session. If you have a question, please press star, then one one on your touch tone phone. If you're using a speakerphone, you may need to pick up the handset before pressing the numbers. In order to accommodate participants in the question queue, please limit yourself to one question and one follow-up. To remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Toni Kaplan with Morgan Stanley. Your line is open. Thanks so much. You know, really nice job on revenue growth this quarter, and you moved to the higher end of the guidance range. You know, it seems like really good momentum in the business. I was just hoping you could give maybe some additional color on the new business that... And you called it out a number of times in the prepared remarks. So I guess, are you seeing acceleration there? Are you seeing changes, like a shortening of sales cycle? Are you able to find new clients? Like, just give us a sense of what the net new was for the quarter, and how that's trending and just the environment in new business. Thanks. Sure. Thanks, Toni, for the question. First of all, we feel very good about our momentum in terms of new business development, new account wins, many in the pipeline and many that are already verbal wins that we don't have signed contracts for. So we're seeing very significant momentum on the new business side, very active pipeline, very active selling season in higher education and K through 12, which as you know, they're still in the middle of their selling seasons. So we feel very good about the momentum and about our net new goals for the year. And we'll disclose fully after the full year what our net new results and the components of growth are for the entire enterprise. But right now, we're very pleased with the momentum and got some very satisfying wins to date and many more to come. Terrific. I wanted to ask my follow-up on margin. You know, margin in the U.S., in particular, looked particularly strong. Wanted to understand the drivers a little bit better. Are you benefiting from maturity in some of the prior years' new business on the margin side? And just the latest on price cost spread and how you're thinking about... It sounds like you're thinking about updating the AOI guidance as we go along, and you're already at the higher end. But just any commentary on the drivers to, of particularly the U.S. margin performance. Thanks. Yeah, thanks. So really strong performance year to date on margins, averaging about 65 basis points of margin improvement. And as I noted, you know, about 50 basis points coming from those underlying levers, you know, with the remaining coming from the inflation moderating. Within that 50, we really like what we're seeing, particularly in supply chain. The growth has really positioned our supply chain organization to generate efficiencies, negotiate better deals, and we're seeing good results out of our GPOs. Secondly, I would just note the middle of the P&L as the operating environment continues to normalize, and our operators can focus on optimizing food and labor without sacrificing service to our clients. We've seen really nice results there, as well. Terrific. Thanks. Our next question comes from Ian Zaffino with Oppenheimer. Your line is open. Hi, great. Thank you very much. Very good quarter. Thank you. Wanted to ask on, you know, again, on, on the new business. You know, what was that? Was that primarily new outsourcing? Were they competitive wins? Maybe give us a little bit more color there. And then as I look into your pipeline, or as you look into your pipeline, you know, what specific lines of business are doing particularly well, with any new, you know, big client opportunities you could talk about? Thanks. Sure. Actually, performance is very broad-based. All the business is doing very well with respect to new business wins and higher education has sold the most business they've ever sold in their history. It's in terms of numbers of new accounts, so it's very, it's been a very solid year from that perspective. Very strong growth in B&I. You know, big, big wins, obviously, across the enterprise in corrections and in other verticals. So we're very pleased with the broad-based nature of the new account wins, the strength of the pipeline, both domestically and internationally. The international business have had a very strong year from a new perspective. So, yeah, we're very encouraged, and I, I would tell you, I think we're seeing still significant tailwind from self-op conversion around the world. We're seeing you know, significant opportunities across all the verticals and across all geographies. So feeling very good about the new business pipeline and the, and the overall results. Great, thank you. And then if I could sneak in another question. If you could share the status of the Mantle Ridge ownership in your company, if you have any type of sense, and you've been posting, you know, great results, including, you know, from last quarter. You know, some are thinking that could be some type of overhang coming. So any insight you could give us, that'd be helpful. You know, behind you. Certainly. Yeah, certainly. You know, generally, in short, the Mantle Ridge vehicle that held Aramark stock has been fully and permanently wound down and is no longer a factor for Aramark. And I'm generally not in the habit of commenting on matters relating to our shareholders, but I have obtained permission to share the key details of the current circumstances, because we do have a reason to believe that there's a little bit of confusion around the current state of their ownership. So as I said, the fund has been fully and permanently wound down. I can confirm that all the stock controlled by Mantle Ridge has found a long-term home. Some was sold over the course of the last six months since their initial sell-down in August, and the balance has found their way to long-term holders. As you know, as I am sure the filings over the course of the next couple of quarters will show, the organizations that have received shares are well-respected, long-term investors who've underwritten the company's strategy thoroughly, and we feel very good about the nature of that relationship. So the bottom line is, Mantle Ridge's ownership is no longer a factor for Aramark. Paul Hilal is a friend, and I trust I will be calling on him for advice in the future, but we have no longer a relationship with Mantle Ridge from an ownership perspective. That's very helpful, color. Thank you very much, and good quarter again. Thank you. Our next question comes from Lizzie Dove with Goldman Sachs. Your line is open. Hi there. Thanks so much for taking the question, and, congrats on a nice quarter. I'm curious, you know, we've heard some negative commentary from other companies over the last few weeks. Does it feel like you're kind of seeing the same pressures? Curious if you could provide an update there just on what you're seeing in terms of health of, health of the consumer. And I'll ask my follow-up now, and also kind of any pushback you're receiving, on pricing. Yeah, I would say we're seeing a very healthy consumer, particularly in the businesses and the verticals that we operate in, as evidenced by the organic growth of the enterprise. Continue to see very strong consumer response in the Sports and Entertainment business, very high levels of attendance and per capita spending, and which I think is a very strong indicator. You know, I think part of that speaks to the verticals we operate in and the essential services we provide across a range of businesses and a range of geographies. So we aren't seeing that consumer pressure, if you will, that other retail organizations may be seeing. From an inflation perspective, we're seeing an environment that is beginning to show some moderation. As we've talked about, we still believe our expectations are in the 4%-5% range, both for a food and labor perspective, but we're also able to achieve pricing to offset that, those inflationary cost pressures. So we feel very good about the, the model that's in place, our ability to recover those costs, and the overall state of the, of the growth of the enterprise and the, and the state of the consumer that we serve. Great. That's helpful. Thanks so much. Our next question comes from Heather Balsky with BofA. Your line is open. Hi, this is Emily Marzo on for Heather Balsky. First question is, could you clarify, in terms of your guidance, it, it sounds like you're guiding to the high end. Is that just on AOI growth or EPS growth as well? Yeah, in terms of the, you know, the guidance, listen, we're really pleased with the performance year to date, and the traction that we have. So I think it's reasonable to conclude, you know, on both fronts, that we'd be toward the higher end of the range as well on AOI and EPS. Okay. Thank you. And then could you, as a follow-up, could you provide any clarity or, maybe some quantitative on what you're seeing in terms of the pricing discussions on the new accounts, and if anything's changed in the last couple of months? No, really nothing. With respect to new accounts, pricing discussions are part of the negotiation process as we sell the new business. But, you know, the pricing is always based on what is appropriate from a P&L perspective and a margin perspective as we sell new business. So, there is no downward pressure on pricing discussions with new clients... and frankly, we've got very good pricing velocity on those accounts that we already serve. So I would say right now, we're very pleased with the pricing environment. As you know, last year, we struggled, you know, during the contractual pricing period on a couple of businesses due to the lag. That lag has been fully recovered, and we are ahead of that, that process now. So we feel very good about the pricing environment in general. Thank you. Our next question comes from Andrew Steinerman with JP Morgan. Your line is open. Hi, I just wanted to get a data point on that 4%-5% food inflation for input costs that you continue to assume. How was that in your book of business in the first half of the fiscal? Yeah, that was roughly 4.2% in the first half. We saw it was very stable in the first quarter, Andrew, then we saw some-- and we actually saw some improvement in the first quarter. Then it kind of hung in the second quarter at around 4.2, 4.3. It was stable, and now we're seeing in most recent weeks, a slight easing again of that. So it's been in that 4%-4.5% range on the input side, pretty much all the year with a little bit of volatility in the quarters. But our expectations are we'll see, we'll see some continued easing over the balance of the year. Just very hard to predict exactly well, how much that'll be. That, that's for Aramark's book of business, right? That's correct. That's for our book of business and our specific market basket of products that we buy and sell to our consumers. Thank you. Our next question comes from Neil Tyler with Redburn Atlantic. Your line is open. Yeah. Hi, good afternoon. Thank you. Firstly, John, on the new wins and, you know, your confidence that you expressed earlier, is there any change in the source of those compared to, say, this time last year? You know, whether that's first-time outsourcing or competitive bids? That's the first question. And then secondly, within the international segment, the obviously strong organic growth, can you remind us to what extent Merlin contract is now sort of at cruising altitude? Is that or is that-- is that contributing meaningfully still to the year-on-year comparison? Thanks. Yeah, I would say, first of all, with respect to Merlin, it's at cruising speed year- over- year. You know, all the Merlin business was open and operating last year at this time as well. So it's basically a very similar operating environment. We did pick up an additional piece of business from Merlin, but we're just beginning to operate that now, so that hasn't really affected the revenue numbers yet, in terms of year-over-year comps. And in terms of the source of new business wins, I would say it's very consistent with what we saw last year. General industry trends continue to be similar. You know, I would say first time outsourcing still contributing probably in the 40%-45% range of new business wins and the balance competitive bids from either regionals or other major players. So I would say on balance, very similar to last year's sales environment. Great. Thank you very much. Thank you. Our next question comes from Shlomo Rosenbaum with Stifel. Your line is open. Hi, thank you for taking my questions. Hey, John, can you just going back to that Merlin comment that you made, you picked up an additional piece of business. Is that, is that a client that has a lot of room to expand from where you are right now? Or are you at a point where you, you kind of maxed out over there? No, I'd say there is still continued room for expansion with Merlin. I don't wanna speak for them, but, you know, they still they obviously have a number of operations in other parts of the world where they continue to self-operate those, and we, you know, we would love to be an operator for them in other parts of the world. I would say with respect to the business in the U.K. and the, and the U.S., it's pretty steady state with the addition of this one additional piece. We feel very good about it. But yeah, I think there's still runway there with Merlin, and we'll continue to work very aggressively to do a great job for them and hopefully continue to expand the partnership. Okay, great. And then just for the follow-up, just getting into the weeds a little bit, could you comment there was 2% growth in rest of the world for international, and I don't know if that's just a tough comp, it kind of stood out amongst a really strong growth over there. And then, just in, in the U.S., everything's doing really well. I know that it's taking some time to stabilize healthcare. Maybe you could talk about how you're thinking, you know, a timeframe for that to kind of, you know, reach a stabilization then start to grow. Yeah, I think we've reached that stabilization point for the healthcare business, and I think you're speaking specifically about senior living. You know, we believe we've stabilized that business and that we will be growing from here in that segment. We're very pleased with the leadership of that team and the progress they've made in the business. So very confident in our ability to grow that significantly over time. With respect to the 2% comp for rest of world, You know, we have over 20% organic growth in rest of world. So I think the impact that you're talking really is about with respect to the GAAP numbers, which reflect all the currency translation effects in international. So that would, you know, that would account for that variance. But, our rest of world calculation is that we're over 20% organic growth. Yeah, John, I, I'll just add in that the $83 million of FX headwinds that we-- you see there, that was primarily, you know, in, in rest of the world, specifically in Latin America. ... Great. Thank you. Our next question comes- Sorry, our next question comes from Leo Carrington with Citi. Your line is open. Good morning. Thank you, John and Jim. It sounds like you're indicating that the 17%-20% AOI growth guide could be raised later in the year. So I suppose why hold off doing it now? What could push you above the top end of that, or what lands you in the middle? And then secondly, perhaps just what kind of margin expansion might be reasonable to expect in H2 on a year-over-year basis compared to what you've achieved in H1? Sure. So yeah, like I said, we had very strong performance in Q1 and Q2, you know, with 65 basis points of margin improvement. You know, in terms of the outlook, we remain very optimistic, and I'd say, you know, expecting to be toward the higher end of that range. A couple factors in terms of we're lapping some significant pricing actions in the prior year, so we'll see how inflation plays out and the timing of new obviously could have an impact as well. But like I said, we're really optimistic with the outlook, and we'll continue to keep you posted on that front. Yeah, I would just add the commentary. As we indicated the top end of the range of AOI and EPS, we're very confident in our ability to deliver on that. We're also, you know, somewhat subject to the—to what happens in the inflation environment from that in that respect. And so, you know, we believe that this is a good, you know, this is a good environment that we have inflation that ultimately may moderate further, and if it does, that will be a continuing tailwind into the third and fourth quarter. And as we experience those changes, we'll continue to update that AOI guidance. Obviously, we're working to get that number as high as we can. We're all incented for the same thing. We all want to drive that performance of the organization, and, you know, we'll update further as we have more data with respect to what second half inflation might look like. Okay, thank you. If, if I might just, follow up on that one. If, if you could help on in, within the margin expansion in Q2, to what extent the, pricing has, has been driving the, the margin expansion, i.e., that the pricing has now, has, has now caught up to the incurred cost inflation? Yeah, so again, the underlying levers, right, which excludes the pricing component, was about 50 basis points. So the delta between is 68 and 50, so 15 to 18 basis points of margin improvement was a result of the pricing and inflation moderating. Okay, very clear. Thank you very much. Our next question comes from Ashish Sabadra with RBC. Your line is open. Thanks for taking my question. A solid progress on the margin front. I was wondering if you could highlight some of the efforts in place to continue to drive more, better margin expansion, particularly on the supply chain efficiency side, as well as the progress on the cost takeout front? Thanks. Certainly on the supply chain side, we continue to work very aggressively to pursue. As we build the business and grow the organization, we continue to use that leverage to go ahead and negotiate new and better and more attractive deals with our suppliers and the manufacturer partners that we have around the world. And we've been able to do just that. We're seeing significant improvement year-over-year in supply chain profitability that contributes to the overall profitability of the enterprise. So, you know, very pleased with that progress. We're also working very aggressively to build our international scale in terms of global supply chain and working with other partners to go ahead and build that scale, which gives us an additional opportunity to impact the business both domestically and internationally. So very, very focused on supply chain growth, and, we think it'll be a good big contributor to margin expansion over time. That's one of the key levers for the company that we've identified in our business case and in our investor day, if you will, that that will be a solid contributor going forward, and it, it has proven to be and will continue to be. I'm sorry, I didn't get the second half of the question. Some of the other drivers. Yeah, so some of the other drivers there of margin expansion, the middle of the P&L, we really like what we saw with the operating environment more normalized. Our operators are doing a great job optimizing food and labor costs, specifically reducing overtime and agency labor, again, as that environment more normalizes. And then secondly, on our SG&A, the organization is really, you know, fit for purpose with the spin. You can see SG&A actually corporate costs down a little bit versus the prior year. So we're able to take a lot more growth on really without adding much to the top line cost. That's great color. Thank you very much. Our next question comes from Stephanie Moore with Jefferies. Your line is open. Hi, good morning. Thank you. Good morning. Good morning. I was hoping you could talk a little bit about the strength you're seeing in the base business. You know, what's driving a lot of this growth in this environment? Thanks. Yeah, we're seeing overall participation rates and strong customer acceptance in a number of businesses. Higher Higher education, we're seeing very strong performance in terms of the customer satisfaction scores and the overall participation on university campuses. We're seeing upperclassmen select board plans on a more frequent basis, which is a key driver of growth opportunity. We're seeing very strong base business growth in the B&I segment both domestically and internationally, as return to work has normalized and businesses are focused on growing again. And we're seeing very strong new business wins in B&I as well, contributing to that. So you know, overall, we're seeing a very healthy environment for all the businesses we operate in. We're very pleased overall with the results in both the operating environment, their cost containment, the customer counts, overall participation rates, all very supportive of just that strong base business growth. Great, and that's helpful. Just as a follow-up, could you remind us where retention rates are trending at the moment? Thanks. Yeah. Right now we expect to achieve 96% retention, which is our historical standard. We are on track to achieve that objective this year. So feel very good about continued high retention rates across the enterprise. Thank you. Our next question comes from Jasper Bibb with Truist Securities. Your line is open. Hey, good morning. Was hoping you could give a bit more color on the GPO and supply chain efficiencies. I guess, how are you thinking about the opportunity to keep growing, spend under management over the next few years, and what that could drive in terms of margin leverage? Well, very specifically, we believe that, that, the supply chain GPO opportunity is very significant. We continue to look at, at both the organic growth of that through the addition of new business, as well as the potential M&A activity with the GPO in the GPO sector, you know, both domestically and internationally, looking at ways to continue to build scale. But our primary growth vehicle for the GPO will be, the organic growth of selling new business, adding new accounts, and adding that spend to our existing, $19 billion worth of spend. That has, double benefits. We earn both the income from the GPO, and we, we are able to negotiate better deals that impact our core business as a result of that increased volume. So it is a key factor for the long-term margin expansion of the enterprise. And, you know, and as I said, we're working very aggressively to continue to build that business, both domestically and internationally, and working with our existing partners to find ways to serve them in other parts of the world, that opens up a whole new range of opportunities for us. Thanks. And then, curious if you could provide any update on sales force productivity. Seems like you've gotten good leverage there on the investments you made a few years ago, but, any update on where that stands today would be helpful. Yeah, I would say we're very, very pleased with overall sales force productivity. That, you know, as we work through the operating review discipline we have on a monthly basis with each of the businesses, we sit down and review with the presidents of those businesses and with the country presidents the sales results literally every 30 days. And so we see the evidence of that productivity on a continuing basis. So very pleased with the results. And frankly, we feel like we've got a very productive sales organization. We are fully staffed and feel comfortable with the level of resources that we have positioned against the growth opportunities. And, we're always looking for new and different verticals to add to the capabilities of the company, to go ahead and expand the universe of opportunities for that sales group to pursue. So Merlin was a great example of that. That was a vertical which had, you know, was 100% self-op in the past. It was a great business opportunity, and we continue to look for new verticals that we can add to the portfolio. That's helpful. Thanks for taking the question. Our last question comes from Josh Chan with UBS. Your line is open. Hi, good morning. Thanks for taking my questions. I think you mentioned that the underlying margin improvement was 50 basis points this quarter. I think it was the same last quarter. So could you just remind us what's implied in your guidance in terms of underlying margin improvement for the year? Yeah. So again, we haven't baked in any benefit from inflation moderating or inflation tailwinds for our full year guidance. We assumed inflation is at similar levels as they were for the second quarter for the remainder of the year. Okay. And then I guess in terms of just the core margin improvement, could you talk about your confidence in that sustaining beyond 2024, based on the initiatives that you have to drive improvement? Thank you. Yeah, given the traction that we have, you know, we're very comfortable that the model is working, and the levers that are driving the margin improvement will continue on into 2025 and 2026, with respect to improved efficiencies and scale in our supply chain. The commentary made with respect to SG&A, that will be similar as we plan for the next couple of years as well. And then again, the middle of the P&L, the trends that we are seeing, I, I think will give us some momentum and tailwinds into 2025 as well. Yeah, and I would just add. Terrific. I'll just add one final comment. No, that's all right. As Jim indicated, we feel very good about the middle of the P&L management, the operating team doing a great job of focusing on delivering efficiency and services to our customers. And that's, and ultimately, that's the best test of an organization: Can you manage the business effectively and deliver on the results that your clients expect? And we feel very good about our ability to do that, and our ability to go ahead and impact the business in a meaningful way. So, with that, I'd like to thank all of you for the time that you've spent with us this morning. Really appreciate it. Feel good about the quarter, and we will continue to update you, you know, through the balance of this year as we achieve great results. So thank you very much. Thank you for participating. This concludes today's conference. You may now disconnect.