Good morning, and welcome to Aramark's Second Quarter 2017 Earnings Results Conference Call. At this time, I would like to inform you that 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 prepared remarks. In order to accommodate all participants in the question queue, please initially limit yourself to one question and one follow-up. I will now turn the call over to Kate Pearlman, Vice President of Investor Relations. Kate, please proceed.

Thank you, and welcome to Aramark's conference call to review operating results for the second quarter of fiscal 2017. Here with me today are Eric Foss, our Chairman, President and Chief Executive Officer; and Steve Bramlage, our Executive Vice President and Chief Financial Officer. I would like to remind you that our notice regarding forward-looking statements is included in our press release this morning, which can be found on our website at www.aramark.com, and is detailed on page 2 of our earnings slide deck. During this call, we will be making comments that are forward-looking, including our expectations for fiscal 2017. 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'll 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 will turn the call over to Eric.

Thanks, Kate, and good morning, everyone, and thanks to everyone for joining us. This morning, we reported another quarter of strong operating results, consistent with our expectations. We're also pleased to announce that we completed a significant refinancing that strengthens our balance sheet, improves our financial flexibility, while also lowering our future borrowing costs. Based on the refinancing as well as the continued confidence in our operational performance, we're increasing our full-year outlook on adjusted EPS to $1.90 to $2 per share. Turning to our second quarter results, we reported adjusted earnings per share of $0.45, a 15% increase from last year. Total company organic sales were up 2%, with broad-based growth in North America and International. Adjusted operating income increased 5% to $231 million. We saw continued strong base productivity improvements, broadly across geographies and sectors, partially offset by reinvestments to support technology, capability building, and growth, which led to AOI margins of 6.4%, up 20 basis points on a constant currency basis to prior year. We expect continued margin expansion in the second half, as the level of reinvestment will dissipate as the year progresses. Once again, these results speak to the strength and execution against our clear and focused strategy, which I'll go deeper on in a minute. Turning to our performance by segment; we saw North America organic revenue grow 1%, led by Sports, Leisure, Corrections, Education, as well as business and industry. North America food and facilities AOI grew 5% to $167 million. Our International business had strong and broad-based performance in the quarter. Organic revenues grew 6% and adjusted operating income margins on a constant currency basis, expanded 20 basis points, which led to an 11% improvement in adjusted operating income to $32 million. In Uniforms, we faced a challenged marketplace, which led to…

Thanks, Eric, and good morning, everyone. As we lapped the half-way point of the year, we're right where we expected to be financially. Our revenue growth thus far has been consistent with expectations, and the cadence of our reinvestment should not be a surprise. I'm particularly pleased with the state of our balance sheet, based on the recent refinancing, which has also enabled us to improve our full-year adjusted earnings outlook. The transaction, which I will cover in more depth momentarily, has significantly bolstered the company's financial flexibility and allows us to remain focused on delivering improved operational performance on enhancing the client and consumer experience, on appropriately reinvesting in the business and driving shareholder value via balanced capital allocation. So, turning now to the sales reconciliation; we've recorded sales on a GAAP basis of $3.6 billion in the quarter. This figure was a 1% increase versus prior year and was impacted by currency headwinds of $22 million, or almost 1%. This was due to the U.S. dollar strengthening against the British pound and the euro, partly offset by USD weakening relative to the Canadian dollar and the Chilean peso. Organic sales for the company grew by 2% in the quarter with North America and International leading the way, while Uniform sales were down very modestly as we expected. The combination of the Easter holiday timing and slowing energy headwinds prove to be a very modest net benefit to us in the quarter. There was no material impact from M&A activity on any of our financials during the second quarter. Adjusted operating income was $231 million in the second quarter, an increase of 5% on a constant currency basis. This was driven by broad-based productivity improvements in our base accounts, as well as continued progress on overhead reductions, which was…

Thanks, Steve. Well, in summary, we continue to execute against our focused strategy, which is all around improving the quality of the service we provide, enabling us to rapidly scale innovation across the portfolio. And these efforts have led to increased consumer and client satisfaction. That combined with our disciplined operational and financial management, this is translating into strong shareholder returns. So, it's an exciting time for Aramark, and we look forward to your questions. With that, I'll turn it back over to the operator.

Your first question comes from the line of Manav Patnaik with Barclays. Your line is open.

Yeah. Good morning, gentlemen.

Good morning, Manav.

Good morning, Manav.

Good morning. So, the first question is just around, you gave us a nice update on sort of the long-term plan and you've done the refinancing, you've got these tax benefits, so I guess, I was just curious what the updated view on that $2.20 EPS target that you had laid out was, because if you just do the interest impacts, I'm guessing it's closer to $2.30, is that fair or what is the thought process there?

Maybe I'll start with, I think as Eric reaffirms today, we certainly see a line of sight to achieving that $2.20. There will clearly be some puts and takes between what we expected the world to be in 2015 when we gave that guidance and where we land, and I think our current view is the some of those puts and takes still lands us with high confidence in our ability to achieve that. The interest and tax will certainly be better than what we had anticipated at that time. The flip will be currency. Obviously, it will be much more of a headwind for us. And so, I think when you go through those various pieces along with really consistent operational performance relative to what we had expected, well, we think we've got a very good line of sight to get to that $2.20.

Okay. And then in the quarter, the international growth, maybe just some color there, I guess, 6% (25:24) was a good number, was that any one-time related to maybe the fair in Germany? Or what was the moving pieces there for International?

No, I think when you looked at our revenue performance, again as I mentioned, I think our revenue performance was fairly broad-based. You can look at it across North America and literally, you can dial through our Sports business, our Leisure business, our Corrections business, our Business Dining business, our Education business, all had strong top-line quarters and then, as you look at our International business, it was very strong. I mean in Europe, we had good growth in Ireland, good growth in Germany, Mexico, Korea, really strong growth that was broad-based and no real one-time events that drove any of that.

Okay. And then just last question, just to clarify. I think you said organic growth for the year would be mid-2s% and I think in the past call you said, you'd be at the low end of 3% to 5%, is that just rounding things up or was there a slight change there?

It's timing of on-boarding a new business, so Eric went through quite a long list of accounts that we have good visibility in terms of when they are coming on-board. And when we just look at the pace of base business growth, some of the Healthcare accounts that Eric referenced earlier, plus when the accounts are likely to start up here in the second half of the year. I think we'll end up somewhere in that mid, in that mid-2% range.

Okay. Thanks a lot.

Thank you.

Your next question comes from the line of Andrew Steinerman with JPMorgan. Your line is open.

Hi. It's Andrew. Could you just go through a little bit more why third quarter organic growth would be lower than second quarter?

Yeah. Maybe I'll start with that, Andrew. So obviously, the comp that we're facing in the third quarter is our most difficult from a year-over-year basis, and so the benefits that we had last year at the Easter timing is a negative in the third quarter versus a benefit in the second quarter. We had a full three months of start-up in Yosemite last year, you may recall and the way that lapped this year, we won't have that same benefit in the quarters the way the timing works. The seasonal sports impact also has a little bit of an impact for us as well. So, it's more a comp-related in terms of what was happening in the second quarter and third quarter of the prior year in the way or seasonality of the business works for us over the calendar summer.

All right. And on the International growth, which was strong in the just reported quarter, do you expect that growth to continue in the second half of the year? And in that context, remind us when we lapped some of the pruning out of international accounts from a year ago?

Yeah, Andrew, this is Eric. We have lapped that, so I think if you're referring to some of the strategic actions that we've referred to, those are now lapped. And to your first question, I think as we look to the second half of the year, we continue to be fairly confident in our ability to grow at this rate of growth, as you look into second half, combined both third quarter and fourth quarter.

Great. Thank you.

Thank you.

Your next question comes from the line of Andrew Wittmann with Robert W. Baird. Your line is open. Andrew John Wittmann - Robert W. Baird & Co., Inc.: Great, good morning.

Good morning. Andrew John Wittmann - Robert W. Baird & Co., Inc.: I had my questions – thanks. My questions are around the comments you had on the, I think you said, better than average bid pipeline, Eric. I was just hoping you could give us a little bit of a sense about what end markets you're seeing that in, how much more than average? And when you expect some of the timing on these assuming that you hit your share could impact it? Is this one of the – and specifically would this be one of the reasons that you see 4Q contribution taking a step up?

Yeah, Andrew. Let me comment on that, I think as we look to the new business wins, and the new business pipeline, and as we kind of fast forward ourselves to fourth quarter, I think you're going to see a couple of things play out. So first and foremost, I'd lead with the point around, we've had strong new business wins broadly year-to-date. Okay? And a lot of that business will get on-boarded with a particular emphasis on fourth quarter. Second, I would say, we've seen very strong new business results in Education, and those new business – new businesses, obviously tend to get on-boarded in the fall during back-to-school timeframe. A third area, I would point you to is, we have seen significant expansion particularly in healthcare relative to our expansion of new business. I think I referenced both Baylor Scott & White as well as CHRISTUS. And so that will also begin to – that expansion will begin as we trend into fourth quarter. And then finally, I think the other mathematical driver, if you will, as we've talked the last couple of quarters about us lapping a large healthcare account, and that large healthcare account is actually worth about a point of revenue on our North America business. So I think, it's really the combination of encouraging new business wins to date and encouraging pipeline, especially encouraging in Education and then the expansion and lapping in healthcare. Is that helpful to your question? Andrew John Wittmann - Robert W. Baird & Co., Inc.: That's a great detail for fourth quarter in particular, yes. I'm going to switch directions for my follow-up question, I guess, and go over to the Uniform business. Some of the other Uniform companies are starting to have called the bottom and showing better organic trends after now, seeing most of their oil and gas headwinds, which has been the primary weights around them subsiding somewhat. You guys are talking about competitive pressures. I was just wondering if you could give a little bit of detail as to where you're seeing those competitive pressures. Is it pricing, is it on specific end market or geography or pruning business, whatever it is, it will be helpful to understand the context to put the growth rate there in context?

Sure. Let me comment on that. I think as you look at our Uniform business, I don't think there is much doubt that, as we've seen some consolidation in the industry, we've seen the competitive intensity increase post that deal. I don't think that's atypical. And I think it's really across the business from everyone trying to go after early renewals, the pricing environment being a little more intensive as folks look to expand share. So, I think if you look at that, you've also seen a couple of competitors undergo some margin compression, the good news is we didn't experience that. But I think from my perspective, everybody will end up kind of defending as they need to defend and I would expect the competitive dynamics maybe to normalize a little bit over the next couple of quarters. And again, I think the Uniform business is a business we like. I think you're likely to see continued consolidation in the industry, obviously the industry is very fragmented but it's an attractive business that over time has good growth potential and we would expect to see this business get back on track as we get into 2018. So I don't think it's anything abnormal that's happened, I think we kind of signaled this to you on our last call, but there is no doubt there has been an intensity in the competitive pressures. Andrew John Wittmann - Robert W. Baird & Co., Inc.: Thank you.

Your next question comes from the line of Toni Kaplan with Morgan Stanley. Your line is open. Jeffrey D. Goldstein - Morgan Stanley & Co. LLC: Hey, this is actually Jeff Goldstein on for Toni. Can you give us a sense of the revenue around the LifeWorks brand, and how big you would expect to grow this? And then just what's your overall thinking regarding introducing other brands into the portfolio over time?

Sure. Well, I think a couple of things, Jeff. I think for us, it's really important for us, irregardless of the line of business, to start with the consumer need states, and there really are four that are critically important. Consumers want quality, which is around taste, temperature, and presentation. They want convenience, which is around speed of service and portability. They want personalization, which is around made-my-way and customized to my likings. And they want things that are healthy, fresh and better for them. As you start with that framework, the LifeWorks concept that we've had in Business Dining and are beginning to expand as I mentioned both in the U.S. and Internationally, is very well positioned to address that. And so, as a premium brand, it's one that continues to grow for us. We haven't and don't want to divulge any specific detail around the size of the brand, but it's largely our premium play in Business Dining, and its revenue and performance has been really strong as we referenced in the comments. Jeffrey D. Goldstein - Morgan Stanley & Co. LLC: Okay. Great. And then just, last year, we'd heard you were near the completion of your PRIMA web and Kronos rollout. So I want to know if you're seeing any tangible benefit yet from those systems? And then if you can just update us with how far along Ariba and MICROS are, and when we're likely to see any benefits from that? Thanks.

Sure. Well, maybe let me start with the benefits that we're seeing, and then we can come back to the pace and the timing. So, I think if you look at kind of our productivity march, we continue to make very good progress. We're certainly on track to deliver the 100 basis points by 2018. We continue to attack complexity as I mentioned in my opening comments, and that's really across the supply chain. We saw very good performance. If you looked at the quarter, we saw a strong base of productivity, up about 50 basis points, food performed well, SG&A performed well. On the labor side, our base labor performed very well, we're driving head count productivity, and then obviously, that was offset by 30 basis points of reinvestment in both start-ups and capability technology that we referenced. So, I think everybody feels really, really encouraged and then obviously those results are enabled by the investments we've made in technology. So, Kronos again helps us schedule labor. It's largely deployed across the enterprise, so now it's about us optimizing it. I think as you look at PRIMA web, again largely deployed, really helps us with optimizing our menu and getting at that. Ariba on the other hand is very, very much in the infancy and kind of pilot phases. And again where we piloted, we're encouraged by the results, but we will continue to monitor that pilot before we look to scale that as we go forward. But I think the point I leave you with is, while the deployment of the technology is on track, importantly it's the process, the technology and the tools, and most importantly, what I would call, just a hands on approach from our leaders that are really driving a high-degree of confidence and conviction that we have, that the margin march will continue. Jeffrey D. Goldstein - Morgan Stanley & Co. LLC: Thanks a lot.

Your next question comes from the line of Anj Singh with Credit Suisse. Your line is open. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC: Hi. Thank you. Just a couple of questions for Steve. Steve, so on the CapEx it seems like for the first half, it's continuing to be below the low end of your guidance range. Should we expect to catch up in the back half? And if you could just share any granularity on what's causing that cadence, is it primarily due to the timing associated with the Education and Healthcare wins referenced earlier?

Yeah, I do expect Anj to catch up for the full-year number by the end of the year. It's part of the reason, we're standing pat on our free cash flow guidance for the year. We're clearly behind where we thought we would be from a capital spending point of view, and your assumption is also correct. A large portion of our capital investment tends to follow new win on-boarding or commitments we have specifically in businesses like higher Education and Sports and Entertainment and so, because we will be so heavy on new account start-ups in Higher Ed in the fourth quarter. We will be making most of those investments over the course of the summer, before schools starts out. So I think we'll catch-up, and I think a lot of it will happen near the tail end of the year, directly related to the reason revenue will ramp in the fourth quarter, we'll have to put the money in, in front of that. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC: Okay. That's helpful. And as a follow-up, if you could just discuss what you are seeing, as far as food, wage inflation versus recent trends, is there anything you'd call out as a headwind or tailwind versus when you had initially laid out your guidance? Thanks.

Sure. I think our guidance just to start with was, we anticipated roughly 2-ish% kind of a weighted average inflation number, labor will be a little bit ahead of that closer to 3% on a global basis. Food would probably be a little bit below that. I think that is largely playing out as we sit here today. I don't think there have been any significant surprises on the labor side, we had pretty good visibility into mandated wage increases in various jurisdictions in the U.S. et cetera. And we hedged quite a bit of our commodity buying on the food side. I think we've had a little bit more inflation in the second quarter on the food side than we did in total in the first quarter. However, I would tell you, I still think the full-year number is going to be somewhere sub-2% specifically on food, which will still land us right around that 2% number.

And maybe I would just add to that. Again, I think most everybody is aware, but our ability to deal with inflationary pressures, whether it's food or labor, given the diversity of the business model, the fact that we have client interest accounts, our language to pass that through, we buy a diverse market basket of goods, all of those give us an opportunity to deal with any type of inflationary environment pretty confidently. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC: Appreciate the thoughts. Thank you.

Your next question comes from the line of Hamzah Mazari with Macquarie. Your line is open.

Hi. This is Kayvon Rahbar filling in for Hamzah. Could you talk a little about how much of your business is currently GPO versus your largest competitor, and whether it's a focus area for you?

Yeah. I think we've said in the past, the development of our GPO is big and that we purchase for ourselves, so we're very good procurer of goods, nobody does that for us. Having said that, the total GPO business is small relative to the competitive set. And I think the way we characterize it in the past is, it continues to be a priority for us, but when we talk about our ability to drive margin improvement, we feel that kind of our current ability to manage food, labor, and SG&A productivity is really what drives all of that 100 basis point commitment we made to you at our Investor Day, so we have bolted on some tuck-in activity with GPOs, but it's still very small in the whole scheme of things. So it's an opportunity, but still very, very small.

Thanks for that. And I mean, just one follow-up question. Could you give us an update in terms of what you're seeing in terms of outsourcing trends by verticals as it relates to the Food Service business and where you're seeing opportunities?

Sure. Well, as I mentioned earlier, I think the way I would characterize, it is our new business results have been fairly broad-based today across multiple lines of business. If you want to frame up the opportunity, the way I would characterize it is, if you look at the North America business, which is obviously our biggest business in particular, you're going to see the Sports business and the Business Dining business, which are both largely outsourced, have less self-op conversion than you would see in other opportunity areas like Healthcare and Education, which still have about 50% or so in that business that's self-operating. So – but having said that, again our new business wins to date are pretty encouraging across various lines of business.

All right. Thank you.

Your next question comes from the line of Kevin McVeigh with Deutsche Bank. Your line is open.

Great. Thank you. I wondered if you could help us understand what drove the decision to boost the revolver for 40%, was that more kind of potential acquisitions or more aggressive capital deployment, any thoughts?

Yeah, Kevin, good morning. This is Steve.

Good morning, Steve.

I think it's somewhat just trying to be prudent around flexibility. My own personal view, that the former credit facility size was roughly $730 million, $750 million or so and I think that had been unchanged for a number of years, and if you just look at the growth of the company, since the company went private, we're significantly larger, obviously than we were at that point in time. And you're right, as we start to look at having more optionality around things to deploy capital against than we have in the past. I just think it's prudent for us to make sure, we've got a larger facility available for us. And I guess, the other piece I would add is, we do have some seasonality in our cash flow, generally, just based on the businesses and Education, Sports, probably being the two best examples of size, and I think we did make sense for us to have a little bit more to handle natural working capital fluctuations.

It's helpful. And then just really good detail on the back-half organic, is there any way just to size how you think Q3 sets up versus Q4 within the context of the 2% you put up in Q2?

Well, I would just reiterate, I think what we've said before my – from an organic perspective, I do think based on the comps and the phasing of the business, Q3 will be the lowest number that we print year-over-year from a revenue perspective. So you can look at the two numbers we've printed so far and draw your own conclusion there. And clearly, I think the fourth quarter has to be the strongest to make that math to work and obviously, looking at the base of business that's coming in, it will be significantly better than everything else that we've printed this year thus far.

Great. Thank you.

Your next question comes from the line of Gary Bisbee with RBC Capital Markets. Your line is open.

Hey, guys, good morning. You talked a lot about bookings and the success year-to-date, what we haven't heard a lot about is losses. Can you give us an update on how losses are trending and in particular, as you've talked about in the last few years being in-line with that 5% or 6% you lose, my sense is you've excluded from that commentary, things like based on a couple of years ago or this large Healthcare contract that's impacting the numbers now. So if you include those, how have you been trending both in the last couple of years and this year? Thank you.

Sure, Gary, it's Eric. No, we've never excluded any client losses from the retention rate. So the retention rate is all revenue based and those losses you mentioned including this year's Healthcare is reflected in that number. So again the way we look at it is, it's to get to the net new, it's all about what do we sell new, and then what do we lose. And that retention number right now, as I mentioned in my comments, looks encouraging on a full-year basis relative to our retention rates this year, so it's going to be a net mid-90s%, 94% or 95% number. And then, so there is – all of the math is in their relative to loss business.

Okay. And then the follow-up on that, so I know there's been a lot of moving parts with your growth and some things are timing and FX and whatnot. But if we knot (47:35) a couple of years below the 3% to 5% (47:35) and losses have been in line, doesn't that mean that new business has the other big lever here as by definition trailed, what you would have expected? Is that the right interpretation? And now you are getting back on track with that, or is there some element to that basic math that I'm not thinking through? Thank you.

Sure. I'd say there's three elements to the math. So, let me try to take you through all three and see if this helps to your question. I think the first element is just, what I'm going to call headwinds, again looking at the strategic actions that we took, looking at some of the energy et cetera. So, there has been those headwinds. And I think for the most part, those have now subsided and are behind us. So, let me go to the other two components of how we think about growth and that would be the combination of how is our base business performing, I would say our base business trends have been very strong. And then, it's the combination of new business sold and loss business. And that business is a result of some of the – the net of that has not performed and been as accretive as we would like. And so, as we look to the second half of the year, again, I'll go back to the point I made earlier, as we now look at the new business wins we've racked and stacked broadly that is encouraging. As we look at the very strong new business wins, we've racked and stacked in Education that will start-up in fourth quarter, encouraging. As we look at the expansion opportunities and wins we've had in Baylor Scott & White and CHRISTUS, encouraging. And as we lap the loss in Healthcare, again a full point on North America's revenue, those four things drive the ramp up that we've referenced, that we expect in fourth quarter.

Great. That's perfect. Thank you.

Your next question comes from the line of Dan Dolev with Nomura Instinet. Your line is open.

Thanks for taking my question. So going back to North America organic growth, in the second quarter, you were facing, say like, 280 basis points easier compares, yet the growth decelerated a little bit. Can you maybe help bridge us kind of how to think about, you definitely didn't have the MLB headwinds, so if you start at like 1.5% in Q1 like, what were the puts and takes? And was there any other lost business that was included in that 1.3%? Thank you.

Yeah. Let me just try to, again, come back at the risk of repeating myself to describe what's happening in our North America business right now. So if you look at the first half of the year, that business is up 1.5% or so. And if you look at the drivers of that, in any business, you're going to have bright spots and hot spots. So our bright spots in North America are our Sports business, our Leisure business, our Corrections business, our Education business, and the Dining business, which picked up in second quarter versus its performance in first quarter. The hot spot is really the Healthcare business. And again, largely attributable, the vast majority of that pressure is driven by the consolidation in the large client that we've referenced. So I mean, that really is an accurate as a picture is I can portray for you, on how the North America business is performing. And then I've tried to take you forward, is to why that is going to change and some very specific reasons why. So that's really I think, a very accurate portrayal of our North America performance and the go-forward performance expectations.

Yeah, I would add, I think very little is – very little fundamentally or structurally has changed, 1Q to 2Q. I think the thing I would have you just keep in mind, the lapping of Healthcare, which is what we've referenced a couple of times, the size of the quarters are different from a revenue perspective, and the dollars that we're lapping in Healthcare are consistent. And so, you will get a different percentage outcome in a small quarter than you will in a large, and that certainly influences a little bit of the sequencing as well.

So just to be clear, so Healthcare didn't weigh more on Q2 versus Q1, because it's already in the 1.5%, right, in the Q1?

Yeah, the dollars of Healthcare were the same, but as a percentage, it's a larger percentage headwind in the second quarter, because our revenue is smaller in the second quarter.

Got it. And just one quick follow-up, the Easter and energy you mentioned, there were modest net benefits. I guess, that's a comment on North America, can you maybe quantify them?

Well, it's a – no, it's a global comment. So Easter impacts our European businesses quite a bit as well. So I would not narrowly ascribe that to North America, I think it's true for both North America and International directionally. But we had clearly a benefit from Easter, call it a half a point or so, and the energy tailwind – or the energy headwind was probably a quarter point or so headwind, a little bit down from the first quarter. So, a very modest net positive, and that would be across all of our segments.

Thank you very much. Appreciate it.

Your last question for today comes from the line of Steve Gojak with Cleveland Research. Your line is open.

Great. Thanks for the question. I guess it seems like a lot of the 3Q sales that you guys called out were things you expected, mostly comparison based. Is there anything else that caused you to lower your third quarter outlook that was unexpected, or was it mostly lies on our wins that you're on-boarding just end up getting pushed in the fourth quarter versus the third quarter? It just seems like there's going to be a change in thought on how the back half plays out, please correct me if I'm wrong? And then secondly, you noted a positive outlook was driven by good new business wins. Within that, what's your view on customer retention, has that – is that expected to stay steady in the back half of the year or do you see that getting better, or just any thoughts on that aspect of the outlook? Thank you.

Sure, Steve. It's Eric. Let me take that. I think as Steve referenced earlier, the Q3 impact is really based on the shift in a little bit of the timing and on-boarding of some of those new business wins. So, I think that's the biggest driver. On the new business front and the retention front, we expect an d continue to see very encouraging retention trends. And as we look at where we are at this point in the year versus where we had planned to be, we are certainly in line with that and slightly ahead of that across many businesses. So I think what – at the end of the day, what gives us a lot of confidence in taking this business forward is, as I mentioned in my comments, some of the leading indicators around consumer satisfaction and client loyalty, we feel like positions us well to grow as we get into Q4 and begin to head into next year with pretty good growth momentum. I think importantly is, this is a business that continues to have tremendous potential relative to our margin expansion journey and that coupled with our consistent track record of delivering solid operating profit growth and double-digit EPS growth, along with some of the things we've done on the balance sheet, we think sets us up well for the future and is a great story. So again, we feel very good about where we're at and very confident about where we're heading.

Great, thanks. That was helpful. And then just switching gears to the Uniform business, operating margin expansion there looked like it slowed versus trend. Can you just talk through quickly the drivers to that? And then as you look at the back half of fiscal year, I mean, it's the more modest operating margin expansion, is that the right way to think about, think about the outlook there?

Yes. I think there is a couple of variables. One, that's a business that feeds on growth. So your ability to run your plans efficiently is really growth dependent. So you see – I think we saw pretty good labor management, but I think the big driver is, as we talked, the pricing pressure and competitive pressures in the marketplace. And I think you're right to assume that, that could be there for another quarter or two.

But I would remind you, Steve, sequentially the behavior is very consistent with what we expected, right. Our first quarter benefited from prior year construction activity across our West Coast footprint. So, the change from the first quarter to second quarter is certainly not surprising to us.

Great. Thank you.

There are no further questions in the queue at this time. I will turn the call back over to the presenters.

Thanks. Well, again, thanks to everybody for joining us. We continue to appreciate your time and interest, and we very much look forward to talking to you at the end of third quarter. Thanks so much. Have a great day.

Thank you to all our participants for joining. This concludes today's presentation, and you may now disconnect.