Financial Report: Operating Income Drops at Aramark Direct Unit

Second-quarter operating income for the Uniform and Career Apparel Direct Marketing unit of Aramark Corp. (NYSE: RMK), which includes the Galls, Wearguard, and Crest Uniform titles, fell 40%, to $2.5 million for the three months ended July 2. The Philadelphia-based company says that culprits were increased marketing and administrative expenses and a decline in its product mix. The recent federal investigation concerning export sales at Galls has also begun to hurt the segment. Direct sales nonetheless increased 4%, to $105.0 million from $101.0 million a year ago.

Companywide, Aramark posted an 11% sales increase, to $2.6 billion for the quarter. Net income fell to $64.5 million from $89.3 million due to a $25.5 million charge for discontinued operations. Excluding the charge, income from continuing operations for the quarter was $64.5 million, compared with $63.9 million last year.

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