Aluminum is reflective. Simply it reflects the thermal energy back at the object within it. This is why people put reflective covers under their windshields (bounces heat back out of the vehicle). This is why survival blankets are huge, thin, reflective sheets. This is why you can put foil in the windows of your house and save money on heating and cooling. Even chemists sometimes wrap glassware in foil to keep it warm inside. Ever notice that people are switching to metal roofs? It saves money because it reflects the heat rather than absorbing it like the dark shingles on many people's houses. It is all the same.
Metal easily conducts thermal energy, but reflective metals can bounce a lot of it back. If you are familiar with IR radiation and how greenhouses work, and how mirrors reflect light, I think you can add the two concepts together and get a decent idea of how reflective metals keep things warm.
I needed to edit this, aluminum does conduct heat since it is a conductor. It reflects IR. So for it to be useful to keep in heat, don't place it directly on the object you want to keep warm. Have a few layers of crinkled foil (makes air pockets) or something else as a medium in between. If foil is touching the object, thermal energy will move through the foil. If the foil is further away from the object, then the foil works better to reflect the energy.
An aluminum foil keeps the food warm, but placing the foil directly on the object or food doesn’t help much. The reason behind this is, if the foil is in contact with the object, the thermal energy would move in the foil itself and might get away, but if the foil is placed a little away from the food then it can properly reflect back the thermal energy and maintain the freshness of the food. So to avoid contact between foil and food, you can add a few layers of butter paper to make air pockets and then add pack in a final layer of aluminum foil.
As aluminum is a poor insulator (substance which doesn’t allow passage of heat) so to make the foil more effective, place it (food wrapped in foil) in fiberglass or ceramic tiffin boxes. It doesn’t only keep the food warmer for long, but also keep things cold.It acts as barrier to the oxygen and air which can transfer heat to the cold or frozen food. Bottom line is it helps by maintaining the temperature of the food, be it warm or cold.