Core Insights - Cintas Corporation reported Q3 fiscal 2025 earnings of $1.13 per share, exceeding the Zacks Consensus Estimate of $1.05, with a year-over-year increase of 17.7% despite rising operating costs [1] - Total revenues reached $2.61 billion, slightly above the consensus estimate of $2.60 billion, marking an 8.4% year-over-year growth driven by higher segmental revenues, with organic sales up 7.9% [1] Segmental Results - The Uniform Rental and Facility Services segment, accounting for 77.5% of net sales, generated revenues of $2.02 billion, reflecting a 7.7% year-over-year increase, surpassing the estimate of $2 billion [3] - The First Aid and Safety Services segment, representing 11.6% of net sales, reported revenues of $301.8 million, up 14.9% year over year, exceeding the estimate of $293.6 million [4] - Revenues from All Other businesses, making up 10.9% of net sales, totaled $286.3 million, a 7.2% year-over-year increase, slightly below the estimate of $288.5 million [4] Margin Profile - Cintas' cost of sales rose 5.9% year over year to $1.29 billion, constituting approximately 49.4% of net sales, while gross profit increased 11.1% to $1.32 billion, resulting in a gross margin of 50.6%, up from 49.4% in the previous year [5] - Selling and administrative expenses totaled $709.5 million, a 6.4% increase from the previous year, representing 27.2% of net sales, with operating income rising 17.1% year over year to $609.9 million and an operating margin of 23.4% compared to 21.6% in the prior year [6] Balance Sheet & Cash Flow - As of the end of Q3 fiscal 2025, Cintas had cash and cash equivalents of $243.4 million, down from $342 million at the end of the previous fiscal year, with long-term debt remaining around $2.03 billion [7] - In the first nine months of fiscal 2025, Cintas generated net cash of $1.53 billion from operating activities, a 10.3% increase year over year, with capital expenditures totaling $294.3 million, down 4.3% year over year, and free cash flow increasing 14.5% to $1.24 billion [8] FY25 Guidance - For fiscal 2025, Cintas expects revenues between $10.28 billion and $10.305 billion, higher than the previous guidance of $10.255 billion to $10.32 billion, with an estimated earnings per share range of $4.36 to $4.40, up from the earlier range of $4.28 to $4.34 [9] - The midpoint of the new revenue guidance aligns with the Zacks Consensus Estimate, while the earnings per share midpoint exceeds the consensus estimate of $4.31 [10]

Core Insights - Cintas reported revenue of $2.61 billion for the quarter ended February 2025, reflecting an 8.4% increase year-over-year and a surprise of +0.53% over the Zacks Consensus Estimate of $2.6 billion [1] - Earnings per share (EPS) for the quarter was $1.13, up from $0.96 in the same quarter last year, with an EPS surprise of +7.62% compared to the consensus estimate of $1.05 [1] Revenue Performance - Total Revenue from Uniform Rental and Facility Services was $2.02 billion, matching the average estimate and showing a year-over-year increase of +7.7% [4] - Total Revenue from Other services reached $588.02 million, exceeding the average estimate of $577.81 million, with a year-over-year change of +11% [4] - Revenue from All Other services was $286.26 million, slightly above the average estimate of $285.47 million, representing a +7.2% year-over-year change [4] - Revenue from First Aid and Safety Services was $301.76 million, surpassing the average estimate of $292.90 million, with a year-over-year increase of +14.9% [4] Operating Income - Operating income from Uniform Rental and Facility Services was $489.48 million, exceeding the average estimate of $459.81 million [4] - Operating income from First Aid and Safety Services was $71.53 million, slightly above the average estimate of $70.90 million [4] - Operating income from All Other services was $48.84 million, surpassing the average estimate of $46.65 million [4] Stock Performance - Cintas shares have returned -6% over the past month, compared to a -2.9% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Cintas reported strong fiscal Q3 2025 earnings, exceeding analyst expectations, but the stock is considered overpriced despite the company's solid performance [1][3][7] Financial Performance - Cintas achieved earnings of $1.13 per share, surpassing the forecast of $1.06, with sales reaching $2.61 billion, slightly above the expected $2.6 billion [1][3] - Year-over-year sales growth was 9.4%, with 0.9 percentage points attributed to acquisitions [3] - Gross margin improved by 120 basis points to 50.6%, and operating margin increased by 180 basis points to 23.4% [3] Guidance and Future Outlook - The company raised its earnings guidance for the fiscal year 2025 to a range of $4.36 to $4.40, while narrowing the sales forecast to between $10.28 billion and $10.305 billion [4] - Analysts predict a slowdown in earnings growth, estimating a five-year average growth rate closer to 12% rather than the current 18% [6] Valuation Concerns - At a stock price of $212, Cintas is trading at 48 times the current year’s earnings, raising concerns about its valuation given its sector [6] - The stock's PEG ratio is calculated at 4, indicating it may be overvalued relative to its growth prospects [6][7]

Core Insights - Cintas reported quarterly earnings of $1.13 per share, exceeding the Zacks Consensus Estimate of $1.05 per share, and up from $0.96 per share a year ago, representing an earnings surprise of 7.62% [1] - The company achieved revenues of $2.61 billion for the quarter ended February 2025, surpassing the Zacks Consensus Estimate by 0.53% and increasing from $2.41 billion year-over-year [2] - Cintas has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.07 on revenues of $2.64 billion, and for the current fiscal year, it is $4.31 on revenues of $10.29 billion [7] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Market Performance - Cintas shares have increased approximately 5.9% since the beginning of the year, contrasting with a decline of -1.8% in the S&P 500 [3] - The outlook for the industry, specifically the Business - Services sector, is currently in the bottom 48% of Zacks industries, which may impact stock performance [8]

Core Insights - Cintas delivered strong fiscal 2025 third-quarter results, with earnings and revenue surpassing market expectations [2][3] - The company reported earnings per share (EPS) of $1.13, exceeding the forecast of $1.05, and revenue of $2.61 billion, slightly above the predicted $2.6 billion [2][4] Financial Performance - EPS increased by 17.7% year over year from $0.96 in Q3 2024 to $1.13 in Q3 2025 [4] - Revenue rose by 8.4% year over year from $2.41 billion in Q3 2024 to $2.61 billion in Q3 2025 [4] - Gross margin improved to 50.6%, up from 49.4% in the previous year [4] - Net income reached $463.5 million, a 16.6% increase from $397.6 million in Q3 2024 [4] Segment Performance - The uniform rental and facility services segment generated $2.02 billion in revenue, a 7.7% increase year over year [8] - The First Aid and Safety Services segment contributed $588.02 million, reflecting an 11% growth over the prior year [8] Operational Efficiency - Operational income increased by 17% year over year to $609.9 million, indicating effective cost management [9] - The company achieved a $15 million gain from the sale of property and equipment, enhancing profitability [9] Dividend and Cash Flow - Cintas announced a 15% increase in its quarterly dividend, reflecting a solid financial foundation [10] - The company generated $1.24 billion in free cash flow over nine months, supporting dividend payouts and future investments [10] Future Outlook - Management raised annual revenue expectations to a range of $10.28 billion to $10.31 billion, with adjusted organic growth projections [11] - EPS guidance was increased to a range of $4.36 to $4.40, indicating confidence in growth trajectory [11] - The company is focusing on technology integration and operational improvements, including investments in systems like SAP and SmartTruck [12]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 increased by 8.4% to $2,610 million, with an organic growth rate of 7.9% [5][11] - Gross margin grew to 50.6%, an all-time high, up from 49.4% last year, reflecting an increase of 120 basis points [6][12] - Operating income rose by 17.1% to $609.9 million, with an operating margin of 23.4%, up from 21.6% [6][16] - Diluted EPS increased by 17.7% to $1.13, compared to $0.96 last year [6][17] - Free cash flow for the first nine months of the year increased by 14.5% over the prior year [7][17] Business Line Data and Key Metrics Changes - Uniform Rental and Facility Services experienced organic growth of 7% [11] - First Aid and Safety Services grew by 15%, while Fire Protection Services increased by 10.6% [11] - Uniform Direct Sale saw a decline of 2.3% [11] Market Data and Key Metrics Changes - Foreign exchange rates negatively impacted third quarter revenue growth by 40 basis points [11][19] - The company expects the second half of the year to be negatively impacted by approximately 40 basis points due to foreign currency exchange rate fluctuations [19] Company Strategy and Development Direction - The company is focused on operational excellence, leveraging technology and supply chain initiatives to improve efficiency and customer experience [6][7] - Strategic acquisitions are a priority, with ongoing efforts to consolidate mid-sized private platforms in the rental uniform and other verticals [21][37] - The company aims to maintain a strong value proposition to customers, particularly in uncertain economic environments [26][50] Management's Comments on Operating Environment and Future Outlook - Management noted that customer purchasing behaviors remain stable, with attractive new business and retention rates [26] - The company is monitoring the macroeconomic environment closely but remains confident in its ability to grow despite uncertainties [50] - Management emphasized the importance of outsourcing as a solution for customers looking to reduce costs [112][115] Other Important Information - The company terminated discussions regarding the acquisition of Unifirst, citing a lack of substantive engagement on key transaction terms [21] - The company is investing in technology, including the rollout of SAP and other systems to enhance operational efficiency [99] Q&A Session Summary Question: Changes in customer purchasing behaviors and sales cycles - Management indicated that customer behavior remains stable, with no significant changes in sales cycles [26] Question: Pricing trends in the current quarter - Management noted that pricing is at historic levels, with no significant changes observed [28] Question: Impact of tariffs on COGS - Management stated it is too early to assess the impact of potential tariffs, but the supply chain organization is a strategic advantage [32] Question: M&A opportunities in the market - Management confirmed that M&A remains a key strategy, with ongoing efforts to pursue tuck-in acquisitions [36] Question: Drivers of impressive margins - Management highlighted strong execution, operational efficiencies, and technology investments as key drivers of margins [40] Question: Outlook for fiscal year 2026 - Management is optimistic about growth potential, emphasizing the company's ability to adapt to various economic conditions [50] Question: Update on cross-selling efforts - Management reported successful cross-selling initiatives, particularly in fire and first aid products [110] Question: Trends in outsourcing during budget tightening - Management noted that outsourcing tends to accelerate during budget cuts, as customers seek to reduce upfront costs [112]

Financial Performance - Revenue for Q3 fiscal 2025 was $2.61 billion, an increase of 8.4% from $2.41 billion in Q3 fiscal 2024[2] - Gross margin for Q3 fiscal 2025 was $1.32 billion, up 11.1% from $1.19 billion in the same quarter last year, representing 50.6% of revenue[3] - Operating income increased 17.1% to $609.9 million, with an operating margin of 23.4% compared to 21.6% in Q3 fiscal 2024[4] - Net income for Q3 fiscal 2025 was $463.5 million, a 16.6% increase from $397.6 million in Q3 fiscal 2024[5] - Diluted earnings per share (EPS) rose 17.7% to $1.13 from $0.96 in the prior year[5] - Total revenue for the nine months ended February 28, 2025, was $7,672,529, representing a 7.7% increase from $7,125,680 in the same period of 2024[19] - Net income increased by 17.9% to $1,364,025 for the nine months ended February 28, 2025, compared to $1,157,277 for the same period in 2024[19] - Basic earnings per share rose by 19.1% to $3.37, up from $2.83 in the prior year[19] - Operating income for the nine months ended February 28, 2025, increased by 15.9% to $1,762,274 from $1,521,039 in the prior year[19] - The company reported a total gross margin of 50.2% for the nine months ended February 28, 2025, compared to 48.7% for the same period in 2024[21] Revenue Expectations - The company updated its annual revenue expectations to a range of $10.280 billion to $10.305 billion, reflecting a slight reduction due to foreign currency impacts[7] - The organic revenue growth rate for Q3 fiscal 2025 was 7.9%, with the low end of the organic growth rate expectations raised from 7.0% to 7.4%[7] - Organic revenue growth for the nine months ended February 28, 2025, was 7.7%, reflecting strong performance excluding acquisitions and foreign currency impacts[27] Cash Flow and Dividends - Free cash flow for the nine months ended February 28, 2025, was $1,235,896, an increase from $1,079,183 in the same period of 2024[25] - Cintas paid a quarterly dividend of $158.1 million, an increase of 14.9% from the previous year[6] - Dividends paid increased to $453,703, compared to $393,310 in the previous year, representing a rise of 15.4%[32] Assets and Equity - Total current assets as of February 28, 2025, were $3,341,428, up from $3,185,207 as of May 31, 2024[30] - The total shareholders' equity increased to $4,592,248 as of February 28, 2025, from $4,316,372 as of May 31, 2024[30] Expenses and Investments - Interest expense for fiscal 2025 is expected to be approximately $100.0 million, up from $95.0 million in fiscal 2024[12] - Capital expenditures for the period were $294,260, a decrease from $307,558 in the previous year, indicating a reduction of 4.2%[32] - Net cash used in investing activities was $474,372, slightly improved from $503,278 in the prior year, showing a decrease of 5.7%[32] Cash and Receivables - Cash and cash equivalents at the end of the period were $243,428, compared to $128,483 at the end of the previous year, marking an increase of 89.5%[32] - Accounts receivable net change was $(158,761), worsening from $(109,040) in the prior year, indicating a decline in collection efficiency[32] Other Financial Metrics - The effective tax rate for Q3 fiscal 2025 was 21.0%, up from 19.9% in the same quarter last year[5] - The gross margin for uniform rental and facility services improved to 49.5% for the nine months ended February 28, 2025, compared to 48.1% for the same period in 2024[21] - Net cash provided by operating activities increased to $1,530,156, up from $1,386,741, reflecting a growth of 10.3%[32] - The company repurchased common stock amounting to $678,129, up from $468,146, reflecting a significant increase of 44.8%[32] - The company reported a gain on the sale of property and equipment of $23,972, which was not recorded in the previous year[32] - The effect of exchange rate changes on cash and cash equivalents resulted in a decrease of $3,790, contrasting with a gain of $341 in the previous year[32]

Financial Performance - Cintas Corporation is set to release its third-quarter financial results on March 26, with expected earnings of $1.06 per share, an increase from $0.96 per share in the same period last year [1] - The company projects quarterly revenue of $2.6 billion, up from $2.41 billion a year earlier [1] Acquisition Proposal - Cintas has ended discussions regarding its proposal to acquire UniFirst for $275 per share in cash [2] - Following the announcement, Cintas shares fell by 0.6%, closing at $193.46 [2] Analyst Ratings - Citigroup analyst Leo Carrington reinstated a Sell rating with a price target of $161 [4] - RBC Capital analyst Ashish Sabadra reiterated a Sector Perform rating with a price target of $215 [4] - Baird analyst Andrew Wittmann maintained a Neutral rating and reduced the price target from $209 to $200 [4] - Morgan Stanley analyst Toni Kaplan maintained an Equal-Weight rating and raised the price target from $185 to $202 [4] - Barclays analyst Manav Patnaik maintained an Overweight rating and increased the price target from $210 to $245 [4]

Investors with an interest in Business - Services stocks have likely encountered both Bowman Consulting (BWMN) and Cintas (CTAS) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positiv ...

Core Viewpoint - Cintas Corporation (CTAS) is expected to report strong third-quarter fiscal 2025 results, with anticipated revenue growth driven by new customer acquisition and product penetration, despite rising costs and foreign currency headwinds [1][6][7]. Financial Performance Expectations - The total revenues for the fiscal third quarter are projected to be $2.6 billion, reflecting a year-over-year increase of 7.6% [6]. - The Uniform Rental and Facility Services segment is expected to generate revenues of $2 billion, marking a 6.9% increase from the previous year [3]. - The First Aid and Safety Services segment is anticipated to achieve revenues of $293.6 million, indicating an 11.8% growth compared to the same quarter last year [4]. - Adjusted earnings are forecasted to be $1.05 per share, representing an 8.9% increase from the year-ago quarter [6]. Operational Insights - The company is expected to see an improvement in operating margin by 70 basis points from the prior year, supported by operational execution and pricing strategies [6]. - Synergistic gains from recent acquisitions, including Paris Uniform Services and SITEX, are likely to enhance revenue and market presence [5]. Cost and Market Challenges - The company is facing rising costs in sales and SG&A expenses, with SG&A expected to increase by 7% year-over-year [7]. - Foreign currency fluctuations are anticipated to negatively impact profitability due to the company's exposure to international markets [7]. Earnings Prediction Insights - The Earnings ESP for CTAS is 0.00%, indicating no expected earnings beat, as both the Most Accurate Estimate and the Zacks Consensus Estimate are at $1.05 per share [9]. - The company currently holds a Zacks Rank of 3, suggesting a neutral outlook [9].