Cintas (CTAS) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, CTAS broke through the 50-day moving average, which suggests a short-term bullish trend.The 50-day simple moving average, which is one of three major moving averages, is widely used by traders and analysts to establish support and resistance levels for a range of securities. Because it's the first sign of an up or down trend, the 50-day is considered to be more important.Shares o ...

Core Insights - Cintas entered takeover talks for UniFirst but backed out due to lack of meaningful interaction, leaving UniFirst's share price outlook uncertain [1][2] - UniFirst is viewed as a younger, less expensive alternative to Cintas, with potential for comparable returns over time, making it an attractive option for dividend growth investors [2] Financial Performance - UniFirst's Q2 revenue was $602.2 million, with diluted EPS of $1.31, both falling short of consensus forecasts, although revenue grew nearly 2% [3][4] - Operating income increased by 11.7%, net income by 19.6%, and EPS by 20.2%, despite a $0.09 impact from CRM and ERP-related costs [4] Segment Performance - The core Laundry operation grew by 1.5%, while the Specialty segment, including nuclear-related equipment, rose by 2.2%, indicating long-term growth potential in the nuclear industry [5] Guidance and Market Sentiment - Guidance is mixed, with lowered revenue forecasts due to FX headwinds but increased earnings outlook, although overall guidance is weaker than analysts' forecasts [6][7] - Analyst sentiment is bearish with a consensus rating of Reduce, but institutional buying has increased, indicating strong support for UniFirst [8][9] Capital Return Strategy - UniFirst has a dividend yield of 0.86%, aligning with Cintas' 0.75%, and has been actively buying back shares, reducing the count by 1% on average for Q2 [9] - The company is expected to sustain annual distribution increases and share buybacks, similar to Cintas, which could drive share price higher over time [10]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the periods ended February 2025 and 2024, adjusted for a stock split - The financial statements are unaudited and should be read in conjunction with the company's 2024 Annual Report on Form 10-K[24](index=24&type=chunk) - All share and per-share amounts have been retroactively adjusted to reflect a **four-for-one stock split** effective September 2024[26](index=26&type=chunk) [Consolidated Condensed Statements of Income](index=3&type=section&id=Consolidated%20Condensed%20Statements%20of%20Income) Key Income Statement Data (in thousands, except per share data) | Metric | Three Months Ended Feb 28, 2025 | Three Months Ended Feb 29, 2024 | YoY Change | Nine Months Ended Feb 28, 2025 | Nine Months Ended Feb 29, 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $2,609,159 | $2,406,173 | +8.4% | $7,672,529 | $7,125,680 | +7.7% | | **Operating Income** | $609,853 | $520,800 | +17.1% | $1,762,274 | $1,521,039 | +15.9% | | **Net Income** | $463,497 | $397,579 | +16.6% | $1,364,025 | $1,157,277 | +17.9% | | **Diluted EPS** | $1.13 | $0.96 | +17.7% | $3.31 | $2.79 | +18.6% | [Consolidated Condensed Balance Sheets](index=5&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Key Balance Sheet Data (in thousands) | Metric | Feb 28, 2025 | May 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $3,341,428 | $3,185,207 | | **Goodwill** | $3,353,553 | $3,212,424 | | **Total Assets** | $9,611,136 | $9,168,817 | | **Total Current Liabilities** | $1,941,146 | $1,828,519 | | **Total Debt (Current + Long-term)** | $2,477,392 | $2,475,529 | | **Total Liabilities** | $5,018,888 | $4,852,445 | | **Total Shareholders' Equity** | $4,592,248 | $4,316,372 | [Consolidated Condensed Statements of Cash Flows](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Nine Months Ended (in thousands) | Cash Flow Activity | Feb 28, 2025 | Feb 29, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,530,156 | $1,386,741 | | **Net cash used in investing activities** | ($474,372) | ($503,278) | | **Net cash used in financing activities** | ($1,150,581) | ($879,470) | | **Net (decrease) increase in cash** | ($98,587) | $4,334 | | **Cash and cash equivalents at end of period** | $243,428 | $128,483 | [Notes to Consolidated Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) This section details accounting policies, revenue recognition, leases, acquisitions, and a significant legal settlement [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial performance, highlighting strong revenue growth, improved margins, and segment results - The company's strategy focuses on customer penetration, geographic expansion, and strategic acquisitions to maximize long-term value[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) Consolidated Performance Summary - Nine Months Ended Feb 28, 2025 | Metric | Amount | YoY Change | Organic Growth | | :--- | :--- | :--- | :--- | | **Total Revenue** | $7,672.5M | +7.7% | +7.7% | | **Operating Income** | $1,762.3M | +15.9% | N/A | | **Operating Margin** | 23.0% | +170 bps | N/A | | **Net Income** | $1,364.0M | +17.9% | N/A | | **Diluted EPS** | $3.31 | +18.6% | N/A | [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Revenue grew 8.4% in Q3 and 7.7% over nine months, driven by organic growth and improved operating margins Q3 FY25 vs Q3 FY24 Performance | Metric | Q3 FY25 | Q3 FY24 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $2,609.2M | $2,406.2M | +8.4% | | **Organic Revenue Growth** | 7.9% | N/A | N/A | | **Operating Income** | $609.9M | $520.8M | +17.1% | | **Operating Margin** | 23.4% | 21.6% | +180 bps | | **Diluted EPS** | $1.13 | $0.96 | +17.7% | Segment Revenue Growth - Q3 FY25 | Segment | Revenue Growth | Organic Growth | | :--- | :--- | :--- | | **Uniform Rental & Facility Services** | +7.7% | +7.0% | | **First Aid & Safety Services** | +14.9% | +15.0% | | **Other** | +11.0% | +10.7% | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow increased to $1.53 billion, funding capex, acquisitions, buybacks, and dividends - For the nine months ended Feb 28, 2025, the company repurchased **$678.1 million** of its common stock and paid **$453.7 million** in dividends[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - As of February 28, 2025, the company had **$2.49 billion** in total debt outstanding and maintained investment-grade credit ratings[119](index=119&type=chunk)[122](index=122&type=chunk) Cash Flow Summary - Nine Months Ended (in millions) | Activity | Feb 28, 2025 | Feb 29, 2024 | | :--- | :--- | :--- | | **Operating Cash Flow** | $1,530.2 | $1,386.7 | | **Investing Cash Flow** | ($474.4) | ($503.3) | | **Financing Cash Flow** | ($1,150.6) | ($879.5) | [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are to interest rates and the Canadian dollar - Cintas is exposed to market risk from interest rates and foreign currency, with the **Canadian dollar** being the primary foreign currency exposure[133](index=133&type=chunk)[134](index=134&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management concluded that as of February 28, 2025, the company's disclosure controls and procedures were **effective**[137](index=137&type=chunk) - **No changes** occurred during the quarter that materially affected the company's internal control over financial reporting[138](index=138&type=chunk) [Part II. Other Information](index=35&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company reached an agreement for a class action lawsuit involving a one-time payment of $45.0 million - Information regarding material legal proceedings is incorporated by reference from Note 12 of the financial statements[141](index=141&type=chunk) - An agreement in principle was reached in the City of Laurel lawsuit, requiring a one-time payment of **$45.0 million**, which has been accrued[68](index=68&type=chunk) [Issuer Purchases of Equity Securities](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company repurchased 134,475 shares in Q3 to cover employee taxes, with $1.47 billion remaining under buyback programs - The company has two active **$1.0 billion** share buyback programs, with no purchases made under the July 2024 program through February 28, 2025[146](index=146&type=chunk) Share Repurchases for Q3 FY2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Dec 2024 | 36,128 | $201.94 | | Jan 2025 | 66,887 | $192.52 | | Feb 2025 | 31,460 | $204.65 | | **Total** | **134,475** | **$197.89** | [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - **No directors or officers** adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[145](index=145&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including officer certifications and financial statements in Inline XBRL format - The report includes required officer certifications and financial statements in **Inline XBRL format**[149](index=149&type=chunk)

Group 1: Paychex Inc. (PAYX) - Paychex reported earnings per share (EPS) of $1.49, beating expectations of $1.48, while revenue was $1.5 billion, slightly below the expected $1.51 billion, but showed a year-over-year (YOY) increase of 5% in revenue and 8% in EPS [2] - The company anticipates that its recent acquisition of Paycor will be accretive to earnings per share [2] - Management noted that companies are struggling to find the right talent, indicating a stronger labor market than perceived [3] Group 2: Cintas Corp. (CTAS) - Cintas achieved an EPS of $1.13 on revenue of $2.61 billion, with revenue reflecting an impressive 8.4% YOY increase [5] - The company reported steady organic growth of 7.9% and guided for slightly higher EPS for the full year while keeping revenue forecasts unchanged [6] - Analysts have a more positive outlook for Cintas stock, with several raising their price targets, suggesting potential for the stock to approach its 52-week high [10] Group 3: Labor Market Insights - Both Paychex and Cintas earnings reports suggest that the labor market remains resilient, contrary to some investor perceptions [1][6] - The Federal Reserve faces a complex situation where a strong labor market may lead to continued inflation above the preferred 2% target, affecting interest rate decisions [9]

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Cintas is currently sporting a Zacks Rank of #2 (Buy). Over the past 90 days, the Zacks Consensus Estimate for CTAS' full-year earnings has moved 1.7% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving. Investors ...

CTAS Cintas $203.22 -3.03 (-1.47%) 52-Week Range $162.16 ▼ $228.12 Cintas Today Dividend Yield 0.77% P/E Ratio 49.00 Price Target $210.58 Add to Watchlist Investors looking for signs of economic distress in the labor market can rest assured it isn't there, at least according to results from Cintas NASDAQ: CTAS. Cintas, the nation's leading uniform and related workplace services provider, reported a solid quarter and guided higher for the year. Get Cintas alerts: The takeaway is that Cintas and the S&P 500 r ...

Cintas (CTAS) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Since a changing earnings picture ...

Cintas Corporation CTAS posted better-than-expected third-quarter earnings on Wednesday.Cintas reported quarterly earnings of $1.13 per share which beat the analyst consensus estimate of $1.06 per share. The company reported quarterly sales of $2.609 billion which beat the analyst consensus estimate of $2.597 billion.Cintas raised its FY25 outlook. The company sees revenues of $10.28 billion – $10.305 billion versus $10.296 billion estimate (prior view: $10.255 billion – $10.32 billion).The company attribut ...

Group 1 - The article highlights a bullish stance on Cintas Corporation (NASDAQ: CTAS) following a significant drop in its stock price in December, with a buy recommendation at $185 leading to returns of $205 or more [1] - The commentary emphasizes the effectiveness of the investment strategy during market selloffs, suggesting that the company has identified key areas for buying opportunities during corrections [1] - The article promotes a blended trading and income approach to enhance savings and retirement timelines, indicating a proactive investment strategy [1] Group 2 - The article mentions a money-back guarantee for the investment service, suggesting confidence in the team's proven track record [2]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 increased by 8.4% to $2.61 billion, with an organic growth rate of 7.9% [5][15] - Gross margin reached an all-time high of 50.6%, up from 49.4% year-over-year, reflecting a 120 basis points increase [6][16] - Operating income rose 17.1% to $609.9 million, with an operating margin of 23.4%, an increase of 180 basis points from the previous year [7][22] - Diluted EPS grew 17.7% to $1.13, compared to $0.96 in the prior year [7][23] - Free cash flow for the first nine months increased by 14.5% year-over-year [9][24] Business Line Data and Key Metrics Changes - Uniform rental and facility services experienced organic growth of 7% [5][16] - First aid and safety services grew by 15%, while fire protection services increased by 10.6% [16] - Uniform direct sales declined by 2.3% [16] Market Data and Key Metrics Changes - Foreign exchange rates negatively impacted revenue growth by 40 basis points in Q3 [16] - The company expects a similar impact from foreign currency fluctuations in the fourth quarter [25] Company Strategy and Development Direction - Cintas is focused on operational excellence through sourcing, supply chain initiatives, and technology-enabled efficiencies [8][13] - The company is actively pursuing strategic acquisitions across its route-based segments [10][28] - Cintas terminated discussions regarding the acquisition of UniFirst, indicating a focus on executing its current strategy [28][29] Management's Comments on Operating Environment and Future Outlook - Management noted stable customer behavior and attractive retention rates despite macroeconomic uncertainties [34][35] - The company remains confident in its ability to grow in various economic environments, emphasizing its value proposition [64][65] - Management highlighted the importance of outsourcing as a solution for customers looking to reduce costs [142][146] Other Important Information - The effective tax rate for Q3 was 21%, compared to 19.9% in the previous year [23] - The company expects capital expenditures to finish close to 4% of revenue for the year [24] Q&A Session Summary Question: Changes in customer purchasing behaviors due to the macro environment - Management indicated that customer behavior remains stable, with no significant changes in sales cycles [34][35] Question: Update on COGS related to tariffs - Management stated it is too early to assess the impact of potential tariffs, but they are monitoring the situation closely [42][43] Question: Drivers of impressive margins and sustainability - Management confirmed that strong execution, revenue growth, and improved sourcing are key drivers of margins, with a target of 25% to 35% incremental margins [53][55] Question: Macro picture heading into next year - Management is monitoring the economic environment closely but remains optimistic about growth opportunities [64][65] Question: Update on tech investments - Management confirmed ongoing investments in technology, including SAP and SmartTracking, to enhance operational efficiency [122][124] Question: Cross-selling opportunities - Management reported strong cross-selling efforts, particularly in fire services and first aid products, with significant potential for growth [140][141] Question: Competitive landscape changes - Management noted no significant changes in the competitive landscape, emphasizing their focus on expanding their customer base [108][110]