UniFirst(UNF) - 2025 Q3 - Quarterly Results

Financial Performance Summary Q3 2025 Financial Highlights UniFirst's Q3 2025 results showed a 1.2% revenue increase and 4.9% diluted EPS growth, supported by a property sale gain and reduced Key Initiative costs | Financial Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Consolidated Revenues | $610.8M | $603.3M | +1.2% | | Operating Income | $48.2M | $48.5M | -0.6% | | Net Income | $39.7M | $38.1M | +4.3% | | Diluted EPS | $2.13 | $2.03 | +4.9% | | Adjusted EBITDA | $85.8M | $84.8M | +1.2% | - Net income and diluted EPS for Q3 2025 were positively affected by a $2.8 million gain on the sale of a non-operating property[1] - Costs directly attributable to the company's CRM and ERP projects (Key Initiatives) were $1.0 million in Q3 2025, a significant reduction from $3.9 million in Q3 2024[1] Segment Performance UniFirst's Core Laundry Operations grew 0.9%, First Aid led with 9.1% revenue growth, and Specialty Garments increased 0.5%, with Key Initiative costs impacting only Core Laundry margins Core Laundry Operations Core Laundry Operations revenue grew 0.9% with 1.1% organic growth, while operating margin slightly declined to 6.9% due to higher costs, though Adjusted EBITDA margin remained stable at 13.5% | Metric | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Revenues | $533.2M | $528.5M | | Revenue Growth | 0.9% | - | | Organic Growth | 1.1% | - | | Operating Margin | 6.9% | 7.0% | | Adjusted EBITDA Margin | 13.5% | 13.5% | - Margins were negatively impacted by approximately $5.7 million in advisory and legal costs during the quarter[4][6] - Costs related to Key Initiatives reduced the segment's operating and Adjusted EBITDA margins by 0.2% in Q3 2025, compared to a 0.7% reduction in Q3 2024[3][16] Specialty Garments & First Aid Specialty Garments revenue grew 0.5% to $47.8 million with a margin decline, while First Aid revenue surged 9.1% to $29.8 million, significantly improving its operating margin to 1.8% | Segment | Metric | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | :--- | | Specialty Garments | Revenue | $47.8M | $47.6M | | | Revenue Growth | 0.5% | - | | | Operating Margin | 22.8% | 23.9% | | First Aid | Revenue | $29.8M | $27.3M | | | Revenue Growth | 9.1% | - | | | Operating Margin | 1.8% | 0.5% | Balance Sheet and Capital Allocation As of May 31, 2025, UniFirst maintained strong liquidity with $211.9 million in cash, generated $196.5 million in operating cash flow, and repurchased $13.6 million in stock - Cash, cash equivalents, and short-term investments totaled $211.9 million as of May 31, 2025[11] - For the first nine months of fiscal 2025, cash flows from operating activities were $196.5 million[11][19] - The company repurchased $13.6 million of its Common Stock in Q3 2025, with $86.4 million remaining under the current share repurchase authorization[11] Fiscal 2025 Outlook UniFirst reaffirmed its FY2025 revenue guidance while raising diluted EPS forecast, primarily due to a revised, lower estimate for Key Initiative costs | Guidance Metric | FY 2025 Range/Estimate | Previous Estimate | | :--- | :--- | :--- | | Annual Revenue | $2.422B - $2.432B | Maintained | | Diluted EPS | $7.60 - $8.00 | Raised | | Key Initiative Costs | ~$7.5M | Not specified (revised down) | - The fiscal year 2025 guidance reflects one less week of operations compared to fiscal year 2024[7] Consolidated Financial Statements Consolidated Statements of Income UniFirst's Q3 2025 revenue reached $610.8 million with $39.7 million net income, while nine-month revenues hit $1.82 billion, yielding $107.2 million net income Thirteen Weeks Ended (Q3) | (In thousands) | May 31, 2025 | May 25, 2024 | | :--- | :--- | :--- | | Revenues | $610,778 | $603,328 | | Operating Income | $48,177 | $48,450 | | Net Income | $39,680 | $38,057 | | Diluted EPS (Common) | $2.13 | $2.03 | Thirty-Nine Weeks Ended (YTD) | (In thousands) | May 31, 2025 | May 25, 2024 | | :--- | :--- | :--- | | Revenues | $1,817,905 | $1,787,564 | | Operating Income | $134,922 | $129,530 | | Net Income | $107,244 | $100,839 | | Diluted EPS (Common) | $5.76 | $5.38 | Condensed Consolidated Balance Sheets As of May 31, 2025, total assets increased to $2.76 billion, total liabilities decreased to $585.2 million, and shareholders' equity grew to $2.17 billion | (In thousands) | May 31, 2025 | August 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $937,874 | $915,676 | | Total Assets | $2,760,027 | $2,696,413 | | Total Current Liabilities | $266,949 | $281,437 | | Total Liabilities | $585,236 | $587,902 | | Total Shareholders' Equity | $2,174,791 | $2,108,511 | Consolidated Statements of Cash Flows For the nine months ended May 31, 2025, operating cash flow was $196.5 million, with $98.5 million used in investing and $48.3 million in financing, resulting in a $50.3 million net cash increase Nine Months Ended | (In thousands) | May 31, 2025 | May 25, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $196,481 | $193,012 | | Net cash used in investing activities | ($98,460) | ($124,293) | | Net cash used in financing activities | ($48,348) | ($36,126) | | Net increase in cash and cash equivalents | $50,339 | $32,803 | | Cash and cash equivalents at end of period | $211,910 | $112,246 | Non-GAAP Financial Measures Reconciliation of GAAP to Non-GAAP Measures The company's Q3 2025 consolidated Adjusted EBITDA was $85.8 million with a 14.1% margin, while the nine-month Adjusted EBITDA increased to $248.7 million with a 13.7% margin - The company defines Adjusted EBITDA as net income before interest, income taxes, depreciation and amortization, further adjusted for share-based compensation and other items to improve comparability[20] Adjusted EBITDA Reconciliation - Q3 | (In thousands) | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Net Income | $39,680 | $38,057 | | Adjustments | $46,146 | $46,734 | | Adjusted EBITDA | $85,826 | $84,791 | | Adjusted EBITDA Margin | 14.1% | 14.1% | Adjusted EBITDA Reconciliation - YTD | (In thousands) | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Net Income | $107,244 | $100,839 | | Adjustments | $141,460 | $137,476 | | Adjusted EBITDA | $248,704 | $238,315 | | Adjusted EBITDA Margin | 13.7% | 13.3% |