Cintas' Q2 Earnings & Revenues Surpass Estimates, EPS View Up

Core Insights - Cintas Corporation reported strong financial performance in the second quarter of fiscal 2025, with earnings per share of $1.09, surpassing the Zacks Consensus Estimate of $1.01, reflecting a year-over-year increase of 21.1% despite rising operating costs [15] Financial Performance - Revenues from the Uniform Rental and Facility Services segment, which accounted for 77.7% of net sales, reached $2 billion, marking a 7.6% increase year over year [1] - Total revenues amounted to $2.562 billion, slightly exceeding the consensus estimate of $2.56 billion, with a year-over-year growth of 7.8% driven by higher segmental revenues [7] - Revenues from the First Aid and Safety Services segment totaled $299.4 million, up 12.4% year over year, surpassing the estimate of $298.2 million [9] - Revenues from All Other business segments reached $272 million, reflecting a 4.5% increase year over year, although below the estimate of $283.4 million [22] Cost and Profitability - Cintas' cost of sales increased by 4% year over year to $1.3 billion, representing approximately 50.2% of net sales, while gross profit rose 12.3% to $1.28 billion, resulting in a gross margin of 49.8%, up from 48% in the previous year [2] - Selling and administrative expenses totaled $685.3 million, a 6.8% increase from the prior year, constituting 26.8% of net sales [10] - Operating income increased by 18.4% year over year to $591.4 million, with an operating margin of 23.1%, compared to 21% in the year-ago quarter [10] Cash Flow and Capital Expenditures - In the first half of fiscal 2025, Cintas generated net cash of $908.1 million from operating activities, a 24.5% increase from the previous year, while capital expenditures totaled $194.3 million, down 3.1% year over year [3] - Free cash flow increased by 34.9% year over year to $713.8 million [3] Shareholder Returns - The company repurchased shares worth $651.5 million, compared to $423.1 million in the year-ago period, and dividend payments totaled $295.6 million, reflecting a 15.5% year-over-year increase [11] Guidance - For fiscal 2025, Cintas expects revenues to be in the range of $10.255-$10.32 billion, higher than the previous estimate of $10.22-$10.32 billion, with an earnings per share estimate of $4.28-$4.34, up from the earlier guidance of $4.17-$4.25 [20]