Financial Data and Key Metrics Changes - Full-year revenues for fiscal 2025 reached $2.432 billion, a 2.1% increase compared to fiscal 2024 after adjusting for an additional week of operations in the previous year [5][21] - Consolidated revenues in Q4 2025 were $614.4 million, down from $639.9 million in the prior year, with a revenue growth of approximately 3.4% when excluding the extra week in fiscal 2024 [21][22] - Consolidated operating income for Q4 2025 was $49.6 million, compared to $54 million in the prior year, while net income decreased to $41 million or $2.23 per diluted share from $44.6 million or $2.39 per diluted share [21][22] Business Line Data and Key Metrics Changes - Uniform and Facility Service Solutions revenues for Q4 2025 were $560.1 million, a decrease of 4.4% from Q4 2024, with organic growth of approximately 2.9% [23][24] - First Aid and Safety Solutions segment revenues in Q4 2025 increased to $31.1 million, with organic growth of 12.4% driven by the segment's van business [25] - Revenues from the Other segment, which includes nuclear services, were $23.3 million, a decrease of 5.3% from Q4 2024 due to lower activity in North American nuclear operations [26] Market Data and Key Metrics Changes - The company experienced notable improvements in customer retention in fiscal 2025 after two years of elevated lost business, with positive trends in key leading indicators such as NPS scores [7] - The employment environment has impacted parts of the customer base, leading to fluctuations in wear-in numbers and overall growth rates [7][12] Company Strategy and Development Direction - The company aims to drive organic growth to mid-single digits and improve EBITDA margins into the high teens over the next couple of years [16] - Investments in technology and organizational initiatives are expected to enhance operational efficiency and scalability, particularly through the implementation of the Oracle ERP system [11][31] - The company is focusing on enhancing customer experience and operational excellence through the introduction of the UniFirst Way, a collection of service-focused procedures [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to drive meaningful improvements in overall profitability despite expected temporary setbacks in fiscal 2026 [14][16] - The impact of tariffs is anticipated to escalate in fiscal 2026, but the company believes it is well-positioned to navigate the evolving trade situation [12][13] - Management highlighted the importance of patience and thoughtful execution in addressing current sourcing and cost environments [16] Other Important Information - The company made significant investments in capital expenditures totaling $154.3 million in fiscal 2025, focusing on facility additions and system updates [26] - The company plans to continue deploying cash flows for strategic investments, including infrastructure enhancements and share buyback programs [18] Q&A Session Summary Question: Can you confirm the drivers for the guided 2.6% organic growth for Uniform and Facility Service Solutions? - Management indicated that while there is momentum in sales and retention, the economic outlook and fluctuations in employment cycles are contributing factors to the current organic growth outlook [34][35] Question: What are the expected impacts on margins for 2026? - Management noted that tariffs, sales and service investments, and digital transformation costs are expected to impact margins, with operational efficiencies anticipated to provide some offsets [37][38] Question: Will benefits from sales and service investments be realized in 2026? - Management clarified that while some benefits from sales and service investments will begin to materialize in 2026, significant ERP-enabled benefits are expected to emerge in 2027 and beyond [45][46] Question: How do you expect pricing dynamics to evolve in 2026? - Management acknowledged that pricing remains challenging due to inflation and tariffs, but they anticipate working through these dynamics with customers [53][54] Question: What is the expected impact of the nuclear services business in fiscal 2026? - Management expects a wind-down of a large project in the first quarter, with normal seasonality affecting the nuclear business throughout the year [75][76]

Financial Data and Key Metrics Changes - Full-year revenues for fiscal 2025 reached $2.432 billion, a 2.1% increase compared to fiscal 2024 after adjusting for an additional week of operations in the previous year [5][21] - Consolidated revenues in Q4 2025 were $614.4 million, down from $639.9 million in the prior year, with a revenue growth of approximately 3.4% when excluding the extra week in fiscal 2024 [21][22] - Consolidated operating income for Q4 2025 was $49.6 million, compared to $54 million in the prior year, while net income decreased to $41 million or $2.23 per diluted share from $44.6 million or $2.39 per diluted share [21][22] - Consolidated adjusted EBITDA for Q4 2025 was $88.1 million, down from $95 million in the prior year [21][22] Business Line Data and Key Metrics Changes - Uniform & Facility Service Solutions revenues for Q4 2025 were $560.1 million, a decrease of 4.4% from Q4 2024, with organic growth of approximately 2.9% [23][24] - First Aid & Safety Solutions segment revenues in Q4 2025 increased to $31.1 million, with organic growth of 12.4% driven by the segment's van business [25] - Revenues from the Other segment, which includes nuclear services, were $23.3 million, a decrease of 5.3% from Q4 2024 due to lower activity in North American nuclear operations [26] Market Data and Key Metrics Changes - The company noted improvements in customer retention and key performance metrics, despite a softer employment environment impacting parts of its customer base [7][8] - The First Aid & Safety Solutions segment is expected to achieve double-digit growth in fiscal 2026, reflecting strong market potential [17] Company Strategy and Development Direction - The company is focused on driving organic growth to mid-single digits and improving EBITDA margins into the high teens [16] - Investments in technology and organizational initiatives are aimed at enhancing customer experience and operational excellence [3][10] - The introduction of the UniFirst Way aims to unify operational approaches and improve service delivery [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to drive meaningful improvements in overall profitability despite anticipated challenges in fiscal 2026 [14][19] - The impact of tariffs is expected to influence short to medium-term profitability, with ongoing efforts to mitigate cost increases [12][13] - Management acknowledged that fiscal 2026 may reflect a temporary step back in profitability due to investments in growth initiatives [16][28] Other Important Information - The company has a robust balance sheet with no long-term debt and cash equivalents totaling $209.2 million [26] - Capital expenditures for fiscal 2025 totaled $154.3 million, with ongoing investments in infrastructure and automation initiatives [26][18] Q&A Session Summary Question: Can you confirm the drivers for the guided 2.6% organic growth for Uniform & Facility Services? - Management indicated that improvements in sales and retention are expected, but challenges from the employment environment may impact growth [33][35] Question: What are the factors impacting margins for 2026? - Management highlighted tariffs, sales and service investments, and digital transformation costs as key factors affecting margins [37][38] Question: Will benefits from sales and service investments be seen in 2026? - Management stated that while some benefits may emerge, significant improvements from ERP-related investments are expected in 2027 and beyond [44][45] Question: What is the outlook for pricing in 2026? - Management noted that pricing remains challenging due to inflation and tariffs, but they expect to work through these dynamics with customers [53][55] Question: Can you provide insights on the nuclear services business for fiscal 2026? - Management expects a wind-down of a large project in the first quarter, with normal seasonality affecting performance throughout the year [75][76]

Financial Data and Key Metrics Changes - Full-year revenues for fiscal 2025 reached $2.432 billion, a 2.1% increase compared to fiscal 2024 after adjusting for an additional week of operations in the previous year [5] - Consolidated revenues in Q4 2025 were $614.4 million, down from $639.9 million in the prior year, with a revenue growth of approximately 3.4% when excluding the extra week in fiscal 2024 [18][21] - Consolidated operating income for Q4 2025 was $49.6 million, compared to $54 million in the prior year, while net income decreased to $41 million or $2.23 per diluted share from $44.6 million or $2.39 per diluted share [18] - Consolidated adjusted EBITDA for Q4 2025 was $88.1 million, down from $95 million in the prior year [18] Business Line Data and Key Metrics Changes - Uniform and Facility Service Solutions revenues for Q4 2025 were $560.1 million, a decrease of 4.4% from Q4 2024, with organic growth of approximately 2.9% [21][22] - First Aid and Safety Solutions segment revenues in Q4 2025 increased to $31.1 million, with organic growth of 12.4% driven by the segment's van business [23] - Revenues from the Other segment, which includes nuclear services, were $23.3 million, a decrease of 5.3% from Q4 2024 due to lower activity in North American nuclear operations [24] Market Data and Key Metrics Changes - The company noted improvements in customer retention and key performance metrics, despite a softer employment environment impacting parts of its customer base [6][12] - The company experienced notable improvements in retention after two years of elevated lost business, with positive trends in NPS scores and customers under contract [6] Company Strategy and Development Direction - The company aims to drive organic growth to mid-single digits and improve EBITDA margins into the high teens over the next couple of years [14] - Investments in technology and organizational initiatives are expected to enhance operational efficiency and scalability, particularly through the implementation of the Oracle ERP system [10][30] - The company is focusing on enhancing customer experience and operational excellence through the introduction of the UniFirst Way, a collection of service-focused procedures [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to drive meaningful improvements in overall profitability, despite expecting a temporary step back in profitability for fiscal 2026 due to ongoing investments [12][14] - The impact of tariffs is anticipated to escalate in fiscal 2026, with management taking steps to minimize cost increases through strategic sourcing and collaboration with customers [11][27] - The company expects to see continued improvements in customer retention and sales effectiveness, which are crucial for future growth [33][42] Other Important Information - The company generated solid cash flows from operating activities totaling $296.9 million in fiscal 2025, with capital expenditures of $154.3 million [24][25] - The company plans to continue strategic investments, including infrastructure enhancements and automation initiatives, to promote growth and efficiency [16] Q&A Session Summary Question: Can you confirm the drivers for the guided 2.6% organic growth for Uniform and Facility Service Solutions? - Management indicated that while there is momentum in sales and retention, the economic outlook and fluctuations in employment cycles are contributing factors to the current guidance [32][34] Question: What are the factors impacting margins for 2026? - Management highlighted tariffs, sales and service investments, and digital transformation costs as primary factors affecting margins, with expectations for operational efficiency to provide some offsets [35][36] Question: Will benefits from investments in sales and service be realized in 2026? - Management stated that while some benefits from sales and service investments will begin to materialize in 2026, significant improvements from ERP-related investments are expected to be realized in 2027 and beyond [40][42] Question: What is the expected impact of tariffs on pricing and client bases? - Management noted that the pricing environment remains challenging due to tariffs and inflation, but they anticipate working through these dynamics with customers [46][50] Question: Can you provide insights on the nuclear services segment's expected performance? - Management expects a wind-down of a large project in the first quarter of fiscal 2026, which will impact the nuclear services segment's performance, particularly in the first quarter [66][68]

Financial Data and Key Metrics Changes - Total revenue for the first quarter grew by 8.7% to $2.72 billion, with an organic growth rate of 7.8% [4][6] - Gross margin as a percentage of revenue increased by 20 basis points to 50.3% [4] - Operating income rose to $617.9 million, a 10.1% increase year-over-year [4][11] - Diluted EPS increased by 9.1% to $1.20 [4][11] - Cash flow from operating activities was $414.5 million [11] Business Line Data and Key Metrics Changes - Organic growth by business: - Uniform rental facility services: 7.3% - First aid and safety services: 14.1% - Fire protection services: 10.3% - Uniform direct sale declined by 9.2% [8] - Gross margin percentages by business: - Uniform rental facility services: 49.7% - First aid and safety services: 56.8% - Fire protection services: 48.9% - Uniform direct sale: 41.7% [9] Market Data and Key Metrics Changes - The company reported steady customer behavior and retention rates, with no significant changes in sales cycles despite a somewhat uncertain environment [26][50] - The customer base improved slightly during the quarter [26] Company Strategy and Development Direction - The company is raising its fiscal 2026 financial guidance, expecting revenue between $11.06 billion and $11.18 billion, and diluted EPS between $4.74 and $4.86 [6][12] - Continued investments in technology and operational efficiency are emphasized as key drivers for future growth [5][99] - The company remains focused on converting "no-programmers" into customers, which is seen as a significant growth opportunity [19][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow even in uncertain macroeconomic conditions, highlighting the value proposition offered to customers [15][26] - The company is optimistic about the future of its first aid and safety services business, expecting it to maintain low double-digit growth [86][87] - Management noted that the competitive environment remains strong, with a focus on expanding the customer base among do-it-yourselfers [72][104] Other Important Information - The company has maintained a 15.4% increase in its quarterly cash dividend, marking the 42nd consecutive year of dividend increases [12] - The company is actively engaged in share buybacks, repurchasing $347.4 million of its shares [12] Q&A Session Summary Question: Impact of macroeconomic pressures on converting no-programmers - Management indicated that in pressured environments, the company helps customers free up cash flow and manage budgets, which aids in converting no-programmers [19][20] Question: Update on the selling environment and client budget trends - Management reported no significant changes in sales cycles and noted that customer retention rates remain strong [26][27] Question: Effects of decelerating non-farm payrolls on rental business - Management acknowledged the deceleration but emphasized the company's ability to grow despite employment levels [33][34] Question: Changes in competitive environment - Management stated that while the market remains competitive, the focus is on converting no-programmers rather than competing directly with traditional competitors [72] Question: Update on tariff-driven expense growth - Management acknowledged the impact of tariffs but emphasized the strength of their global supply chain and process improvements to mitigate costs [57][58] Question: Gross margins in the first aid segment - Management explained that the gross margin was flat sequentially and attributed any year-over-year changes to timing and investment strategies [66][67] Question: M&A pipeline and appetite for expansion - Management confirmed that M&A remains important, with ongoing evaluations for both tuck-in deals and larger acquisitions [80][82] Question: Impact of visa requirements on customer hiring - Management noted no material impact from changes in immigration policy on customer hiring [110] Question: Update on myCintas portal - Management highlighted the myCintas portal as a competitive advantage, though specific metrics were not disclosed for competitive reasons [105][106]

Financial Data and Key Metrics Changes - Total revenue for the first quarter grew 8.7% to $2.72 billion, with an organic growth rate of 7.8% [4][6] - Gross margin as a percentage of revenue was 50.3%, a 20 basis point increase over the prior year [4] - Operating income increased to $617.9 million, a 10.1% rise compared to the previous year [4][11] - Diluted EPS rose to $1.20, reflecting a 9.1% increase year-over-year [4][11] - Cash flow from operating activities was $414.5 million [11] Business Line Data and Key Metrics Changes - Organic growth by business: - Uniform rental facility services: 7.3% - First aid and safety services: 14.1% - Fire protection services: 10.3% - Uniform direct sale declined by 9.2% [8][9] - Gross margin percentages by business: - Uniform rental facility services: 49.7% - First aid and safety services: 56.8% - Fire protection services: 48.9% - Uniform direct sale: 41.7% [9] Market Data and Key Metrics Changes - The company is experiencing steady customer retention rates and slight improvement in the customer base during the quarter [26][50] - The overall selling environment remains competitive, with no significant changes in sales cycles noted [26][71] Company Strategy and Development Direction - The company is raising its fiscal 2026 financial guidance, expecting revenue between $11.06 billion and $11.18 billion, and diluted EPS between $4.74 and $4.86 [6][12] - Continued investments in technology and operational efficiency are emphasized as key drivers for future growth [5][99] - The company remains focused on converting "no-programmers" into customers, which is seen as a significant growth opportunity [19][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow even in uncertain macroeconomic environments, highlighting the value proposition offered to customers [15][26] - The company is optimistic about the future of its first aid and safety services, projecting low double-digit growth [86][87] - Management noted that while they would prefer a favorable employment environment, they are prepared to grow regardless of job market conditions [34][50] Other Important Information - The company has maintained a 15.4% increase in quarterly cash dividends, marking the 42nd consecutive year of dividend increases [12] - The company is actively engaged in share buybacks, repurchasing $347.4 million of its shares [12] Q&A Session Summary Question: Impact of macroeconomic pressures on converting no-programmers - Management indicated that they can help customers under budget pressures, allowing them to focus on their core business [19][20] Question: Update on fire protection services and SAP implementation - Management acknowledged additional costs due to SAP implementation but remains bullish on the fire protection business [21][22] Question: Overall selling environment and client budget trends - Management reported no significant changes in customer behavior or sales cycles, with retention rates remaining strong [26][27] Question: Impact of decelerating non-farm payrolls on rental business - Management noted that they can grow despite employment levels and are focused on converting no-programmers [33][34] Question: Changes in competitive environment - Management stated that the market remains competitive, but they focus on the large untapped market of no-programmers [72][73] Question: Tariff-driven expense growth - Management highlighted their competitive advantage in global supply chain management and process improvements to mitigate tariff impacts [57][58] Question: First aid segment gross margins - Management explained that gross margins were flat sequentially and attributed fluctuations to timing and investment strategies [65][66] Question: M&A pipeline and appetite for expansion - Management confirmed that M&A remains important, with ongoing evaluations for both tuck-in and larger deals [80][82] Question: First aid and safety services growth outlook - Management expects low double-digit growth for the first aid business moving forward, supported by ongoing investments [86][87] Question: myCintas portal progress - Management indicated that the myCintas portal is a competitive advantage, enhancing customer and employee partner experiences [105][106]

Financial Data and Key Metrics Changes - Total revenue for the first quarter grew by 8.7% to $2.72 billion, with an organic growth rate of 7.8% [4][6] - Gross margin as a percentage of revenue increased by 20 basis points to 50.3% [4] - Operating income rose to $617.9 million, a 10.1% increase year-over-year [4][11] - Diluted EPS increased by 9.1% to $1.20 [4][11] - Cash flow from operating activities was $414.5 million [11] Business Line Data and Key Metrics Changes - Organic growth by business: - Uniform rental facility services: 7.3% - First aid and safety services: 14.1% - Fire protection services: 10.3% - Uniform direct sale declined by 9.2% [8] - Gross margin percentages by business: - Uniform rental facility services: 49.7% - First aid and safety services: 56.8% - Fire protection services: 48.9% - Uniform direct sale: 41.7% [9] Market Data and Key Metrics Changes - The customer base remained steady, with slight improvements noted during the quarter [26][50] - Retention rates were described as very attractive, indicating strong customer loyalty [26] Company Strategy and Development Direction - The company is focused on converting non-programmers to customers, particularly in uncertain economic environments [19][20] - Continued investments in technology and operational efficiency are seen as key drivers for future growth [5][99] - The company raised its fiscal 2026 financial guidance, expecting revenue between $11.06 billion and $11.18 billion, and diluted EPS between $4.74 and $4.86 [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite macroeconomic uncertainties [15][26] - The company is committed to delivering exceptional customer experiences and making necessary investments for sustained growth [15] - Management noted that the overall selling environment remains stable, with no significant changes in sales cycles [26][60] Other Important Information - The company announced a 15.4% increase in its quarterly cash dividend, marking the 42nd consecutive year of dividend increases [12] - The company is actively engaged in share buybacks, repurchasing $347.4 million of its shares [12] Q&A Session Summary Question: Impact of macroeconomic pressures on converting non-programmers - Management indicated that they can grow in various ways, especially in environments where customers face budget pressures, helping them free up cash flow [19][20] Question: Update on the fire protection services and SAP implementation - Management acknowledged additional costs associated with SAP implementation but remains optimistic about the long-term growth of the fire protection business [21][22] Question: Overall selling environment and client budget trends - Management reported no significant changes in customer behavior or sales cycles, with retention rates improving slightly [26][27] Question: Impact of decelerating non-farm payrolls on rental business - Management noted that they can grow even with stagnant job growth, focusing on converting non-programmers and selling additional services [33][34] Question: Changes in competitive environment - Management stated that the market remains competitive, but they focus on the large untapped market of do-it-yourselfers rather than traditional competitors [72] Question: Update on tariff-driven expense growth - Management confirmed that while tariffs have impacted costs, their global supply chain provides a competitive advantage [56][58] Question: First aid segment gross margins - Management explained that gross margins were flat sequentially and attributed any year-over-year changes to timing and investment strategies [65][66] Question: M&A pipeline and appetite for expansion - Management emphasized the importance of M&A for growth, with a focus on tuck-in deals and maintaining strong relationships for future opportunities [80][82] Question: Outlook for first aid and safety services business - Management expects low double-digit growth for the first aid business moving forward, supported by ongoing investments [86][87]

Core Insights - Cintas Corporation (CTAS) reported Q4 fiscal 2025 earnings of $1.09 per share, exceeding the Zacks Consensus Estimate of $1.07, with a 9% year-over-year increase despite rising operating costs [1][9] - Total revenues reached $2.67 billion, surpassing the consensus estimate of $2.63 billion, marking an 8% year-over-year growth driven by higher segmental revenues [2][9] - For fiscal 2025, net revenues were $10.34 billion, a 7.7% increase year over year, with adjusted earnings of $4.40 per share, up 16.1% year over year [2] Segment Performance - The Uniform Rental and Facility Services segment generated revenues of $2.03 billion, accounting for 76.1% of net sales, reflecting a 6.3% year-over-year increase [3] - The First Aid and Safety Services segment reported revenues of $324.4 million, representing 12.2% of net sales, up 16.8% year over year [4] - Revenues from All Other businesses totaled $312.6 million, making up 11.7% of net sales, with a 10.8% year-over-year increase [4] Financial Metrics - Cintas' cost of sales increased 6.9% year over year to $1.34 billion, representing 50.3% of net sales, while gross profit rose 9.1% to $1.33 billion, resulting in a gross margin of 49.7% [5] - Selling and administrative expenses totaled $728.5 million, a 9.1% increase from the previous year, representing 27.3% of net sales [6] - Operating income increased 9.1% year over year to $597.5 million, with an operating margin of 22.4% [6] Balance Sheet & Cash Flow - At the end of fiscal 2025, Cintas had cash and cash equivalents of $264 million, down from $342 million a year ago, with long-term debt increasing to approximately $2.42 billion [7] - The company generated net cash of $2.17 billion from operating activities, a 4.7% increase year over year, while capital expenditures totaled $408.9 million, down 0.1% [8] - Free cash flow increased 5.9% year over year to $1.76 billion [8] Future Guidance - For fiscal 2026, Cintas expects revenues between $11 billion and $11.15 billion, with an EPS estimate of $4.71 to $4.85, indicating a midpoint of $4.78, which is below the consensus estimate of $4.87 [11] - The company anticipates net interest expenses of approximately $98 million, down from $101.1 million in fiscal 2025, with an effective tax rate expected at 20% [12]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue grew by 8% to $2.67 billion, with an organic growth rate of 9% [6][9] - For the full year, fiscal 2025 revenue reached a record $10.34 billion, an increase of 7.7%, with organic growth at 8% [9] - Gross margin for Q4 increased from 49.2% to 49.7%, while operating income as a percentage of revenue rose by 9.1% [8] - Diluted EPS for Q4 increased by 9% to $1.09, and for the full year, diluted EPS grew by 16.1% to $4.40 [9] Business Line Data and Key Metrics Changes - Organic growth rates for business segments in Q4 were 7.2% for Uniform Rental and Facility Services, 18.5% for First Aid and Safety Services, and 12.1% for Fire Protection Services [7][14] - Uniform Direct sales grew by 9% in Q4, reflecting strong demand across all products and services [14] Market Data and Key Metrics Changes - The company reported strong retention rates and consistent pricing levels, indicating stability in customer relationships despite market uncertainties [31][32] - The customer base is diversified, with 70% in services and 30% in goods production, showing resilience across sectors [43] Company Strategy and Development Direction - The company emphasizes balanced capital allocation, investing in technology, infrastructure, and acquisitions to support growth [10][24] - Strategic investments include technology enhancements and management training to improve operational efficiency and customer service [8][10] - The company aims to maintain a growth trajectory with revenue expectations for fiscal 2026 in the range of $11 billion to $11.15 billion, reflecting a growth rate of 6.4% to 7.8% [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertainties in the marketplace, citing a strong value proposition that resonates across economic cycles [31][32] - The outlook for fiscal 2026 includes expectations for diluted EPS growth of 7% to 10.2%, indicating continued operational strength [11][42] Other Important Information - The company was recognized in the Fortune 500 for the ninth consecutive year, highlighting its status among successful companies [12] - Significant capital was returned to shareholders through dividends and share repurchases, with a commitment to increasing dividends for 41 consecutive years [24] Q&A Session Summary Question: Overall selling environment and client sentiment - Management noted no significant changes in customer behavior, with strong new business and retention rates despite market uncertainties [30][31] Question: Factors affecting operating margin expansion - Management indicated that while Q4 was strong, comparisons to the previous year were tougher, but they remain confident in their margin targets [34][36] Question: Cadence of 2026 outlook - The revenue guidance for fiscal 2026 reflects a growth rate similar to fiscal 2025, with expectations for continued margin expansion [40][42] Question: Cost trajectory and tariffs impact - Management highlighted their ability to navigate cost challenges through efficient operations and strategic sourcing, with no significant impact expected from tariffs [73][75] Question: M&A prospects and pipeline - The company remains active in pursuing M&A opportunities, focusing on acquiring quality businesses that enhance their service offerings [82][84] Question: End market exposure and performance - Management reported no significant weaknesses in their broad customer base, with services sectors performing well [115][116] Question: First Aid business performance - The First Aid segment is experiencing strong growth, particularly in recurring revenue products, with expectations for continued success [102][109]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue grew 8% to $2.67 billion, with an organic growth rate of 9% [5][7] - For the full year, fiscal 2025 revenue reached a record $10.34 billion, an increase of 7.7%, with organic growth of 8% [7][9] - Gross margin for Q4 increased from 49.2% to 49.7%, while diluted EPS rose 9% to $1.09 [6][7] Business Line Data and Key Metrics Changes - Uniform Rental and Facility Services segment saw organic growth of 7.2%, while First Aid and Safety segment grew by 18.5% [5][12] - Fire Protection Services grew by 12.1%, and Uniform Direct sales increased by 9% [12] - Gross margin percentages were 49% for Uniform Rental and Facility Services, 56.8% for First Aid and Safety Services, and 49.3% for Fire Protection Services [14] Market Data and Key Metrics Changes - The company reported strong retention rates and consistent pricing levels across its customer base [12][29] - The customer base is diversified, with 70% in services and 30% in goods producing sectors, showing resilience despite economic uncertainties [41][112] Company Strategy and Development Direction - The company emphasizes balanced capital allocation, investing in technology, infrastructure, and acquisitions to support growth [8][21] - The focus remains on enhancing customer experiences and expanding service offerings across various verticals, including healthcare and government [94][96] - The company aims to leverage its strong supply chain and operational efficiencies to navigate cost challenges and maintain competitive pricing [72][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties and highlighted the strength of the company's value proposition [29][40] - The outlook for fiscal 2026 anticipates revenue growth of 6.4% to 7.8% and EPS growth of 7% to 10.2% [9][10] - The company remains focused on long-term growth and value creation through continuous improvement and strategic investments [25][40] Other Important Information - The company was recognized in the Fortune 500 for the ninth consecutive year, reflecting its strong market position [11] - Significant capital was returned to shareholders through dividends and share repurchases, with a commitment to increasing dividends for 41 consecutive years [22] Q&A Session Summary Question: Overall selling environment and client sentiment - Management noted no significant changes in customer behavior, with strong new business and retention rates [28][29] Question: Factors affecting operating margin expansion - Management indicated that while operating margins are strong, tougher year-over-year comparisons are influencing growth rates [32][33] Question: 2026 outlook cadence and revenue growth - The company expects revenue growth to be consistent with previous years, with a focus on maintaining strong performance [39][40] Question: Cost changes and tariff impacts - Management highlighted their ability to navigate cost challenges through effective supply chain management and operational efficiencies [70][72] Question: M&A prospects and pipeline - The company remains active in pursuing M&A opportunities, focusing on acquiring strong businesses that enhance their service offerings [79][81] Question: Pricing strategy and competitive landscape - Management confirmed that pricing strategies are aligned with historical levels, and they are well-positioned to manage competitive pressures [86][89] Question: Updates on strategic verticals - The company is optimistic about growth in key verticals like healthcare and government, leveraging industry-specific knowledge to drive innovation [94][96] Question: First Aid business performance - The First Aid segment is experiencing strong demand, particularly for recurring revenue products, although some training spikes are not expected to continue [98][100]