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UniFirst (UNF) Q2 Earnings Miss Estimates, Revenues Beat

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UniFirst Corporation (UNF - Free Report) reported mixed second-quarter fiscal 2022 (ended Feb 26, 2022) results. Its earnings missed estimates by 23.5%, while sales beat the same by 1%.

The company’s shares gained 1.2% yesterday, ending the trading session at $184.28.

Earnings & Revenues

UniFirst’s adjusted earnings in the fiscal second quarter were $1.24 per share, lagging the Zacks Consensus Estimate of $1.62. The bottom line decreased 27.5% from the year-ago figure of $1.71.

The company’s fiscal second-quarter revenues were $486.7 million, surpassing the consensus estimate of $482 million. The top line increased 8.2% on a year-over-year basis. The increase was primarily driven by impressive performance across its segments.

Segmental Breakup

Coming to operating segments, Core Laundry Operations’ quarterly revenues were $433.1 million, up 8.7% year over year. The increase was driven by strength across its end markets. Revenues of the Specialty Garments segment increased 0.9% to $35.5 million, supported by growth in the cleanroom and European nuclear operations. First Aid’s revenues jumped 11% to $18.1 million.

Unifirst Corporation Price, Consensus and EPS Surprise

Unifirst Corporation Price, Consensus and EPS Surprise

Unifirst Corporation price-consensus-eps-surprise-chart | Unifirst Corporation Quote

Costs/Margins

The company’s cost of sales in the reported quarter was $324.8 million, up 12.2% year over year. Selling, general and administrative expenses were $112.4 million, up 20.5%. Total operating expenses were $464.1 million compared with $409.1 million a year ago.

Operating income in the quarter was $22.6 million, down 44.5% on a year-over-year basis. The operating income margin was 4.6%, down 440 basis points.

Balance Sheet/Cash Flow

Exiting the fiscal second quarter, UniFirst had cash and cash equivalents of $425.9 million compared with $478.1 million in the previous quarter. It had no long-term debt outstanding at the end of the reported quarter.

In the first six months of fiscal 2022, the company generated $44.9 million in cash from operating activities compared with $128 million in the year-ago period. In the first six months of fiscal 2022, capital expenditure was $60.1 million compared with $66.9 million incurred a year ago.

In the first two quarters of fiscal 2022, the company paid out dividends worth $10 million to its shareholders, up 9.9% year over year. It repurchased shares worth $14.8 million, higher than $9.5 million in the year-ago period.

Guidance

UniFirst updated guidance for fiscal 2022 (ending August 2022). The company anticipates earnings to be in the range of $6.80 to $7.00 per share compared with $7.00 to $7.30 guided earlier. It anticipates revenues to be between $1.967 billion and $1.980 billion compared with $1.940 billion to $1.955 billion predicted earlier.

For fiscal 2022, UniFirst expects adjusted tax rate to be 24.2%.

Zacks Rank & Key Picks

UniFirst currently carries a Zacks Rank #4 (Sell).

Some better-ranked companies from the Zacks Industrial Products sector are discussed below.

Nordson Corporation (NDSN - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a four-quarter earnings surprise of 9.85%, on average.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nordson’s earnings estimates have been stable for fiscal 2022 (ending October 2022) in the past 30 days. Its shares have lost 5.6% in the past six months.

Standex International Corporation (SXI - Free Report) presently has a Zacks Rank #2. Its earnings surprise in the last four quarters was 5.85%, on average.

In the past 30 days, Standex’s earnings estimates have been stable for fiscal 2022 (ending June 2022). SXI’s shares have lost 2.4% in the past six months.

Ferguson plc (FERG - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last reported quarter was 11.56%.

In the past 30 days, Ferguson’s earnings estimates have increased 6.5% for fiscal 2022 (ending July 2022). FERG’s shares have lost 3.8% in the past six months.