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Will Cintas (CTAS) Disappoint in Q1 Earnings on Cost Woes?

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Cintas Corporation (CTAS - Free Report) is scheduled to report first-quarter fiscal 2023 (ended Aug 31, 2022) results on Sep 28, before market open.

The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being approximately 8%.

Let’s see how things are shaping up for Cintas’ fiscal first quarter.

Cintas Corporation Price and EPS Surprise

Cintas Corporation Price and EPS Surprise

Cintas Corporation price-eps-surprise | Cintas Corporation Quote

Factors to Note

The Uniform Rental and Facility Services segment is expected to reflect higher revenues on the back of increased capacity of several customers' businesses. The Zacks Consensus Estimate for fiscal first-quarter revenues at the Uniform Rental and Facility Services segment indicates a 6.4% increase from the year-ago reported number.

Strength across the first aid cabinet service business is likely to have boosted performance of the First Aid and Safety Services segment. The Zacks Consensus Estimate for fiscal first-quarter revenues at the First Aid and Safety Services segment suggests a 9% rise from the year-ago reported figure.

Cost-control measures and pricing actions are expected to have supported Cintas’ margin performance in the fiscal first quarter.

However, escalating cost of sales due to high labor and purchasing costs might have dented CTAS’ bottom line in the to-be-reported quarter. Additionally, given the company’s significant international presence, foreign currency headwinds might have impacted its fiscal first-quarter performance.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Cintas this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Cintas has an Earnings ESP of -0.68% as the Most Accurate Estimate is pegged at $3.13, lower than the Zacks Consensus Estimate of $3.15. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cintas currently carries a Zacks Rank #3.

Highlights of Q4 Earnings

Cintas’ fourth-quarter fiscal 2022 (ended May 31, 2022) earnings of $2.81 per share beat the Zacks Consensus Estimate of $2.68. The bottom line increased 13.8% year over year despite high costs. Total revenues of $2,074.7 million also outperformed the Zacks Consensus Estimate of $2,001 million. The top line improved 13% year over year due to higher segmental revenues.

Stocks to Consider

Here are some companies that you may want to consider, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.

Lindsay Corporation (LNN - Free Report) has an Earnings ESP of +5.99% and a Zacks Rank #2. The Zacks Consensus Estimate for LNN’s fourth-quarter fiscal 2022 (ended Aug 31, 2022) earnings has been revised upward by 23.7% in the past 60 days.

Lindsay pulled off a trailing four-quarter earnings surprise of 25.6%, on average.

Acuity Brands (AYI - Free Report) has an Earnings ESP of +5.08% and a Zacks Rank #3. The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2022 (ended Aug 21, 2022) earnings has been revised downward by 1.5% in the past 60 days.

However, Acuity Brands delivered a trailing four-quarter earnings surprise of 15.7%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


In-Depth Zacks Research for the Tickers Above


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Lindsay Corporation (LNN) - free report >>

Cintas Corporation (CTAS) - free report >>

Acuity Brands Inc (AYI) - free report >>

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