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Cintas Corporation (CTAS - Free Report) reported fourth-quarter fiscal 2023 (ended May 31, 2023) earnings of $3.33 per share, which beat the Zacks Consensus Estimate of $3.19. The bottom line increased 18.5% year over year despite high costs.
Total revenues of $2,284.5 million outperformed the Zacks Consensus Estimate of $2,247.3 million. The top line climbed 10.1% year over year due to higher segmental revenues. Organic sales were up 10.3% year over year.
Segmental Results
The company has two reportable segments - Uniform Rental and Facility Services and First Aid and Safety Services. Other businesses like Uniform Direct Sale and Fire Protection Services are included in All Other. Quarterly sales data is briefly discussed below.
Cintas Corporation Price, Consensus and EPS Surprise
Revenues from the Uniform Rental and Facility Services segment (representing 77.6% of the reported quarter’s net sales) totaled $1,773.21 million, up 8.8% year over year. The Zacks Consensus Estimate for segmental revenues stood at $1,800 million, while our estimate for the same was $1,724.1 million.
Revenues from the First Aid and Safety Services segment (representing 10.9% of the reported quarter’s net sales) totaled $231.61 million, up 14.4% year over year. The Zacks Consensus Estimate for the same was pegged at $247 million, while our estimate was $226.9 million.
Revenues from All Other business (representing 11.4% of the reported quarter’s net sales) totaled $261.51 million, up 15.6% year over year. The Zacks Consensus Estimate for the same stood at $249 million, while our estimate was $271.4 million.
Margin Profile
In the quarter under review, Cintas’ cost of sales (comprising costs related to uniform rental and facility services and others) increased 6% year over year to $1,195.69 million. It represented approximately 52.3% of net sales. Gross profit increased 15.1% to $1,088.8 million. The gross margin was 47.7%, up from 45.6% in the year-ago fiscal quarter.
Selling and administrative expenses totaled $617.98 million, reflecting a 14.1% increase from the year-ago figure. It represented 27% of net sales. The operating margin in the reported quarter was 20.6% compared with 19.5% in the year-ago quarter. Interest expenses increased 11.8% to $25.77 million.
Balance Sheet and Cash Flow
Exiting the fiscal fourth quarter, Cintas had cash and cash equivalents of $124.15 million, up 37.2% year over year. Long-term debt was $2,486.41 million, almost flat from the figure reported at the end of the fourth quarter of fiscal 2022.
At the end of the fiscal fourth quarter, CTAS generated net cash of $1,597.81 million from operating activities, up 3.9% from the year-ago period. Capital expenditure totaled $331.11 million in the period, up 37.6% year over year. Free cash flow dipped 2.3% year over year to $1,266.71 million in fiscal 2023.
In fiscal 2023, the company repurchased shares worth $398.87 million, down from $1,525.87 million in the year-ago period. Dividend payments totaled $449.92 million in the same period, up approximately 20% year over year.
Fiscal 2024 Outlook
For fiscal 2024, Cintas expects revenues of $9.35-$9.50 billion. The Zacks Consensus Estimate for the same stands at $9.28 billion. Earnings per share are estimated to be in the range of $13.85-$14.35. The mid-point of the guided range — $14.10 — lies above the Zacks Consensus Estimate of $14.01.
Cintas predicts interest expense of approximately $98 million in fiscal 2024. This compares with interest expense of $109.5 million recorded in fiscal 2023. The effective tax rate is expected to be 21.3% compared with 20.4% recorded in fiscal 2023.
Zacks Rank & Other Stocks to Consider
Cintas presently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks within the broader Industrial Products sector are as follows:
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Cintas (CTAS) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Cintas Corporation (CTAS - Free Report) reported fourth-quarter fiscal 2023 (ended May 31, 2023) earnings of $3.33 per share, which beat the Zacks Consensus Estimate of $3.19. The bottom line increased 18.5% year over year despite high costs.
Total revenues of $2,284.5 million outperformed the Zacks Consensus Estimate of $2,247.3 million. The top line climbed 10.1% year over year due to higher segmental revenues. Organic sales were up 10.3% year over year.
Segmental Results
The company has two reportable segments - Uniform Rental and Facility Services and First Aid and Safety Services. Other businesses like Uniform Direct Sale and Fire Protection Services are included in All Other. Quarterly sales data is briefly discussed below.
Cintas Corporation Price, Consensus and EPS Surprise
Cintas Corporation price-consensus-eps-surprise-chart | Cintas Corporation Quote
Revenues from the Uniform Rental and Facility Services segment (representing 77.6% of the reported quarter’s net sales) totaled $1,773.21 million, up 8.8% year over year. The Zacks Consensus Estimate for segmental revenues stood at $1,800 million, while our estimate for the same was $1,724.1 million.
Revenues from the First Aid and Safety Services segment (representing 10.9% of the reported quarter’s net sales) totaled $231.61 million, up 14.4% year over year. The Zacks Consensus Estimate for the same was pegged at $247 million, while our estimate was $226.9 million.
Revenues from All Other business (representing 11.4% of the reported quarter’s net sales) totaled $261.51 million, up 15.6% year over year. The Zacks Consensus Estimate for the same stood at $249 million, while our estimate was $271.4 million.
Margin Profile
In the quarter under review, Cintas’ cost of sales (comprising costs related to uniform rental and facility services and others) increased 6% year over year to $1,195.69 million. It represented approximately 52.3% of net sales. Gross profit increased 15.1% to $1,088.8 million. The gross margin was 47.7%, up from 45.6% in the year-ago fiscal quarter.
Selling and administrative expenses totaled $617.98 million, reflecting a 14.1% increase from the year-ago figure. It represented 27% of net sales. The operating margin in the reported quarter was 20.6% compared with 19.5% in the year-ago quarter. Interest expenses increased 11.8% to $25.77 million.
Balance Sheet and Cash Flow
Exiting the fiscal fourth quarter, Cintas had cash and cash equivalents of $124.15 million, up 37.2% year over year. Long-term debt was $2,486.41 million, almost flat from the figure reported at the end of the fourth quarter of fiscal 2022.
At the end of the fiscal fourth quarter, CTAS generated net cash of $1,597.81 million from operating activities, up 3.9% from the year-ago period. Capital expenditure totaled $331.11 million in the period, up 37.6% year over year. Free cash flow dipped 2.3% year over year to $1,266.71 million in fiscal 2023.
In fiscal 2023, the company repurchased shares worth $398.87 million, down from $1,525.87 million in the year-ago period. Dividend payments totaled $449.92 million in the same period, up approximately 20% year over year.
Fiscal 2024 Outlook
For fiscal 2024, Cintas expects revenues of $9.35-$9.50 billion. The Zacks Consensus Estimate for the same stands at $9.28 billion. Earnings per share are estimated to be in the range of $13.85-$14.35. The mid-point of the guided range — $14.10 — lies above the Zacks Consensus Estimate of $14.01.
Cintas predicts interest expense of approximately $98 million in fiscal 2024. This compares with interest expense of $109.5 million recorded in fiscal 2023. The effective tax rate is expected to be 21.3% compared with 20.4% recorded in fiscal 2023.
Zacks Rank & Other Stocks to Consider
Cintas presently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks within the broader Industrial Products sector are as follows:
Enersys (ENS - Free Report) presently flaunts a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Enersys has an estimated earnings growth rate of 28.1% for the current year. Shares of the company have surged approximately 87% in a year.
Xylem Inc. (XYL - Free Report) currently sports a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 17.7%, on average.
Xylem has an estimated earnings growth rate of 21.7% for the current year. Shares of the company have jumped 45.5% in a year.