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Cintas Gears Up to Report Q1 Earnings: What's in the Offing?

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Cintas Corporation (CTAS - Free Report) is scheduled to release first-quarter fiscal 2025 (ended August 2024) results on Sep. 25, before market open.

The Zacks Consensus Estimate for earnings has increased by a penny in the past 60 days. The company has a stellar earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average beat being 4.5%.

Let’s see how things have shaped up before Cintas’ fiscal first-quarter earnings release.

Factors to Note

Strong growth from new customers and penetration of additional products and services into existing customers are expected to have driven the Uniform Rental and Facility Services segment’s performance. Also, improving operational productivity and effective pricing actions are likely to have been beneficial for the segment. We expect segmental revenues to be $1.9 billion, implying an increase of 5.9% from the year-ago level.

Increasing demand for AED Rentals, eyewash stations and WaterBreak products is likely to have supported the performance of the First Aid and Safety Services segment. We expect this segment’s revenues to be $283 million, implying an increase of 8.5% from the year-ago number.

Also, synergistic gains from the acquisitions of Paris Uniform Services (March 2024) and SITEX (February 2024) are expected to have boosted revenues. While the Paris Uniform Services buyout has enhanced Cintas’ presence in Pennsylvania, New York, Maryland and West Virginia, the SITEX acquisition has boosted its market position in the U.S. central Midwest region.

CTAS is anticipated to have put up a healthy margin performance, supported by its focus on operational executions and pricing actions. We expect the operating margin to improve 40 basis points from the prior-year level.

However, the company has been witnessing escalating costs of sales and selling, general and administrative (SG&A) expenses, which are likely to weigh on its bottom-line results. For the quarter under review, we anticipate SG&A expenses to rise nearly 9% from the year-earlier level. Also, given the company’s exposure to international markets, foreign currency headwinds are likely to have affected its profitability.

Cintas Corporation Price, Consensus and EPS Surprise

 

Cintas Corporation Price, Consensus and EPS Surprise

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

 

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for CTAS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.

Earnings ESP: CTAS has an Earnings ESP of -1.14% as the Most Accurate Estimate is pegged at 99 cents per share, which is lower than the Zacks Consensus Estimate of $1. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: CTAS presently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

Terex Corporation (TEX - Free Report) has an Earnings ESP of +0.71% and a Zacks Rank of 3 at present.

The company is scheduled to release third-quarter results on Oct. 30. Terex’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7%.

Costco Wholesale Corporation (COST - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank of 3. The company is slated to release fourth-quarter fiscal 2024 (ended August 2024) results on Sep. 26.

Costco’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 2.3%.

KB Home (KBH - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank of 3 at present. It is slated to release third-quarter fiscal 2024 (ended August 2024) results on Sep. 25.

KB Home’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.4%.

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

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