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CTAS Q1 Earnings & Revenues Beat Estimates on Margin Gains
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Key Takeaways
Cintas beat Q1 earnings and revenue estimates on 8.9% organic revenue growth and record margins.
Cintas raised fiscal 2027 revenue guidance to $12.15B-$12.27B and lifted adjusted EPS outlook.
CTAS generated $464.8M in free cash flow and repurchased $315.7M of common stock in Q1.
Cintas Corporation (CTAS - Free Report) reported first-quarter fiscal 2027 adjusted earnings of $1.39 per share, which beat the Zacks Consensus Estimate of $1.35 by 3.0%. The bottom line increased 15.8% from the year-ago quarter. Revenues of $3.01 billion surpassed the consensus estimate of $2.97 billion by 1.3% and rose 10.9% year over year.
The top line benefited from 8.9% organic revenue growth, reflecting growth after adjusting for acquisitions, foreign currency movements and workday differences. Record gross and operating margins were other key highlights in the quarter.
Cintas' Segmental Results
The company has two reportable segments, Uniform Rental and Facility Services and First Aid and Safety Services. Other businesses are included in All Other. Quarterly sales data are briefly discussed below.
Cintas' Uniform Rental and Facility Services segment generated revenues of $2.29 billion, up 9.7% year over year from $2.09 billion. Segment operating income rose to $575.09 million from $499.94 million.
The First Aid and Safety Services segment delivered revenues of $388.52 million, increasing 16.1% from $334.66 million in the prior-year quarter. Operating income climbed to $99.54 million from $80.33 million.
Revenues from the All Other segment totaled $330.73 million, up 13.1% from $292.40 million a year ago. Segment operating income increased to $51.67 million from $37.60 million.
Cintas Corporation Price, Consensus and EPS Surprise
Cintas' cost of sales totaled $1.46 billion compared with $1.35 billion in the year-ago quarter. Gross margin increased 13.7% to $1.55 billion, while gross margin, as a percentage of revenues, expanded to 51.5% from 50.3%.
Selling and administrative expenses were $827.24 million, up 10.5% year over year. The company also incurred $14.41 million of transaction expenses related to the proposed UniFirst Corporation acquisition. Operating income rose 15.2% to $711.89 million.
Operating margin improved to 23.6% from 22.7% in the prior-year quarter. Net income increased 12.3% to $551.71 million, while net income margin was 18.3% compared with 18.1%. The effective tax rate increased to 20.0% from 17.6%.
Cintas' Cash Flow Trends
In the first quarter of fiscal 2027, Cintas generated $572.33 million in net cash from operating activities, up from $414.48 million in the year-ago period. Capital expenditures totaled $107.53 million compared with $101.96 million a year earlier.
Free cash flow increased to $464.80 million from $312.52 million. Net cash used in investing activities was $117.37 million, reflecting capital expenditures, purchases of investments and business acquisitions.
During the quarter, the company repurchased common stock worth $315.71 million and paid $180.70 million in dividends. Net cash used in financing activities totaled $500.17 million.
CTAS' Balance Sheet
Cintas exited the quarter with cash and cash equivalents of $243.60 million compared with $289.02 million at the end of fiscal 2026. Accounts receivable increased to $1.59 billion from $1.56 billion, while inventories declined to $433.29 million from $446.44 million.
Total current assets were $3.93 billion compared with $3.85 billion at May 31, 2026. Long-term debt was $1.43 billion, while debt due within one year totaled $999.29 million. Total shareholders' equity increased to $5.20 billion from $5.14 billion.
Cintas' Fiscal 2027 Outlook
For fiscal 2027, the company raised its revenue guidance to $12.15-$12.27 billion from the prior projection of $12.10-$12.25 billion. Adjusted earnings per share are now projected in the range of $5.45-$5.54, up from $5.36-$5.50 previously.
The guidance excludes expected impacts from the proposed UniFirst acquisition and assumes no future acquisitions and constant foreign exchange rates. Fiscal 2027 also has one more workday than fiscal 2026.
Cintas expects net interest expense of approximately $103.00 million compared with $101.20 million in fiscal 2026, with the increase primarily tied to amortization of bridge loan financing expenses related to UniFirst. The company projects an effective tax rate of 20.4% for fiscal 2027.
CTAS’ Zacks Rank
The company currently carries a Zacks Rank #2 (Buy).
In the third quarter of fiscal 2026 (ended June 2026), Spectrum Brands Holdings, Inc. (SPB - Free Report) reported adjusted earnings from continuing operations of $2.79 per share, increasing 125% from $1.24 in the year-ago quarter and surpassing the Zacks Consensus Estimate of $1.49.
Net sales increased 7.7% year over year to $753.3 million and surpassed the Zacks Consensus Estimate of $732 million.
Interparfums, Inc. (IPAR - Free Report) posted quarterly earnings of 95 cents per share in the second quarter of 2026, which decreased 4% from 99 cents reported in the prior-year period. The metric missed the Zacks Consensus Estimate of $1.04 per share.
Consolidated net sales rose 2% to $341 million from $333.9 million in the year-ago quarter. Organic sales rose 1%. Excluding headwinds related to the war in the Middle East, second-quarter organic sales increased 4%.
lululemon athletica inc. (LULU - Free Report) reported adjusted EPS of $2.06 in the second quarter of fiscal 2026 (ended July 2026), which declined 33.5% year over year but surpassed the Zacks Consensus Estimate of $1.79 by 15.1%.
The company’s revenues declined 4% from the year-ago period to $2.42 billion and 5% on a constant-dollar basis. Revenues missed the Zacks Consensus Estimate of $2.47 billion by 2.1%.
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CTAS Q1 Earnings & Revenues Beat Estimates on Margin Gains
Key Takeaways
Cintas Corporation (CTAS - Free Report) reported first-quarter fiscal 2027 adjusted earnings of $1.39 per share, which beat the Zacks Consensus Estimate of $1.35 by 3.0%. The bottom line increased 15.8% from the year-ago quarter. Revenues of $3.01 billion surpassed the consensus estimate of $2.97 billion by 1.3% and rose 10.9% year over year.
The top line benefited from 8.9% organic revenue growth, reflecting growth after adjusting for acquisitions, foreign currency movements and workday differences. Record gross and operating margins were other key highlights in the quarter.
Cintas' Segmental Results
The company has two reportable segments, Uniform Rental and Facility Services and First Aid and Safety Services. Other businesses are included in All Other. Quarterly sales data are briefly discussed below.
Cintas' Uniform Rental and Facility Services segment generated revenues of $2.29 billion, up 9.7% year over year from $2.09 billion. Segment operating income rose to $575.09 million from $499.94 million.
The First Aid and Safety Services segment delivered revenues of $388.52 million, increasing 16.1% from $334.66 million in the prior-year quarter. Operating income climbed to $99.54 million from $80.33 million.
Revenues from the All Other segment totaled $330.73 million, up 13.1% from $292.40 million a year ago. Segment operating income increased to $51.67 million from $37.60 million.
Cintas Corporation Price, Consensus and EPS Surprise
Cintas Corporation price-consensus-eps-surprise-chart | Cintas Corporation Quote
CTAS' Margin Profile
Cintas' cost of sales totaled $1.46 billion compared with $1.35 billion in the year-ago quarter. Gross margin increased 13.7% to $1.55 billion, while gross margin, as a percentage of revenues, expanded to 51.5% from 50.3%.
Selling and administrative expenses were $827.24 million, up 10.5% year over year. The company also incurred $14.41 million of transaction expenses related to the proposed UniFirst Corporation acquisition. Operating income rose 15.2% to $711.89 million.
Operating margin improved to 23.6% from 22.7% in the prior-year quarter. Net income increased 12.3% to $551.71 million, while net income margin was 18.3% compared with 18.1%. The effective tax rate increased to 20.0% from 17.6%.
Cintas' Cash Flow Trends
In the first quarter of fiscal 2027, Cintas generated $572.33 million in net cash from operating activities, up from $414.48 million in the year-ago period. Capital expenditures totaled $107.53 million compared with $101.96 million a year earlier.
Free cash flow increased to $464.80 million from $312.52 million. Net cash used in investing activities was $117.37 million, reflecting capital expenditures, purchases of investments and business acquisitions.
During the quarter, the company repurchased common stock worth $315.71 million and paid $180.70 million in dividends. Net cash used in financing activities totaled $500.17 million.
CTAS' Balance Sheet
Cintas exited the quarter with cash and cash equivalents of $243.60 million compared with $289.02 million at the end of fiscal 2026. Accounts receivable increased to $1.59 billion from $1.56 billion, while inventories declined to $433.29 million from $446.44 million.
Total current assets were $3.93 billion compared with $3.85 billion at May 31, 2026. Long-term debt was $1.43 billion, while debt due within one year totaled $999.29 million. Total shareholders' equity increased to $5.20 billion from $5.14 billion.
Cintas' Fiscal 2027 Outlook
For fiscal 2027, the company raised its revenue guidance to $12.15-$12.27 billion from the prior projection of $12.10-$12.25 billion. Adjusted earnings per share are now projected in the range of $5.45-$5.54, up from $5.36-$5.50 previously.
The guidance excludes expected impacts from the proposed UniFirst acquisition and assumes no future acquisitions and constant foreign exchange rates. Fiscal 2027 also has one more workday than fiscal 2026.
Cintas expects net interest expense of approximately $103.00 million compared with $101.20 million in fiscal 2026, with the increase primarily tied to amortization of bridge loan financing expenses related to UniFirst. The company projects an effective tax rate of 20.4% for fiscal 2027.
CTAS’ Zacks Rank
The company currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
In the third quarter of fiscal 2026 (ended June 2026), Spectrum Brands Holdings, Inc. (SPB - Free Report) reported adjusted earnings from continuing operations of $2.79 per share, increasing 125% from $1.24 in the year-ago quarter and surpassing the Zacks Consensus Estimate of $1.49.
Net sales increased 7.7% year over year to $753.3 million and surpassed the Zacks Consensus Estimate of $732 million.
Interparfums, Inc. (IPAR - Free Report) posted quarterly earnings of 95 cents per share in the second quarter of 2026, which decreased 4% from 99 cents reported in the prior-year period. The metric missed the Zacks Consensus Estimate of $1.04 per share.
Consolidated net sales rose 2% to $341 million from $333.9 million in the year-ago quarter. Organic sales rose 1%. Excluding headwinds related to the war in the Middle East, second-quarter organic sales increased 4%.
lululemon athletica inc. (LULU - Free Report) reported adjusted EPS of $2.06 in the second quarter of fiscal 2026 (ended July 2026), which declined 33.5% year over year but surpassed the Zacks Consensus Estimate of $1.79 by 15.1%.
The company’s revenues declined 4% from the year-ago period to $2.42 billion and 5% on a constant-dollar basis. Revenues missed the Zacks Consensus Estimate of $2.47 billion by 2.1%.