Cintas Corporation — Fiscal 2027 First Quarter Earnings Summary

Financial Performance

• Total revenue increased 10.9% year-over-year to $3.01 billion for the quarter ended August 31, 2026, compared to $2.72 billion in the prior year period.
• Organic revenue growth was 8.9%, adjusting for acquisitions, foreign currency fluctuations, and workday differences.
• Gross margin increased 13.7% to $1.55 billion, representing 51.5% of revenue, up from 50.3% in the prior year period (a 120 basis point increase).
• Operating income rose 15.2% to $711.9 million, or 23.6% of revenue, compared to $617.9 million (22.7% of revenue) in the prior year.
• Operating income included $14.4 million in transaction expenses related to the proposed UniFirst Corporation acquisition.
• Net income increased 12.3% to $551.7 million, compared to $491.1 million in the prior year.
• Diluted earnings per share (EPS) increased 13.3% to $1.36, compared to $1.20 in the prior year.
• Adjusted diluted EPS was $1.39, an increase of 15.8% over the prior year, excluding the $0.03 impact of UniFirst transaction expenses.
• The effective tax rate was 20.0% for the quarter, compared to 17.6% in the prior year, impacted by discrete items related to stock-based compensation.
• Free cash flow was $464.8 million for the quarter, compared to $312.5 million in the prior year.
• Net cash provided by operating activities was $572.3 million, compared to $414.5 million in the prior year.
• Capital expenditures were $107.5 million for the quarter.

Guidance and Future Outlook

• Cintas raised full fiscal 2027 annual revenue guidance from a range of $12.10 billion to $12.25 billion to a range of $12.15 billion to $12.27 billion.
• Adjusted diluted EPS guidance for fiscal 2027 was raised from a range of $5.36 to $5.50 to a range of $5.45 to $5.54.
• The updated adjusted diluted EPS guidance excludes non-recurring transaction expenses related to the UniFirst acquisition.
• Fiscal 2027 is expected to have one more workday than fiscal 2026.
• Fiscal 2027 interest, net is expected to be approximately $103.0 million, compared to $101.2 million in fiscal 2026, primarily due to amortization of bridge loan financing expenses related to the UniFirst acquisition.
• The expected effective tax rate for fiscal 2027 is 20.4%, compared to 20.2% in fiscal 2026.
• Guidance excludes expected impacts from the proposed UniFirst acquisition and does not assume any future acquisitions.
• Guidance assumes a constant foreign currency exchange rate.

Business Segments and Product Lines

• Uniform rental and facility services revenue was $2.29 billion, up 9.7% year-over-year.
• First Aid and Safety Services revenue was $388.5 million.
• All Other revenue was $330.7 million.
• Gross margin for uniform rental and facility services was 50.8%, up from 49.7% in the prior year.
• Gross margin for the "Other" category was 53.9%, up from 52.3% in the prior year.
• The company continues to invest in technology, capacity, and talent to support customer facilities.

Market and Competitive Landscape

• The company serves more than one million businesses, providing products and services to keep facilities clean, safe, and professional.
• The company is engaged with the U.S. Federal Trade Commission regarding the review of the proposed UniFirst transaction.

Risks and Challenges

• The completion of the UniFirst transaction is subject to regulatory approvals and other conditions; failure to receive approvals or satisfy conditions could prevent the transaction from closing.
• Risks include potential adverse reactions from customers, employees, or partners, and the diversion of management attention to the transaction.
• Future results may be impacted by operating costs, including energy and fuel costs, supply chain constraints, inflationary pressures, and higher interest rates.
• Risks include changes in global trade policies, tariffs, and exchange rates, as well as fluctuations in material and labor costs.
• Potential risks include union organizing activities, compliance with government regulations, cybersecurity threats, and litigation.

Management Commentary and Tone

• CEO Todd M. Schneider expressed pleasure with the start to fiscal 2027, citing record revenue and record operating margins.
• Management highlighted the strength of the business model and the ability to help customers operate facilities safely and professionally.
• Schneider noted excitement about the value expected to be created through the UniFirst transaction, anticipating the transaction to close prior to the end of calendar 2026.
• The tone reflected confidence in the company's growth trajectory and operational execution.

Other Key Points

• On September 15, 2026, Cintas paid an aggregate quarterly dividend of $208.8 million to shareholders.
• During the first quarter of fiscal 2027 and through September 22, 2026, Cintas purchased shares of common stock for a total of $544.7 million.
• The proposed acquisition of UniFirst Corporation involves transaction expenses of $14.4 million included in the current quarter's operating income.
• The company is a component of both the Standard & Poor's 500 Index and Nasdaq-100 Index.