In This Article:
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Total Revenue: $2.61 billion, an increase of 8.4% year-over-year.
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Organic Growth Rate: 7.9%, adjusted for acquisitions and foreign currency exchange rate fluctuations.
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Gross Margin: 50.6%, an all-time high, up 11.1% from the previous year.
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Operating Income: $609.9 million, up 17.1% from last year.
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Operating Margin: 23.4%, adjusted to 22.8% excluding a $15 million property sale gain.
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Diluted EPS: $1.13, an increase of 17.7% year-over-year.
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Free Cash Flow: Increased 14.5% over the prior year for the first nine months.
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Uniform Rental and Facility Services Organic Growth: 7%.
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First Aid and Safety Services Growth: 15%.
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Fire Protection Services Growth: 10.6%.
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Uniform Direct Sale: Decreased by 2.3%.
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Quarterly Cash Dividend: $0.39 per share.
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Annual Revenue Guidance: Updated to $10.28 billion to $10.305 billion.
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Annual Diluted EPS Guidance: Raised to $4.36 to $4.40.
Release Date: March 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cintas Corp (NASDAQ:CTAS) reported a strong third quarter with total revenue growth of 8.4% to $2.61 billion.
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The company achieved an all-time high gross margin of 50.6%, reflecting an 11.1% increase over the prior year.
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Operating income increased by 17.1% to 23.4%, marking another all-time high for the company.
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Diluted EPS grew by 17.7% to $1.13, showcasing robust earnings growth.
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Cintas Corp (NASDAQ:CTAS) continues to generate strong cash flow, with free cash flow increasing by 14.5% over the prior year.
Negative Points
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Foreign exchange rates negatively impacted third quarter revenue growth by 40 basis points.
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Uniform Direct Sale segment experienced a decline of 2.3% in organic growth.
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The company faces potential challenges from tariffs on Mexico and China, though it is currently too early to assess the impact.
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There is uncertainty in the macroeconomic environment, which could affect customer purchasing behaviors.
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Cintas Corp (NASDAQ:CTAS) terminated discussions with UniFirst regarding a proposed acquisition, indicating challenges in reaching mutual agreement on key transaction terms.
Q & A Highlights
Q: Can you talk about how customer purchasing behaviors and sales cycles are changing given the current environment? A: Todd Schneider, President and CEO, stated that customer behavior remains stable with attractive new business and retention rates. Despite market uncertainties, Cintas' value proposition continues to resonate, especially during uncertain times, as outsourcing can improve cash flow and save time for customers.