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Cintas Corporation CTAS reported third-quarter fiscal 2025 (ended Feb. 28, 2025) earnings of $1.13 per share, which beat the Zacks Consensus Estimate of $1.05. The bottom line rose 17.7% year over year despite an increase in operating costs.
Total revenues of $2.61 billion marginally outperformed the consensus estimate of $2.60 billion. The top line rose 8.4% year over year, driven by higher segmental revenues. Organic sales were up 7.9% year over year.
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Cintas’ 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.
Revenues from the Uniform Rental and Facility Services segment (representing 77.5% of the quarter’s net sales) totaled $2.02 billion, up 7.7% year over year. Our estimate for segmental revenues was $2 billion.
Revenues from the First Aid and Safety Services segment (representing 11.6% of the quarter’s net sales) totaled $301.8 million, up 14.9% year over year. Our estimate for segmental revenues was $293.6 million.
Revenues from All Other business (representing 10.9% of the quarter’s net sales) totaled $286.3 million, up 7.2% year over year. Our estimate for segmental revenues was $288.5 million.
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CTAS’ Margin Profile
Cintas’ cost of sales (comprising costs related to uniform rental and facility services and others) increased 5.9% year over year to $1.29 billion. It represented approximately 49.4% of net sales. Gross profit increased 11.1% to $1.32 billion. The gross margin was 50.6% compared with 49.4% in the year-ago period. Our estimate for the gross margin was pegged at 49.9%.
Selling and administrative expenses totaled $709.5 million, reflecting a 6.4% increase from the year-ago figure. It represented 27.2% of net sales. Operating income increased 17.1% year over year to $609.9 million. The operating margin was 23.4% compared with 21.6% in the year-ago quarter. Interest expenses decreased 3% to $24.8 million.
Cintas’ Balance Sheet & Cash Flow
Exiting third-quarter fiscal 2025, Cintas had cash and cash equivalents of $243.4 million compared with $342 million at the end of the year-ago fiscal year. Long-term debt was about $2.03 billion, in line with the prior fiscal year’s number.
In the first nine months of fiscal 2025, CTAS generated net cash of $1.53 billion from operating activities, up 10.3% from the year-ago period. Capital expenditures in the same period totaled $294.3 million, down 4.3% year over year. Free cash flow increased 14.5% year over year to $1.24 billion.
The company repurchased shares worth $678.1 million compared with $468.2 million in the year-ago period. Dividend payments totaled $453.7 million, up 15.4% year over year.