Yahoo Finance Cintas' Q1 Earnings & Revenues Surpass Estimates, View Up
Cintas Corporation CTAS reported first-quarter fiscal 2025 (ended Aug. 31, 2024) earnings of $1.10 per share, which beat the Zacks Consensus Estimate of $1.00. The bottom line increased 18.3% year over year despite an increase in operating costs.
Total revenues of $2.502 billion marginally outperformed the consensus estimate of $2.497 billion. The top line rose 6.8% year over year, driven by higher segmental revenues. Organic sales were up 8% year over year.
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 77.3% of the quarter’s net sales) totaled $1.93 billion, up 5.5% year over year. Our estimate for segmental revenues was $1.93 billion.
Revenues from the First Aid and Safety Services segment (representing 11.7% of the quarter’s net sales) totaled $292.6 million, up 12.2% year over year. Our estimate for segmental revenues was $283 million.
Revenues from All Other business (representing 11% of the quarter’s net sales) totaled $275.2 million, up 8% year over year. Our estimate for segmental revenues was $275.3 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 (comprising costs related to uniform rental and facility services and others) increased 4.1% year over year to $1.25 billion. It represented approximately 49.9% of net sales. Gross profit increased 9.6% to $1.25 billion. The gross margin was 50.1% compared with 48.7% in the year-ago period. Our estimate for the gross margin was pegged at 49.7%.
Selling and administrative expenses totaled $691.1 million, reflecting a 7.8% increase from the year-ago figure. It represented 27.6% of net sales. Operating income increased 12.1% year over year to $561 million. The operating margin was 22.4% compared with 21.4% in the year-ago quarter. Interest expenses increased 4.4% to $25.6 million.
Cintas’ Balance Sheet & Cash Flow
Exiting first-quarter fiscal 2025, Cintas had cash and cash equivalents of $101.4 million compared with $88.1 million at the end of the year-ago fiscal quarter. Long-term debt was about $2.03 billion compared with $2.48 billion at the end of the prior fiscal year.
In the first three months of fiscal 2025, CTAS generated net cash of $466.7 million from operating activities, up 38.5% from the year-ago period. Capital expenditures in the same period totaled $92.9 million, down 12.9% year over year. Free cash flow increased 62.4% year over year to $373.8 million.
The company repurchased shares worth $614.8 million compared with $73.3 million in the year-ago period. Dividend payments totaled $138.2 million, up approximately 17.5% year over year.
CTAS’ FY25 Guidance
For fiscal 2025, Cintas expects revenues to be in the range of $10.22-$10.32 billion, higher than the earlier predicted band of $10.16-$10.31 billion. The mid-point of the guided range — $10.27 billion — is in line with the Zacks Consensus Estimate. Earnings per share are estimated to be in the range of $4.17-$4.25 compared with $4.06-$4.19 guided earlier. The mid-point of the guided range — $4.21 — lies above the consensus estimate of $4.16.
Cintas predicts net interest expenses of approximately $101 million. This compares with interest expenses of $95 million recorded in fiscal 2024. The effective tax rate is expected to be 20.4%, which is the same compared with fiscal 2024.
Stocks to Consider
Cintas currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Flowserve Corporation FLS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 18.2%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2024 earnings has increased 3.8%.
Crane Company CR presently has a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 2%.
RBC Bearings RBC currently carries a Zacks Rank of 2. RBC delivered a trailing four-quarter average earnings surprise of 4.8%.
In the past 60 days, the consensus estimate for RBC Bearings’ fiscal 2025 earnings has increased 0.7%.
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