Cintas Boosts FY23 Outlook As Q2 Results Top Estimates

Business services company Cintas Corp. (CTAS) reported on Wednesday that profit for the second quarter grew 10 percent from last year, driven by improved margins and double-digit revenue growth. Both earnings per share and revenues topped analysts’ expectations. The company also raised its earnings and revenue outlook for the full-year 2023.

“Each of our operating segments again grew revenue at a double-digit rate. Strong volume growth from new customers and the penetration of existing customers with more products and services generated operating leverage,” said Todd Schneider, Cintas’ President and CEO.

For the second quarter, net income increased to $324.29 million or $3.12 per share from $294.67 million or $2.76 per share in the prior-year quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $3.03 per share for the quarter. Analysts’ estimates typically exclude special items.

Revenue for the quarter grew 13.1 percent to $2.17 billion from $1.92 billion in the same quarter last year. Analysts expected revenues of $2.13 billion for the quarter.

The organic revenue growth rate, which adjusts for the impacts of acquisitions, divestitures and foreign currency exchange rate fluctuations, was 12.8 percent.

Revenues from uniform rental and facility services improved 11.4 percent to $1.71 billion and other revenues grew 20.1 percent to $464.87 million from last year.

Gross margin, as a percentage of revenue, improved 100 basis points to 47.0 percent from last year.

Looking ahead to fiscal 2022, the company now projects earnings in a range of $12.50 to $12.80 per share on revenues between $8.67 billion and $8.75 billion.

Previously, the company expected earnings in the range of $12.30 to $12.65 per share on revenues between $8.58 billion and $8.67 billion.

The Street is looking for earnings of $12.58 per share on revenues of $8.63 billion for the year.

The company noted that the guidance assumes a stable economy and excludes COVID-19 pandemic-related setbacks or economic downturns.

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