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.