A month has gone by since the last earnings report for Cintas (CTAS). Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Cintas due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cintas' Q4 Earnings & Revenues Surpass Estimates, Increase Y/Y
Cintas reported fourth-quarter fiscal 2026 earnings of $1.29 per share, which beat the Zacks Consensus Estimate of $1.24 by 4%. The bottom line increased 18.3% from the year-ago quarter figure. Revenues of $2.91 billion surpassed the consensus estimate of $2.88 billion by 1% and rose 8.9% year over year.
The top line was driven by 8.4% organic revenue growth, reflecting solid demand across its route-based businesses. Record gross margins also stood out as a key highlight in the quarter.
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 are briefly discussed below.
Cintas’ Uniform Rental and Facility Services segment generated revenues of $2.20 billion, up 8.2% year over year from $2.03 billion. Segment operating income rose to $529.5 million from $465.1 million, reflecting steady demand and operating leverage.
The First Aid and Safety Services segment delivered revenues of $368.1 million, increasing 13.5% from $324.4 million in the prior-year quarter. Operating income climbed to $98.6 million from $76.7 million, supported by strong demand for safety and compliance solutions.
Revenues from the All Other segment totaled $339.4 million, up 8.6% from $312.6 million a year ago. Segment operating income increased to $59 million from $55.7 million.
Margin Profile
Cintas’ cost of sales (comprising costs related to uniform rental and facility services and others) increased 6.2% year over year to $1.42 billion. Cintas reported gross profit of $1.48 billion, up 11.6% year over year. Gross margin improved 130 basis points to 51%, marking a record high.
Selling and administrative expenses totaled $793.2 million, up 8.9% from the year-ago quarter figure. Despite this increase, operating income rose 12.7% to $673 million.
Operating margin was 23.2%, up from 22.4% in the prior-year quarter, helped by higher sales. Net income increased 14% to $511 million, with a tax rate of 21.2%.
Cintas’ Balance Sheet & Cash Flow
Exiting fiscal 2026, Cintas had cash and cash equivalents of $289 million compared with $264 million at the end of fiscal 2025. Long-term debt was about $1.43 billion compared with $2.42 billion at the end of fiscal 2025.Â
In fiscal 2026, it generated net cash of $2.28 billion from operating activities, up 5.1% from the year-ago period. Capital expenditures in the same period totaled $395.1 million, down 3.4% year over year.
The company repurchased shares worth $952.1 million compared with $934.8 million in the previous fiscal year. Dividend payments totaled $701.5 million, up 14.7% year over year.
Fiscal 2027 Outlook
For fiscal 2027, the company expects revenues to be in the range of $12.10-$12.25 billion. Adjusted earnings per share are projected in the range of $5.36-$5.50. The guidance excludes any expected impacts associated with the pending UniFirst acquisition.
Management expects net interest expense of approximately $105 million and an effective tax rate of 20.2% for the year. The outlook assumes stable foreign exchange rates and excludes contributions from acquisitions.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Cintas has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock has a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cintas has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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