Cintas Raises Fiscal 2027 Outlook After Record First-Quarter Results

Cintas Corporation (NASDAQ:CTAS) lifted its fiscal 2027 revenue and earnings guidance following a first-quarter performance that set new records for the company. The firm reported quarterly revenue of $3.01 billion, a 10.9% increase from the prior year, marking the first time it has surpassed the $3 billion threshold in a single quarter.

Organic revenue growth, which excludes the effects of acquisitions, currency fluctuations, and workday differences, stood at 8.9%. Chief Executive Officer Todd Schneider attributed the results to sustained demand for outsourced services that assist businesses with image, safety, cleanliness, and compliance. He noted that the company continues to benefit from new customer acquisitions, expansion within existing accounts, and strong retention rates.

Profitability metrics also reached historic highs. Gross margin climbed to a record 51.5% of revenue, while adjusted operating margin expanded by 90 basis points year over year to a record 23.6%. President and Chief Operating Officer Jim Rozakis stated that growth was primarily volume-driven rather than pricing-driven, with pricing remaining consistent with historical levels. He credited new business wins, improved retention, and cross-selling for the positive results.

Segment performance varied, with First Aid and Safety leading organic growth at 14.2%. Other segments reported organic growth of 9.6% for Uniform Direct Sale, 9.2% for Fire Protection Services, and 8.0% for Uniform Rental and Facility Services. Rozakis noted that Uniform Rental growth benefited from solid new-business performance and slightly improved retention, despite a favorable comparison to the prior-year quarter. Management indicated that selected verticals, including healthcare, hospitality, government, and education, all outperformed the company average.

On an earnings basis, diluted earnings per share rose 13.3% to $1.36. Excluding expenses related to the proposed UniFirst transaction, adjusted diluted EPS increased 15.8% to $1.39. Operating income grew 15.2% to $711.9 million, or 17.6% on an adjusted basis. Executive Vice President and Chief Financial Officer Scott Garula explained that one additional workday contributed 50 basis points to operating margin, a benefit offset by 50 basis points of UniFirst-related expenses.

Looking ahead, Cintas raised its fiscal 2027 revenue outlook to a range of $12.15 billion to $12.27 billion, up from the previous range of $12.10 billion to $12.25 billion. The adjusted diluted EPS forecast was increased to $5.45 to $5.54 from $5.36 to $5.50. The guidance assumes constant foreign exchange rates and excludes future acquisitions or share repurchases.

The company remains focused on completing its proposed acquisition of UniFirst, which is subject to regulatory approval in the United States and Canada. Schneider expressed optimism that the transaction will close by the end of calendar 2026 but declined to provide further details to avoid speculation. Cintas also increased its regular quarterly dividend by 15.6% and has repurchased $545 million in shares through the date of the earnings call.