Cincinnati-based Cintas, a provider of uniform-rental and other services, is expected to report impressive financial results for its fiscal fourth quarter.
According to FactSet, the company is projected to post a quarterly profit of $331.5 million, or $3.19 per share. This is an increase from $294.5 million, or $2.81 per share, in the same quarter last year.
Cintas is also expected to report a significant growth in revenue for the quarter ended May 31. Revenue is estimated to be $2.26 billion, up from $2.07 billion in the previous year, according to FactSet.
Key Factors to Watch
Cintas is likely to benefit from reduced labor costs and deflation in material costs, particularly for cotton. This is expected to boost the company’s margins. UBS analysts noted that hourly earnings of its uniform and linen supply employees have slowed down in recent months.
Executives have attributed Cintas’ third-quarter growth to increased business from new customers and existing clients seeking additional products and services. Investors will be keeping an eye on the company’s performance in the healthcare, hospitality, education, and government sectors to ensure consistent growth.
Cintas has achieved robust growth by focusing on upselling, expanding service capabilities, and offering adjacent services. UBS analysts reported a core compound annual growth rate of 6% to 7% from fiscal 2013 to fiscal 2022. Investors will be interested in knowing if the company can maintain this historical growth rate while competing against smaller competitors with lower sales and limited service capabilities.