Uniform rental firm Cintas raises annual profit forecast on resilient demand, cost savings

Reuters
03-26
Uniform rental firm Cintas raises annual profit forecast on resilient demand, cost savings

March 26 (Reuters) - Cintas CTAS.O raised its annual profit forecast on Wednesday, banking on resilient demand for its uniform rentals and fire-safety supplies, as well as benefits from cost-saving measures, sending its shares up nearly 7.5% in early trading.

The Ohio-based company also raised the lower end of its organic revenue growth forecast and topped analysts' estimate for third-quarter profit.

Cintas has benefited from steady job growth in the United States as businesses increased their need for supplies of services such as facility cleaning and first-aid training, along with rental uniforms.

The company is also offering bundled products at a lower price compared to what it charges for individual services, in an effort to retain customers.

Besides, it has heavily invested in technology to reduce costs, such as in a routing system called SmartTruck — an application showing shorter routes to its delivery destinations, helping it save time and fuel.

The uniform rental company now expects its fiscal 2025 profit per share to be between $4.36 and $4.40, compared with its previous forecast of $4.28 to $4.34.

Cintas also benefited from slowing the pace of price increases in recent quarters and had previously hinted that future hikes will depend on how inflation is pressuring customers.

The company expects its organic revenue to grow between 7.4% and 7.7%, compared with its prior range of a 7% to 7.7% rise.

Its third-quarter revenue rose 8.4% to $2.61 billion. Analysts' on average estimated $2.60 billion, according to data compiled by LSEG.

Cintas posted a per-share profit of $1.13 for the quarter ended February 28, beating expectation of $1.06.

Separately, the company said on Monday it has terminated discussions related to the acquisition of rival UniFirst UNF.N.

(Reporting by Aamir Sohail in Bengaluru; Editing by Shilpi Majumdar)

((Aamir.Sohail@thomsonreuters.com))

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