Press release·03/03/2025 18:44:56

Cintas Delivers Strong Quarterly and Six-Month Results

Cintas Corporation, a leading provider of corporate uniform and facility services, has reported impressive financial results for the three and six months ended November 30, 2024. The company’s revenue, profitability, and cash flow generation demonstrate its ability to navigate the current business environment and capitalize on growth opportunities.

Consolidated Results: Three Months Ended November 30, 2024

Total revenue for the three-month period increased 7.8% to $2,561.8 million, driven by organic growth of 7.1% and a 0.7% contribution from acquisitions. The Uniform Rental and Facility Services segment, Cintas’ largest business unit, reported a 7.6% increase in revenue, with organic growth of 6.9%. The First Aid and Safety Services segment also delivered strong results, with revenue rising 12.4% on an organic basis.

Cintas’ focus on operational efficiency was evident in the improved gross margins across both the Uniform Rental and Facility Services and First Aid and Safety Services segments. Cost of uniform rental and facility services, as a percentage of revenue, decreased from 52.6% to 50.9%, while cost of other (primarily first aid and safety products) improved from 49.6% to 47.4%. These improvements were driven by efficiency gains in energy and in-service inventory usage, as well as better leverage of fixed costs.

Selling and administrative expenses increased 6.8% but declined as a percentage of revenue from 27.0% to 26.8%, primarily due to a decrease in employee-related expenses. Operating income rose 18.4% to $591.4 million, or 23.1% of revenue, up from 21.0% in the prior-year period.

Net income for the quarter increased 19.7% to $448.5 million, and diluted earnings per share grew 21.1% to $1.09, reflecting the strong operational performance and effective capital allocation.

Consolidated Results: Six Months Ended November 30, 2024

For the six-month period, total revenue increased 7.3% to $5,063.4 million, with organic growth of 7.6%. The Uniform Rental and Facility Services segment reported a 6.7% increase in revenue, while the First Aid and Safety Services segment saw a 12.3% organic revenue growth.

Cost of uniform rental and facility services, as a percentage of revenue, improved from 52.3% to 50.8%, and cost of other decreased from 49.4% to 47.3%. These margin expansions were driven by the same factors as the quarterly results.

Selling and administrative expenses increased 7.3% but remained flat as a percentage of revenue at 27.2%. Operating income grew 15.2% to $1,152.4 million, or 22.8% of revenue, up from 21.2% in the prior-year period.

Net income for the six-month period increased 18.5% to $884.1 million, and diluted earnings per share rose 19.7% to $2.19.

Segment Performance

The Uniform Rental and Facility Services segment reported strong results, with revenue growth of 6.7% and 6.9% on an organic basis for the six-month period. Gross margin improved from 47.7% to 49.2%, and income before income taxes increased 14.0% to 23.4% of revenue, driven by the operational efficiencies mentioned earlier.

The First Aid and Safety Services segment also delivered impressive performance, with revenue growth of 12.3% on an organic basis for the six-month period. Gross margin expanded from 55.2% to 57.5%, and income before income taxes increased from 22.0% to 24.8% of revenue, reflecting the favorable sales mix, sourcing and productivity initiatives, and improved leverage of fixed costs.

Liquidity and Capital Resources

Cintas’ cash flow from operating activities increased to $908.1 million for the six-month period, up from $729.6 million in the prior-year period. This strong cash generation enabled the company to fund capital expenditures of $194.3 million, make $154.9 million in acquisitions, and return $651.5 million to shareholders through share repurchases and dividends.

As of November 30, 2024, Cintas had $122.4 million in cash and cash equivalents, including $63.7 million held outside the U.S. The company has access to $2.0 billion in debt capacity through its revolving credit facility and maintains investment-grade credit ratings, providing ample liquidity and financial flexibility.

Outlook and Strategic Priorities

Cintas’ strong performance in the first half of the fiscal year and its solid financial position suggest the company is well-equipped to navigate the current business environment. The company’s focus on operational efficiency, strategic acquisitions, and disciplined capital allocation should continue to drive shareholder value.

Going forward, Cintas’ strategic priorities include:

1. Organic Growth: Leveraging its sales force, product and service offerings, and customer relationships to drive new business and expand existing customer relationships.

2. Acquisitions: Pursuing strategic acquisitions that complement its core Uniform Rental and Facility Services and First Aid and Safety Services segments, as well as its Fire Protection operations.

3. Operational Excellence: Maintaining a relentless focus on cost management, productivity improvements, and efficient use of capital to enhance profitability and cash flow generation.

4. Capital Allocation: Balancing investments in the business, strategic acquisitions, share repurchases, and dividend payments to deliver consistent returns to shareholders.

Cintas’ diversified business model, strong market position, and disciplined execution have enabled the company to deliver impressive results in the face of macroeconomic challenges. As the company continues to execute on its strategic priorities, investors can expect Cintas to remain a leader in the corporate services industry.