Cintas Corporation Announces Fiscal 2025 Third Quarter Results

About this update from Cintas Corporation

CINCINNATI --(BUSINESS WIRE)-- Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2025 third quarter ended February 28, 2025 . Revenue for the third quarter of fiscal 2025 was $2.61 billion compared to $2.41 billion in last year’s third quarter, an increase of 8.4%. Revenue growth in the quarter was positively impacted by 0.9% due to acquisitions and negatively impacted by 0.4% due to foreign currency exchange rate fluctuations. The organic revenue growth rate for the third quarter of fiscal 2025, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 7.9%. Gross margin for the third quarter of fiscal 2025 was $1.32 billion compared to $1.19 billion in last year’s third quarter, an increase of 11.1%. Gross margin as a percentage of revenue was 50.6% for the third quarter of fiscal 2025 compared to 49.4% in last year's third quarter, an increase of 120 basis points. Operating income for the third quarter of fiscal 2025 increased 17.1% to $609.9 million compared to $520.8 million in last year's third quarter. Operating income as a percentage of revenue was 23.4% in the third quarter of fiscal 2025 compared to 21.6% in last year's third quarter. Operating income for the third quarter of fiscal 2025 benefited from a $15.0 million gain on the sale of property and equipment, while the prior fiscal year third quarter was negatively impacted by a $15.0 million agreement in principle to settle a purported class action contract dispute. Both of these items were recorded in selling and administrative expenses. Net income was $463.5 million for the third quarter of fiscal 2025 compared to $397.6 million in last year's third quarter, an increase of 16.6%. The third quarter of fiscal 2025 effective tax rate was 21.0% compared to 19.9% in last year's third quarter. The tax rates in both quarters were impacted by certain discrete items, primarily the tax accounting impact for stock-based compensation. Third quarter of fiscal 2025 diluted earnings per share (EPS) was $1.13 compared to $0.96 in last year's third quarter, an increase of 17.7%. The diluted EPS in each period is reflective of the impact of the four-for-one split of Cintas' common stock on September 11, 2024 (the Stock Split). On March 14, 2025 , Cintas paid an aggregate quarterly dividend of $158.1 million to shareholders, an increase of 14.9% from the amount paid last March. Todd M. Schneider , Cintas' President and Chief Executive Officer, stated, “Cintas delivered strong revenue growth, operating margins and cash flow generation in the third quarter. Our results are a testament to superb execution by our employee-partners and the differentiated value proposition we offer to our customers in providing for their image, safety, cleanliness and compliance needs.” Mr. Schneider concluded, "As we close out a strong fiscal 2025, we are updating our annual revenue expectations from a range of $10.255 billion to $10.320 billion to a range of $10.280 billion to $10.305 billion . The $15.0 million reduction at the top of the range reflects the negative impact of the foreign currency exchange rate fluctuations experienced in the third quarter and the expected impact for the fourth quarter. While the top end of the range for the organic growth rate expectations remains unchanged at 7.7%, we are raising the low end of the organic growth rate expectations from 7.0% to 7.4%. Although foreign currency exchange rate fluctuations do not impact organic growth rates, they do impact total growth. Finally, we are raising our diluted EPS guidance from a range of $4.28 to $4.34 to a range of $4.36 to $4.40 . Looking ahead, our superior products and services, unique culture and world-class team of employee-partners continue to position us to deliver meaningful value for our shareholders, customers and all stakeholders.” Please keep in mind there are two fewer workdays in fiscal 2025 compared to fiscal 2024. The following table helps illustrate the impact of two fewer workdays: Previous Guidance Fiscal 2025 Updated Guidance Fiscal 2025 (in millions) Fiscal 2024 Low end of Range Growth vs. 2024 High end of Range Growth vs. 2024 Low end of Range Growth vs. 2024 High end of Range Growth vs. 2024 A B E H I L M P Q Total revenue $ 9,596.6 $ 10,255.0 6.9 % $ 10,320.0 7.5 % $ 10,280.0 7.1 % $ 10,305.0 7.4 % E=(B-A)/A I=(H-A)/A M=(L-A) /A Q=( P-A )/A C D D D D Workdays in the period 262 260 260 260 260 A F G J K N O R S Workday adjusted revenue $ 9,596.6 $ 10,333.9 7.7 % $ 10,399.4 8.4 % $ 10,359.1 7.9 % $ 10,384.3 8.2 % F=( B/D )*C E=(F-A)/A F=(H/D)*C K=(J-A)/A N=(L/D)*C O=(N-A)/A R=(P/D)*C S=(R-A)/A Acquisition/Foreign currency impacts (0.7 )% (0.7 )% (0.5 )% (0.5 )% Organic revenue growth 7.0 % 7.7 % 7.4 % 7.7 % Please note the following regarding the total revenue guidance: Guidance does not assume any future acquisitions. Guidance incorporates the impact of foreign currency exchange rate fluctuations. While the first half of fiscal 2025 revenue was negatively impacted by only 0.1% or $5 million , the second half of fiscal 2025 is expected to be negatively impacted by approximately 0.4% or $16 million . Guidance assumes no significant economic disruption or downturn. For fiscal 2025, we are raising our diluted EPS expectations from a range of $4.28 to $4.34 to a range of $4.36 to $4.40 . Previous Guidance Fiscal 2025 Updated Guidance Fiscal 2025 Fiscal 2024 (1) Low end of Range Growth vs. 2024 High end of Range Growth vs. 2024 Low end of Range Growth vs. 2024 High end of Range Growth vs. 2024 Diluted EPS $ 3.79 $ 4.28 12.9 % $ 4.34 14.5 % $ 4.36 15.0 % $ 4.40 16.1 % (1) All references made to common stock shares, common stock per share amounts and treasury stock shares in this table, in the accompanying consolidated condensed financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Stock Split. Please note the following regarding diluted EPS guidance: Fiscal year 2025 interest, net is expected to be approximately $100.0 million compared to $95.0 million in fiscal year 2024, predominately as a result of higher variable rate debt. This may change as a result of future share buybacks or acquisition activity. Fiscal year 2025 effective tax rate is expected to be 20.2%. Our diluted EPS guidance includes no future share buybacks or significant economic disruptions or downturn. Cintas Cintas Corporation helps more than one million businesses of all types and sizes get Ready™ to open their doors with confidence every day by providing products and services that help keep their customers’ facilities and employees clean, safe and looking their best. With offerings including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday ®. Headquartered in Cincinnati , Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and Nasdaq-100 Index. Cintas will host a live webcast to review the fiscal 2025 third quarter results today at 10:00 a.m., Eastern Time . The webcast will be available to the public on Cintas' website at www.Cintas.com . A replay of the webcast will be available approximately two hours after the completion of the live call and will remain available for two weeks. CAUTION CONCERNING FORWARD-LOOKING STATEMENTS This Press Release contains forward-looking statements, including statements regarding our future business plans and expectations, and including the company's fiscal 2025 full-year guidance. The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press Release. Factors that might cause such a difference include, but are not limited to, the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions; supply chain constraints and macroeconomic conditions, including inflationary pressures and higher interest rates; changes in global trade policies, tariffs, and other measures that could restrict international trade; fluctuations in costs of materials and labor, including increased medical costs; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; the effect on operations of exchange rate fluctuations, and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; our ability to meet our aspirations relating to sustainability opportunities, improvements and efficiencies; the cost, results and ongoing assessment of internal controls over financial reporting; the effect of new accounting pronouncements; risks associated with cybersecurity threats, including disruptions caused by the inaccessibility of computer systems data and cybersecurity risk management; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events including global health pandemics; the amount and timing of repurchases of our common stock, if any; changes in global tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made, except otherwise as required by law. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2024 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us, or that we currently believe to be immaterial, may also harm our business. Cintas Corporation Consolidated Condensed Statements of Income (Unaudited) (In thousands except per share data) Three Months Ended February 28 , 2025 February 29 , 2024 % Change Revenue: Uniform rental and facility services $ 2,021,144 $ 1,876,642 7.7 % Other 588,015 529,531 11.0 % Total revenue 2,609,159 2,406,173 8.4 % Costs and expenses: Cost of uniform rental and facility services 1,009,660 960,208 5.2 % Cost of other 280,158 258,117 8.5 % Selling and administrative expenses 709,488 667,048 6.4 % Operating income 609,853 520,800 17.1 % Interest income (1,349 ) (930 ) 45.1 % Interest expense 24,764 25,530 (3.0 )% Income before income taxes 586,438 496,200 18.2 % Income taxes 122,941 98,621 24.7 % Net income $ 463,497 $ 397,579 16.6 % Basic earnings per share $ 1.14 $ 0.98 16.3 % Diluted earnings per share $ 1.13 $ 0.96 17.7 % Basic weighted average common shares outstanding 403,769 405,910 Diluted weighted average common shares outstanding 410,307 412,746 Cintas Corporation Consolidated Condensed Statements of Income (Unaudited) (In thousands except per share data) Nine Months Ended February 28, 2025 February 29, 2024 % Change Revenue: Uniform rental and facility services $ 5,945,393 $ 5,554,009 7.0 % Other 1,727,136 1,571,671 9.9 % Total revenue 7,672,529 7,125,680 7.7 % Costs and expenses: Cost of uniform rental and facility services 3,004,875 2,882,022 4.3 % Cost of other 819,479 772,691 6.1 % Selling and administrative expenses 2,085,901 1,949,928 7.0 % Operating income 1,762,274 1,521,039 15.9 % Interest income (3,561 ) (2,121 ) 67.9 % Interest expense 77,048 76,664 0.5 % Income before income taxes 1,688,787 1,446,496 16.8 % Income taxes 324,762 289,219 12.3 % Net income $ 1,364,025 $ 1,157,277 17.9 % Basic earnings per share $ 3.37 $ 2.83 19.1 % Diluted earnings per share $ 3.31 $ 2.79 18.6 % Basic weighted average common shares outstanding 403,568 406,723 Diluted weighted average common shares outstanding 410,492 413,389 CINTAS CORPORATION SUPPLEMENTAL DATA Gross Margin and Net Income Margin Results Three Months Ended Nine Months Ended February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024 Uniform rental and facility services gross margin 50.0 % 48.8 % 49.5 % 48.1 % Other gross margin 52.4 % 51.3 % 52.6 % 50.8 % Total gross margin 50.6 % 49.4 % 50.2 % 48.7 % Net income margin 17.8 % 16.5 % 17.8 % 16.2 % Reconciliation of Non-GAAP Financial Measures The press release contains non-GAAP financial measures within the meaning of the rules promulgated by the U.S. Securities and Exchange Commission . To supplement its consolidated condensed financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides these additional non-GAAP financial measures of free cash flow and organic revenue growth. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance as well as prospects for future performance. A reconciliation of the differences between these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP are shown in the tables below. Computation of Free Cash Flow Nine Months Ended (In thousands) February 28, 2025 February 29, 2024 Net cash provided by operations $ 1,530,156 $ 1,386,741 Capital expenditures (294,260 ) (307,558 ) Free cash flow $ 1,235,896 $ 1,079,183 Management uses free cash flow to assess the financial performance of the Company. Management believes that free cash flow is useful to investors because it relates the operating cash flow of the Company to the capital that is spent to continue, improve and grow business operations. Computation of Organic Revenue Growth Three Months Ended Nine Months Ended February 28 , 2025 February 29 , 2024 Growth % February 28 , 2025 February 29 , 2024 Growth % A B G I J O Revenue $ 2,609,159 $ 2,406,173 8.4 % $ 7,672,529 $ 7,125,680 7.7 % G=(A-B)/B O=(I-J)/J C D K L Workdays in the period 65 65 195 196 E F H M N P Workday adjusted revenue $ 2,609,159 $ 2,406,173 8.4 % $ 7,711,875 $ 7,125,680 8.2 % E=(A / C)*D F=( B/D )*D H=(E-F)/F M=(I /K)*L N=(J/ L)*L P=(M-N)/N Acquisition and foreign currency exchange impact, net (0.5 )% (0.5 )% Organic revenue growth 7.9 % 7.7 % Management believes that organic revenue growth is valuable to investors because it reflects the revenue performance compared to a prior period with the same number of revenue generating days and excludes the impact from acquisitions and foreign currency exchange rate fluctuations. SUPPLEMENTAL SEGMENT DATA (In thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total For the three months ended February 28, 2025 Revenue $ 2,021,144 $ 301,759 $ 286,256 $ 2,609,159 Gross margin $ 1,011,484 $ 172,133 $ 135,724 $ 1,319,341 Selling and administrative expenses $ 522,001 $ 100,600 $ 86,887 $ 709,488 Operating income $ 489,483 $ 71,533 $ 48,837 $ 609,853 For the three months ended February 29, 2024 Revenue $ 1,876,642 $ 262,602 $ 266,929 $ 2,406,173 Gross margin $ 916,434 $ 147,732 $ 123,682 $ 1,187,848 Selling and administrative expenses $ 496,027 $ 90,015 $ 81,006 $ 667,048 Operating income $ 420,407 $ 57,717 $ 42,676 $ 520,800 For the nine months ended February 28, 2025 Revenue $ 5,945,393 $ 893,693 $ 833,443 $ 7,672,529 Gross margin $ 2,940,518 $ 512,421 $ 395,236 $ 3,848,175 Selling and administrative expenses $ 1,532,238 $ 294,377 $ 259,286 $ 2,085,901 Operating income $ 1,408,280 $ 218,044 $ 135,950 $ 1,762,274 For the nine months ended February 29, 2024 Revenue $ 5,554,009 $ 789,696 $ 781,975 $ 7,125,680 Gross margin $ 2,671,987 $ 438,824 $ 360,156 $ 3,470,967 Selling and administrative expenses $ 1,445,440 $ 262,996 $ 241,492 $ 1,949,928 Operating income $ 1,226,547 $ 175,828 $ 118,664 $ 1,521,039 Cintas Corporation Consolidated Condensed Balance Sheets (In thousands) February 28 , 2025 May 31 , 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 243,428 $ 342,015 Accounts receivable, net 1,397,824 1,244,182 Inventories, net 420,826 410,201 Uniforms and other rental items in service 1,100,039 1,040,144 Income taxes, current 663 — Prepaid expenses and other current assets 178,648 148,665 Total current assets 3,341,428 3,185,207 Property and equipment, net 1,610,414 1,534,168 Investments 336,892 302,212 Goodwill 3,353,553 3,212,424 Service contracts, net 315,336 321,902 Operating lease right-of-use assets, net 209,399 187,953 Other assets, net 444,114 424,951 $ 9,611,136 $ 9,168,817 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 408,461 $ 339,166 Accrued compensation and related liabilities 208,952 214,130 Accrued liabilities 825,032 761,283 Income taxes, current — 18,618 Operating lease liabilities, current 48,786 45,727 Debt due within one year 449,915 449,595 Total current liabilities 1,941,146 1,828,519 Long-term liabilities: Debt due after one year 2,027,477 2,025,934 Deferred income taxes 466,816 475,512 Operating lease liabilities 165,664 146,824 Accrued liabilities 417,785 375,656 Total long-term liabilities 3,077,742 3,023,926 Shareholders’ equity: Preferred stock, no par value: — — 100 shares authorized, none outstanding Common stock, no par value, and paid-in capital: 2,525,876 2,305,301 1,700,000 shares authorized FY 2025: 776,172 issued and 403,669 outstanding FY 2024: 773,097 issued and 405,008 outstanding Retained earnings 11,507,826 10,617,955 Treasury stock: (9,498,504 ) (8,698,085 ) FY 2025: 372,503 shares FY 2024: 368,089 shares Accumulated other comprehensive income 57,050 91,201 Total shareholders’ equity 4,592,248 4,316,372 $ 9,611,136 $ 9,168,817 Cintas Corporation Consolidated Condensed Statements of Cash Flows (Unaudited) (In thousands) Nine Months Ended February 28 , 2025 February 29 , 2024 Cash flows from operating activities: Net income $ 1,364,025 $ 1,157,277 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 225,714 207,637 Amortization of intangible assets and capitalized contract costs 146,580 119,815 Stock-based compensation 97,586 84,490 Gain on sale of property and equipment (19,341 ) — Deferred income taxes (7,286 ) (21,366 ) Change in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net (158,761 ) (109,040 ) Inventories, net (8,053 ) 55,834 Uniforms and other rental items in service (60,502 ) (9,060 ) Prepaid expenses and other current assets and capitalized contract costs (146,062 ) (104,873 ) Accounts payable 72,799 5,771 Accrued compensation and related liabilities (4,562 ) (58,511 ) Accrued liabilities and other 47,617 52,945 Income taxes, current (19,598 ) 5,822 Net cash provided by operating activities 1,530,156 1,386,741 Cash flows from investing activities: Capital expenditures (294,260 ) (307,558 ) Purchases of investments (7,064 ) (7,592 ) Proceeds from sale of property and equipment 23,972 — Acquisitions of businesses, net of cash acquired (198,808 ) (185,028 ) Other, net 1,788 (3,100 ) Net cash used in investing activities (474,372 ) (503,278 ) Cash flows from financing activities: Repayment of debt — (13,450 ) Proceeds from exercise of stock-based compensation awards 699 1,275 Dividends paid (453,703 ) (393,310 ) Repurchase of common stock (678,129 ) (468,146 ) Other, net (19,448 ) (5,839 ) Net cash used in financing activities (1,150,581 ) (879,470 ) Effect of exchange rate changes on cash and cash equivalents (3,790 ) 341 Net (decrease) increase in cash and cash equivalents (98,587 ) 4,334 Cash and cash equivalents at beginning of period 342,015 124,149 Cash and cash equivalents at end of period $ 243,428 $ 128,483 View source version on businesswire.com : https://www.businesswire.com/news/home/20250326432928/en/ For additional information, contact: J. Michael Hansen , Executive Vice President & Chief Financial Officer - 513-972-2079 Jared S. Mattingley , Vice President, Treasurer & Investor Relations - 513-972-4195 Source: Cintas Corporation

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