HomeMost PopularInvestingCintas (CTAS) Q1 Earnings & Revenues Top Estimates, Increase Y/Y

Cintas (CTAS) Q1 Earnings & Revenues Top Estimates, Increase Y/Y

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Cintas Corporation (CTAS) has released its first-quarter fiscal 2024 results, ending August 31, 2023. The company reported earnings of $3.70 per share, exceeding the Zacks Consensus Estimate of $3.65. Despite higher costs, the bottom line increased by 9.1% compared to the previous year.

Total revenues for the quarter reached $2,342.3 million, surpassing the Zacks Consensus Estimate of $2,324.8 million. The top line grew by 8.1% year over year, driven by higher segmental revenues. Organic sales also increased by 8.1% compared to the previous year.

Segmental Performance

Cintas operates in two main segments: Uniform Rental and Facility Services, and First Aid and Safety Services. Other businesses are included in the All Other category. Here is a breakdown of the quarterly sales data:

  • Uniform Rental and Facility Services segment revenues amounted to $1,826.83 million, representing a 7.6% year-over-year increase.
  • First Aid and Safety Services segment revenues totaled $260.69 million, reflecting an 11.3% year-over-year growth.
  • All Other business revenues reached $254.81 million, increasing by 8.6% compared to the previous year.

Margin Profile

In the first quarter, Cintas’ cost of sales increased by 5.4% year over year to $1.20 billion, accounting for approximately 51.3% of net sales. Gross profit rose by 11% to $1.14 billion, resulting in a gross margin of 48.7%, up from 47.5% in the previous year.

Selling and administrative expenses amounted to $641.02 million, representing a 9% increase from the previous year and 27.4% of net sales. The operating margin for the quarter was 21.4%, compared to 20.3% in the same period last year. Interest expenses decreased by 11.5% to $24.54 million.

Balance Sheet and Cash Flow

As of the end of the first quarter, Cintas had cash and cash equivalents of $88.13 million, down from $124.15 million at the end of fiscal 2023. Long-term debt was $2.48 billion, slightly lower than the previous year.

During the quarter, operating activities generated net cash of $336.95 million, a 13% increase from the previous year. Capital expenditure totaled $106.70 million, marking a 52.4% year-over-year increase. Free cash flow increased by almost 1% to $230.25 million.

The company repurchased shares worth $73.28 million during the first quarter, compared to $320.33 million in the same period last year. Dividend payments totaled $117.57 million, up approximately 20.4% year over year.

Fiscal 2024 Guidance

Cintas raised its fiscal 2024 guidance, now expecting revenues of $9.40-$9.52 billion, compared to the previously anticipated range of $9.35-$9.50 billion. The mid-point of the guided range, $9.46 billion, is higher than the Zacks Consensus Estimate of $9.45 billion. Earnings per share are estimated to be in the range of $14.00-$14.45, compared to the previous estimate of $13.85-$14.35. The mid-point of the guided range, $14.23, is slightly lower than the Zacks Consensus Estimate of $14.29.

Cintas predicts interest expense of approximately $98 million in fiscal 2024, compared to $109.5 million recorded in fiscal 2023. The effective tax rate is expected to be 21.3%, up from 20.4% in the previous year.

Zacks Rank & Other Top Stocks

Cintas holds a Zacks Rank #2 (Buy). Other top-ranked companies in the Industrial Products sector include:

  • Flowserve Corporation (FLS) – Zacks Rank #1 (Strong Buy)
  • Graham Corporation (GHM) – Zacks Rank #1 (Strong Buy)

These rankings are based on their impressive earnings performances and growth potential.

Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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