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By Dean Seal
Cintas reports results for its fiscal first quarter on Tuesday morning. Here’s what you need to know:
EARNINGS: The Cincinnati-based provider of uniform-rental and other services is expected to post a quarterly profit of $383 million, or $3.67 a share, compared with $352 million, or $3.39 a share, in the same quarter a year ago, according to FactSet.
SALES: Revenue is expected to be $2.34 billion, up from $2.17 billion in the year-ago quarter, according to FactSet.
WHAT TO WATCH
COSTS: Cintas has benefited from normalizing costs recently, with moderation in labor costs and deflation in material costs, particularly cotton, driving up margins at the end of the last fiscal year. Energy costs have also been coming down, Cintas said over the summer.
MARGINS: Management has reported that inflation is moderating, which UBS analysts said in July could help Cintas deliver toward the high-end of its 20% to 30% incremental margin target after two inflationary years.
PRICING: With inflation moderating, the company’s pricing has moderated as well, leading it to set guidance for 7% to 8% organic sales growth in fiscal 2024, though investors will be looking to see how this change affects core volumes.
Write to Dean Seal at [email protected]
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