Cintas, the Cincinnati-based provider of corporate uniforms and business services, matched fourth- quarter revenue expectations and beat earnings estimates. Cintas stock traded narrowly up Thursday.
Estimates: Wall Street predicted Cintas earnings per share of $2.68 and $2 billion in sales. When CTAS announced its third-quarter earnings in March, the company projected fourth-quarter revenue in the range of $1.96 billion-$2.02 billion and diluted EPS of $2.54-$2.74.
Results: EPS increased nearly 14% to $2.81. Revenue increased 13% to $2.07 billion.
Full Fiscal Year: Sales increased 10.4% t0 $7.85 billion. Diluted EPS increased 13.8% to $11.65.
"We achieved significant accomplishments this fiscal year despite significant inflation, including delivering upon our stated financial goals of mid-to high-single digit organic revenue growth rates, incremental operating margins in the range of 20% to 30%, double-digit EPS growth and the allocation of capital to improve shareholder returns," CEO Todd Schneider said in a statement.
Outlook: CTAS expects revenue to be in the range of $8.47 billion-$8.58 billion for fiscal year 2023. The company predicts diluted EPS between $11.90 and $12.30.
Indicator Of Commercial/Industrial Demand
Cintas is known as a leader in selling, renting and cleaning work uniforms and other clothes to more than 1 million businesses worldwide. It's also active in adjacent markets, providing fire safety equipment along with cleaning and first-aid supplies. The company's broad, deep customer base makes it a sensitive indicator of commercial and industrial demand.
The uniform rental company's health care and hygiene division did very well amid the pandemic as it offered in-demand protective gear, masks and hand sanitizer. Both earnings and sales growth accelerated for Cintas in the 2022 third-quarter. Earnings grew 25% to $2.97 per share. Over the past three quarters, its EPS growth rate rose from 12% to 16% and then 25%. In the third-quarter, revenue climbed 10% to $1.96 billion.
Cintas Stock
Shares of Cintas edged up 2.53% to 387.13 at the close of Thursday's market trading. CTAS stock is off June lows, but has been sliding for the past seven months. It is down 19% from its on Dec. 13 record high, and 14% below an interim high from April.
Cintas stock earns the No. 4 rank among its peers in the Commercial Services-Outsourcing industry group. Exlservice and Insperity are also among the group's highest-rated stocks. One possible concern is that it has a D Accumulation/Distribution Rating, which indicates institutional investors are still wary after Cintas fell off during the early 2022 market slump. Institutional ownership increased 10% year-over-year to 1,846 in June.
Cintas stock has a Composite Rating of 94. It has a 73 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The EPS rating is 93.
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