Cintas has raised its full-year earnings forecast following the reporting of fiscal second-quarter revenue that aligns with market expectations, but its shares experienced a decline during intraday trading on Thursday. The uniform supplier now anticipates earnings per share for fiscal 2025 to be between $4.28 and $4.34, which is an increase from the previous estimate of $4.17 to $4.25.
Market analysts surveyed by FactSet are projecting an EPS of $4.24 for the current fiscal year. In terms of revenue, Cintas expects figures in the range of $10.26 billion to $10.32 billion, marking a raise from its previous bottom estimate of $10.22 billion. Analysts are forecasting a revenue total of $10.28 billion. The revised guidance reflects "strong momentum and confidence in our outlook," stated Chief Executive Todd Schneider during a conference call, as recorded in a transcript by FactSet. Despite the positive outlook, Cintas shares dropped approximately 10% during the afternoon trade.
Research analyst Jasper Bibb from Truist Securities noted in a report that the drop may be attributed to investor disappointment due to a lack of revenue growth in the fiscal second quarter. Revenue for the three-month period ending on November 30 rose to $2.56 billion, compared to $2.38 billion for the same period last year, meeting the consensus estimate on FactSet.
Earnings per share increased to $1.09 from $0.90. Breaking down revenue by segment, organic sales grew by 6.9% in uniform rental and facility services, about 12% in first aid and safety, and 10% for fire protection. However, uniform direct organic sales saw a decrease of 9.2%. The direct sale division primarily caters to "Fortune 1000-type customers" including airlines, hotels, and casinos, experiencing growth at normalized levels.
However, Schneider emphasized that direct sales are not expanding at the expected rate..