Uniform rental firm Cintas raises annual forecasts on strong demand
Sept 25 (Reuters) -Cintas Corp CTAS.O raised its annual profit and revenue forecasts on Wednesday, banking on resilient demand for its products that range from rental uniforms, cleaning supplies to first aid and safety kits.
While overall U.S. job growth slowed down in June, sectors such as healthcare and government offices saw persistent hiring, according to the Labor Department's Bureau of Labor Statistics report.
This rise in employment helped boost the company's first-quarter revenue as Cintas provides uniform rental services to such sectors.
Cintas forecast an annual revenue in the range of $10.22 billion to $10.32 billion, compared with a prior forecast of $10.16 billion to $10.31 billion.
It expects diluted earnings per share between $4.17 and $4.25 for fiscal 2025, compared with $4.06 to $4.19 projected earlier.
Analysts on average were expecting diluted earnings of $4.17, according to LSEG data.
The company's quarterly revenue rose 6.8% to $2.50 billion from a year ago, in line with analyst estimates.
Revenue from its core segment, uniform rental and facility services, rose 5.9% in the quarter ended Aug. 31, compared with 7.6% a year ago.
The company earned a profit of $1.10 per share, beating estimates of 95 cents.
Cintas, which offers a variety of services and products including shop towels, fire extinguishers and flame-resistant clothing, has also benefited from cross-selling opportunities across categories.
Meanwhile, lower costs of energy, labor and raw materials such as cotton helped the company expand its first-quarter gross margins by 140 basis points to 50.1%.
Following the results, Cintas' shares were up about 3% in premarket trading.
Reporting by Neil J Kanatt and Anuja Bharat Mistry in Bengaluru; Editing by Shreya Biswas
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