For the uninitiated, business service group Cintas (CTAS:NASDAQ) has provided everyday items such as workwear, mops and cleaning products to over a million US businesses since the 1930s and today also serves customers in Latin America and Canada.
While that might sound dull, Shares estimates the company has grown its EPS (earnings per share) by 14% per year over the last 40 years with remarkably low annual volatility.
The Cincinnati, Ohio-based firm is expected to release fourth-quarter results on 16 July, and investors will be keen to see if it can yet again beat analysts’ expectations, having done so for the last four quarters with an average 8% positive earnings surprise.
Going into the report, the consensus is for EPS (earnings per share) to rise by 7% to $1.07, while for the year to May 2025 the firm is seen posting EPS of $4.39, equivalent to 15.8% annual growth.
Strong earnings momentum has powered the stock 27% higher over the last 12 months, more than double the return of the Nasdaq Composite index, so it is fair to say expectations are running high going into the results.
In its third-quarter update (26 March), Cintas reported an 8.4% increase in revenue to $2.6 billion driven by organic growth across all segments as well as contributions from acquisitions.
Strong cost control and operating leverage drove improved margins, which translated into net income growing 16.6% on the prior year to $463.5 million, or EPS of $1.13, surpassing consensus estimates by 7.6%.
The company raised its full year EPS guidance to a range of $4.36 to $4.40 from $4.28 to $4.34 previously, with consensus sitting at the top of the new range.
Investors may also be looking for an update on the abandoned takeover of uniform supplier Unifirst (UNF:NYSE), despite the firm’s $5.3 billion offer representing a 46% premium.
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