Cintas Q4 2025 Earnings Report

Cintas EPS Results

• Actual EPS: $1.09
• Consensus EPS: $1.07
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $3.99

Cintas Revenue Results

• Actual Revenue: $2.67 billion
• Expected Revenue: $2.63 billion
• Beat/Miss: Beat by +$41.29 million
• YoY Revenue Growth: +8.00%

Cintas Announcement Details

• Quarter: Q4 2025
• Date: 7/17/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 17, 2025
• Conference Call Time: 10:00AM ET

Cintas (NASDAQ:CTAS) engages in the provision of corporate identity uniforms and related business services primarily in the United States, Canada, and Latin America. It operates through Uniform Rental and Facility Services, First Aid and Safety Services, and All Other segments. The company rents and services uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other ancillary items; and provides restroom cleaning services and supplies, as well as sells uniforms. In addition, the company offers first aid and safety services, and fire protection products and services. It provides its products and services through its distribution network and local delivery routes, or local representatives to small service and manufacturing companies, as well as major corporations. The company was founded in 1968 and is based in Cincinnati, Ohio. Cintas Corporation was formerly a subsidiary of Cintas Corporation.

Cintas Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong Q4 and FY25 results: Q4 revenue rose 8% to $2.67 B with 9% organic growth, and full-year revenue reached a record $10.34 B (7.7% growth) as operating margin hit 22.8% and diluted EPS grew 16.1% to $4.40.
• Positive Sentiment: Confident FY26 outlook: management guided revenue of $11.0 B–$11.15 B (6.4%–7.8% growth) and EPS of $4.71–$4.85 (7%–10.2% growth), implying further margin expansion and high-20s incrementals.
• Positive Sentiment: Ongoing investments and capital deployment: FY25 saw $409 M CapEx (4.4% of sales), $133 M in acquisitions (largest in nearly 20 years), $936 M in share repurchases and $612 M in dividends (41st consecutive increase).
• Positive Sentiment: Broad-based segment growth and margin gains: organic growth was 7.2% in Uniform Rental & Facility Services, 18.5% in First Aid & Safety, 12.1% in Fire Protection and 11.1% in Uniform Direct, with margin boosts driven by supply-chain efficiencies, plant automation and SmartTruck routing.
• Neutral Sentiment: Tariff and cost-pressure mitigation: management emphasized diversified sourcing, dual suppliers for 90% of products, inventory management and continuous efficiency initiatives to offset potential tariff and inflation impacts.

Presentation

[Operator]

Good day, everyone, and welcome to the Cintas Corporation Announces Fiscal twenty twenty five Fourth Quarter and full year results conference call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jared Mattingly, Vice President, Treasurer and Investor Relations. Please go ahead, sir.

[Jared Mattingley, VP, Treasurer & IR at Cintas]

Thank you, Ross. Thank you for joining us. With me are Todd Schneider, President and Chief Executive Officer Jim Rozakis, Executive Vice President and Chief Operating Officer and Scott Garula, Executive Vice President and Chief Financial Officer. We will discuss our fiscal twenty twenty five fourth quarter and full year results. After our commentary, we will open the call to questions from analysts.

[Jared Mattingley, VP, Treasurer & IR at Cintas]

The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor from civil litigation for forward looking statements. This conference call contains forward looking statements that reflect the company's current views as to future events and financial performance. These forward looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those we may discuss. I refer you to the discussion on these points contained in our most recent filings with the Securities and Exchange Commission. I'll now turn the call over to Todd.

[Todd Schneider, President & CEO at Cintas]

Thank you, Jared, and thank you all for joining us. I'd like to take a moment and welcome Jim and Scott to our call today. Jim is a seasoned leader that brings twenty six years of experience with Cintas, and over the last two years has served as Cintas' Chief Operating Officer. Scott was recently appointed as our Chief Financial Officer and brings with him over twenty nine years of experience, including leading each of our route based businesses. On today's call, I'll start by sharing an overview of the quarter, the year and our outlook for fiscal twenty twenty six.

[Todd Schneider, President & CEO at Cintas]

Jim will share some more detail on our segment performance and the drivers in the business, and Scott will wrap up with more detail on our financials. We are pleased to have delivered a strong fourth quarter to close out another impressive fiscal year for CentOS. We delivered robust top line growth and maintained healthy margins and cash flow, excuse me, demonstrating the strength of our value proposition. In the fourth quarter, total revenue grew 8% to $2,670,000,000 Our organic growth rate, which adjusts for the impacts of acquisitions, foreign currency exchange rate fluctuations and workday differences was 9%. We continue to execute at a high level across each of our businesses, including organic growth of 7.2% in the Uniform Rental and Facility Services segment and 18.5% in our First Aid and Safety segment.

[Todd Schneider, President & CEO at Cintas]

All Other, which includes our fire protection services and Uniform grew Direct organically by 11.1%. Turning to profitability. Gross margin for the fourth quarter grew 9.1% over the prior year from 49.2% to 49.7. Operating income as a percentage of revenue increased 9.1% over the prior year, and diluted EPS increased 9% to $1.09 We remain confident that the strategic investments we've made in the business position us to capitalize on future growth opportunities. Those investments include technology that makes it easier for our employee partners to do their jobs, such as our SAP system and SmartTruck platform investments in our infrastructure to increase capacity and position our employee partners for success as well as investments in management trainees and selling resources.

[Todd Schneider, President & CEO at Cintas]

For the full year, fiscal twenty twenty five revenue was a record $10,340,000,000 an increase of 7.7%. Organic growth was 8% for the year. Our top line growth continues to underscore the strength of Cintas' value proposition. Operating margins for the full year were 22.8%, an increase of 14.1% and an all time high compared to our prior year operating margin of 21.6%. Diluted earnings per share of $4.4 grew 16.1% over the prior year.

[Todd Schneider, President & CEO at Cintas]

Balanced capital allocation remains a key pillar of our strategy. In the fourth quarter and throughout fiscal twenty twenty five, we continue to deploy capital across all of our strategic priorities, including reinvesting in our products, people and technologies to ensure we are best positioned to deliver value for our customers. Looking ahead to fiscal twenty twenty six, our financial expectations reflect both the strength of the underlying business and our commitment to disciplined execution. Scott will later touch on the assumptions included in our guidance. We expect our revenue to be in the range of $11,000,000,000 to $11,150,000,000 a total growth rate of 6.4% to 7.8%.

[Todd Schneider, President & CEO at Cintas]

We expect diluted EPS to be in the range of $4.71 to $4.85 a growth rate of 7% to 10.2%. Our fourth quarter and full year 2025 results and 2026 outlook underscore the strength of our business model and our ability to execute in a dynamic environment. Fiscal twenty twenty five now marks fifty four years out of the last fifty six years we've grown sales and adjusted EPS. I want to thank all of our employee partners for their hard work and dedication. With our culture of continuous improvement, superior products and services and disciplined execution, we are well positioned for sustained growth and value creation.

[Todd Schneider, President & CEO at Cintas]

Lastly, we were named to the prestigious Fortune 500 for the ninth consecutive year. It is an honor to be recognized among the most successful and respected companies. We're proud of these results and the value we continue to deliver for CentOS' shareholders. With that, I'll turn it over to Jim for additional insights.

[James Rozakis, EVP & COO at Cintas]

Thanks, Todd, and good morning. We continue to grow at attractive rates by helping new customers meet their needs of image, safety, cleanliness and compliance. We are seeing success in adding new products and new services to existing customers. Our retention rates are right at our all time highs and pricing continues to be at our historical levels. Turning to the fourth quarter organic growth by business.

[James Rozakis, EVP & COO at Cintas]

We grew 7.2% for Uniform Rental and Facility Services, 18.5% for First Aid and Safety Services, 12.1% for Fire Protection Services and Uniform Direct sale was up 9%. As we've done in the past, I will share revenue mix of the Uniform Rental and Facility Services operating segment for the fourth quarter. Keep in mind, can be small fluctuations in mix between quarters. Uniform Rental was 48%, Dust was 19%, Hygiene was 16%, Shop Towels were 3%, Linen, which includes microfiber, wipes, towels and aprons was 10%, and Catalog revenue was 4%. These percentages are consistent with last year and demonstrate we continue to experience strong demand across all our products and services.

[James Rozakis, EVP & COO at Cintas]

Gross margin percentage by business was 49% for Uniform Rental and Facility Services, 56.8% for First Aid and Safety Services, 49.3% for Fire Protection Services and 41.6% for Uniform Direct Sale. Gross margin for the Uniform Rental Facility Services segment increased 40 basis points from last year. Our progress year over year reflects the positive impacts made by our excellent supply chain team as well as cost savings initiatives such as our garment sharing, technology enhancements like our auto sortation systems in our plants and our proprietary Smart Truck solution that makes our routes more efficient. Gross margin for the First Aid and Safety Services segment increased 140 basis points from last year, with strong revenue growth continuing to create leverage. A healthy revenue mix that includes growth in high margin recurring revenue products like AED rentals, high wash stations and water brake, as well as cost savings initiatives such as smart truck and improved sourcing.

[James Rozakis, EVP & COO at Cintas]

Before I turn over to Scott, I'd to share an example that demonstrates how we're delivering for our customers. A customer in the Southeastern part of the country has been a valued customer for over ten years. For most of that time, we provided them exclusively with facility services, products and services. Their maintenance department uniforms were direct purchase, what we would call a no programmer. Our customer approached us to see if we could help them address three key pain points.

[James Rozakis, EVP & COO at Cintas]

One, the initial investment ongoing costs associated with replacing uniforms due to turnover and damage made it difficult to forecast spend and manage cash flow. Two, their employees expressed a strong preference for the convenience and professionalism of a laundered uniform program over washing their uniforms at home. Three, their managers found that overseeing uniform logistics in house took valuable time away from focusing on their core business operations. In response, we successfully introduced our Uniform Rental program on top of our facility services offering. But the story doesn't end there.

[James Rozakis, EVP & COO at Cintas]

We also earned a trust in their culinary department, onboarding those employees who had previously been with a traditional Uniform competitor. The switch was driven by a premium ChefWorks exclusive attire and the opportunity for vendor consolidation. This example underscores several points. First, we don't always have to leave with uniforms. In this case, we had a long successful relationship with a customer built on our facility services offering.

[James Rozakis, EVP & COO at Cintas]

Second, we can grow in a variety of different ways. We can convert no programmers to a rental program. We can add new customers that are currently with another Uniform Rental provider by offering premium products and services. And we can grow by adding new products and services to our existing customers. This example also illustrates how Santos is more than a service provider.

[James Rozakis, EVP & COO at Cintas]

We are true problem solvers committed to helping our customers succeed. And by staying attuned to their feedback, we continue to strengthen our relationships and expand our footprint across industries. And I'll turn it over to Scott for additional details on capital allocation strategy and 2026 outlook.

[Scott Garula, EVP & CFO at Cintas]

Thank you, Jim, and good morning, everyone. As Todd mentioned, we closed our fiscal year with strong financial performance. Our balance sheet remains healthy and during fiscal twenty twenty five, we generated $1,600,000,000 of free cash flow. In the fourth quarter, we were able to put our capital to work through capital expenditures of $114,600,000 acquisitions of $34,100,000 dividends of $157,800,000 and share repurchases of $256,700,000 Our effective tax rate for the fourth quarter was 22.1% compared to 21.4% last year. For fiscal twenty twenty five, the effective tax rate was 20% compared to 20.4% the prior year.

[Scott Garula, EVP & CFO at Cintas]

During fiscal year twenty twenty five, we deployed significant capital across each of our capital allocation priorities. This capital allocation strategy has been effective for many years and has served us well. We invested $408,900,000 in capital expenditures, which helps support investments in our technology and infrastructure. Capital expenditures were 4.4% of revenue, which is right where we like to be. We invested $132,900,000 in acquisitions in fiscal twenty twenty five, representing our largest year of M and A activity in almost twenty years, excluding our 2017 acquisition of G and K.

[Scott Garula, EVP & CFO at Cintas]

These acquisitions spanned across each of our three route based segments, adding new customers, extending capacity and delivering compelling synergies. By optimizing our existing route structure, we've been able to spend more time with customers, while reducing time spent on the road. Acquisitions remain an important lever for growth, enabling us to broaden our offerings and deliver greater value to our stakeholders. Additionally, we returned over 1,000,000,000 point dollars to shareholders through dividends and share buybacks. Almost $612,000,000 in dividend payments marks the forty first consecutive year that we've increased our dividend, which is every year since going public.

[Scott Garula, EVP & CFO at Cintas]

We also repurchased approximately $935,000,000 of shares fiscal year twenty twenty five. Todd provided our fiscal twenty twenty six outlook at the start of the call. And I'd like to provide some context on a few assumptions underpinning our guidance. Please note that both fiscal twenty twenty five and fiscal twenty twenty six have the same number of workdays for the year and by quarter. Our guidance does not assume any future acquisitions.

[Scott Garula, EVP & CFO at Cintas]

Our guidance assumes a constant foreign currency exchange rate. The fiscal twenty twenty six interest net is expected to be approximately $98,000,000 The fiscal twenty twenty six effective tax rate is expected to be 20%, which is the same as fiscal twenty twenty five. And our guidance includes no future share buybacks or significant economic disruptions or downturn. With that, I'll turn it back over to Todd for closing remarks.

[Todd Schneider, President & CEO at Cintas]

Thank you, Scott. As we look ahead to fiscal twenty twenty six, our results reflect the strength of our strategy and the value we provide in helping our customers meet their image, safety, cleanliness and compliance needs. We remain focused on delivering exceptional customer experiences while continuing to make the necessary investments in our business to sustain long term growth and value creation. Our confidence in our ability to navigate the current environment and capitalize on future opportunities remains strong. Jared, back to you.

[Jared Mattingley, VP, Treasurer & IR at Cintas]

Thanks, Todd, Jim and Scott. That concludes our prepared remarks. Now we are happy to answer questions from the analysts. Please ask just one question and a single follow-up if needed. Thank you.

[Operator]

And our first question comes from George Tong from Goldman Sachs. Please go ahead, George.

[George Tong, Senior Research Analyst - Equity Research, Business Services at Goldman Sachs]

Hi, thanks. Good morning. Starting at a high level, can you talk a little bit about what the overall selling environment looks like, including how sales cycles are performing and how client sentiment is trending?

[Todd Schneider, President & CEO at Cintas]

Good morning, George. Thanks for the question. I'll start and then Jim if you want to add any color. No real change to the customer behavior, sales cycles. New business remains strong.

[Todd Schneider, President & CEO at Cintas]

Retention rates are still at very attractive levels. Add stops really no significant change there. It is there are certain excuse me, clearly there's more uncertainty in the marketplace with tariff trade tax or excuse me, tarifftrade taxes, which has a little bit more clarity, and interest rates. But nevertheless, our value proposition continues to resonate. And it resonates virtually every economic cycle, hence our 54 the last fifty six years.

[Todd Schneider, President & CEO at Cintas]

And we expect that to continue and we like the position we're in. Anything else Jim on customer behavior that you'd like to contribute?

[James Rozakis, EVP & COO at Cintas]

Yes. I think maybe Todd, the only color I would add on that is that the customer behavior offers an opportunity for us to add value to our customers. I was recently at an operational visit. And in a routine conversation, one of our employee partners was out a customer site. And as you can imagine during traditional rapport building, the customer expressed concern regarding the overall uncertainty in a macro environment. Our employee partner turned out an opportunity to discuss further Cintas products and services.

[James Rozakis, EVP & COO at Cintas]

And we found out that we were able to go ahead and save this customer significant money on something as simple as disposable gloves. So there certainly is a degree as you described of a little bit of uncertainty, that uncertainty creates opportunity and the customers are looking for answers and oftentimes we'll to provide those answers for them.

[George Tong, Senior Research Analyst - Equity Research, Business Services at Goldman Sachs]

Very helpful. And then my follow-up, you're continuing to see and deliver operating margin expansion from what was 4050% before to around 25%. Can you talk a bit about what factors may be causing this narrowing rate of margin expansion?

[Todd Schneider, President & CEO at Cintas]

Yes, George. Yes, we had another really good profit quarter. We did run 22.4% operating profit for the quarter. That brings us to 35% incrementals for the year, excluding our land sale. I will say last year Q4 was by far our best profit quarter.

[Todd Schneider, President & CEO at Cintas]

So the comparables were certainly tougher. And as you know, running a business isn't linear, but we like where we are. We're right in that sweet spot of 25% to 35 incrementals. And we're investing for the future. And we're doing that because we see the opportunities ahead and we like what the opportunities look like for us. So we're investing appropriately.

[George Tong, Senior Research Analyst - Equity Research, Business Services at Goldman Sachs]

Got it. Very helpful. Thank you.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

And our next question comes from Jasper Bibb from Truist Securities. Please go ahead, Jasper.

[Jasper Bibb, VP - Equity Research at Truist Securities]

Hey, good morning, guys. I know you guys get all the way down. I was just hoping you could give a little bit more color on the cadence of your 2026 outlook, as I imagine you're going have a lot more difficult comps on the incremental margin front in the first half versus second half.

[Todd Schneider, President & CEO at Cintas]

Jasper, thanks for the question. Yes, on the revenue side, we just finished a very successful year where we grew 7.7%, which is right where we want to be. The '26 revenue guide calls for 6.4% to 7.8%, which again, a growth, which again is right where we like to be and sets us up for another really good year. We're performing well and we like the momentum that we have in the business. On the EPS side, we had a great year in FY 2025 and we think we're set up for another really good year in FY 2026.

[Todd Schneider, President & CEO at Cintas]

The guide calls for EPS growth of 7% to 10.2%, which infers margin expansion throughout the guide. And at the midpoint of revenue EPS guide, it also represents operating margin above 23% and incrementals in the high 20s. So this is all consistent with how we guided last year. And this year, certainly the macro environment is there is a little bit more uncertainty, but we think we're well positioned to navigate the environment and have another very successful year in 2026.

[Jasper Bibb, VP - Equity Research at Truist Securities]

Got it. Hoping maybe you could give some color on what you're seeing in the ad stops and how you're thinking about that trend in your fiscal twenty twenty six guidance?

[Todd Schneider, President & CEO at Cintas]

Yes. Jasper, good question. We have an incredibly broad customer base. So we have some customers that are absolutely thriving in this environment, some are dealing with input costs challenges. But the net net is our customer base is still performing well and we think that we're in a good position there.

[Todd Schneider, President & CEO at Cintas]

Keep in mind, 70% of our customer base are in the services providing sector, 30% in the goods producing. But we so from an ad stop standpoint, we think we're in a good spot. We don't give out that specific number, but we like the momentum that we see in our business.

[Jasper Bibb, VP - Equity Research at Truist Securities]

Thanks for taking the question.

[Operator]

And our next question comes from Manav Patnaik from Barclays Capital. Please go ahead, Manav.

[Ronan Kennedy, Vice President at Barclays Investment Bank]

Hi, good morning. This is Ronan Kennedy on for Manav. Thank you for taking my questions. You touched on this in response to Jasper's question, but if I may just look to go a little more granular. The 26 guide is the implied operating income margins of 25% I think are at the lower end of the mid term guide at '25 to 35 and then 2327 at the low and high ends respectively.

[Ronan Kennedy, Vice President at Barclays Investment Bank]

There's obviously an element of operating leverage at play and revenues, but any further insights you can shed as to the puts and takes to drivers of those incrementals, whether it's the positive impacts of supply chain, tech initiatives, or the negative impacts, say, of the SAP implementation for fire protection? Any further insights on kind of puts and takes to those incrementals please?

[Todd Schneider, President & CEO at Cintas]

Yes. Thank you, Ronan. Yes, we like our guide. We think we're the incrementals are right where we want to be. Certainly, there is we will be continuing to invest in SAP in our fire business.

[Todd Schneider, President & CEO at Cintas]

Does that that's not an inexpensive effort there. But that's all contemplated in our guide as is any input cost challenges that are thrown our way as a result of the environment that the macro environment that we're dealing with, etcetera. So we feel good about the spot we're in from an incremental margin standpoint, again, 5% to 35%. And we're investing appropriately. Running a business isn't linear.

[Todd Schneider, President & CEO at Cintas]

So we but we're focused on the long term and positioning our partners and customers to be incredibly successful. And we like the spot that we're in.

[Ronan Kennedy, Vice President at Barclays Investment Bank]

Thank you. And then for my follow-up, please. Similar question in relation to revenues. The range the guided revenue range is, I think, 140 basis points, which you understandably indicated is right where you want to be. I also think that range is consistent with the guided range for f twenty five.

[Ronan Kennedy, Vice President at Barclays Investment Bank]

Can you give us any further insight as to what that contemplates from organic by department or the expected contributions from say price, new biz, etcetera versus historicals? Any further insight there please would be greatly appreciated.

[Todd Schneider, President & CEO at Cintas]

Yes, certainly Ronan. Yes, we like our guide on the revenue as well. We think we're positioned there. The net for us, we want to grow our business in the mid to high single digits revenue. We certainly expect that our rental business will be similar and our fire and first aid businesses be in the double digit area.

[Todd Schneider, President & CEO at Cintas]

And then in our uniform direct sale business, as we've detailed out, we are not trying to grow that as aggressively. Low single digits would be a good way to think about it. But it is a very strategic business because those rather large customers we sell are route based businesses into as well. So that's kind of how we think about it.

[Ronan Kennedy, Vice President at Barclays Investment Bank]

Thank you very much. Appreciate it.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

And our next question comes from Tim Mulrooney from William Blair. Please go ahead, Tim.

[Tim Mulrooney, Partner & Group Head - Global Services at William Blair]

Todd, Tim, Scott, good morning.

[Todd Schneider, President & CEO at Cintas]

Good morning, Thanks

[Tim Mulrooney, Partner & Group Head - Global Services at William Blair]

for taking my questions. Just the first one on the quarter, your fourth quarter results here, organic growth was 9%, That was well above consensus. I was also above what was implied by your own guidance range that you provided last quarter. So I'm just curious what business lines or sectors picked up during the quarter relative to your own expectations?

[Todd Schneider, President & CEO at Cintas]

Yes. Thank you, Tim. Yes, we're really proud of our fourth quarter performance. It did exceed our expectations. I think underscores the momentum we have in our business.

[Todd Schneider, President & CEO at Cintas]

We did have for some, I'll call it more discrete type one time benefits in the area of our first aid business. We were propelled by, I mean, a great performance in our training area, which those tend to be a little bit more discrete one time in nature. Our uniform direct sale business grew 9%, which was a really strong close to a what was a bumpy year. So a little bit more one time in nature there, but we're really proud of the performance in the close of the year. And we think we're well positioned for FY 2026.

[Tim Mulrooney, Partner & Group Head - Global Services at William Blair]

Okay. No follow-up needed. Thanks, guys.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

And our next question comes from Andrew Steinerman from JPMorgan. Please go ahead, Andrew.

[Andrew Steinerman, Equity Research Analyst - Business & Info Services at JP Morgan]

Hi. The quarter ended six weeks ago and I just wanted to get a sense of how the current quarter started just what's already kind of behind us in June in the first couple of weeks of July in terms of revenue growth momentum? Has it sort of been consistent with the way you finished the quarter? And then I'll just ask my second question also. I just saw some discussion.

[Andrew Steinerman, Equity Research Analyst - Business & Info Services at JP Morgan]

I was just wondering if there's any recent changes to your go to market strategy, particularly around national accounts?

[Todd Schneider, President & CEO at Cintas]

Good morning, Andrew. Thanks for the question. First off, yes, you're right. I mean, we're because of this being our Q4 call, are further into our quarter than normal. And the start of the year is it's starting exactly the way we expected and it's reflected in our guide.

[Todd Schneider, President & CEO at Cintas]

So kind of well, I would say consistent with what we expected for the start of the year. As for our go to market strategy, that really hasn't changed. Websites change. And we talk about trying to position ourselves appropriately to all of our customers. But we've been in the national account business for thirty plus years, I'd say virtually my entire career.

[Todd Schneider, President & CEO at Cintas]

And the only thing I would call out is our vertical strategy is obviously has been different over the last five to ten years and that has performed well. So no other change no real change in our market strategy. We're constantly reinvesting in our products and services to make them of more value to our customers and to position our employee partners to make it easier to take care of our customers. So there's always refreshes going on, a product here, product there. That's just part of our culture to try to make sure we're positioned to be successful as possible.

[Andrew Steinerman, Equity Research Analyst - Business & Info Services at JP Morgan]

Sounds right. Thanks.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

And our next question comes from Josh Chan from UBS. Please go ahead,

[Josh Chan, Executive Director & Equity Research Analyst at UBS Group]

Hi. Good morning, Todd, Jim, Scott, Jared. As you look into your different cost buckets kind of going into 2026, material, labor, your fleet, anything to highlight in terms of trajectory of cost changes? And maybe on the material side, could you touch on potential tariffs impact and how that could have how that could impact kind of the cost? Yes.

[Todd Schneider, President & CEO at Cintas]

Good morning, Josh. Yes, I want to just speak a little bit about that subject. We believe we're in a good position to navigate through what is a clearly a very dynamic environment with challenges like tariffs and what have you. We think it gives us an opportunity to flex our strength, which is our people and our culture, which in all this is reflected in our guide. We contemplated some additional expense into the guide, but we have some we think some real advantages. First off, the nature of how we expense our goods in our largest businesses is because we amortize it, it gives us time.

[Todd Schneider, President & CEO at Cintas]

It also we you probably noticed our balance sheet, our inventory is up. So we've anticipated and managed this appropriately. And I'd like to also say that we've navigated this very successfully in the past. The past five years, whether it's been inflation or supply chain challenges, our global supply chain has shined and has been a competitive advantage for us in the marketplace. As a reminder, we source products all over the world.

[Todd Schneider, President & CEO at Cintas]

So we have great geographic diversity. And we also have 90% or so of our products, we have two or more sources. You put that together with our buying power, all that gives us options and leverage. So we think that that positions us well. And you put on top of that our corporate culture traits of positive discontent, competitive urgency.

[Todd Schneider, President & CEO at Cintas]

It fuels us to look at process improvements and finding ways to extract inefficiencies out of our business, so that we can be more efficient. We don't take the approach that well, if a tariff is going to raise a cost, then we just got to eat that and pass along to our customer. It's not how we run our business and it's not how we've run it in the past and it's not how we're going to run-in the future. We're and we think it gives us an opportunity to shine.

[James Rozakis, EVP & COO at Cintas]

And Josh, if I might add to that, I think Todd did a great job describing the supply chain. He also talked about some of the work we're doing to remove inefficiencies. We have several initiatives ongoing, some were mentioned in our prepared remarks that are all in play and again contemplated in next year's expectations. But our garment sharing would be one that I think would be worth highlighting here. We continue to leverage the SAP platform to be able to share goods that we have in inventory across our entire network and that's been quite effective and we think we've got some room to go on that one.

[James Rozakis, EVP & COO at Cintas]

Automating within our plants and deploying auto sortation technology in our plants, we have about 50% of our plants have some degree of auto sortation and we're in the middle of trying to deploy more of that. In the past, it's been challenging due to our plants being all different shapes and sizes. We believe that we develop technology to overcome that and limit the disruption. So those are in motion and we expect those to continue to deploy this year. Todd mentioned operational excellence.

[James Rozakis, EVP & COO at Cintas]

Operational excellence is us really maximizing the assets specifically in our rental business around the plant that allows us to continue to defer capital expenditure and it also allows us to run those plants more efficiently, allowing us to wash fewer loads, consume less energy, less chemistry and water within our facilities. And then maybe last that I would be mentioning would be our SmartTruck initiative that's been ongoing now for several years that allows us to incrementally route our fleets more efficiently, get them more time in front of the customer. But certainly, route growth is significantly less than what our revenue growth is, and we're going to continue that in this next fiscal.

[Josh Chan, Executive Director & Equity Research Analyst at UBS Group]

That's great color. I appreciate the context there. That's really helpful. And then, I guess, for my follow-up, I think, Scott, you highlighted the M and A spend this past year. Just wondering if you could comment on the prospects of M and A kind of going forward and how the pipeline of the bolt ons look at the moment. Thanks.

[Todd Schneider, President & CEO at Cintas]

Why don't I start a little bit on pipeline and then Scott can talk about capital allocation. M and A is tough to predict, but it's very important to us. These relationships that we have we've had for decades And in trying to figure out when a business is going to be interested in selling is I mean, it's not random, it is certainly tough to predict. We had a great year and we leveraged those relationships that we've had for decades. And but we're in the business of buying really good businesses.

[Todd Schneider, President & CEO at Cintas]

And when you buy really good businesses, you get a lot of things, but you get customers and you get employee partners and are most important areas. And in certain cases, we get capacity. And if we don't get capacity, we get really good synergy. So we'll continue to work our pipeline and but nevertheless, we can't time it, but we're highly active so that when somebody is interested, we're well positioned for that. Scott, do you want to talk a bit about capital allocation?

[Scott Garula, EVP & CFO at Cintas]

Yes. Thanks, Todd. As I mentioned in our prepared remarks, our approach to a balanced capital allocation strategy has served us well for many years. I've been part of that in my prior roles and really don't see a change in that in the future. And continue not only to invest in M and A activity, we'll continue to reinvest back in the business via capital expenditures and continue to invest in both dividends and be opportunistic with share buybacks.

[Josh Chan, Executive Director & Equity Research Analyst at UBS Group]

Great. Thank you for your time and congrats on a good quarter.

[Scott Garula, EVP & CFO at Cintas]

Thank you.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

And our next question comes from Jason Haas from Wells Fargo. Please go ahead,

[Jason Haas, Director & Senior Equity Research Analyst at Wells Fargo]

Hey, good morning and thanks for taking my questions. I'm curious if you expect the industry to pass on higher price increases in fiscal twenty twenty six given the tariff driven inflation and if that's something that you've baked into your guidance assuming you could take more price as well and what that could represent upside? Thank you.

[Todd Schneider, President & CEO at Cintas]

Thanks for the question, Jason. Our pricing strategy is we're back at historical levels on pricing. We certainly don't control how our competitors price things, but we expect to be at historical levels of pricing. What we know of the environment today, we think we're well positioned. It's contemplated in our guide.

[Todd Schneider, President & CEO at Cintas]

And as I mentioned earlier, we don't just run our business in a manner where well, if a tariff comes through and there is some cost increase, first off, we don't just accept that. And then secondly, we find ways to run our business more efficiently because we operate in a competitive environment, competitive marketplace. And as a result, want to make sure that we're being great fiduciaries for not only our shareholders and our partners, but our customers. So our guide contemplates historical pricing and that's how we would plan to manage the business.

[Jason Haas, Director & Senior Equity Research Analyst at Wells Fargo]

Okay. Thank you. That's helpful. And then as a follow-up, I was curious in this environment if you're seeing more competitive wins, particularly from some of your larger competitors that are out there since it seems like your growth rates are quite elevated versus what we've seen from others? Thank you.

[Todd Schneider, President & CEO at Cintas]

Yes. So again, thanks for the question. No real change in the marketplace, I'd say from a competitive landscape. It's been competitive my entire career and I'm sure it will be into the future as well. That being said, we don't look at it as a finite pie.

[Todd Schneider, President & CEO at Cintas]

There's we have a little over a million business customers. There's 16,000,000 to 17,000,000 businesses in The U. S. And Canada. So we look at it as an opportunity to go and sell more to those customers who are not buying from us today.

[Todd Schneider, President & CEO at Cintas]

And then we have this incredible opportunity to sell more products and services to our current customers. How someone else in our direct competitor might be growing is that's not of interest to us. We're more focused on how can we provide more value to our customers, how can we position our employee partners to be more successful? We want to be easier to do business with, want to be easier for our partners to sell and easier for our customers for them to do business with us.

[Jason Haas, Director & Senior Equity Research Analyst at Wells Fargo]

Got it. Thank you. That's very helpful.

[Operator]

And our next question comes from Ashish Sabadra from RBC. Please go ahead, Ashish.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

Thanks for taking my question. I just wanted to focus on the four strategic verticals, healthcare, government, education and hospitality. I was wondering if you could just provide any update on those fronts and any big initiative as we go into 2026. Thanks.

[Todd Schneider, President & CEO at Cintas]

Good morning, Ashish. Thanks for the question. I'll start and then Jim, feel free to chime in. We like all our verticals. We think we've chosen them really well.

[Todd Schneider, President & CEO at Cintas]

As a reminder, we don't just sell into those verticals, we organize around them. And from a business standpoint to make sure that we can service them appropriately and provide better value. But we think we've chosen them quite well and we expect them all to perform above our average growth rates. Jim, anything specific on verticals you'd like to call out?

[James Rozakis, EVP & COO at Cintas]

I guess I would just add that by organizing around the verticals allows us to gain intimate knowledge and really understand the industries well. Therefore, we're able to collaborate and innovate solutions that we bring to the marketplace that not only allow us to have solid growth within those verticals, but oftentimes those solutions could expand outside of those verticals. And one we've discussed in the past has been our healthcare journey and our journey with really what initiated scrub dispensing. So that's growth that dispensing service now is out beyond just healthcare and we see lots of applications for that. We've gone on a recent journey in healthcare to really innovate and change how we go to market for privacy curtains and we believe that those are indicative in the types of solutions that you're able to bring to marketplace when you get that involved and invested in particular verticals and we want to continue to do that moving forward.

[Todd Schneider, President & CEO at Cintas]

Ashish, we hear from our customers, as Jim mentioned, when you organize around them and you spend that much time with them, you hear where they need help and where they're struggling for whether it's cleanliness or compliance or image or safety. And Jim just walked through the privacy curtains and it's a great example where customers really struggled with that with the compliance, which affects cleanliness. And we didn't just roll out privacy curtains, we invested in technology around that and also in improving how they function. And as a result of that, have patents around that and we've got a lot of customers that are have been really excited and happy about what we're doing there.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

That's great color. And maybe just on the follow-up, we've seen some material acceleration in the first aid business. I was just, it seems like based on the prepared remarks that it was broad based across products, but I was just curious if there is incremental traction that you're getting for certain products or just improving penetration? Any color there will be helpful. Thanks.

[Todd Schneider, President & CEO at Cintas]

Yes, great question. We love the First Aid business and it's performing at very exciting clip. And the value that they provide to the customers is reflected. Jim talked a little bit about that we've got some good momentum around certain products and services. AEDs have been in great demand.

[Todd Schneider, President & CEO at Cintas]

That's been good. Our water break, our eyewash stations, those recurring revenue type products are really good for us. But our cabinet business is attractive. So it's we've invested appropriately there and we're seeing the benefits of that. That being said, we did benefit from a spike in training during the quarter, which we don't expect to continue at those levels.

[Todd Schneider, President & CEO at Cintas]

But nevertheless, we think we're well positioned to be successful in the marketplace in the First Aid business.

[Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets]

That's great color. Thank you.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

And our next question comes from Shlomo Rosenbaum from Stifel Nicolaus. Please go ahead, Shlomo.

[Shlomo Rosenbaum, Managing Director at Stifel Institutional]

Hi, thank you for taking my questions. I want to piggyback a little on Ashish's question. In that first aid business, how much of that revenue would you say is more kind of recurring? And how much of that business is usually training into other areas that might be more one time ish?

[Todd Schneider, President & CEO at Cintas]

Yes. Good morning, Shlomo. Yes, we don't give out the exact percentages as far as revenue that's recurring versus more on consumption. But nevertheless, we're constantly reinvesting in that business to try to come up with products and services that are of real value to the customers and we're seeing the benefits there. So that's part of our culture is that reinvestment and we'll continue down that path.

[Todd Schneider, President & CEO at Cintas]

And we think, again, we're well positioned to be successful in that market and the demand is showing. And we expect that that business will grow in the low double digits moving forward. And we like to spot for there.

[Shlomo Rosenbaum, Managing Director at Stifel Institutional]

Okay. Thank you. And just for the follow-up, could you comment a little on the spike up in Uniform sales? Is that usually, I know you expect it to grow in the low single digits. And was there something that will carry forward into the next quarter or two?

[Shlomo Rosenbaum, Managing Director at Stifel Institutional]

Or was it really just kind of a one quarter kind of fulfillment or something?

[Todd Schneider, President & CEO at Cintas]

Yes. Good question, Shlomo. Yes. In the uniform direct sale business, do expect that to grow in the low single digits. It was a bumpy year for them and they had a really strong close, but I would not expect that that would continue into the fiscal year.

[Todd Schneider, President & CEO at Cintas]

We plan for that business to grow in the low single digits and because of the nature of it with rollouts, it can be a little bit of lumpiness to that. And Q4 was a really strong close to the year.

[Shlomo Rosenbaum, Managing Director at Stifel Institutional]

Thank you.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

And our next question comes from Stephanie Moore from Jefferies. Please go ahead,

[Stephanie Moore, SVP - Equity Research at Jefferies]

Great. Good morning. Thank you. I was hoping you could talk a little bit about some of your end market exposure, if you're seeing any kind of weakness or strength in particular end markets, maybe the manufacturing sector, for example, has been kind of weak across the board here in The US. But any areas of weakness or areas of strength that you could call out? Thank you.

[Todd Schneider, President & CEO at Cintas]

Yeah. Good morning, Stephanie. In general, again, we have an incredibly broad customer base, whether it's by business type, NAIC code and also geographically. And so no real weakness that we're seeing whatsoever in the marketplace. Certainly, goods producing customers have been under more pressure the last few years.

[Todd Schneider, President & CEO at Cintas]

The services providing customers are trying to fulfill demand. So the net net of it is no real weakness that we're seeing there. We would be encouraged to see more production coming back into The U. S. From the goods producing sector.

[Todd Schneider, President & CEO at Cintas]

And we would we're hoping for more certainty as far as what the tax or excuse me, what the trade looks like, which will allow business people to invest appropriately. And we are hopeful that that will come here in the near future.

[Stephanie Moore, SVP - Equity Research at Jefferies]

Got it. And then really just any kind of I guess just one follow-up here. As you think about your M and A opportunity, obviously, you've given some color today on kind of your continued focus on M and A. But are there any areas that you would look at expanding in M and A outside of kind of the core Uniform area?

[Todd Schneider, President & CEO at Cintas]

Yes. Thanks for the question, Stephanie. First off, we're acquisitive in each of our route based businesses. And that's a key component of our strategy. We love when we make an acquisition.

[Todd Schneider, President & CEO at Cintas]

I talked about synergies, I talked about capacity. But it does give us an opportunity to go to those customers with a broader breadth of products and services that will that we can help them with. So that's an important function. But yes, we're acquisitive in each of our route based businesses and we're always various people bring us opportunities outside of those and we don't need to. We don't need to go outside of those.

[Todd Schneider, President & CEO at Cintas]

The opportunity in our business is significant. As I mentioned, a little over a million business customers, whether 16,000,000, 17,000,000 businesses in U. S. And Canada. So the opportunity looking forward is very encouraging and we're staying disciplined while being aware of opportunities that are out there.

[Todd Schneider, President & CEO at Cintas]

But all three route based businesses are we're trying to make deals.

[Stephanie Moore, SVP - Equity Research at Jefferies]

Thank you. Appreciate it.

[Todd Schneider, President & CEO at Cintas]

Yes, ma'am. Thank you.

[Operator]

And our next question comes from Scott Schneeberger from Oppenheimer. Please go ahead,

[Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.]

Thanks very much. Todd, I believe you mentioned progress relating to SmartTruck and improved sourcing. Could you please elaborate on that? And then my follow-up, I'll ask upfront for Scott. Just curious, it sounds like we should be expecting 4% of revenue CapEx again in fiscal twenty twenty six.

[Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.]

I'm just curious digging in from the one big beautiful act, Bill Act, anything to expect there impacting cash flow in 2026 or any other aspects of the business? Thanks guys.

[Todd Schneider, President & CEO at Cintas]

Well, thank you for the question, Scott. Yes, as I mentioned, and I think Jim expanded upon it, SmartTruck has been a great investment for us. It's technology that allows us to spend more time with the customer and less time driving. And as we like to say around here, we don't generate any revenue when the wheels are turning. We only make generate revenue when the wheels stop.

[Todd Schneider, President & CEO at Cintas]

So and that technology has allowed us to improve upon that. Jim mentioned that we're adding routes at a certainly a slower pace than we're adding revenue. And that speaks to just what I mentioned. From a sourcing standpoint, we're constantly working on improving sourcing. We have seen benefits over the past few years with our centralized purchasing with our First Aid distribution center.

[Todd Schneider, President & CEO at Cintas]

But our sourcing organization is they're working overtime right now. And because of the environment with tariffs being uncertain there. And but we're encouraged by what they do, how they do it. And again, we think this will give them an opportunity to shine. Scott, if you want to talk a little bit about CapEx and cash flow?

[Scott Garula, EVP & CFO at Cintas]

Thanks Todd. Thanks for the question Scott. Regarding CapEx, it came in at 4% of revenue in fiscal year twenty twenty five And we expect to be in that 3.5% to 4% going forward. As we know, I mean investments can fluctuate from quarter to quarter and year to year, but we like to be in that 3.5% to 4% range as a percent of sales. I believe your second question was related to the tax bill.

[Scott Garula, EVP & CFO at Cintas]

And we are not based on our the strength of our balance sheet and financials, we're expecting any material impact from the tax bill on our tax rate, cash flow or the business in general.

[Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.]

Great. Thanks, guys.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

And our next question comes from Toni Kaplan from Morgan Stanley. Please go ahead,

[Yehuda Silverman, Equity Research Analyst at Morgan Stanley]

Hi, good morning. This is Yehuda Selverman on the line for Toni Kaplan. So just had a quick question about new sales. Typically what's the main driver for a customer to switch providers? Is there a certain product or area that's more or most attractive to customers?

[Todd Schneider, President & CEO at Cintas]

Yes, thank you for the question, there is we don't care where the customers start doing business with us, whether it's uniforms or FS, as Jim spoke about earlier with his example in his prepared remarks, first aid, fire uniform direct sale. We just want to start doing business with them. And then and as we do business, we think that that makes it easier because they historically have a very good experience and then it leads to what else can you help us with. And when you have eyes and ears and minds in your customers place of business on a frequent basis, it breeds confidence and it breeds the opportunity as they look out and say, what else can we help you with? Jim mentioned a little bit about it really varies based upon where we get started, but also the impetus for a customer to switch.

[Todd Schneider, President & CEO at Cintas]

Because of the white space out there where there's so many businesses that are self serve, that's where we really focus our time. And they're all spending money to some degree on items, meaning they're all where their people are wearing clothes, their people are getting disposables from somewhere. It might be a e commerce or it might be a brick and mortar retail store. So it really doesn't it varies based upon where the customer is, what their business is at that point. They may be dealing with an environment where they don't have as many people, but the work still needs to be done.

[Todd Schneider, President & CEO at Cintas]

Or they're struggling to keep up with demand. And you can help me with this, take this off my plate, be happy to free to do that. Jim, anything else you'd to add there?

[James Rozakis, EVP & COO at Cintas]

The only thing I would say is, the new business wins converting from a traditional competitor over to us, they happen for a variety of different reasons and we believe we have a lot of differentiators from the product line to the service to the technology offerings for the customers. But just as a maybe a level setting is that about two thirds of our new business comes from what we call no programmers or really that as Todd described the do it yourself or the folks that are purchasing from some retailer e commerce type of solution. And that's where we focus a lot of our time and that's where we have the most success. That's been a strategy for years and will continue to be a strategy and we know that that resonates well in the market.

[Yehuda Silverman, Equity Research Analyst at Morgan Stanley]

Great. Thank you.

[Operator]

And our next question comes from Kartik Mehta from Northcoast Research. Please go ahead, Kartik.

[Kartik Mehta, Executive Managing Director - Director of research at Northcoast Research]

Hey, good morning. Todd, maybe on the first aid business, and I know that you're able to get pricing on the uniform side just because of the service level you're providing. And I'm wondering, as you look at the first aid business and that double digit growth, what component is price and what's your ability to get price increases?

[Todd Schneider, President & CEO at Cintas]

Good morning Kartik. Great question. The First Aid businesses from a pricing strategy is the same as what how we run our other businesses and they're back to historical levels. And so the vast majority of our growth in that business is volume growth. We're not growing our business because of or any of our businesses because of pricing being the major strategy.

[Todd Schneider, President & CEO at Cintas]

We're growing it because we're providing more value, more products, services to customers. So that volume is growing. That's the same in each of our businesses. And that's an important component of our strategy. So yes, can we get some price?

[Todd Schneider, President & CEO at Cintas]

Yes, but it's at historical levels. And we're excited about the value that we're providing the customers in the First Aid, but all of our businesses.

[Kartik Mehta, Executive Managing Director - Director of research at Northcoast Research]

And just a follow-up, but different topic, just use of AI kind of where you are in Syntas more from, is it today more of a cost? Is it a benefit? Or is it neutral?

[Todd Schneider, President & CEO at Cintas]

Great question, Kartik. I appreciate that. We've been investing in technology for years. And we will be doing so, I'm sure in perpetuity. And I'll start with our investment in our, what I call our rock solid foundation of SAP.

[Todd Schneider, President & CEO at Cintas]

And then moving on to, let me start investing in data analytics, once we had that ability of accessing the data and then algorithms. And now machine learning and artificial intelligence, is certainly in the early innings for us, but we see opportunity there. So yes, we're making investments and we're doing so because we think we're excited about where we think we can pick this technology and for it to be easier for our employee partners to do their job and make it easier for customers to do business with us. An example of that is when we talked about with SmartTruck technology, that's not artificial intelligence, but it is certainly is has been important to us and the learnings that we've had there, we're making it better and better. Garment sharing applications, as Jim mentioned, We're getting efficiencies out of our most critical assets.

[Todd Schneider, President & CEO at Cintas]

And all this makes it for our employee partners to be more successful and productive and to take administrative time out of their day. We also see opportunities too with technology and machine learning to direct them where to spend their time. So we think that's important. All this will show up Kartik in, I'll say, incremental improvements over many years, but important investments for us to make so that we can get those incremental investments and benefits for many years to come.

[Kartik Mehta, Executive Managing Director - Director of research at Northcoast Research]

Thank you. I appreciate it.

[Todd Schneider, President & CEO at Cintas]

Thank you.

[Operator]

Great. And we have run out of time for our question and answer session. So I will turn the call back over to Jared for closing remarks.

[Jared Mattingley, VP, Treasurer & IR at Cintas]

Thank you, Ross, and thank you for joining We will issue our 2026 financial results in September. We look forward to speaking with you again at that time. Thank you.

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Jared Mattingley, VP, Treasurer & IR
• James Rozakis, EVP & COO
• Scott Garula, EVP & CFO

Analysts

• Todd Schneider, President & CEO at Cintas
• George Tong, Senior Research Analyst - Equity Research, Business Services at Goldman Sachs
• Jasper Bibb, VP - Equity Research at Truist Securities
• Ronan Kennedy, Vice President at Barclays Investment Bank
• Tim Mulrooney, Partner & Group Head - Global Services at William Blair
• Andrew Steinerman, Equity Research Analyst - Business & Info Services at JP Morgan
• Josh Chan, Executive Director & Equity Research Analyst at UBS Group
• Jason Haas, Director & Senior Equity Research Analyst at Wells Fargo
• Ashish Sabadra, Information & Business Services Analyst at RBC Capital Markets
• Shlomo Rosenbaum, Managing Director at Stifel Institutional
• Stephanie Moore, SVP - Equity Research at Jefferies
• Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.
• Yehuda Silverman, Equity Research Analyst at Morgan Stanley
• Kartik Mehta, Executive Managing Director - Director of research at Northcoast Research