Cintas NASDAQ: CTAS said it ended fiscal 2026 with strong fourth-quarter revenue growth, record profitability metrics and a fiscal 2027 outlook that calls for continued gains in sales and adjusted earnings.
President and Chief Executive Officer Todd Schneider said fourth-quarter revenue rose 8.9% to $2.91 billion, while organic revenue growth, excluding acquisitions and foreign currency effects, was 8.4%. Gross margin was 51%, matching the company’s third-quarter level, which Schneider described as an all-time high, and up about 130 basis points from the prior year.
Operating income increased 12.7% to $673 million, or 23.2% of revenue. Excluding transaction expenses related to the company’s pending acquisition of UniFirst, adjusted operating margin was 23.6%, up about 120 basis points year over year. Diluted earnings per share rose 15.6% to $1.26, while adjusted diluted EPS increased 18.3% to $1.29.
For the full fiscal year, Cintas reported revenue of about $11.26 billion, up 8.9% from fiscal 2025. Organic revenue growth was 8.3%. Schneider said the results marked the 55th year out of the past 57 in which Cintas grew both its top and bottom lines.
“Our strong top-line performance highlights the durability of our business model in all macro environments,” Schneider said. He added that the company continues to see a “massive” total addressable market across customers of all sizes and industries.
Full-year gross margin was 50.7%, up 70 basis points from the prior year. Schneider said Cintas has expanded gross margin by 450 basis points over the past four years. Fiscal 2026 operating margin was 23.1%, or 23.3% on an adjusted basis excluding UniFirst-related transaction expenses, which Schneider said was an all-time high for the company. Adjusted diluted EPS for the year was $4.94, above the company’s March guidance range of $4.86 to $4.90, which also excluded UniFirst transaction costs.
Segment Growth Led by First Aid, Fire Protection
Executive Vice President and Chief Operating Officer Jim Rozakis said Cintas saw “strong results across all of our business segments” in the fourth quarter. Organic growth in Uniform Rental and Facility Services was 7.9%, while First Aid and Safety Services grew 13.2% and Fire Protection Services grew 10.7%. Uniform Direct Sales declined 4%.
Within the Uniform Rental and Facility Services segment, Rozakis said fourth-quarter revenue mix included 47% from uniform rental, 20% from dust control, 16% from hygiene services, 11% from linen, 3% from shop towels and 3% from catalog sales.
Gross margin by business was 50.2% for Uniform Rental and Facility Services, 57.9% for First Aid and Safety Services, 50.8% for Fire Protection Services and 42% for Uniform Direct Sales. Rozakis said Fire Protection’s gross margin was an all-time high, though he cautioned that margins in that business can vary by quarter due to revenue mix and ongoing acquisition integration.
Rozakis said Cintas continues to win new customers, with about two-thirds of new customers transitioning to a managed program after previously handling related services on their own. He said retention rates remained “very attractive,” while pricing was close to historical levels.
Fiscal 2027 Outlook Calls for Continued Growth
Cintas guided for fiscal 2027 revenue of $12.1 billion to $12.25 billion, implying total growth of 7.4% to 8.7%. The company expects adjusted diluted EPS of $5.36 to $5.50, representing growth of 8.5% to 11.3%.
Executive Vice President and Chief Financial Officer Scott Garula said fiscal 2027 will include one more workday than fiscal 2026, which should add about 40 basis points to total revenue growth. The guidance assumes constant foreign exchange rates, no additional acquisitions, net interest expense of about $105 million and an effective tax rate similar to fiscal 2026’s 20.2% rate. The outlook excludes future share repurchases, significant economic disruptions or downturns, and non-recurring transaction costs tied to UniFirst.
In response to analyst questions, Garula said the fiscal 2027 guidance implies adjusted incremental margins in the 30% to 32% range, within Cintas’ stated long-term range of 25% to 35%. He also said the outlook implies operating margin expansion of 10 to 60 basis points across the guidance range.
Garula noted that higher energy costs affected fourth-quarter results by about 20 basis points year over year and sequentially. He said the company’s fiscal 2027 guidance assumes an uptick in energy expenses roughly on par with the fourth-quarter impact.
Capital Allocation and UniFirst Update
Garula said Cintas generated $709.1 million in operating cash flow in the fourth quarter, its strongest cash flow quarter of the year. During the quarter, the company made $96 million in capital expenditures, completed $61.9 million of acquisitions and paid $180.6 million in dividends.
For fiscal 2026, Cintas invested $395.1 million in capital expenditures, equal to 3.5% of revenue, and deployed $164.5 million toward acquisitions in route-based businesses. The company returned $1.7 billion to shareholders through dividends and share repurchases, which Garula said was its second-largest annual return of capital.
Schneider also provided a brief update on Cintas’ pending acquisition of UniFirst. He said UniFirst shareholders approved the merger in June, while regulatory review remains ongoing in the U.S. and Canada. Cintas received a second request from the Federal Trade Commission, which Schneider said was expected and similar to the process the company experienced with its G&K Services acquisition. He said Cintas remains optimistic the deal will close during the second half of calendar 2026, but added that the company would not provide further commentary to avoid speculation.
Management Cites Large Market Opportunity Despite Macro Uncertainty
Analysts asked management about the macroeconomic environment, customer budgets and hiring trends. Schneider said Cintas has operated amid uncertainty for several years and remains focused on factors it can control, including investments in employees, technology and products.
Rozakis said customers remained responsive to Cintas’ value proposition and that all four of the company’s growth levers are performing well: new business, retention, pricing and penetration of current customers through cross-selling and upselling. He said retention rates are at all-time highs and pricing is “right at historical levels,” possibly slightly above historical levels but immaterial in nature.
Management pointed to healthcare, hospitality, education and state and local government as strategic vertical markets that continue to contribute to growth. Rozakis said these verticals are performing above overall company growth, reflecting how Cintas organizes not only sales but also products and service models around those markets.
Schneider said Cintas is not dependent on employment growth, though it benefits from strong GDP and hiring trends. He said the company has a little over 1 million business customers compared with an estimated 16 million to 20 million businesses in North America. Garula added that there are roughly 180 million people going to work in North America, while Cintas serves about 5 million wearers.
“We remain encouraged by the momentum in our business,” Schneider said in closing. “Our results demonstrate the power of our strategy and the critical value we provide in addressing customers’ image, safety, cleanliness, and compliance needs.”
About Cintas NASDAQ: CTAS
Cintas Corporation NASDAQ: CTAS is a provider of business services and products focused on workplace appearance, safety and facility maintenance. The company is best known for its uniform rental and corporate apparel programs, which include rental, leasing and direct-purchase options, laundering and garment repair. Cintas markets its services to a wide range of end-users, including manufacturing, food service, healthcare, hospitality, retail and government customers.
Beyond uniforms, Cintas offers a suite of facility services and products designed to help organizations maintain clean, safe and compliant workplaces.
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