UniFirst Stock Rises After Q1 Earnings Beat: Retail Stays Enthusiastic After Cintas’ Buyout Offer
By Stocktwits Inc | First Published Jan 9, 2025, 12:33 AM ISTThe company reported a 2% year-over-year (YoY) rise in revenue to $604.91 million during the quarter, missing an analyst estimate of $606.6 million according to FinChat. Earnings per share (EPS) came in at $2.31 compared to an estimated $2.22.
Shares of UniFirst Corporation (UNF), a supplier and servicer of uniform and workwear programs, facility service products, and first aid and safety supplies, rose over 2% on Wednesday after the firm reported its first-quarter earnings.
The company reported a 2% year-over-year (YoY) rise in revenue to $604.91 million during the quarter, missing an analyst estimate of $606.6 million, according to FinChat. Earnings per share (EPS) came in at $2.31 compared to an estimated $2.22. Net income rose 1.8% YoY to $43.11 million.
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The firm’s Core Laundry operations saw revenues increase by 1.7% to $532.7 million, and the operating margin increased to 8.1% from 8.0%.
The operating margin rise was primarily due to lower merchandise and other operating input costs, partially offset by higher healthcare, legal and environmental, and selling costs in the first quarter of fiscal 2025 as a percentage of revenues.
The Specialty Garments segment’s revenue rose 2.9% to $45.9 million, primarily led by growth in the European and North American nuclear operations. This was partially offset by a decline in the cleanroom operations.
CEO Steven Sintros said the firm expects revenues for fiscal 2025 to be between $2.43 billion and $2.44 billion. “We continue to expect diluted earnings per share to be between $6.79 and $7.19. This outlook continues to include an estimated $16 million of costs directly attributable to our key Initiatives that we anticipate will be expensed in fiscal 2025,” he said.
On Tuesday, UniFirst stock drew considerable attention after Cintas Corporation (CTAS) announced that it submitted a proposal to the company’s board to acquire all outstanding common and class B shares of UniFirst for $275 per share in cash. Following the offer, UNF shares rose over 20% to close at $204.69.
However, UniFirst confirmed within a couple of hours that in November and December 2024,
its board of directors received and unanimously rejected an unsolicited, non-binding, and highly conditional proposal from Cintas Corporation to acquire its shares at the said price.
The company noted it was “not in the best interests of UniFirst, its shareholders and other stakeholders.”
However, retail sentiment surrounding the stock remained in the ‘extremely bullish’ territory (79/100) on Wednesday, albeit with a lower score, accompanied by ‘extremely high’ retail chatter.
UniFirst shares have gained over 26% over the past year.
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