Uniform Supplier UniFirst Reports Mixed Q2 Results, Revises Annual Outlook

Benzinga04-02

UniFirst Corporation (NYSE:UNF) reported second-quarter FY25 revenue growth of 1.9% year-on-year to $602.22 million, slightly missing the analyst consensus estimate of $602.80 million.

Core Laundry Operations revenue increased 1.5% to $530.4 million and Specialty Garments improved 2.2% to $44.4 million.

UniFirst registered an operating income of $31.2 million, an increase of 11.7% year over year, with an operating margin of 5.2%.

Adjusted EBITDA increased to $68.9 million from $64.8 million in the prior year. Adjusted EPS of $1.40 beat the analyst consensus estimate of $1.32.

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UniFirst reported expenses of approximately $1.9 million in the quarter related to its key initiatives, including customer relationship management and enterprise resource planning projects. These items had a $0.09 effect in the second quarter.

UniFirst said its cash, cash equivalents and short-term investments totaled $201.0 million as of March 1, with no long-term debt outstanding.

The company repurchased 33,000 shares for $6.2 million in the second quarter. As of March 1, UniFirst had $63.7 million remaining under its existing share repurchase authorization.

“We are excited that our investments in the business are starting to show returns in several areas, including improved profitability, cash flow and overall operational execution,” said President and CEO Steven Sintros.

In January, Cintas Corporation submitted a proposal to acquire all outstanding shares of UniFirst for $275 per share in cash.

UniFirst rejected the proposal, claiming it was not in the best interests of the company and its shareholders.

Subsequently Cintas ended the discussion on the acquisition proposal last week, as the talks remained inconclusive.

Outlook: UniFirst sees FY25 revenue of $2.422 billion – $2.432 billion (prior view $2.425 billion – $2.440 billion) against an estimate of $2.430 billion.

The company raised its FY25 EPS outlook from $6.79 – $7.19 to $7.30 – $7.70 versus the estimate of $7.77.

Price Action: UNF shares traded higher by 0.92% at $176.97 at last check Wednesday.

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